EXCLUSIVE-Philippines suspends 2 nickel mines, halts permits in environmental crackdown

by Reuters
Thursday, 7 July 2016 15:22 GMT

* BenguetCorp, Zambales Diversified mines suspended

* Philippines halts exploration permit issuance for a month

* Nickel prices have risen on signs of Philippines crackdown (Adds more comments from minister, background)

By Manolo Serapio Jr

MANILA, July 7 (Reuters) - The Philippines has ordered the suspension of operations at two nickel ore mines for environmental violations and halted the issuance of exploration permits as a nationwide crackdown led by a new mining minister begins.

The move could curb nickel ore shipments from the Southeast Asian country, the top supplier to No. 1 market China, and push up global prices further.

News last week that the Philippine government would review all mining operations in the country lifted the price of nickel by 8 percent in two days. It hit an eight-month high of $10,410 a tonne on Monday.

The two nickel mines to be suspended are operated by BenguetCorp Nickel Mines Inc and Zambales Diversified Metals Corp in Zambales province, north of the capital Manila, Leo Jasareno, director of the Mines and Geosciences Bureau, told Reuters on Thursday.

The suspensions followed "various complaints of environmental degradation," Jasareno said, adding they would be in effect until the companies complied with conditions set by the agency.

Officials at Benguet Corp, which owns BenguetCorp Nickel Mines, were not immediately available for comment. Zambales Diversified Metals could not immediately be reached for comment.

The mining minister, Regina Lopez, a staunch environmentalist, separately said there would be a ban on fresh mining exploration in the country for a month while a review of all existing mines was underway.

"There's a moratorium on new mining until we're done with the audit," Lopez told Reuters in an interview.

The Philippines has stopped issuing new permits to develop mines since 2012 amid efforts to boost the state's revenue share from mining, but has allowed exploration until now.

'LIFE OF OUR PEOPLE'

Philippine President Rodrigo Duterte, who took office last week, has warned he would cancel mining projects causing environmental harm.

Of around 40 metals mines operating in the Philippines, Lopez said she didn't "even know of one" that practised responsible mining, strictly adhered to environmental standards or took full care of the local communities where they operate.

Following the month-long audit, she said mines found in violation of regulations would be suspended.

"I will not allow any kind of activity which impinges on the life of our people," said Lopez, who believes the country can benefit more from developing tourism than mines.

The Philippines' mining sector, one of the world's largest in the 1970s, has since struggled partly due to environmental rules and policy flip-flops, missing much of the mining boom in recent decades and now facing much lower commodity prices.

Despite the Philippines' rich mineral reserves, mining contributes less than 1 percent to its economy. Of 9 million hectares identified by the government as having high mineral reserves, only 3 percent is being mined.

Commodities giant Glencore Plc last year quit the $5.9 billion gold-copper Tampakan project in the southern Mindanao island. The project failed to take off after the province where Tampakan is located banned open-pit mining in 2010.

"I'm not against mining as an industry. However, I am very much against making money and making people suffer," said Lopez. (Reporting by Manolo Serapio Jr.; Editing by Mark Potter)

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