The Philippines is positioning itself as supplier of critical metals to economic powerhouse amid strong global demand and value chain disruptions, said Trade and Industry Undersecretary Ceferino S. Rodolfo.

Rodolfo noted that as the world is transitioning into a green economy, it offers a myriad of opportunities for the Philippines to be a major player in the electric vehicle and battery supply chains by leveraging the country’s abundant resources of nickel, cobalt, and copper.

“Philippines is transitioning towards an innovative and greener economy by taking advantage of the increasing global demand for critical metals and catching up with other countries in the production and processing of such metals,” said Rodolfo, who is also managing head of the Board of Investments (BOI), the Philippines premier investment promotion agency.

Rodolfo further said that this BOI vision is backed by what the experts of the IHS Markit said in a virtual Connect Session held last 15 February 2022 that the Philippines has a huge potential in its green metals production in the coming years.

For nickel and chromium minerals production, the years ahead are looking good for the Philippines because of the potential shortfalls of other importing countries. On the chromium imports, South Africa, the world’s top producer of chromium, floated an idea of placing tariffs on its export chromium ore coupled with its lack of power and high-power costs. With a possible risk of supply disruption, the Philippines could enter the scene and be a major supplier and processor of chromium ore to the economic powerhouse.

“So if there were to be disruptions to that supply, that would open up another big opportunity for the Philippines,” said Amanda Eglinton, IHS Markit’s Associate Director of Pricing and Purchasing.

Likewise, the scenario can also be applied to nickel ore production, as Indonesia banned the export of such minerals in 2020 to develop its domestic processing industry. In the absence of Indonesian nickel imports, China will increasingly depend on the Philippines to fill in the gap of its huge demand.

Eglinton reported that 72 percent of the nickel produced is used to manufacture stainless steel. Recent development shows that EV battery is one of the fastest-growing sectors for nickel consumption, standing at seven percent.

“We do expect demand from the battery sector to dominate the growth in nickel consumption,” she added. Over the last year, the Philippines and Indonesia are the top producers of mined nickel globally, and will continue to rise in the following years, the expert bared.

The Philippines is a dominant supplier of nickel ore not only in Asia but in the world. In a bid to a low-carbon global economy, producing nickel in a “green and sustainable” way can offer a competitive advantage for the Philippines and edge out the competition.

For copper, John Mothersole, Director of Research and Pricing said that while the Philippines is a “relatively small producer”, the country can stand head and shoulders above other markets with its strategic location coupled with the additional investments in smelting and refining capacity. According to the International Copper Study Group, over the last two to three years, the Philippine copper production has been relatively steady between 70,000 to 80,000 metric tons, with production climbing up to 400,000 metric tons in the next 20 years.

Copper is a crucial element in transitioning to green technology, as it is unrivaled as an efficient electrical and thermal conductor, which lowers the amount of energy needed to produce electricity and helps reduce CO2 emissions. According to the International Energy Agency (IEA), in a scenario where the Paris Agreement goals are met, total demand for copper over the next two decades is set to increase by more than 40 percent.

“There is no doubt that cooper is vital in energy transition because of the efficiency in transmitting energy,” Mothersole said, explaining that gross copper demand for energy transition will be three times higher by 2035 globally, driven by electric vehicles and power distribution investment. In fact, energy transition technology accounts for about 6.6 million metric tons of the world’s copper production with a total market of about 25 to 26 million metric tons.

As a response to this demand, the Philippines is already on its way to further develop its copper industry cluster through the Leyte Ecological Industrial Zone (LEIZ) that is envisioned to attract more investors and businesses to locate in Leyte by identifying suitable areas where copper processing and allied activities can be done while promoting the entry of carbon-neutral companies to ensure the conservation and protection of the environment.

On the other hand, the Philippines has the fourth largest reserves of cobalt. Celine Buechel, Principal Research Analyst – Battery Materials pointed out that cobalt demand is set to grow at a double-digit rate from 2020 to 2030. An expensive mineral, cobalt is mined as a by-product of nickel and copper. Additionally, EV batteries have increased their share in overall cobalt consumption at 13 percent in 2020 and up to 36 percent in 2025. Cobalt consumption will be greater in electric cars than in portable devices after 2025, Buechel added.

What the Philippines could do to gear up its electric vehicle industry is through subsidies, reduction of the carbon dioxide (CO2) emission, and restricted use of combustion engine vehicles, Stefan Schlag Leon Beraud said, who is the IHS Markit’s Executive Director for Inorganic Chemicals, Minerals, and Mining Chemicals.

In a survey by market research firm Frost & Sullivan, which was commissioned by Nissan, the Philippines, along with Thailand and Indonesia, is one of the top three countries in the world that is willing to adopt electric vehicles.

As a matter of fact, the House of Representatives overwhelmingly approved House Bill 10213, or the proposed “Electric Vehicle Industry Development Act", which aims to provide a national energy policy and regulatory framework for the use and development of electric vehicles and their development as an industry in the country.

Furthermore, in a recent online event, the New Clark City webinar, Rodolfo called on the participating Taiwanese companies to jointly develop and process mineral ores in the Philippines to complete the value chain needed for the production of electric vehicles.

“Our view for a modern post pandemic Philippine economy can be anchored on the results from COP26, particularly as we see this imperative for greening the supply chain as an opportunity for the Philippines to process critical minerals including green metals where the Philippines has relative abundance such as nickel, cobalt and copper,” Rodolfo concluded.