Nickel Prices See Continued Upside on Philippine Mining Crackdown
Nickel prices have soared, and are currently trading at their highest in about a year as the Philippine government cracks down on mining in the country.
This week, Philippine president Rodrigo Duterte told miners that he will forgo the revenue coming from the sector if it means protecting the environment. Duterte wants the country’s miners to comply with international environmental standards or shutdown, and a massive audit of mines is currently underway with six nickel miners already shut by the Environment Department. Philippine miners are the world’s largest suppliers of nickel ore.
The latest statement from Duterte shows how serious he is, as there have been some doubts if the country would actually go through with massive shutdowns, not wanting to forgo the revenue. The six miners already closed had accounted for 8% of output in 2015.
There is currently extra demand for Philippine nickel exports after Indonesia enacted a nickel ore export ban, and the price recovery in nickel is prompting other companies to enter (or reenter) the market. Just this week BHP Billiton announced that it will restart development work at its 2012 Venus nickel discovery at its Nickel West unit. The decision was due to the price recovery in the metal, amid Indonesia’s export ban on unprocessed ores and the Philippine crackdown. In Australia, several small miners have also shuttered, and this leaves even more room for new production.
On Monday, LME nickel traded in the $10,680 to $10,860 range. The metal is finding support at $10,140, meeting resistance at $10,900.
