Nickel ore export ban would stunt local industry, says economist

The proposed ban on nickel ore exports would hurt the Philippine mining sector which, if implemented, would translate to “quite substantial losses,” according to an economist.

“I think an export ban is not a very good industrial policy to encourage our nickel mining industry to forward integrate, meaning to go into even the basic processing like what we are doing now in HPAL (high-pressure acid leash) plants,” said Winston Conrad Padojinog, who is with the University of Asia and the Pacific.

Padojinog said in a recent interview with the Inquirer that the proposed ban would affect the country’s mining production as nickel accounts for 22 percent of the total.

While the projected percentage of production loss is meager at 0.4 percent, he said this will amount to billions of pesos and will displace communities that host mining projects.

Aside from that, Padojinog said smaller industry players will cease operations should the ban push through.
“It (losses) will be quite substantial as far as the industry is concerned,” said the industrial economist. He added that entities engaged in processing plants are “not doing very well.”

Padojinog also said the “very volatile” market, coupled with the red tape, makes it challenging to venture into the development of nickel processing plants.

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“I think two of our HPAL processing plants in the Philippines and their financial statements do not really exhibit a very encouraging signal to allow and attract investors at the moment,” he said.

Instead of an export ban, Padojinog proposed strengthening the mining fiscal regime to provide a more stable environment for the mining industry.

Padojinog also said the government should reduce the process for facilitating exploration permits. He noted that the mining cycle “is long” and lasts for many years.