The Philippines is anticipating an increase in the volume of outbound shipment of nickel ore by 2020. This is the positive result of the Indonesian ban on mineral exports.
The increase is not going to be small and insignificant.
Instead, the Philippine Nickel Industry Association claimed that exports might exceed production. Direct shipping of ore for 2020 could go beyond expected production volume that year.
The association estimates that next year, production will be at 39 wet metric tons.
According to PNIA President, Dante Bravo, it is possible that direct shipping can reach 40 million WMT. Whether it will go beyond 50 million WMT, however, is doubtful.
He explained that the main trigger is truly the Indonesian export ban.
Apart from this, the increase in shipment can also rely on the prices specifically for the lower grade ores, especially since this is where the added volume is likely to be generated.
Indonesia’s Nickel Export Ban
While Indonesia’s nickel ore export ban may be bad for some other economies and markets, it has created an opportunity for the Philippine nickel mining industry.
In particular, it created the chance for Philippine miners to ease the inevitable shortage in the supply of nickel in the world markets.
Indonesia, after all, is the largest nickel producer around the world.
Reopening of Closed Mines
Bravo added that in 2020, more mines would start to resume their operations to contribute to the much-needed inventory.
He specifically cited four mines opening up in Zambales and Dinagat islands.
At present, as high as 90 percent of nickel export goes to China. The rest is going to Japan.
According to the analysis done by Fitch Solutions Macro Research, a unit of Fitch Group, the national mining industry seen marked improvements and growth this year because of the nickel operations that resumed their activities.
Back in 2016, the former environmental secretary, Gina Lopez, ordered the closing and suspension of many mines.
As a result, between 2016 and 2019, local production of this metal declined by a significant 22.7 percent.
Fitch, however, supported the idea that the Indonesian ban can trigger an improvement in Philippine nickel production.
China The Main Market
China is likely to feel the brunt of the ban and look for alternative sources of supply.
The Philippines is a good alternative because of its proximity to China as well as substantial nickel mining capacity.
With demand spiking up, nickel mine development will accelerate.
In relation to this, the investment will also increase on other relevant operational projects that can bump up production volume next year.
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