FOCUS - 15 pct of global nickel supply at risk over Philippines - Morgan Stanley

print Print this document.  Post this story to Facebook.
Meimei Qinmeimei.qin@fastmarkets.com+442072642479

London 11/07/2016 - Around 15 percent of global nickel supply from the Philippines is at risk following the suspensions of two nickel miners on environmental grounds, Morgan Stanley said.

Operations at BenguetCorp Nickel Mines and Zambales Diversified Metals - with combined capacity of 20,000-25,000 tonnes per year - were suspended last Friday by the government while it reviews their environmental impact and each companies' rehabilitation programmes.

In total, another 300,000 tonnes per year or 15 percent of global supply are exposed to the new regime's mining policy in the Philippines,  the bank said in its latest research note on Monday.

But established miners such as Coral Bay Nickel and Taganito Mining, which produce more than 60,000 tonnes per year of nickel products, are expected to meet any government-imposed industry standards, it added.

The mining industry in Philippines, the world's largest source of nickel exports - accounting for 23 percent of global supply - appears set to be overhauled under the new government led by President Rodrigo Duterte, Morgan Stanley noted.

Newly appointed environment and natural resources secretary Regina Lopez is a long-standing anti-mining campaigner who believes that the local industry lacks effective controls, the bank pointed out, citing a Bloomberg report.

"Any policy shift potentially lifts our forecast deficit, creating upside risk to the price outlook," it said.

LME three-month nickel was last at $10,115 per tonne, up $245 from Friday’s close, having earlier peaked at $10,180.

(Editing by Mark Shaw)



Fastmarkets.com
mailto:press@fastmarkets.com
8 Bouverie Street, London, EC4Y 8AX, UK
+44 (0)845 241 9949