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The price of nickel jumped on Thursday morning as hedge funds and speculators rushed to close bets against the industrial metal after the Philippines pressed ahead with an environmental crackdown on its mining industry.

Nickel, which is used to make stainless steel, rose $190 to $10,470 a tonne on the London Metal Exchange, after Manila ordered the closure of 21 mines and the suspension of another six pits, including the country’s biggest gold mine.

The Philippines is one of the world’s biggest sources of unprocessed nickel ore and a major supplier to China. But after the election in 2016 of President Rodrigo Duterte, Manila launched a review of its mining industry, which it accused of “spoiling the land” and appointed a stanch environmentalist as his new resource minister.

Supply-side issues are emerging as one of the hottest topics in the mining industry in 2017 as workers push for higher pay after years of austerity and some resource rich nations change their mining laws.

During a televised press conference, environment and natural resources secretary Regina Lopez, said the mines earmarked for closure on Thursday accounted for around half of the country’s output of nickel.

“My issue here is not about mining, my issue here is about social justice,” she said during a briefing in Manila. “Why is mining more important that people’s lives?”

The method most widely used to produce nickel ore is open pit rather than underground mining, and has been blamed by for declining agricultural production.

“Shorts have been covering,” said Marex Spectron, a commodity brokerage.

In nickel, bearish bets account for 11 per cent of open interest – the total number of outstanding derivative contracts, the largest of any industrial metal.

Nickel prices came under pressure earlier this month after Indonesia, another major supplier of ore, announced a potential resumption of exports.

“We are very pleased to see the Philippines taking this action while allowing proper mining companies which adhere to better environmental practice to continue,” said analysts at SP Angel, adding the whole nickel supply chain was an “environmental disaster”.

“The huge growth of ore exports into China for the production of nickel pig iron disrupted the nickel industry in recent years while causing massive environmental disruption in the mining areas and at the nickel pig-iron furnaces.”

Nickel pig iron is a cheap alternative to pure nickel favoured by many Chinese consumers.

Also caught up in the fallout from Thursday’s closures was Australian mining company Oceanagold, which operates the biggest gold miner in the Philippines. It shares fell 15 per cent after Ms Lopez ordered the suspension of operations at its Didipio operation.

The news surprised analysts given the mine’s strong environment credentials.

“Strangely Oceanagold Philippines won the 2016 safest mining operation, safest surface mining operation, safest mineral processing and 3rd runner-up for best in mining forest program,” note SP Angel.

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