While the agricultural sector in the Philippines dread the looming El Niño phenomenon that could introduce widespread dryness across the country, the mining segment see it as a “blessing.”
“The impact of El Niño on our operations is going to be positive. The dry weather means our mines can continue to be productive in October or November when the season of heavy rains usually starts.” Nickel Asia Corporation CFO Emmanuel L. Samson told Business World.
During wet season, metal producers are forced to suspend field operations for safety and technical reasons, as it would be difficult to get ore underground when the earth is wet and damp. Typically, the rainy season stretches from October to the second quarter of the following year, a long period when most mining operations are recording average productivity levels.
Nickel Asia, which is also partly owned by Japan’s Sumitomo Metal Mining, has projected an ore export volume of more than 19 million wet metric tonnes (WMT) for 2015. The company produced only 17.9 million WMT last year.
In 2014, Philippine producers became the top suppliers of high-grade ore in the world when Indonesia decided to prohibit their local ore from reaching foreign markets. Since then, giant consumers such as China and Japan have been getting their ore supplies from the country, a scenario that sent the local mining industry into a prolonged boom.
In the past months, however, top nickel producers in the country admitted that they might fail in satisfying all of China and Japan’s demands due to the falling supplies outside Asia.
“NPI producers would be completely reliant on Philippine ore after stockpiles of Indonesia[n] ore run out. Chinese stainless steel producers will now have to source nickel elsewhere,” Samson told Bloomberg last April.
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