LAUNCESTON, AUSTRALIA – It’s not often that jobs get exported from the developing world back to a developed country, but this is likely to be the case with nickel, the Philippines and Australia.
The new Philippine government of President Rodrigo Duterte has roiled global nickel markets by suspending 10 nickel mines and threatening the closure of at least 12 more, citing environmental violations.
The suspended mines and those at risk represent nearly 60 percent of output in the Philippines, the world’s largest producer of nickel ore and top supplier to top buyer China.
It’s no surprise that the uncertainty surrounding the Philippines’ nickel output has led to a surge in prices, with benchmark London futures rising 18.5 percent from the end of last year to Monday’s close of $10,350 a tonne.
But while the global market for nickel is undoubtedly tighter than it was, the recent rally from February’s 13-year low will serve to boost supply over the longer term. An example of this is plans to reopen the Avebury mine in Tasmania, Australia’s island state, that was mothballed in 2009 after nickel prices collapsed in the wake of the 2008 global recession.
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