Nickel Asia expects mining to thrive this year

MANILA, Philippines — The Philippine mining industry is seen to thrive more this year given the perceived strong support of government, as well as the growing global demand for nickel, according to a top official of Nickel Asia Corp.

“The mining industry in the Philippines is positive as the government is taking on a more supportive stance for our industry,” NAC president and CEO Martin Antonio Zamora said.

“I think overall we’re quite positive versus last year for the industry,” he said.

The Marcos administration sees high growth potential in the mining sector that will help the economy recover amid the pandemic.

The mining sector has only been contributing less than one percent to gross domestic product (GDP).

As the Philippines’ largest producer of lateritic nickel ore and one of the largest in the world, NAC also sees positive drivers for nickel this year.

Zamora pointed to China’s economic recovery and the global push to roll out electric vehicles (EVs). China is a heavy user of nickel to produce lithium-ion batteries.

“The nickel industry specifically is highly dependent on China, on the recovery story. So, if China‘s recovery pans out as expected, then we believe that there will be support for demand for nickel, specifically for the steel industry,” he said.

“The EV sector continues to be a major source of demand and we do not expect any slowdown in the take up of EVs at least in the medium term,” Zamora said.

Last Dec. 9, China shifted from a COVID Zero policy to a full-on economic reopening.

China’s reopening, coupled with the nickel demand for EVs, could bump up prices this year.

“There are factors such as the reopening in China and its positive impact to the economic recovery there, which would accelerate towards the second half of 2023, which may provide a relief for class 2 nickel prices,” NAC vice president for treasury, investor relations and sales Andre Dy said.

“Recovery may offset slowing growth in the US, Europe, coupled with continuous demand for EVs. We think this is positive for nickel prices in the long term,” he said.

Data from the Mines and Geosciences Bureau (MGB) showed metal production increased by 31.73 percent to 238.05 billion last year from P180.71 billion in 2021.

The nickel group took the lion’s share of the total production value with P117.58 billion or 49.39 percent.

Production volume of nickel direct shipping ore slipped 11 percent to 29.27 million dry metric tons (dmt) from 32.93 million dmt due to the production shortfall incurred by most nickel projects.

The decline in output was offset by the high nickel prices, which rose to $11.86 per pound from $8.35 per pound.