LONDON, June 27 What sort of threat does the election of a new government in the Philippines pose to China’s nickel pig iron (NPI) sector? Incoming President Rodrigo Duterte has already fired several warning shots at the country’s mining sector, calling on local operators to “shape up” and stop “the spoiling of the land”.
His actions speak as loud as his words. He has just appointed a committed environmentalist, Gina Lopez, as Secretary of the Department of Environment and Natural Resources, a position with broad oversight of the mining sector.
The Philippines produces a wide range of minerals but the immediate focus is on the huge amounts of nickel ore it ships every month to Chinese producers of nickel pig iron (NPI).
China’s NPI sector, an integral part of the country’s stainless steel supply chain, has become increasingly dependent on Philippine ore since 2014, when its previous main supplier, Indonesia, banned all exports of unprocessed minerals.
Since nickel ore is largely produced by open pit mining, likely to be specifically targeted by the new Philippine administration, there is a ripple of bullish expectation running through the nickel market. But we’ve been here before.
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