Manila to close mines that fail environmental audit

Ms Lopez inspecting a tropical rainforest that has regrown on the edge of Manila's biggest open-air dump, in February last year. The environment chief is spearheading tougher regulation of the resources sector.
Ms Lopez inspecting a tropical rainforest that has regrown on the edge of Manila's biggest open-air dump, in February last year. The environment chief is spearheading tougher regulation of the resources sector.PHOTO: AGENCE FRANCE-PRESSE

MANILA • Mines in the Philippines will be shuttered this year if they fail environmental checks, according to the country's Environment Secretary who's spearheading tougher regulation of the resources sector.

Ms Gina Lopez, hired by new President Rodrigo Duterte to clean up mining, announced the probe last week on assuming the post.

The audit will be completed in three to four weeks and may result in mines being closed in the next six months, she said in a Bloomberg interview.

"If they are killing our rivers, how can their business interest be more important than the lives of our people? I will not allow suffering," said Ms Lopez, who has previously disclosed that she does not like mining. "The main thing is that what- ever we do, the welfare of the people must be paramount."

The Philippines is the world's biggest source of mined nickel, and supplies almost all of the nickel ore imported by China and used to make stainless steel.

Nickel surged about 8 per cent in two days after Ms Lopez announced the probe amid concerns that closures would cut supply and deepen an emerging global shortage.

Nickel Asia Corp and Global Ferronickel Holdings Inc, the nation's top two producers, say they operate according to the standards demanded by their new regulator.

The environment chief said on Thursday she will oppose the Tampakan copper and gold mine project on Mindanao island in the south of the Philippines, which has been on hold because of a local government ban on open-pit mining.

"Open-pit mining? It's horrible," Ms Lopez said. "Tampakan is on top of hundreds of hectares of agricultural land, the food basket of Mindanao, and you want to put a 700ha open-pit mine? I don't care how much money they give us. It's not worth it. Who is making the money here and who is taking the risk?"

Mining has been halted in other areas too. Operations in Zambales province, in the north of the Philippines, have been suspended by the local government because of "complaints on environmental degradation", according to Mines & Geosciences Bureau director Leo Jasareno. The Supreme Court separately issued a stop order against mining companies in the province in June.

Chinese imports of nickel ore from the Philippines were already set to drop this year before the crackdown, according to Mr Ding Zhiqiang, an analyst at Baosteel Resources Ltd, a unit of Shanghai Bao- steel Group. Cost issues and loading disruptions because of the weather mean shipments could drop by more than 20 per cent from last year, he said at a conference in Shanghai yesterday.

Those worst hit by the measures will be nickel miners because "increased costs from compliance to environmental regulation will be exacerbated by the current low nickel prices", analysts from BMI Research said in a note on Thursday.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 09, 2016, with the headline 'Manila to close mines that fail environmental audit'. Print Edition | Subscribe