MANILA, Philippines - Philippine nickel exports to China has grown by 26 percent in the period January to August this year, from reports released by Reuters.
The Mines and Geosciences Bureau (MGB) reported that the country produced P99.3 billion ($2.2 billion) worth of precious and base metals in 2013, including nearly P30 billion ($667.2 million) of nickel ore.
Nickel dominates the country’s mining sector, with the number of nickel mines jumping from 15 in 2010, to 27 in 2014.
“Expectations that China’s stainless steel mills would run out of ore after Indonesia’s ban helped benchmark nickel prices surge more than 50 percent by May. They have since cut gains to around 20 percent for the year, standing at around $16,550 a ton,” according to the Oxford Business Group (OBG), a globally-recognized and respected source of business intelligence.
It said that the supply deficit in nickel is expected to last until at least 2018, and longer if stainless steel demand continues to grow, even at a slower pace than the current seven percent. Prices are likely to remain high.
Marcventures Mining & Development Corp. (MMDC), a subsidiary of listed company Marcventures Holdings Inc., expects Chinese exports to reach three million wet metric tons (WMT) this year, up from 2.8-million WMT in 2013, and more than quadruple the 620,000 WMT exported in 2011, when its mining operations first began.
Nickel Asia, the country’s largest nickel producer, expects to ship 17-million WMT in 2014, a 21 percent increase over 2013, reporting in October that its four operating mines sold a total of 14.3-million WMT between January and September, a 38-percent increase over the same period last year.
The Philippines, which was ranked by the US Geological Survey as the world’s biggest producer of nickel alongside Indonesia in 2013, is rapidly expanding output to meet demand from China.
In spite of its vast mineral reserves, the Department of Environment and Natural Resources (DENR) said that the sector’s economic input is low. But mining revenues account for barely one percent of gross domestic product (GDP).
Mineral reserves are estimated at $850 billion, including the third-largest gold reserves in the world, fourth-largest copper reserves and fifth-largest nickel reserves.
Contributions to total exports have stood at single digits until recently, according to the MGB with the export of minerals and mineral products averaging 3.94 percent from 2003-2012.
But the OBG report said that the sector’s contribution is likely to rise this year.
Total exports of minerals and related products rose by 46.2 percent between 2012 and 2013 to reach P3.42 billion ($76.1 million) in 2013.
By the second quarter of this year, total mineral exports had reached a value of P2.09 billion ($46.5 million). This compares with total exports of $29.8 billion in the same period.