By Madelaine B. Miraflor
President Rodrigo Duterte once identified industrialization as one of the top policy directions for the mining sector, something that Environment Secretary Roy Cimatu has supported since day one of his appointment.
Duterte, in one of his statements regarding the sector, explained that industrialization “invariably involves value-adding activities for downstream processing of metallic mineral resources.”
Philippine Nickel Industry Association (PNIA) President Dante Bravo just burst that bubble and said the Philippines is not a strategic location to develop new mineral processing plants in.
Right now, the Philippines, one of the highly mineralized countries in the world, only ships raw minerals abroad.
But Bravo said the administration’s downstream dream may only backfire to the government and its policies.
Moreover, he said the country may also find itself in an awkward position in terms of dealing with its highly industrialized market for nickel, which happens to be China, the second largest economy in the world.
“It’s a question of viability,” he said, pointing out to two obvious reasons — Executive Order (EO 79) and the high cost of power.
Under EO 79, no new mineral agreements should be approved until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect.
“The question is do you have sufficient reserves to put up a plant because it takes years of reserves. Right now, there is EO 79 and a new policy limits mining operations,” Bravo said, also referring to the recently issued Department of Environment and Natural Resources (DENR) Administrative Order which limits the area where miners can operate at any given time.
He then pointed out that Indonesia, also a top nickel exporter, has cheaper power cost than the Philippines which makes it more ideal for new processing plants.
“Another thing we have to consider is given we have to compete with China, where are we going to sell [the processed minerals]? In China, too?” Bravo said.
“We don’t have the local market for it. China can produce stainless steel in big volumes because they are using it. They have the technology, they have the money, they have everything,” he added.
Right now, Philippines is still the largest supplier of nickel ore to China.
“What we can do is to continue to be part of the value chain,” Bravo said.
Bravo, who also serves as the president of Global Ferronickel Holdings, Inc. (FNI), the largest single lateritic mine exporter in the world, said the aforementioned reality in the mining sector is also what’s making it hard for his company to push through with its partnership with Russian firm Vi Holding.
FNI is the third largest nickel ore producer in the Philippines and the largest single lateritic mine exporter in the world.
Right now, FNI is working with Russian firm Vi Holding on a feasibility study for the proposed processing plant for lateritic ores here in the Philippines.
It was on the exact day of his confirmation last year when Cimatu first mentioned about Vi Holding’s plan to expand here.
He said the foreign firm’s entry in the Philippines will help add value to the country’s mineral resources.