DENR backs bill banning ore export
September 9, 2014 at 11:28
THE GOVERNMENT should move toward banning mineral ore exports, the environment secretary said yesterday, offering support to a bill proposing restrictions that may threaten nickel ore supplies to China.
The proposal last month by Senator Paolo Benigno A. Aquino IV would require all minerals to be processed before export. The move follows a similar ban by Indonesia, the world’s largest producer of nickel, that went into effect in January and helped push up prices of the refined metal 37% this year. The Philippines has replaced Indonesia as the largest supplier of nickel ore to China, the world’s biggest user.
“The government should really move toward that direction,” Environment Secretary Ramon J. P. Paje said in a phone interview from Manila.
“It’s disadvantageous to be continually shipping raw ore. We’re not saying let’s ban it now. There’s enough time to discuss the proposal, improve government support and provide incentives to make the industry more competitive.”
Mr. Paje’s comments that the nation should focus on boosting the downstream mineral sector were echoed today by the bill’s sponsor, Senator Aquino, and Leo L. Jasareno, director of the country’s Mines and Geosciences Bureau.
“This will be quite a long process and it’s good to start discussions now on how to create more value for the mineral sector,” Senator Aquino, cousin of President Benigno S. C. Aquino III and a member of the ruling Liberal Party, said in a phone interview.
“The mining industry can be one of those sectors that can fulfill our target in terms of bringing in more foreign direct investments.”
For policy makers in Manila “the real issue is not the ban, but to establish a downstream processing industry,” Mr. Jasareno said.
‘FIRST SHOT’
A ban on mineral exports would be “the first shot across the bow” before the government raises mineral-export taxes, Ian Roper, a Singapore-based analyst at CLSA Ltd., said by phone.
“Capture more rent from it, raise more export tax, get more money for the government, but don’t ban it,” Mr. Roper said.
“If it happened, it would be very, very serious and China would have very few sources.”
The Philippines overtook Indonesia as China’s largest supplier this year, according to Chinese customs data. Imports of Philippine nickel ore more than tripled since December to 5 million metric tons in July, accounting for nearly all overseas supplies.
“If the Philippines did implement a ban along the same lines as Indonesia, virtually all nickel ore flow would be cut off and there would be very little raw material available to produce nickel pig iron (NPI) in China,” Ivan Szpakowski, a Hong Kong-based commodity analyst at Citigroup Inc., said by phone.
NPI is a low-quality alternative for refined nickel in the production of stainless steel.
A ban would provide further support for Citigroup’s 2015 price forecast of $24,000 a ton, the bank said in a report yesterday. The metal on the London Mercantile Exchange was down 0.2% at $19,030 per ton at 1:09 p.m. Hong Kong time yesterday after surging 2.8% Wednesday following news of the proposal. – Bloomberg
Source: https://www.bworldonline.com/content.php?section=TopStory&title=DENR-backs-bill-banning-ore-export&id=94041
