The Philippines’ mining industry regulator said on Monday two new nickel mines would help boost production of the country’s top metal export this year, but prices may remain weak amid tepid demand from top consumer China.
The Southeast Asian country was last year’s biggest nickel ore supplier to China’s producers of nickel pig iron, used in stainless steel production, after previous top supplier Indonesia banned exports of unprocessed metallic minerals.
Leo Jasareno, director of the Mines and Geosciences Bureau (MGB), said nickel output this year should rise with the entry of the Libjo and Agata mines in the south.
“These new nickel mining projects are expected to boost the 2015 nickel production of the country, with the expected mine output of Libjo and Agata about 714,000 dry metric tons and 1,360,000 dry metric tons respectively,” he said in a statement.
Average nickel prices rose 11.6 percent last year to $7.56 per pound, boosting the value of the country’s overall metallic output to a record high P137.53 billion ($3.1 billion), MGB data released on Monday showed.
Nickel accounted for 58 percent, or nearly P80 billion, of overall output last year. In terms of volume, nickel direct shipping ore rose 20 percent to 30.2 million dry metric tons while mixed nickel-cobalt sulfide jumped 91 percent to 87,280 dry metric tons.
“Looking ahead, 2015 nickel prices are not anticipated to revert back to the double-digit levels set in 2011, given the sufficient inventory, new supplies coming on stream and weaker demand in the market, particularly involving China,” Jasareno said.
The Libjo project of Libjo Mining Corp. and the Agata project of TVI Resources Development Inc., which is partly owned by Canada’s TVI Pacific Inc., are located in Surigao province, a major nickel-producing region supplying ore to processing plants in Australia, China, South Korea and Japan.
Gold output last year rose 7 percent to 18,423 kg, while copper fell 7 percent to 349,269 dry metric tons, the MGB said.
The Philippines sits on mineral reserves worth $1.4 trillion, among the world’s biggest, but mining accounts for less than 1 percent of GDP as development is hampered by policy bottlenecks and a strong anti-mining lobby led by the Roman Catholic Church.