The Philippine Nickel Industry Association (PNIA) has expressed its opposition to the proposed ban on exporting raw nickel ore, which is embodied under a Senate bill aiming to modernize the country’s mining fiscal regime.
PNIA, the country’s largest group of nickel mining companies, said the ban threatens the growth and competitiveness of the industry.
“When we are pushing for the mining fiscal regime, we’re hoping that we’ll have a stable and predictable policy that eliminates any uncertainty,” PNIA President Dante Bravo said in a press conference on Tuesday, Feb. 11.
“This ore export ban is an uncertainty,” he stressed.
Senate Bill (SB) No. 2826, or the “Enhanced Fiscal Regime for Large-Scale Metallic Mining Act,” proposes a five-tier windfall profit tax system that ranges from one to ten percent and a margin-based royalty between one to five percent.
The bill, which is a priority measure by the Legislative-Executive Development Advisory Council (LEDAC), was approved on third and final reading by the Senate on Feb. 3.
Under this, it seeks to implement a ban on exporting locally extracted raw minerals, which shall take effect five years after being signed into law.
Bravo, who admitted to be taken by surprise with this provision, emphasized that this is not the appropriate policy.
While the PNIA have yet to calculate the estimated economic impact, they are expecting that small mines will face the brunt.
Bravo said this would lead to reduction of jobs, taxes, and government revenues, as well as loss of support for host communities and indigenous peoples (IPs).
If the government insists on enforcing an export ban, the NPIA said the Philippines can follow Indonesia when it also implemented a similar ban.
The group said the Indonesian government not only prepared a conducive investment climate for value-added processing, it also offered several advantages such as policy implementation, infrastructure, and strong government support.
“Besides these advantages, the ore ban was only implemented after the country had secured a substantial number of investors committed to its mining industry growth,” the PNIA said in a statement.
For the Philippines’ case, Bravo said the alternative for now is to first fix the regulatory and permitting processes in the mining industry.
He pointed out that it takes more ten years to get all the permits necessary to mine minerals in the country.
The PNIA official also wants the government to fix the “power problem”. He said the cost of power in the Philippines cost twice as high as Indonesia and China.
“By disagreeing without being disagreeable with Senator Chiz Escudero, we will not be considered un-Filipino, we are very much Filipino, working for the progress of this country,” added Bravo, referring to the lawmaker who introduced the proposed ban.
Escudero, the Senate President, said the prohibition seeks to shift the industry’s policy from exporting raw minerals to developing our own processing capabilities.
“This will result in added value for our minerals-related exports, provide a much-needed boost to our economy, and generate employment for our people,” he said in an Instagram post.
Looming threat
Based on global market reports, the Philippines the second largest producer of raw nickel ore globally, only behind Indonesia.
PNIA is estimating continued growth for the local industry, given projections that global nickel production is projected to grow by 3.8 percent in 2025.
Consumption, meanwhile, is expected to rise by five percent to 3.514 million tons, driven primarily by demand in stainless steel and renewable energy.
A looming threat in the industry is United States (US) President Donald Trump’s planned implementation of imposing 25 percent tariffs on steel and aluminum imports.
This comes as China introduced retaliatory tariffs against a number of American goods, as a response to the additional 10 percent tariff ordered by Trump recently.
When asked about this igniting trade war, PNIA said they are yet to see any impact on local nickel mining firms.
“At the moment, theoretically speaking, there is supposed to be an impact and we’re not yet feeling the impact,” responded Bravo.
PNIA Board Director Martin Zamora, meanwhile, noted that 100 percent of the country’s nickel exports to China goes to stainless steel.
Such consumption, he said, is mostly utilized for domestic purposes.
“The main driver of that would be the growth rate in China. And as far as we can see, the Chinese government has always been able to maintain steady growth rate domestically, regardless of what is going on in the rest of the world,” said Zamora.
Zamora said if these exports rely on electric vehicles (EVs), then there would have been uncertainties.
“We are somewhat insulated from all the geopolitical and climate issues happening in the world,” he continued.
originally published in The Manila Bulletin