Philippine President Duterte warns miners: Comply with standards or shut down

Filipino President Rodrigo Duterte speaking inside Malacanang presidential palace in Manila.
Filipino President Rodrigo Duterte speaking inside Malacanang presidential palace in Manila. PHOTO: EPA

MANILA (BLOOMBERG) - Philippine President Rodrigo Duterte ratcheted up pressure on the country's miners, the world's biggest suppliers of nickel ore, telling them either to comply with international environmental standards or shutter.

"You obey or we will survive as a nation without you," he told a briefing in Manila on Monday (Aug 1), saying the country can live without the revenue from mining.

Mr Duterte and his environment chief Gina Lopez have unleashed a campaign to clean up mining in the Philippines and vowed to close operations if a government audit shows they fail to meet the required norms.

The country is the top supplier of nickel ore to China where the material is used to make stainless steel.

"I can forego the 40 billion pesos (S$1.14 million) I collect from you guys," said Mr Duterte, who took office on June 30, referring to mining companies. "The Filipinos will survive without you."

He defended his Environment Secretary. "You try to castigate Gina Lopez for being strict and yet you destroy the land, destroy the soil," he said, without identifying anyone. "You get rich at the expense of our native land. Do not do it. I will not allow it."

The Speaker of the House of Representatives, Pantaleon Alvarez, last week floated a proposal for an export ban on raw ores to spur domestic processing. While that would echo a move by Indonesia in 2014, lower ore grades in the Philippines and smaller reserves would hamper investment, according to Mr David Wilson, director of metals research and strategy at Citigroup Inc.


In other move on Monday, Mr Duterte appointed Ms Mario Luis Jacinto as director of the Mines and Geosciences Bureau, replacing Mr Leo Jasareno, the agency said on its website.

Ms Jacinto will assist Ms Lopez in reviewing and evaluating mining permits and clearances.

Six nickel miners that have already been shut by the Environment Department represented 8 per cent of national output in 2015, Mr Jasareno said in a phone message last week.

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


Prices on the London Metal Exchange climbed 13 per cent in July and 12 per cent in June on concern over the clampdown. The campaign means a quarter of the country's nickel mine output could be lost for the next six months, sending prices to US$12,000 (S$16,105) a metric tonne, according to Goldman Sachs Group Inc.

The metal advanced for the second day on Tuesday.

Some US$20 billion to US$30 billion of mining investments have been lined up over the next five to 10 years, including the Tampakan copper-gold project in South Cotabato province.

Ms Lopez has already said she won't allow Tampakan to start operations.

The country's Chamber of Mines will step up efforts to adhere to the principles of responsible mining and supports the president's drive to weed out miners that operate without regard for the law, it said in a statement on Tuesday.