THE local mining sector is poised to gain from the uncertainty surrounding America’s sweeping tariffs. This, although the industry is on its toes for potential risks caused by global economic slowdowns and trade tensions.
Ronald Recidoro, executive director of the Chamber of Mines of the Philippines (COMP), said the overall impact of US President Donald Trump’s so-called “reciprocal” tariffs“ is expected to be limited.”
“The clearest indirect benefit would be the surge in demand for gold and the increase in gold prices,” Recidoro told the Inquirer.
Gold, considered as a safe haven investment, on Friday, June 13, traded close to its peak of more than $3,500 an ounce seen in April. This was following the conflict between Israel and Iran.
The precious metal has appreciated by around 30 percent since the start of the year.
“Considering long-term economic challenges in the US, China, and Europe, we believe that the demand for gold will only continue to grow as a hedge against inflation and currency volatility,” Recidoro said.
Even if gold were relatively unaffected by US President Donald Trump’s tariff announcement, Recidoro said the sector remains more vulnerable to global economic slowdowns and trade tensions.
Safe haven
“While the Trump administration’s tariffs have limited direct impact on the Philippine mining sector, the uncertainty in the global economic climate has increased gold’s appeal as a safe-haven asset,” he added.
Peter Garnace, equity research analyst at Unicapital Securities Inc., said investor appetite for safe-haven assets such as gold will likely increase despite heightened global uncertainties driven by Trump’s mercurial policies.
“Under the mining sector, precious metals continue to be attractive safe-haven assets with gold prices likely to remain elevated in the near term amid global trade tensions, prospects of rate cuts, and macroeconomic uncertainties,” Garnace told the Inquirer.
Listed mining companies — including Apex Mining Co. Inc. under the Razon Group, Philex Mining Corp. led by tycoon Manuel Pangilinan and OceanaGold Philippines Inc., the local subsidiary of multinational gold mining and exploration firm OceanaGold Corp. — are seen to benefit from current market volatility as gold prices surge to all-time highs.
The analyst said the year-to-date performance of their stock prices are “notably trending upwards.”
Among publicly listed mining firms, Garnace said Atlas Consolidated Mining and Development Corp. is insulated from America’s tariff policy. Although Atlas Mining has the biggest exposure to copper because of the possible tariff on this metal, the company exports its entire copper output to China and Japan.
Under Trump’s tariff agenda, steel and aluminum are slapped with a 50-percent import duty, while tariffs on copper imports are under consideration. (Jordeene B. Lagare © Philippine Daily Inquirer)
