The government of Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) suspended activities of all four mining companies in its jurisdiction, Reuters reported early Monday, quoting Bangsamoro's natural resources minister Abdulraof Abdul Macacua.

Macacua said the suspension was in preparation for the implementation of a new responsible mining law.

BMO said the move "potentially removes a further source of nickel ore supply from the market as the scramble to secure raw material units ahead of the end-of-year Indonesian ore ban continues, and is likely to further bolster nickel ore prices".

The bank said there was no indication exports had been halted, so it anticipated Filipino material would still flow to China in the next two months. "Beyond this, however, ore supply may be affected should the mining suspension remain in place."

The bank said the announcement would hinder its projection that nickel contained in ore exports from the Philippines to China would rise by 50,000 tonnes in 2020, "particularly if the SR Languyan operation on Tawi Tawi island (one of the mines affected by this suspension) ceases operation due to ore depletion, as is now widely expected".

"Removing the affected supply from our model would see about 40ktpa of further reduction in Chinese NPI output next year and about 55kt additional drop in 2021. While we now model faster Indonesian NPI output ramp up, we see the refined market in deficit over the next two years," BMO said.

Nickel prices have risen sharply of late after the Indonesian government confirmed late August a ban on nickel ore exports would come into at the beginning of 2020.