Global Ferronickel CEO says planned mining curbs may hit output this year

MANILA — The Philippines’ second-biggest nickel miner, Global Ferronickel Holdings, Inc., said planned government curbs on mining may hit its long-term output and would force it to make adjustments to meet its 2018 shipment goals.

Manila wants to restrict the amount of land that miners can extract mineral deposits from at any given point in a bid to boost environmental rehabilitation, according to a draft government order.

“It is possible because you lose the flexibility,” Global Ferronickel President and Chief Executive Officer Dante Bravo told Reuters in an interview, when asked whether the planned curbs would limit future output.

“Yes, in future, but for this year, we’re still confident that we can hit our target.”

The company, which sells its nickel ore to top buyer China where it is used to produce stainless steel, is aiming to ship 6 million tons this year, the same as 2017.

Under the government plan, mines producing up to 1 million tons of nickel ore a year will be allowed to work on 50 hectares at any one time. That goes up to 100 hectares for mines with output of 9 million tons and above. Projects with a processing plant will be allowed up to 162 hectares.

Global Ferronickel’s extraction area will be reduced to 90 hectares from more than 100 hectares currently when the new rule takes effect, Bravo said on Wednesday.

“We will have to make adjustments. We will have to concentrate on mining blocks that will suit our target for this year,” he said.

The miner cannot stockpile too much ore due to the risk of heavy rains during the monsoon season between November and March, he said. Prolonged rains can reduce the quality of ore stored outside.

“For the time being, ( if ) the ( government’s) intention is to limit the area and they want us to follow, then we’ll follow. It’s as simple as that,” said Bravo.

The Philippines was the biggest nickel ore supplier to China last year, shipping nearly 30 million tons. Indonesia has been the biggest supplier so far this year after Jakarta relaxed its ore export policy.

On Tuesday, top Philippine nickel miner Nickel Asia Corp said its export plans this year remain unchanged despite the proposed new rules.

Global Ferronickel, which in 2016 signed a memorandum of cooperation with China’s stateowned Baiyin Nonferrous Group Co. Ltd. to look at the potential of building a nickel processing plant in the Philippines, has no immediate plans to pursue it.

“The necessary ingredients for us to make it viable are not there yet,” Bravo said, citing costly power, among other factors. —