Nickel-Ore Exports From Philippines Seen Rising on Indonesia Ban

April 2 (Bloomberg) --Nickel-ore production and exports from the Philippines are set to increase this year as the nation benefits from Indonesia’s plan to halt shipments of unprocessed material next month, the Mines and Geosciences Bureau said.

Ore exports may climb from last year’s 20.1 million metric tons, which yielded 253,247 tons of refined metal, Leo Jasareno, acting bureau director, said in an interview, without giving an estimate. Four companies are awaiting government approval to start mining, Jasareno said in Manila on March 29.

Ore from Indonesia and the Philippines accounted for 26 percent of global refined output last year, making them the joint second-largest origins, according to the U.S. Geological Survey. Stock in Nickel Asia Corp. (NIKL), the biggest Philippine ore producer, gained to record, rising 61 percent this year, as it may benefit from the Indonesian curb on exports.

“Our exports and production will be far better this year,” Jasareno said, predicting higher shipments to China. “Indonesia’s ban would create opportunities for our miners. The processing plants will be looking for raw-ore sources.”

Refined-nickel prices on the London Metal Exchange have slumped 33 percent over the past year to $17,405 a ton at 4:08 p.m. in Singapore on March 30. Global refined output will exceed demand by 45,000 tons this year, up 73 percent from 2011, according to a Feb. 16 estimate from Barclays Capital.

China (CNOIIQTL), the world’s largest metal user, bought 53 percent of its nickel ore from Indonesia last year, and 46 percent from the Philippines (CNOIIQPH), customs data showed. Indonesia’s ore ban may prompt the country to seek increased refined imports, Barclays Capital said last month.

Largest Economy

Indonesia, which shipped 33 million tons of ore last year, will enforce the ban on exports in May, bringing forward a plan originally set for 2014. Southeast Asia’s largest economy, also rich in copper and tin, is seeking to increase the value of its commodity exports.

The Philippines and Indonesia each produced ore equivalent to 230,000 tons of refined nickel in 2011, second only to Russia, which had an output of 280,000 tons, according to USGS data. The metal is used to strengthen stainless steel in everything from kitchen sinks to aircraft-fuel tanks.

Nickel Asia, which runs four of the 18 operating nickel mines in the Philippines, mined about 20 percent of the nation’s ore in 2011, data from the bureau showed. That makes the company the largest Philippine producer.

Stock in the company, which reached a record close of 34.45 pesos on March 29, rallied 41 percent last month. Nickel Asia will be the main beneficiary of the Indonesian ban, according to George Ching, an analyst at CitisecOnline.

Among the other producers in the Philippines are Benguet Corp. (BC) and Marcventures Holdings Inc. (MARC), according to government data.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Norman P. Aquino in Manila at naquino1@bloomberg.net

To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net

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