MANILA, Philippines – The Philippine Nickel Industry Association (PNIA) urged the Senate to reconsider its proposed five-year ban on raw mineral exports, saying the ban will hit small-scale miners the hardest.
The group’s statement comes after the Senate passed on third and final reading a measure banning the exportation of raw minerals to allow the local processing industry to develop. Senators patterned the ban after Indonesia’s export ban, when it stopped exporting nickel in 2020 and bauxite in 2022.
A working paper by the US International Trade Commission found that Indonesia’s export ban triggered a surge in exports of processed nickel products and an inflow of foreign investment in the downstream or smelted nickel production capacity.
PNIA President Dante Bravo called the proposed ban “ill-timed” and said it will discourage further investments and the development of the value-added processing (VAP) industry.
“A proposal like the ore export ban is appealing, however, if implemented at this time, it overlooks the regulatory and business challenges that make value-added processing in the Philippines difficult to implement,” he said.
For PNIA, the export ban will prevent the entry of new industry players since the process of acquiring mining permits can take up to a decade.
“One of the requirements of value-added processing is sufficiency of research. But if you have right now an export ban, and that’s five years, who would be investing in exploration? Who would even bother applying for exploration, knowing that it takes more than 10 years to get all the permits? So that will basically stop all exploration investments,” Bravo explained.
Bravo also said that an export ban similar to Indonesia’s will only work if the Philippines’ own industry was under similar conditions. He noted that Indonesia’s ore export ban was successful due to large reserves, favorable business conditions and strong government support.
“In contrast, without addressing these foundational gaps in the Philippines, rushing into an export [ban] rather than [helping] our ability to compete globally and develop a successful value-added processing sector,” he said.
PNIA urged senators to instead focus on improving the ease of doing business in the Philippines and reconciling the process of acquiring permits between the national and local governments.
The group also urged the government to address other fundamental industry challenges such as high power costs and infrastructure gaps.
‘Insulated’ impact of US-China trade war
PNIA also believes that the local nickel industry will be insulated from the impact of a brewing trade war between the United States and China.
According to the group’s board director Martin Antonio Zamora, majority of the Philippines’ nickel exports to China are mostly used for Beijing’s local steel industry.
“If we are reliant on EVs [electric vehicles], then I think there will be more uncertainty as to demand for our products. But because 100% of our exports goes to the stainless steel industry, I think that we are somewhat insulated,” he said.
But Bravo also acknowledged that it would be difficult to develop the Philippines’ downstream industry without China since it houses the most affordable technologies.
China is one of the Philippines’ top markets for nickel ore. Data from research group Observatory of Economic Complexity show that the Philippines exported $1.2 billion in nickel ores to China in 2022.
US President Donald Trump earlier raised tariffs on steel and aluminum imports from 10% to 25%.
PNIA’s members produce 85% of the country’s nickel. The Philippines is the world’s second largest producer of raw nickel ore. – Rappler.com