SINGAPORE – The Philippines should follow Indonesia’s lead and prohibit the export of raw metal ores, according to National Development Planning Minister Bambang Brodjonegoro, who said he was a big supporter of the curbs imposed by his country and results so far have been a success.
The restrictions have helped to spur the local manufacture of greater-value products, the former finance minister said in an interview in Singapore on Monday. Although some revenue was lost in the near term, the policy means there’ll be much a better result in future, he said.
Indonesia halted the export of ores from 2014, roiling the nickel market, and some Philippine lawmakers are now weighing a similar move as President Rodrigo Duterte conducts an audit of the industry to ensure its compliance with environmental standards. While Indonesia’s curbs opened the door to the development of the Philippine industry as its miners stepped into the gap, Brodjonegoro said policy makers there would do well to emulate Indonesia.
'VERY DANGEROUS'
“I would recommend that because history has told us that dependency on natural resources could be very dangerous,” Brodjonegoro said. “Of course there might be short-term pain for the long-term gain.”
President Duterte and Environment Secretary Gina Lopez are spearheading the crackdown on mining, ordering operators to comply with rules or shutter, and the audit is due to be completed this month. The country replaced Indonesia as the top supplier of nickel ore used in China’s stainless-steel industry, and accounts for about 20% of global mined output.
Nickel has climbed 17% to $10 300 a metric ton on the London Metal Exchange this year as predictions for a shift to global deficits and the Philippine crackdown have lifted prices. In the first half of 2014 as Indonesia’s ore-trade ban went into effect, nickel surged 37%.
'SERIOUSLY CONSIDER'
The Philippine lower house will fast-track hearings on a bill to amend the Mining Act, including a measure to ban ore exports, according to Congressman Carlos Isagani Zarate. Zarate, who heads the House Natural Resources Committee, said last week that the proposal sounds right.
Congressman Ping Amante has refiled a bill in the House of Representatives seeking to ban the export of unprocessed ores and criminalising the practice by imposing a jail term on violators. Amante was among congressmen who filed an earlier bill that foundered on a lack of support.
Still, the country may face an uphill battle. Lower-quality ores and less-abundant coal resources than in Indonesia mean building nickel-processing plants in the Philippines would be a more costly and less attractive investment, Vivienne Lloyd, an analyst at Macquarie Group, has said.
“Every developed country in the world never has dependency on commodities, their economies are always supported by manufacturing or real sectors,” Brodjonegoro said. “This is a big lesson not only for the Philippines but also for Indonesia. We are both developing countries and we both have natural resources, and this is a wise decision.”