Nickal Asia 50% SP rise on Indonesia news2 Sep 2019 12:02
UPDATE 2 – Philippines' nickel ore output hike unlikely to plug Indonesia supply gap
2019-09-02 10:37:18
Philippines produces and sells mainly low-grade nickel ore
Top supplier Indonesia's ore export ban to start in 2020
Supply of Philippine ore 'not an issue' - industry head
Hard to cover Indonesia supply outage - Nickel Asia CFO
Philippines miners' shares surge, led by Nickel Asia
(Recasts with Nickel Asia CFO comments, details and Philippine miners' share prices)
By Enrico Dela Cruz
MANILA, Sept 2 (Reuters) – Philippine nickel mining companies are likely to boost ore production next year when Indonesia bans exports of the raw material used in stainless steel and batteries, but may still not be able to fill up the supply gap.
The Southeast Asian neighbouring countries are the biggest suppliers of nickel ore to China, the world's largest stainless steel producer and home to some of the biggest makers of batteries for electric vehicles.
Indonesia will stop nickel ore exports from Jan. 1, 2020, two years earlier than initially flagged as it speeds up efforts to process more of its resources at home, raising questions about the Philippines' ability to cover the supply gap created by the ban. ...
The ban will encourage Philippine miners to start ramping up ore output when the local mining season resumes next year, Dante Bravo, president of the Philippine Nickel Industry Association told Reuters.
The Philippines, which has 29 nickel mines and two nickel processing plants, usually ends its mining season in October, when heavy rains and strong winds hamper mining and shipping operations. Production will resume in March or April next year, or at least three months following the implementation of the export ban.
Indonesian ore is generally a higher grade than ore from the Philippines, Bravo noted.
"However, Chinese smelters have been able to process our lower grade ores, so supply of lower grade ores coming from the Philippines is not an issue," said Bravo, who is also president of Global Ferronickel Holdings Inc , the Philippines' No. 2 nickel ore producer and exporter.
Prices, Shares Soar
Bravo did not give any estimate on Philippines' ore production and shipments for the next year, but said Indonesia's policy move will pave the way for increased sales of lower-grade 1.2%, 1.3% and 1.4% nickel ores.
Nickel Asia Corp , the leading nickel ore miner in the Philippines, expects the supply outage to be massive as Indonesia plans to export about 20 million tonnes this year alone.
"It's zero exports from Indonesia next year. How do you cover that?" Senior Vice-President and CFO Emmanuel Samson said. "The Philippines will have a difficult time covering that," he told Reuters.
Nickel Asia, which accounts for about half of the Philippines' nickel ore production, expects to book windfall gains from the supply disruption that will keep nickel prices high, he said.
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