BMI Research, the research arm of Fitch Group, has kept its outlook on the country’s nickel ore production at an average of 2.4 percent from 2017 to 2021.
In its report released on Tuesday, BMI Research said nickel production in the country will continue to grow as the closure and suspension orders made by the former chief of Department of Environment and Natural Resources (DENR) only affected smaller players in the mining industry.
“We also maintained our nickel production forecasts for the Philippines as we believed the Philippine nickel industry would not suffer a significant decrease in overall output in 2017 in relation to 2016, as prices recover and the government’s mine closures largely affect smaller players,” the report read.
“True to all our expectations, production from the Philippines in 2017 will be stable. Nickel ore production growth in the Philippines will register an annual average of 2.4 percent during 2017-2021,” it noted.
Last year, nickel output was estimated to drop 18 percent.
But the BMI Research said the country’s mining space will attract thin foreign investments, with the “increasing government’s regulation, policy uncertainty and increasing environment regulations.”
“Although the new head of the DENR, Roy Cimatu, is more adaptive and believes mining and protecting the environment can be achieved simultaneously, President Rodrigo Duterte insists the existing mining law will be upheld,” the report stated.
In its Mining Risk/Reward Index, the Philippines’ mining regulation is the least attractive in Asia.
The country scored 45.1 out of 100 in the Mining Risk/ Reward Index, below Asia’s average of 55.6.
“Foreign investment into the mining sector in the Philippines will be limited due to policy discontinuity, severe government intervention and strict environmental laws. Besides, protests against mining by environmental activists and local communities, supported by the Catholic Church, are also commonplace in the country,” the BMI Research said. (Kris M. Crismundo/PNA)