[Seda Hotel BGC, Taguig City] July 26, 2024 -- PMEA President and emcee, Joey Nelson R. Ayson with guest speaker, Dante R. Bravo of Philippine Nickel Industry Association, Inc.
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During a mid-year mining event by the Philippine Mining Club, guest speaker, Dante R. Bravo, discussed the Philippine mining industry’s growth, particularly nickel, amidst global trends on green technologies. Bravo is a member of the Board of Trustee of the Chamber of Mines of the Philippines and President of the Philippine Nickel Industry Association, Inc. (PNIA). He is also the President of Global Ferronickel Holdings, Inc.
Despite a 28% drop in nickel prices from July 2023 to July 2024, with forecasts ranging from $16,954 to $18,635 per pound for fiscal year 2024, long-term demand is projected to rise due to electric vehicles and clean energy technologies. The industry is adapting ESG principles and standardizing practices to attract foreign investments, with potential partnerships from countries like Canada, Australia, and USA. Challenges include regulatory hurdles, but the Philippines aims to enhance its global competitiveness through policy reforms and strategic collaborations.
Global Mining Landscape and Nickel Market Overview
Bravo discussed the increasing demand for critical minerals caused by the shift towards green technologies and digitalization.
“As the world transitions towards green technologies and digitalization, the demand for critical minerals like lithium, cobalt, and nickel, is increasing rapidly. These minerals are essential for the production of electric vehicles and renewable energy technologies,” he said.
“Despite the rising demand, the global mineral market is experiencing significant fluctuations due to various macroeconomic and geopolitical factors. Recently, we have observed a general decrease in metal prices experience globally. This could be attributed to a number of factors.”
Emphasis on the importance of sustainable mining practices, with mining companies adopting ESG principles to reduce environmental impacts and ensure transparency.
Challenges and Opportunities in the Philippine Mining Industry
On his keynote speech, he said that China currently dominates the market for critical minerals, with advanced technology and public finance.
The Philippine government's efforts to open up the mining industry for foreign investments are seen as a positive development.
The rise of net zero goals in major economies creates opportunities for the Philippines to widen its market for critical mineral exports.
Nickel Market Trends and Projections
Bravo reported that nickel prices have dropped significantly by 28% from July 23 to July 2024, with a forecasted range for fiscal year 2024 between $16,954 and $18,635 per pound.
The decline in nickel prices is attributed to increased supply from countries like Indonesia, the ban on Russian and UK metals, and trade tariffs.
Despite the current price drop, long-term demand for nickel is expected to increase due to the growing demand for electric vehicles and stainless steel.
Bravo projects a potential nickel deficit by 2030, driven by the increasing demand for clean energy technologies.
Environmental, Social, and Governance (ESG) Practices in Mining
Bravo emphasizes the importance of ESG principles in the mining industry, highlighting the need for environmental stewardship and social responsibility.
He stated, “There is a heightened focus on sustainable mining practices. Mining companies globally are increasingly adapting environmental social and governance, or ESG, principles, to mitigate environmental impacts, improve social outcomes and ensure confidence transparency. This shift towards sustainability is crucial for maintaining the social license to operate and for the long-term viability of the mining sector.”
“But mainly right now, if you want to have a good investment, you have to comply with the ESG standards. So, I believe that the industry is truly passionate about ESG, and I look forward to friendly competition among us players on how best we can meaningfully contribute to our communities and enhance our environment.”
He noted that the integration of ESG practices is seen as a strategic imperative, not just a regulatory requirement. Mining companies in the Philippines are actively implementing ESG principles, including the Sustainable Development Goals (SDGs) and ISO 14001 management systems.
The extractive industries transparency initiative mandated by the Department of Finance ensures transparency at the multilateral level.
Policy Recommendations and Industry Challenges
Bravo presented the findings of the Fraser Institute's 2023 mining survey, which ranks the Philippines 72nd out of 86 mining jurisdictions. The low ranking is attributed to historical challenges, including the constitutionality of the mining law, the global financial crisis, and a moratorium on mineral agreements.
Despite these challenges, the development of the local mining industry is critical for both the national and global economies.
Sustainability and Competitive Positioning
Further in his address, Bravo emphasized the importance of positioning the Philippine nickel industry for long-term success and sustainability.
“Despite our industry's current standing against our foreign neighbors, the future remains bright for local mining industry, major countries globally have reached out to our local industry in the hopes of rooting sustainable and significant trade relationships.”
He noted that appointing a champion for the nickel industry, such as Secretary Frederick D. Go, is crucial for advocating for the industry and influencing regulators. He stated that the Philippines must remain persistent in its efforts to attract more investments and position itself as a key player in the global market.
Sustained collaboration and political will are essential to translate signals into firm commitments that will make the mining industry truly competitive.
Looking Forward
Bravo said, “There is a growing interest in the Philippines, particularly because this administration has opened up the mining industry for more foreign investments. Now, with the continuous support of the government in our local communities, we continue to ramp up production to meet our foreseen increase in demand brought about by increased productivity in China and the net zero goals.”
Last October 17 at Digging Deeper 2024: A Mining Policy Forum, Bravo said a rebound will be felt next year, with La Niña or prolonged wet season, finally ending. This year, nickel production is expected to fall short of expected targets primarily because some companies stopped production due to inclement weather. He said a spike in demand is expected in 2025 due to the global demand for transition metals, buoyed by the boom in e-vehicle production, including batteries.
Mines and Geosciences Bureau (DENR-MGB) reported the value of production metal reached P249.05 billion in 2023, up by 4.8% from P237.66 billion in 2022 with gold accounting for nearly half of the total production value or P106.64 billion, a 17% increase from P91.05 billion in 2022. Nickel ore was valued at P65.84 billion, up by 7% from a year ago. Nickel ore and other nickel byproducts were valued at P113.37 billion, accounting for 45.52% of the total production value, while copper was valued at P25.41 billion (10.2%), and the combined output of silver, chromite, and iron at P3.63 billion (1.46%). Metals production declined 6.7% by value during the first half amid soft nickel prices, according to the MGB.
The Philippine government, under the Marcos Jr. administration, is counting on mining to play a crucial role in the country’s post-pandemic economic recovery. The mining industry contributed ₱249.05 billion to the national economy in 2023, with nickel, gold, and copper production as the leading minerals. As the industry looks to the future, addressing policy and operational bottlenecks will be key to unlocking its full potential.
