< p > In February 2017 , Gina Lopez , the Philllipines ’ then environment secretary and a long – time green activist , ordered 23 of the country ’ s 41 mines to close permanently and another five to suspend operations indefinitely for alleged environmental violations . That decision was overturned by President Rodrigo Duterte last December , and the new government led by president – elect ‘ Bongbong ’ Marcos – who assumes office on 30 June – is likely to continue with the change of direction . & nbsp ; p >
Mining Mega Trends and Their Impact to your Organisation's Resilience
< p > The government ’ s decision is underpinned by the knowledge that nickel is the most important metal by mass in the lithium – ion batteries used to power electric vehicles and is set to play a vital role in the global green energy transition . In 2020 , Tesla CEO Elon Musk asked mining companies to , “ please mine more nickel ”, and nickel prices have jumped by more than 35 % between 1 January and 20 May this year . & nbsp ; p >
< p > The Philippine Government would like to triple the size of the country ’ s mining sector by 2027 , and nickel will form a cornerstone of any such resurgence . Yet environmental concerns remain , and the challenges of trading in an increasingly globalised sector , mean that any optimism for the future of nickel in the Philippines ought to be tempered .& nbsp ; p >
Making up for lost time
< p > Most of the mines that were closed under the ban produced nickel and were responsible for a high proportion of the country ’ s annual nickel production , which peaked at 418 , 292 tonnes in 2015 before dropping to 339 , 377 tonnes in 2017 and 351 , 127 tonnes in 2021 , according to GlobalData . It forecasts output will reach 361 , 305 tonnes this year and 382 , 610 tonnes by 2025 , driving a compound annual growth rate of 2 . 2 % until 2025 . & nbsp ; p >
< p > The Mines and Geosciences Bureau ( MGB ), part of the Philippines ’ Department of Environment and Natural Resources , notes that the country could have as many as 190 new mining projects during the next four years and up to 40 % will be open – pit mines . Nickel – which comes from laterite deposits in the country – will account for one – third of the new mines and make up the bulk of the new open – pit mining .& nbsp ; p >
< p > The MGB said in March that about 12 new metallic mines – mostly nickel projects – would begin commercial operations this year .& nbsp ;& nbsp ; p >
< p >“ The moratorium on new mining agreements , not just for nickel , was reversed last year to aid pandemic recovery , as it is expected to inject more tax revenue and provide more jobs in the far – flung areas of the country ,” says Mitzi Sumangil , associate commodity analyst , metals and mining research at S & amp ; P Global Commodity Insights .& nbsp ;& nbsp ; p >
High potential production
< p >“ The potential of the mining sector to help the economic recovery is very high ,” says Wilfredo Monacano , the director of the MGB , whose agency has drawn up plans for the future of the country ’ s mining sector in the form of the Philippines Minerals Industry Roadmap .& nbsp ; p >
< p >“ Under phase one [ of the roadmap ] we suggested policies that would stabilise the business environment and they are already in place ,” Moncano continues . “ Under phase two – which we are currently under – we have identified priority mining projects for different commodities , including nickel , gold and copper . The plan is to expand the production capacity of existing mines and to open up new mines .”& nbsp ; p >
< p > The Philippines is the fifth – most mineralised country in the world with an estimated $ 1tn in untapped reserves of copper , gold , nickel , zinc and silver . Under its national constitution , the state owns all natural resources including minerals , and the exploration , development and use of mineral resources are under the full control and supervision of the state .& nbsp ; p >
< p > According to the US Geological Survey , the Philippines boasts the fifth – largest reserves of nickel in the world , and according to S & amp ; P Global , it accounted for a quarter of Asian mined nickel production in 2021 .& nbsp ; p >
< p > Moncano said the country has three big ticket mining projects – all located on Mindanao island – which would start development soon : the Silangan copper and gold project , the Tampakan gold copper facility and the King – king copper and gold project .& nbsp ; p >
< p > Beyond these larger projects , a total of 190 planned new projects would bring the overall number of workers in the metallic and non – metallic mining sector up to as many as 600 , 000 by 2027 from around 215 , 000 today . Currently , the large – scale mining sector contributes around 0 . 7 % to GDP but , if all the new projects come to fruition , that could rise to as much as 5 % by 2027 . & nbsp ; p >
An in-demand mineral
