Global Ferronickel says mining curbs may hit production

The Philippines’ secondbiggest 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 is it used to produce stainless steel, is aiming to ship 6 million tonnes this year, the same as 2017.

Under the government plan, mines producing up to 1 million tonnes of nickel ore a year will be allowed to work on 50 hectares (124 acres) at any one time. That goes up to 100 hectares for mines with output of 9 million tonnes 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. (Reuters)