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Philippines says only 10 of 40 mines pass nationwide audit

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The Philippines said that only 10 mines had passed an environmental audit, a quarter of the nationwide total, while a further 10 have been suspended and the remainder now need to "get their act together," with seven days to respond to alleged shortcomings before a final decision.

[MANILA] The Philippines said that only 10 mines had passed an environmental audit, a quarter of the nationwide total, while a further 10 have been suspended and the remainder now need to "get their act together," with seven days to respond to alleged shortcomings before a final decision.

"The critical thing is that the resources of the country will be utilised in a way that benefits the greater majority," Environment Secretary Gina Lopez told a briefing in Manila on Tuesday. The probe in the world's largest nickel producer was ordered by new President Rodrigo Duterte and Ms Lopez in July to check on compliance. The country has 40 metallic mines.

Nickel has been the best-performing metal this quarter on concern that the audit will disrupt ore shipments, adding to supply pressures in a market that's been supported by projections for a global deficit. The nation accounts for about a quarter of global mined nickel supply, with most cargoes feeding China's stainless-steel industry.

'NO BEEF'

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"I want to make it clear. I have no beef against the mining industry, but I am against the adverse effects happening in some of the situations," Ms Lopez said. "There are mining companies that passed and I want to work with them. I want to be better than Canada, better than Australia."

Prices surged to US$11,030 a metric ton on the London Metal Exchange last month as the audit got under way, the highest in a year, and nickel has outperformed all other metals on the Bloomberg Commodity Index this quarter. Prices traded 2.2 per cent lower at US$10,300 a ton at 11.28am in Manila.

Citigroup Inc has played down the likely impact of the audit in a quarterly commodities report received on Monday even as the bank forecast global nickel deficits through to at least 2020. The larger nickel miners probably won't affected by the closures and may even increase output, according to Citigroup.

The Philippines' principal mining group has challenged the legitimacy of the checkup, saying there were anti-industry campaigners among the personnel that assessed suppliers. The teams didn't act as impartial auditors, the Chamber of Mines of the Philippines told Bloomberg last week.

The country produced 467,000 tons of nickel last year, 24 per cent of the global mined total of 1.93 million tons, according to a quarterly report from Morgan Stanley.

There was a cumulative global deficit 42,500 tons in the first seven months of the year, the International Nickel Study Group said in September.

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