Philippine metals output fell 10 percent in value in the first three months of the year, after at least five straight quarters of growth, due to low production at the country's mines, according to official data.
Heavy rains in January-March, the closure of some copper and chromite mines, and a decline in world nickel prices contributed to the fall, a source at the state mining agency said at the weekend.
But despite the fall in the value of metal output, foreign mining firms continue to look at investing in the Southeast Asian nation, partly due to sustained increases in other metal prices, a report from the Mines and Geosciences Bureau (MGB) showed.
The Philippine government hopes investments in mining will reach $10 billion in the next three years from just $1 billion accumulated since the industry opened its doors to full foreign ownership in late 2004.
Prices of gold, copper and silver in the world market jumped 42 percent, 34 percent and 32 percent, respectively, in the first quarter from the same period of 2007.
"This positive mood in metal prices in a way cushioned an otherwise greater fall in the production value brought about by the significant shortfall in mine output," the report said.
Total metallic mineral production in January-March was nearly 17 billion pesos ($385 million) against 18.8 billion pesos a year earlier, official MGB data showed.
Nickel accounted for the biggest drop in volume of output at 69 percent, with the value of nickel ore falling 83 percent to 425.4 million pesos from 2.5 billion pesos in the first quarter of 2007.
Five of the country's 10 nickel producers had no production in the first quarter due to heavy rains in the southern Surigao del Norte province where they are all located, the report said.
Production of the rest of the nickel miners -- Rio Tuba Nickel Mining, Berong Nickel Corp, CRAU Mineral Resources Corp, Plantinum Group Metals Corp and CTP Construction and Mining -- was not enough to offset that lack of output.
But the mines bureau is optimistic that demand and prices for nickel would recover.
"Outlook for nickel remains encouraging as China and India continue to push demand to the brim," the report said, adding China imports its nickel ore mostly from the Philippines.
Gold recorded a 2 percent rise in volume and a 14 percent increase in value in the first quarter. Gold purchased by the central bank from small-scale mines accounted for 81 percent of the country's total January-March gold output, the bureau said.
Some of the world's biggest mining firms such as BHP Billiton have started to explore the Philippines' estimated $1 trillion of untapped mineral wealth. But opposition from anti-mining groups, including the powerful Catholic Church, legal uncertainty, and attacks on mining facilities by communist rebels have scared some foreign investors in the sector.
($1=44.2pesos)
Source: Reuters
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