Manila. The Philippines may consider banning exports of raw minerals to encourage domestic processing and boost the value of shipments, an environment official said on Friday (03/03), as the government looks to extract more from its mining sector after a crackdown.
Nickel prices rose more than 1 percent on the potential for supply disruption from the world's top nickel ore exporter, but miners said following in the foosteps of neighboring Indonesia wouldn't be viable without big government incentives.
Previous governments in the Philippines have supported calls to spur domestic processing of raw minerals but earlier efforts in Congress to enact appropriate laws have failed to take off.
"It's one of the things we're considering for any mine that we think should remain operating," Environment and Natural Resources Undersecretary Maria Paz Luna told reporters.
"In the long term that will help our economy because that will increase the value of the products," she said, adding that any ban would have to be considered by the entire government.
Mining has come into sharp focus in the Philippines in recent months after the country's firebrand environment minister, Regina Lopez, ordered the closure of more than half of the country's mines to protect watersheds, prompting an industry backlash.
Her decision is now being reviewed by the government's Mining Industry Coordinating Council amid concerns over its financial impact and criticism that due process was not followed.
The Philippines took over as the world's top nickel ore exporter after Indonesia banned exports of unprocessed ore in 2014, aiming to spur development of higher value smelting industries.
However, Indonesia relaxed its mining export rules in January, allowing exports of raw ore under certain conditions, after facing a hefty budget deficit and missing its 2016 revenue target by $17.6 billion.
"It means that (Indonesia's) experiment has failed," Ronald Recidoro, lawyer from the Chamber of Mines of the Philippines, told Reuters.
"The policy direction of banning ore exports will not by itself create a domestic processing industry," he said.
To encourage processing plants the government needed to provide incentives to investors and subsidize power and coal costs, he said.
The Southeast Asian nation has four mineral processing plants, two for gold and two for nickel.
"The question of value-added processing is a question of viability," said Dante Bravo, president of Global Ferronickel Holdings Inc, the country's No. 2 nickel ore miner.
The mining council's review will cover 23 mines ordered shut by the environment ministry and another five that were suspended.
Finance Secretary Carlos Dominguez said the three-month review, announced in February, would continue even if Lopez's appointment is not confirmed by Congress.