Their policy changes have still swayed the nickel market, though. Metal Bulletin looks back at the key policy changes in these key global nickel ore suppliers in 2017.
In the first half of 2017, nickel prices plunged after Regina Lopez - who had ordered closures of mines accounting for half of the country’s nickel production - was dismissed from her role
as chief of the Philippines’ Department of Environment and Natural Resources (DENR).
While Lopez’ dismissal removed a major uncertainty for nickel ore supply in the short term, the impact of the policies she had put in place during her 11 months at the helm of the DENR continued to affect the market.
During her tenure, Lopez had ordered the closure of 22 and suspension of five mining operations
on alleged environmental violations. She also cancelled 75 mineral agreements with miners and banned future open-pit mining
in the country.
Nickel ore production in the Philippines fell 11% year on year to 19.01 million dry metric tonnes
(dmt) in January-September in 2017, partly due to suspended operations at several domestic nickel mines.
But Lopez’ departure did not mean it was all smooth sailing for Philippine miners. Her successor, ex-army general Roy Cimatu, was expected to take a more moderate position on mining relative to Lopez but his public statements during the year have largely been in line with President Rodrigo Duterte’s stance.
In the third quarter of this year, Duterte said he was planning a new mining law
, with input from mining stakeholders and Lopez, and considering banning ore exports
to encourage domestic processing.
Politicians in the country jumped on the bandwagon
and called for the country to ban ore exports, with 22 congressmen filing a bill late in August seeking to halt the export of unprocessed mineral ores and mining in watershed areas.
Late this year, Duterte rejected the recommendation of the Mining Industry Coordinating Council (MICC) to lift the Lopez-initiated ban on new domestic open-pit mining.
A majority of the MICC, which is co-chaired by the Philippines Department of Finance and the DENR, had voted to remove the ban on open-pit mining
The MICC is still reviewing the 22 mines which Lopez had ordered to shut and/or suspend oerations
, with preliminary results due in January. But judging from Duterte’s rejection of the MICC’s recommendation on new domestic open-pit mining, it is now uncertain if he will revoke Lopez’ order even if the MICC endorses restarts.
The developments in the Philippines’ mining industry over the past year suggest mining policy changes in the country will remain unpredictable.
At the start of 2017, Indonesia said it would relax export restrictions on unprocessed ore exports
subject to certain conditions, including requiring miners to complete smelter projects within five years.
While there had been rumors of a possible removal of the ore export ban prior to Indonesian government's announcement, the policy change still sent shockwaves across the industry - Indonesia’s export ban since 2014 had provided support for nickel prices, particularly in the initial year of the ban.
Indonesia gradually approved export quotas to various companies following the end of the ban. To date, Indonesia has awarded quotas for more than 15 million tonnes of nickel ore exports to nickel miners and smelters. Further quotas are expected to be approved in the near future, bringing the total export volumes close to 20 million tonnes
, Metal Bulletin understands.
Impact on prices
Laterite ore prices sank in the first half of 2017, a move triggered by Lopez’ dismissal and Indonesia’s restart of ore exports. The price of laterite ore with 1.5% nickel content
fell to as low as $28 per tonne cif China in June from as high as $49 per tonne at the start of the year.
But the developments in the Philippines and Indonesia had less of an impact on London Metal Exchange nickel prices in the second half of the year - the focus turned to optimism over EV battery and stainless steel demand and the global macroeconomic outlook. This boosted the LME three-month nickel price to as high as $13,030 per tonne in November, its highest since June 2015.
The demand-side narrative for nickel proved stronger than that on the supply-side in the second half of 2017. But with the Philippines and Indonesia still the largest producers of nickel ore in the world and biggest suppliers of nickel ore to China, both countries’ mining and ore export policies can still sway the nickel market, as they have done in the past.