Big day for nickel yesterday. With prices leaping nearly 20 cents on the day to near $4.60 per pound — marking a nearly 5% move in a matter of hours.
And there was one major reason for the jump: more government turmoil for miners in the Philippines.
As I’ve been discussing of late, the new Philippines mines minister Regina Lopez was scheduled to unveil results of a nationwide mines audit last Thursday. But the minister relented at the last minute, saying that the announcement of the results would be delayed a week — to this Thursday, September 22.
But in the interim, things have gotten very tense for miners in the country.
The biggest gauntlet in this growing fight came yesterday. When Reuters asked minister Lopez if this week’s results could see “10 or more mines suspended” — to which she replied simply, “Yes possible.”
A suspension of operations on that scale could be very significant for the mining world. Given that the Philippines only has 30 mines operating right now (after 10 were already suspended so far this year) — which are responsible for 21% of global nickel production.
A negative outcome for Philippines miners appears all the more likely after some bizarre comments by minister Lopez in an interview with local news last Thursday. Where she appeared to suggest she would do everything in her power to ensure that miners do not pass the current government audits.
Here’s a direct quote from Lopez:
“If an audit team passes a mining company for whatever reason, you’re not only passing a mining company, you’re saying it’s okay, that’s really scary. Right?”
It sounds like the minister is suggesting here that it is not acceptable for mining companies to pass the audit under any circumstances. Because that might give the idea that mining is okay. A downright ludicrous suggestion from a person who is supposed to be a regulator for the industry.
All of which suggests that the results of the upcoming audit could be very bad for the Philippines mining scene — and thus for global nickel supply. Watch for details Thursday on mine suspensions, and effects on production and exports.
Here’s to keeping it real.
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By Dave Forest
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Mining Audits in Philipines quote by minister Lopez - think Dave Forest misunderstood the real meaning behind minister Lopez's quote - “If an audit team passes a mining company for whatever reason, you’re not only passing a mining company, you’re saying it’s okay, that’s really scary. Right?”.... my understanding of the real meaning here is that the Philippines now want to improve standards and not just pass and audit without really looking whether certain standards are met... in the country like the Philippines that can be difficult as it is changing the culture in a way - in the past you can pay and now this is changing.... this is part of the changes coming with the new President Rodrigo Duterte (he is very anti-corruption, and he has his hands full in the Philippines which is why he has to be so tough otherwise he would never have even the slightest chance)