NEWS

By Dindo Manhait | Philippine Daily Inquirer | May 22, 2024 5:08AM

Critical minerals are becoming increasingly strategically important because they constitute a significant component of technologies that can serve as renewable sources of energy. Because of this strategic power and potential, a country’s use of its mineral resources may be viewed from the lens of both geoeconomics and geopolitics.

From a geoeconomic perspective, the complex technical and regulatory dynamics in the extraction and processing of these minerals make ensuring the reliability and security of supply chains paramount. From a geopolitical perspective, critical minerals have become a tool for leveraging and exerting influence with countries that control significant reserves, using them to gain strategic advantages.

An example is China’s decision to ban the export of rare earths to Japan, causing massive disruptions in the latter’s advanced technology industry.

Lazard Geopolitical Advisory identified China’s leveraging of critical minerals as one of five key risks. The other four risks include shortages in the supply of copper, fragmentation of global supply chains, increasing resource nationalism and political risks in the producing countries, and the growing incentives for critical materials consumers and producers to join with peers to gain geopolitical leverage and market power.

These risks open an opportunity for the Philippines to position itself as a major player in the global market for critical minerals. To seize this opportunity, however, there must be a vibrant mining sector governed by consistently implemented policies that are conducive to investments.

During a recent conference on mining organized by the Stratbase Institute with the Department of Environment and Natural Resources (DENR), what emerged was a willingness among stakeholders to work together. National Economic and Development Authority Secretary Arsenio Balisacan said the government looks forward to working with partners in the private sector, both domestic and foreign.

Environment Secretary Ma. Antonia Yulo-Loyzaga set the tone and echoed the direction from President Marcos stating in her keynote address, “The message is clear that the Philippines must leverage its status as one of the world’s most mineral-rich nations to drive economic growth.”

Office of the Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go noted that “investors across the globe have expressed interest to take the plunge in the Philippine mining industry.”

The DENR, and the mining industry represented by the Chamber of Mines of the Philippines, Philippine Nickel Industry Association (PNIA), Philippine Mine Safety and Environment Association, and Philippine Mining and Exploration Association have entered into a renewed partnership formalized by the signing of a joint declaration that aligned on urgent policy reforms to accelerate the rejuvenation of the mining sector.

The ambassadors of Australia, Canada, the European Union (EU), and Japan have all equally expressed their support for the Philippines.

Then again, this enthusiasm should translate into concrete actions with meaningful results. Specifically, two areas emerge as good points for collaboration: diversifying exports and improving local capacity to process minerals.

The PNIA said 96 percent of our nickel exports go to China, with the rest going to Japan, Australia, and Indonesia. In 2022, 83 percent of China’s total imported nickel came from the Philippines. These numbers are heavily skewed, so it is important that we expand our export portfolio.

Exporting to the EU and Japan is a viable possibility. EU Ambassador to the Philippines Luc Véron, said the EU has signed memoranda of understanding and strategic partnerships with a number of source countries as a way of diversifying its supply of critical raw materials.

Meanwhile, Japan Ambassador to the Philippines Endo Kazuya shared that “Japan is willing to consider the joint geological survey to evaluate the potential of mineral resources, such as nickel, in response to the proposal from the Philippines.”

While the country’s minerals are mostly exported as raw materials, the challenge is to develop viable processing capacities to boost value and revenues. In this regard, Canadian Ambassador to the Philippines David Hartman expressed that “Canada, and indeed Canadian companies, stand ready to support the Philippines in harnessing the potential of these minerals.”

The Philippines is fortunate to have critical minerals among its natural resources. To best serve our economy and our people, it is imperative that we harness our natural endowments responsibly.

Dindo Manhit is founder and CEO of the Stratbase Group.

Source: Inquirer.Net