DTI weighs ban or tax on raw nickel exports

The Department of Trade and Industry (DTI) is studying whether or not a tax or a ban on raw nickel exports should be imposed to support the government’s effort to develop the local nickel industry and participate in the bustling electric vehicle battery supply chain.

DTI Secretary Alfredo E. Pascual said the Board of Investments is currently conducting a study to come up with a policy for the nickel industry.

“Inspired by the success of nickel's high-value production in Indonesia, the DTI is initiating the government's industrial policy study to determine whether an export tax or a ban on nickel exports will be imposed,” said Pascual.

The DTI chief explained that the study's overall goal is to generate downstream nickel materials and products, ultimately supporting the development of the electronic vehicle battery supply chain, which may include potential roles for other government agencies.

Nickel is a key component in the lithium-ion battery cells used in electric vehicles. The lithium battery is the most expensive part of an EV, accounting for more than 50 percent of the cost of the car. Nickel packs more energy into batteries and allows producers to reduce use of cobalt, which is more expensive and has a less transparent supply chain.

“We are still studying the options,” Pascual said.

DTI is also considering not to impose tax or ban if it makes better economic sense. “Perhaps, nickel miners will further process nickel ores based on business considerations,” Pascual added. China accounts for 90 percent of the country's nickel exports.

The Philippine Statistics Authority reported that the country’s total export sales in November 2022 amounted to $7.10 billion, reflecting an annual increase of 13.2 percent from an increment of 20.3 percent in the previous month. In November 2021, the total export sales grew at an annual rate of 6.6 percent.

Of the top 10 major commodity groups, five recorded annual increases in terms of the value of exports. These were other mineral products (51.0%) such as nickel oxide sinters and other intermediate products of nickel metallurgy and nickel ores; ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (23.1%); electronic products (22.9%); cathodes and sections of cathode, of refined copper (8.7%); and other manufactured goods (4.8%) such as blister copper and other unrefined copper and other cigarettes containing tobacco.

Nickel is used in many everyday products, including electric guitar strings, magnets and rechargeable batteries.

The PSA said that despite its small area, the Philippines is one of the world's richly endowed countries in terms of mineral resources.

It stated that in 1994, the estimated levels of metallic and non-metallic mineral reserves in the country stood at 7 billion metric tons and 50 billion metric tons, respectively. Copper accounted for the bulk of metallic mineral resources of about 72 percent, while nickel’s share was estimated at 16 percent. Among the non-metallic minerals, limestone and marble accounted for about 39 and 29 percent, respectively.

In terms of chromite resources, the Philippines is also one of the most endowed countries. In fact, the country's refractory chromite resource in Zambales is considered as one of the largest in the world.