Figure 1. Nickel Ore Production in the MIMAROPA Region, 2014-2016
Source: MGB MIMAROPA
Negative growth has beset MIMAROPA’s production for the past year. Statistics reveal that nickel ore production had exhibited a generally decreasing trend over time. In 2016, the region’s total volume of production plummeted by nearly 41 percent, from 3.88 Million to 2.29 Million dry metric tons (DMT), as shown in Figure 1. Rio Tuba Nickel Mining Corporation (RTNMC) posed a 6 percent decline in production. Despite this, the company remains to be the top contributor of nickel ore in the region, providing almost 82 percent or 1.87 Million DMT of the region’s total supply that year.
Further, the Hydrometallurgical Processing Plant (HPP) operated by Coral Bay Nickel Corporation (CBNC) which produces mixed sulfide of Nickel and Cobalt is highly dependent on the supply of RTNMC. Hence, CBNC’s total output also slipped by 23 percent, reporting a total production of 36,783.00 DMT.
Significantly, what greatly attributed to the sharp decline in MIMAROPA’s nickel ore production was the suspension of Berong Nickel Corporation (BNC) and Citinickel Mines and Development Corporation (CMDC). CMDC only produced 162,584.50 DMT of nickel ore in 2016 - about 84 percent lower than the previous year. Meanwhile, BNC experienced a 70 percent decrease in their volume of production, contributing only 260,231.00 DMT.
Consequently, mineral export sales also tumbled down as presented in Figure 2. Sales of BNC, CMDC, and RTNMC decreased by 85, 57, and 30 percent, respectively, brought about by the drop in nickel production and further aggravated by depressed nickel prices in the world market. It is interesting to note that despite the limited supply available in the market, price levels remained low. In fact, it reached a 6-year low in September 2016, as recorded by the Mines and Geosciences Bureau. The average price per DMT of nickel ore derived from MIMAROPA went down from $USD46.83 to $USD35.40.
Trade in the world market had also been weaker in 2016. China, the largest consumer of nickel ore, accounted for 2.08 Million DMT or almost 72 percent of MIMAROPA’s nickel ore exports. Albeit the anticipated rise in demand for metals in view of easier credit access across China, nickel ore exports were 31 percent lower than the previous year. Meanwhile, 24 percent is exported to Japan while the remaining 4 percent went to Australia.
Figure 2. Nickel Ore Sales in MIMAROPA, Figure 3. Country Destinations of Nickel Ore
2014-2016 Exports from MIMAROPA, 2016
Source: MGB MIMAROPA Source: MGB MIMAROPA
As a result, excise tax collections continued to fall from PhP195.42 Million in 2015 down to PhP135.14 Million in 2016. This, in turn, is bound to have an impact on present and future plans and projects of local government units. Likewise, the suspension also affected jobs generated in Palawan. Figure 4 shows the number or jobs these large scale mining companies generated the past two years. It is evident that employment coming from BNC and CMDC diminished by approximately 65 and 72 percent, respectively. Additionally, the number of jobs employed by RTNMC slightly increased despite the inclement weather conditions during the second half of the year in review.
Figure 4. Employment generated by large-scale mining companies in Palawan, 2015-2016
Source: MGB MIMAROPA
With initiatives focused on infrastructure development like President Duterte’s ‘Build! Build! Build! Program and US President Trump’s potential infrastructure spending plans, coupled with the credit boom in China, the demand for metals both in the domestic and international markets is expected to rise. However, with Indonesia lifting their export ban on unprocessed minerals and the consecutive mining suspensions in the Philippines, it is difficult to predict if the performance of nickel will continue on its sluggish path or finally take flight.
As one of the mineral-rich countries in the world, the mining sector is of great value to the country’s socio-economic development, and the sector’s performance and sustainability still rests on the balance of proper enforcement of existing environmental laws and sound economic guidance of the government.