By Manolo Serapio Jr and Enrico Dela Cruz
MANILA, Aug 23 (Reuters) – A Philippine lawmaker has revived a proposal to ban exports of unprocessed minerals to spur domestic processing, in a move that may tighten global nickel supply and make it an even tougher business environment for miners in the world’s top producer.
The Philippines has vast but largely untapped mineral resources, limiting the contribution of mining to its economy to less than 1 percent. The sector is now facing a tough regime under the government of firebrand President Rodrigo Duterte who has suspended some miners causing environmental destruction.
Without an industry that will process mineral ore, the Philippines may be better off shutting its mining sector given its modest contribution to the economy and the environmental harm it causes, Congressman Erlpe John Amante said.
“We are trying to refine mining in our country. We are trying to make mining more relevant,” Amante told Reuters in his office in Quezon City, north of the capital Manila.
Amante is hoping to tap into Duterte’s push for responsible mining that has led to the suspension of 10 miners so far, eight of them nickel producers.
“What we’re fighting for here is to maximise the benefit for our country and our people,” said Amante. “If that cannot be done then we might as well stop mining.”
Amante first filed a bill to stop exports in 2014 after Indonesia banned ore shipments, but failed to gain support. This time, Pantaleon Alvarez, Speaker of the House of Representatives and an ally of Duterte, is backing the measure.
The proposed legislation, when it becomes law, will ban ore exports after three to five years and force miners to invest in local processing plants, Amante said.
That will be a huge setback for China which imports most of its nickel ore from the Philippines, and will boost metal prices that rallied to one-year highs following the recent suspension of Philippine nickel mines.
The Philippines has four mineral processing plants, two for gold and two nickel. It has 40 mines, including 27 nickel and five gold, with the rest producing chromite, copper and iron.
Senator Cynthia Villar said “doing more processing” at home should be a long-term vision of the industry.
“Not now because the industry is not that developed.”
High-grade ore is scarce in the Philippines, making it difficult to invest in processing plants, said Gerard Brimo, chief executive of top nickel ore producer Nickel Asia Corp which partly owns the country’s two nickel plants.
Then there is also underutilisation, with only 3 percent being mined of the 9 million hectares identified by the government as having high mineral reserves.
According to Amante, if ore is processed locally, mining may contribute 5-10 percent to the economy – which grew by 7 percent in the second quarter, the fastest in three years.
But power costs in the Philippines, among the highest in Asia, is making processing plants unviable, said Ronald Recidoro from the Chamber of Mines of the Philippines.
“It doesn’t make sense,” he said.
(Reporting by Manolo Serapio Jr. and Enrico dela Cruz; Editing by Himani Sarkar)
Read more from original source: http://www.dailymail.co.uk/wires/reuters/article