UPDATE 1-Nickel mining indefinitely suspended in southern Philippines -official

* Four nickel mines in Tawi-Tawi province suspended
* Suspension issued as mining policy being reviewed
* Tawi-Tawi is key source of high-grade nickel ore

(Adds more comments and details, background)
By Enrico Dela Cruz
MANILA, Sept 16 (Reuters) - A nickel mining hub in the
southern Philippines, which produces mostly high-grade material,
has suspended extraction operations indefinitely as the regional
government conducts an industry audit, a top government official
told Reuters on Monday.
The government of Bangsamoro Autonomous Region in Muslim
Mindanao (BARMM) has suspended operations of all four mining
companies in its jurisdiction, said Environment, Natural
Resources and Energy Minister Abdulraof Abdul Macacua.
The Philippines was the world's second-largest nickel ore
producer in 2018 after Indonesia, with both Southeast Asian
nations as the top two suppliers to biggest buyer China.
By next year, when Indonesia bans nickel ore exports, China
is expected to rely mainly on the Philippines for supply of the
material for stainless steel and electronic vehicle battery.
The suspension was based on a memorandum order dated Aug. 5
issued by the regional government, Macacua said in an e-mail
reply to Reuters' queries about the status of mining in the
region's Tawi-Tawi province.
Latest available industry data showed that 2.34 million wet
metric tonnes (wmt) of high-grade ore, or nearly 90% of 2.66
million wmt of the high-grade material the Philippines exported
to China in the first half of 2018 came from Tawi-Tawi.
Tawi-Tawi accounted for 27% of overall nickel ore exports,
totalling 15.8 million wmt, to China during the six-month
period.
"The suspension order was due to the ongoing review of
mining policy in BARMM," Macacua said.
The audit is being conducted as the local government
prepares to push for the enactment of a Bangsamoro Responsible
Mining Law that will serve as a road map for the region's mining
industry, Macacua said, without elaborating.
A "performance assessment and evaluation team" has been
created to review the mining firms' operations, with no definite
timeline as to how long the suspension will be, he said.
The BARMM suspension order covers four mining companies
actively operating in Tawi-Tawi out of seven that have been
given permits, Macacua said, without identifying the four.
Tawi-Tawi is where SR Languyan Mining Corp, the country's
top supplier of high-grade material to China, operates.
SR Languyan is expected to shut its mining operations later
this year as ore deposits at its project are nearly depleted,
Jaynul Ali Sambarani, head of mines and geoscience services at
BARMM's environment ministry, told Reuters last month.
SR Languyan's average monthly ore exports this year is
around 416,500 wmt, Macacua said. There is no government data
available about the size of ore deposits left at SR Languyan's
project.
The bulk of the Philippines' total nickel ore output usually
comes from the main mining region of Caraga, also in the south.
Philippine nickel miners may ramp up ore output by next year
as they expect the Indonesian ore export ban and brisk demand to
keep prices elevated.
Their production capacity, however, is limited by a number
of factors, including government-imposed mining curbs, industry
executives said at a Philippine mining conference last week.