In a bid to establish the Philippines as a vital player in the global value chain linked to the transition to a low-carbon economy, President Marcos issued last week Executive Order No. 122 that for the first time established a coherent, comprehensive, and unified national policy framework that will govern the development of the country’s critical minerals sector.
Big business groups including the Chamber of Mines of the Philippines that groups the country’s large and longest-operating, large-scale metallic mining and exploration companies welcomed the issuance of the framework.
After all, the EO called the National Policy Framework for Developing the Critical Minerals Industry has made it clear that it is now state policy to go beyond mere extraction of natural resources and promote value-added processing and downstream industries that would employ more Filipinos and bring in more revenues from the same minerals.
The Philippines is taking a page from the playbook of neighboring Indonesia, the world’s largest nickel producer which went a step higher by banning the export of all nickel ore starting 2020, thus forcing companies who wanted its nickel to establish job-generating and value-adding processing facilities within their country.
Pax Silica hub
Mr. Marcos wants the benefits of Indonesia’s policy to be replicated in the Philippines that also has ambitions to move up the value chain.
Aside from shifting from mere extraction to processing, the framework also recognizes that critical minerals are crucial to national security, clean energy transition, digital transformation, and infrastructure development.
The ardent push makes even more sense when viewed along with the Philippines’ commitment to the United States-led, artificial intelligence industry-focused Pax Silica hub in New Clark City that will eventually require these critical minerals.
“Critical minerals” are defined in the framework as those deemed “essential inputs” for clean energy transition technologies, advanced manufacturing, national defense, and digital infrastructure.
While not specifically spelled out in EO 122, these minerals will likely prioritize nickel, of which the Philippines is the world’s second largest producer.
Nickel is heavily used in manufacturing stainless steel and a key component of electric vehicle (EV) batteries and renewable energy infrastructure. Cobalt, meanwhile, provides heat and wear resistance and structural strength while copper’s high conductivity makes it critical for cooling advanced electronics such as EV engines.
Kilometric red tape
The mining sector has long been woven into the country’s economic fabric and the government has identified at least nine million hectares of prospective areas across the country that could hold these prized critical minerals.
Getting them out of the ground and eventually processed within the country, however, will require substantial and long-term investments.
Thus to entice local and foreign investors and bolster their confidence in putting their money into the high-risk, capital-intensive sector that the private sector has criticized for interminable delays, unstable policies, and kilometric red tape, the government vowed to maintain a “stable, predictable, transparent, and internationally competitive investment environment.”
This means honoring valid agreements, ensuring that rules will not be changed in the middle of the game and that “strategically critical” mineral projects will be implemented in part through the strengthened Mining Industry Coordinating Council.
The framework, however, is not without its critics with primary concerns centered on the possible violation of the rights of farmers and indigenous peoples whose land also overlap with these areas with potential mineral reserves, the potential destruction of land and sea resources that support people’s lives and livelihood and the loss of control to foreign entities with more funds and therefore more power.
Guiding principles
Opposition lawmaker Rep. Antonio Tinio of ACT Teachers party list, for instance, slammed the framework, saying it was tantamount to a “wholesale surrender” of the country’s massive ore wealth to foreigners.
“They will extract our critical minerals, export them as raw materials, and leave our environment devastated and our people displaced.” Tinio said.
Anti-mining advocate Alyansa Tigil Mina likewise slammed the framework for “shamefully promoting ‘sustainable mining’ when it has been clearly debunked as a concept” even as EO 122 identified environmental protection and social/cultural development as firm guiding principles.
These are valid concerns that the Marcos administration could not afford to dismiss.
Indeed, while there are merits to pursuing mining as a national development policy, the government must ensure that it is aligned with higher goals to protect the environment and the people and the legitimate rights of communities.
This way, the “blessing” that is the massive deposits of natural resources will not wind up becoming a curse.