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Philippine nickel ore output may rise, but return to 2014 peak level unlikely - industry head

Kitco News

* Philippine mining output limited by govt curbs, weather
* Top nickel ore producer Indonesia to ban exports in 2020
* Philippines seen as China's alternative nickel ore source

MANILA, Sept 11 (Reuters) - Philippine nickel miners are likely to ramp up ore output by next year, but their production capacity is limited by a number of factors, including government-imposed mining curbs, the head of the local industry lobby group said on Wednesday.

The Southeast Asian nation's nickel ore output may rise in 2020 mining season, but the volume is unlikely to return to the 2014 record-high level of about 50 million tonnes, said Dante Bravo, president of the Philippine Nickel Industry Association.

The Mines and Geoscienses Bureau (MGB), the industry watchdog under the Department of Environment and Natural Resources (DENR), limits the land that miners can develop at any one time under new rules introduced in September last year to protect the environment.

"I don't think we will return to that level because the DENR has already imposed this area limit that you can mine, and there is no new mine that's being opened," Bravo told reporters on the sidelines of a Philippine mining conference.

"We are limited also by the weather," said Bravo, who is also president of the Philippines' second-biggest nickel ore exporter Global Ferronickel Holdings Inc .

The mining season in the Philippines usually starts in April and ends in October. Mining and shipping operations are halted towards the end of the year until the first quarter of the following year because of strong rains and winds in the mining region.

The Philippines was the world's second-largest producer of nickel ore in 2018, selling most of its output to top buyer China. In 2020, when last year's top producer Indonesia is due to ban its ore exports, China is expected to rely mainly on nickel ore from the Philippines, according to analysts.

Indonesia said earlier this month it will 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. Speculation about the ban and the eventual confirmation by Indonesian authorities had fuelled a rally in nickel prices in recent weeks.

"When you have higher prices, even lower grades can be saleable already unlike before," Bravo said. "But I won't say it's minimal. We'll see," he said about the prospective increase in Philippine ore output.

"Each mining company has its own mining plans and, of course, they would want at this time to optimize the use of their resources, so they have to do it carefully," he said.

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