Last month, Francis Chiz Escudero, the president of the Philippines Senate, approved a measure seeking to ban raw mineral exports. He explained that this move will boost the economy, create jobs and increase the processed minerals exported by the country.
Under the plan, this ban is slated to come into force five years after the enactment of the law. The five-year timeline is intended to give players in the minerals industry ample time to set up processing facilities. This change in policy could have major implications for clean energy metals, such as nickel that are instrumental in the battery and renewable energy spheres.
Escudero cited the example of Indonesia, which banned the export of nickel ore back in 2020. This, he said, was a success story that the Philippines needed to emulate. He expressed hope that once the country starts processing its copper and nickel, it would become a leading player in the production of battery inputs. This would position the country as a major player in the worldwide electric vehicle industry.
The Senate President also mentioned that when mineral processing takes off in the country, it could open the door for the country to possibly manufacture EVs in future.
However, not everyone is thrilled with this measure. COMP, the chamber of mines in the country, and PNIA, an association of nickel industry players in the country, expressed their displeasure at sections of this proposed law. While they are happy about the proposal in the law to tax mineral products based on the profits made, they say that banning ore exports is likely to be problematic.
The two groups say mining firms won’t be able to set up processing facilities within such a short time because the transport systems in the country are poor, the costs of power are very high and local rules often conflict from jurisdiction to jurisdiction. Processing minerals would be very costly due to high electricity prices, they say. For processing to happen locally, these issues must be addressed, they added. Otherwise, the planned ban could backfire.
The country’s plan to process its minerals could also face headwinds arising from global industry events. For example, there exists a surplus of nickel on the global market, and this surplus is forecast to persist or even grow this year and beyond. As a result, prices of the metal could stagnate or even fall. In such a situation, attracting investors to establish the needed processing facilities could be a Herculean task.
It remains to be seen how the country will navigate these hurdles and successfully sell processed minerals, not ore, as has been the case. It should also be prepared to contend with new players in the nickel value chain, such as Fathom Nickel Inc. (CSE: FNI) (FSE: 6Q5) (OTCQB: FNICF) that are closer to the biggest market for clean energy minerals.
NOTE TO INVESTORS: The latest news and updates relating to Fathom Nickel Inc. (CSE: FNI) (FSE: 6Q5) (OTCQB: FNICF) are available in the company’s newsroom at https://ibn.fm/FNICF
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