While the Philippine mining industry recognizes the benefits of putting up value-added processing plants in the country to lower production costs and raise revenues, there is a need to review the complexity of the measure as not all that are established are bound to succeed.
In a press conference in the Nickel Initiative 2019 on Tuesday, Philippine Nickel Industry Association (PNIA) President Dante Bravo said the country could partake in the ongoing competition in value-added processing among mining countries.
However, the government, in collaboration with the private sector, needs “strategic policies” to make the local mining sector attractive to potential investors.
“While it is important that we have to comprehensively use natural resources, particularly going to downstream activity by value-added processing, not every value-added processing is successful,” Bravo said.
“Why is that foreign investors go into those places and not in the Philippines [while] we have also have huge potential here? [That’s because] we were not able to capitalize on that,” he added.
Bravo expressed concern that the government’ policies could restrict investors from capitalizing on value-added processing plants in the Philippines, in turn driving away bigger revenues and limiting the industry’s contribution to the national economy.
“If you put up a value-added processing plant, it’s capital intensive and it’s long term. You have to guarantee that there is a sufficient reserve to support the plant and it requires exploration not just one year but for a number of years,” he said.
“If you’re only limited to one area… [what] if you’re going to expand in the future your capacity, where will you source it? It’s important that it has to be open and we need to identify that at the beginning,” Bravo added.
Currently, the Philippines is the second largest nickel producer in the world, next to Indonesia which is dubbed as its strongest competitor.
To increase the sector’s competitiveness, the PNIA said it was poised to formulate a roadmap that would expand the possibility of a viable environment for value-added processing plants.
“[I]f we have the right policies, where we can guarantee investments, supply, and provide them, under competitive advantage, the integrity as the second largest producer of nickel, we can also become the second, if not as number one, in the value-added processing,” Bravo said.
Aside from the roadmap, the PNIA also partnered with the Electric Vehicles Association of the Philippines and the European Chamber of Commerce to cope up with the challenges in the industry.
“Both parties agreed to collaborate on the development of the industry and nickel road map. We shall explore the conduct of research in collaboration with our academic partners,” said PNIA Chairman Emeritus Clarence Pimentel.
“[The MoU] also encourages for deeper cooperation on policy formulation and promotion on issues impacting both parties,” he added.
Furthermore, the PNIA also welcomed the invitation of the International Nickel Study Group (INSG) to the Philippines, which seeks to provide forum to discuss issues and interests in nickel-producing and -using countries.
“Through this, we hope to be more informed and learned from the experiences of other countries not only in relation to nickel production but also in terms of processing, recycling and other activities within the value chain,” Bravo said.
While INSG Secretary General Paul White reported that the nickel mining’s global performance will remain strong this year, the outlook for the Philippines’ nickel production may still be lower compared to last year’s.
Bravo maintained PNIA’s earlier projection that the country’s nickel output could be reduced by 10 to 20 percent in 2019 from 30 million wet metric tons (MT) or 19.5 million MT in 2018.