Philippines Cracking Down on Gold Mining Companies amid Safety, Environmental Concerns

gold miner pickFrom OilPrice.com: The Market Vectors Gold Miners ETF (NYSE:GDX) is plunging today, as news of a continued crackdown on mining companies in the Philippines that could rock the industry.

Potential problems have been looming in this important copper, gold and nickel nation since the election of new president Rodrigo Duterte in late May — who campaigned on a strong anti-mining platform. Which quickly became more evident when he appointed noted mining opposition figure Gina Lopez as minister in charge of mining.

And this week, Minister Lopez made her first big moves against mining operations in the country. Let’s count them down.

One of the biggest developments was reports in the local press yesterday that the government has agreed to rescind an exploration permit for notable Philippines miner OceanaGold. With the papers quoting local groups near the company’s project in Nueva Vizcaya province as saying that Minister Lopez has asked regulators to “immediately start working on the cancellation of OceanaGold’s exploration permit.”

That would be a big move. And it’s far from the only one over the past week.

Since taking office, Lopez has reportedly also banned new mining projects in Sarangani province — and halted all mining activity in the Autonomous Region of Muslim Mindanao.

Perhaps the biggest hit from the new regime has come in the nickel mining sector. Where three separate mining operations — two in Zambales province, and one in Palawan — have reportedly been shut down over environmental concerns.

Concerns over lost nickel supply here have in fact caused a major lift in prices. With the metal rising over 25% since President Duterte’s May election — to a current $4.78 per pound.

That rise appears justified, given that the Philippines was the world’s largest nickel producer in 2015, putting out 21% of global supply. And especially so given that exports from fellow major producer Indonesia are still up in the air due to a ban on concentrates exports.

Effects of mining disruptions in the Philippines for other metals like copper and gold won’t be that pronounced. But the unfolding events here are a major concern for any developers or investors in the country.

The Market Vectors Gold Miners ETF (NYSE:GDX) fell $0.90 (-3.13%) to $27.88 in Monday morning trading. The GDX has surged 104% this year amid a big turnaround in commodity prices.

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This article is brought to you courtesy of OilPrice.com.

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