Philippines: Further Mine Closures Displace Thousands of Mining Workers

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In pursuit of stricter standards than global mining centers like Canada and Australia, the Philippines has ordered the suspension of activity at many of the counties mines for environmental violations according to recent reports. Most of these mines produce nickel which is used in the production of steel. The mining suspensions have forced China, a global commodities powerhouse, to look for alternative ore suppliers to fill its metals production needs.

This is largely due to the fact that the Philippines is the primary global nickel producer. The closest competitors, Russia, Canada and Indonesia, each produce almost half the nickel produced by the Philippines. Current recommendations for mine suspensions would bring the total number of closed mines to 30. Of these, 18 are nickel producers which account for just over 55% of the country's total nickel ore output based on last year's production. Or approximately 9% of global nickel production based on 2014 output numbers from the U.S. geological survey of 2015.

With many mining workers unable to work the Department of Environment and Natural Resources (DENR) is being asked to expedite plans to provide a source of income to thousands of displaced workers. Roughly 3,000 mining workers have been displaced due to the current suspensions. Data from the Mines and Geosciences Bureau showed that the mining and quarrying industry employed a total of around 236,000 workers last year, making up 0.6% of the country’s total employment that year.

A reforestation program of the Environment Department referred to as National Greening Program (NGP) is still in the works and may be used to employ displaced mining workers on a cash-for-work basis, according to comments made by Environment and Natural Resources Secretary Regina Lopez. Miners who are not included in this program will be forced to seek work elsewhere. Whether these workers are able to secure jobs at mines that are allowed to reopen or with employers in related industries remains to be seen.

Countries that are facing similar environmental concerns include Malaysia, Indonesia and China. According to the Manpower Employment Outlook Survey (MEOS) results for the final quarter of 2016 hiring expectations in most APAC region countries is expected to remain flat. In China, however, Payrolls are forecast to increase in all six industry sectors during the last three months of this year. The strongest of the six industry sector Outlooks is +8%, reported for the Services sector. The weakest sector Outlooks of +4% are reported in the Manufacturing sector and the Mining & Construction sector. The Outlook for the Mining & Construction sector is 2 percentage points stronger when compared with the previous quarter but declines by 3 percentage points year-over-year.

Canada’s mining production also shrunk this past quarter due to mine closures. This trickles into the fourth quarter with hiring in the Canadian mining sector forecast at a 2% decrease from the previous quarter. “The hiring climate is expected to be modest heading into the fourth quarter this year,” said Darlene Minatel, Vice President, Manpower Canada Operations & Strategic Accounts. “It’s hard to ignore the impact that the sustained lower price of oil has had on the economy.”

While positive hiring in Australia’s Mining and Construction sector is expected based on the MEOS for the last quarter of 2016, these gains were attributed to the new construction projects within the country as opposed to new mining jobs. “Construction is the main driver of growth in the Mining and Construction category. Residential property construction and large infrastructure projects, mainly in Victoria and New South Wales, are spurring growth.” said Richard Fischer, Managing Director, ManpowerGroup Australia and New Zealand.

With the need for mining talent in the region and elsewhere not great enough to influence workers to migrate within their current job sector to another country for work, it’s more likely that any displaced workers unable to find new mining sector engagements within the Philippines would use their skills to find work in related fields where their previous job experience would be beneficial to their new employer. Jobs requiring similar skills may include construction, industrial labor and other positions requiring a lot of physical labor or machinery skills. Employers could see cost savings from an hourly pay rate perspective with the large number of similarly skilled workers rejoining the labor pool in the Philippines as well as some of the other countries mentioned where mining engagements are decreasing through the end of the year.