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Philippines H1 nickel ore output rises 3% despite mine shutdowns

Kitco News

MANILA, Sept 10 (Reuters) - Nickel ore output in the Philippines, one of the world's two biggest producers of the material for stainless steel and batteries, rose 3% in the first half despite zero production at more than half the country's mines, government data showed.

The Southeast Asian country, which sells most of its nickel ore to top buyer China, produced 11.31 million dry metric tonnes of the material between January and June, compared with 11.01 million tonnes in the same period last year, the Mines and Geosciences Bureau (MGB) said on Tuesday.

A series of government-initiated audits on the industry's compliance with environmental regulations disrupted the miners' operations, with some of them suspended from operations until corrective measures have been made.

Sixteen of the Philippines' 31 nickel mines reported zero output due to either maintenance shutdown or suspension of operations for environmental and other offences, it said. The operating mines also produced 43,363 tonnes of mixed nickel-cobalt sulfide during the six-month period, up 2% from the January-June 2018 volume, the MGB said in its quarterly industry performance report.

The Philippines is 2018's second-biggest nickel ore producer, next to Indonesia, the MGB said, citing data from the United States Geological Survey. The Philippines is now the world's top nickel ore producer, according to Fitch Solutions Macro Research.

The MGB said the country's operating nickel mines managed to modestly increase ore output despite lacklustre prices in the first half.

Philippine nickel miners are likely to boost ore production next year, but may still not be able to fill up a supply gap to be created when Indonesia halts its ore exports, industry executives have said.

Indonesia has decided to stop nickel ore exports from Jan. 1, 2020, two years earlier than initially flagged as it speeds up efforts to process more of its resources at home.

Prices of nickel in both the London Metal Exchange and Shanghai Futures Exchange had rallied before and after Indonesia's announcement, and the MGB and local miners believe prices will remain supported in the coming years due to supply constraints.

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