Philippines Fires Warning as Lopez Tells Miners Audit Is Lawby and
Lopez says suppliers must conform to findings or be suspended
Results of the audit in top nickel shipper are due next week
The Philippines said an audit of the nation’s miners will carry the full force of law and producers that don’t follow findings and recommendations face closure, reinforcing its tough message in a showdown in the top nickel producer that may see mass suspensions.
“They have to follow, because if they don’t they face closure,” Environment Secretary Gina Lopez said in a text message from New York, commenting a day after local suppliers challenged the integrity of the probe ordered by President Rodrigo Duterte. “I am not suggesting things, I am mandating the law.”
Nickel is the best-performing commodity this quarter as concern the Philippine audit will disrupt shipments boosted prices that have already been supported by projections for a deficit. The nation accounts for about 20 percent of mined supply, with most cargoes feeding China’s stainless-steel industry. After several delays, the full results of the audit are due for release on Tuesday.
“We are an island ecosystem that is densely populated, so we cannot afford mistakes,” Lopez said in the text message. The secretary, who’s said the environment agency would recommend further actions on specific mines to ensure they operate at the highest standards, wants an industry that’s better than Canada or Australia’s, she said.
Nickel surged to $11,030 a metric ton on the London Metal Exchange last month as the audit got under way, the highest in a year, and the metal leads all members of the Bloomberg Commodity Index so far this quarter. Prices -- which jumped 3 percent to $10,660 on Thursday -- erased losses on Friday to trade unchanged at $10,660 at 4:19 p.m. in Manila.
The Philippines’ principal mining group has challenged the legitimacy of the audit, saying it’s concerned about how the checks were carried out. The probe was ordered by Duterte and Lopez to ensure suppliers met environmental and welfare standards. Ten mines have been suspended so far, and Lopez said this week more than 10 additional suppliers face closure.
Nickel’s gains have come this year as stockpiles tracked by the LME sank to the lowest level since October 2014, with a 0.5 percent drop to 363,216 tons on Friday. Commodity trader Glencore Plc said this week that it expects prices to climb through 2018 as demand outstrips supply.