< p > The Philippines ’ return to nickel mining comes at a time where demand for the metal has never been higher . According to research firm Wood Mackenzie , nickel consumption for EV batteries is projected to leap 64 % between 2019 and 2025 . Indonesia ’ s first plant to process nickel for use in batteries was commissioned in May 2021 , with at least seven more projects in the pipeline .& nbsp ; p >
< p >“ We understand now that the Philippines has been shipping nickel ore directly to China and Japan but , as the regulator , we are linking with the national congress because we want to ‘ value add ’ to our mineral ores that are being extracted ,” says Moncano . “ During the incoming administration , we would propose that congress passes a law to mandate the gradual restriction on the direct shipping of the ore , so that domestic processing can be established in the country and add value in particular to nickel .& nbsp ; p >
< p >“ We want to increase the number of nickel processing plants in the country but we want the support of congress on this ,” Moncano continues . “ We hope that mineral companies that are serious and have huge deposits here will set up their own mineral processing plants in the country .”& nbsp ; p >
< p > The Philippines has been China ’ s biggest supplier of nickel ore and concentrate since Indonesia introduced its ban . It will be hard for the country to move significantly down the nickel supply chain , as the production of nickel – rich cathodes in lithium – ion batteries requires a stringent , high – purity class I nickel as feedstock to produce the key ingredient , nickel sulfate . Traditional stainless steel feed of nickel pig iron ( NPI ) and laterite ores have not been suitable for the production of these batteries .& nbsp ; p >
Looking west
< p > Moncano says it is possible that the Philippines will supply a greater volume of nickel to Western companies in the future , and such global deals are quickly becoming a necessity of the modern mining industry .& nbsp ; p >
< p >“ It ’ s a business decision on the part of the individual mining companies [ in the Philippines ] but the nearest and biggest consumer of this nickel ore is China ,” Moncano says . “ There would be additional costs to transport it to Europe for processing , say [ but ] e do not discourage it .”& nbsp ; p >
< p > However , challenges remain for the Philippine mining industry , now burdened by rising fuel prices , higher inflation , a manpower shortage , supply chain disruption and potentially rising freight charges .& nbsp ; p >
< p >“ While some legislative hurdles have been removed , the country ’ s mining industry still has a long way to go ,” says Sumangil . “ Stable government policies , strong economic plans , and transparency can secure investment , but there is also a need to assure and prove that the extractive mineral industry will safeguard the environment and its directly impacted communities .”& nbsp ; p >
< p > A strong business case can be made for the Philippines to establish new open – pit nickel mines , amid such high global nickel prices . Thousands of jobs will be generated . However , it is highly unlikely that new mines can be opened up without causing significant environmental damage .& nbsp ;& nbsp ;& nbsp ; p >
Environmental opposition
< p > The prospect of environmental damage remains the greatest obstacle to more widespread mining operations , with environmentalists heavily opposed to the new projects . Neri Colmenares , the chair of the Bayan Muna political party , said in an interview with the < em > Phnom Penh Post em > that the government should stop using economic recovery as an excuse for allowing destructive , large – scale mining since there were “ far better ways to revitalise the economy ”. & nbsp ; p >
< p >“ It is a death sentence for our forests , rivers , mountains and the communities that depend on them ,” he said .& nbsp ; p >
< p > Moncano is more sanguine about the potential environmental impact . “ Under phase one of the roadmap there are already existing policies that would minimise the adverse impact of surface mines ,” he says . “ For example , a nickel project with an annual mining capacity of one million wet metric tonnes would only be allowed to disturb a maximum area of 50ha at any given time . They are not allowed to develop new areas until the mined – out areas are progressively rehabilitated , restored and revegetated . There is a limit on the production of allowable disturbed area . & nbsp ; p >
< p >“ Submarine deep sea tailings disposal was allowed in the country until the early eighties but it ’ s no longer allowed ,” continues Moncano . “ Tailings disposal now takes place via the construction of a storage or sedimentation facility inland . Tailings containment is now inland [ and ] there has to be a balance between the economy and environmental protection .& nbsp ; p >
< p >“ We cannot sacrifice the environment for the sake of growing the economy but we cannot also be fully environmentally conscious or depending largely on environmental protection without developing the economy .”& nbsp ; p >
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