OceanaGold gold shares tumble following forced closure of Philippine mine

Shares in the gold miner have tumbled after the Philippine government ordered the closure of its big mine in Luzon.

The Didipio mine in Luzon, Philippines.

Shares in OceanaGold, one of the biggest gold miners on the ASX, have been halted after tumbling more than 8 per cent following an announcement from the Philippines government ordering the closure of its big Didipio mine in Luzon.

OceanaGold (OGC) shares plunged more than 8 per cent in less than half an hour, wiping around $200 million off the company’s value, following a statement from the Philippines that it had suspended another 20 mines across the country.

The company subsequently requested a trading halt pending an announcement.

Environment and Natural Resources Undersecretary Leo Jasareno reportedly told a news briefing in Manila today that OceanaGold was among the companies suspended.

The Philippines subsidiary of Perth-based Medusa Mining (MML), which operates the Co-O gold mine in Mindanao, is among the ten miners that avoided suspension.

Didipio is OceanaGold’s key operation, pumping out around 100,000 ounces of gold and 14,000 tonnes of copper each year. The mine was expected to operate out to 2030 and beyond.

The crackdown on mining under the new Philippines government of president Rodrigo Duterte has now seen 30 mines suspended for “environmental violations”.

Most of those suspended mines produce nickel, and their closure should help drive nickel prices higher. The suspended mines reportedly account for 55.5 per cent of the country’s output last year.

Before the trading halt, OceanaGold shares were down 8.2 per cent at $4.35 a share, against a broader market fall of 0.6 per cent.