MINING NEWS
Where Does the Philippines Lie on the Nickel Mining Value Chain? written by: ENGR. EDISON MATING
T
o paraphrase a popular mining saying, “They are making a ton of money and the Philippines is not getting a nickel.” The Philippines needs to maximize revenue from its nickel mining operations. Further up, the mining value chain presents more opportunities for the country to realize the contribution of mining. The US Geological Survey (USGS) lists nickel, cobalt, lithium, and rare earth metals as critical minerals. Stainless steel production, super alloys, and rechargeable batteries all use nickel. It is one of the world’s most important metal markets at $20 billion in size. The World Economic Forum reports that the world’s battery capacity must grow 40 times larger than it is today, and electric vehicles will require 80% of that future capacity. A Tesla car battery would require up to 50 kilograms of nickel. In addition, many major countries vowing to stop gas and diesel vehicles are driving further the global boom in electric vehicles (EVs). As the world’s second top nickel ore producer, it is time for the Philippines to advance further up the nickel mining value chain. But is the country ready or is it too late?
THE MINING VALUE CHAIN The mining value chain starts with the first stage of the mine life cycle, exploration and analysis. Value steadily rises with new information that is favorable to the project. Each bit of knowledge brings it closer to the project construction and commissioning stage, known as the development stage. The value of a mine rises sharply in this stage as it closes to the production stage. Value remains steady in the production stage
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and declines as it approaches closure and rehabilitation. If we magnify into the production stage and look further into the sale and marketing of metals, we will realize that the most significant value added is in the final product. While this might be as simple as it looks in precious metals such as gold, the process is complex in critical minerals like nickel.
CURRENT POSITION IN THE VALUE CHAIN According to the Observatory of Economic Complexity (OEC), nickel is the 9th most exported product in the Philippines. The product comes from 32 operating nickel mines and 2 processing facilities. It is classified as direct-shipping ore (DSO), as most nickel operations in the Philippines directly ship nickel laterites to China without further processing to increase its value. However, this is suitable for high-pressure acid leach (HPAL) ores. The Philippines, Indonesia, Cuba, and New Caledonia contribute nickel
laterites to the world market. In 2022, the Philippines was the world’s largest nickel producer, producing 370,000 metric tonnes or 10% of the global mined nickel output. S&P reports that the Philippines' nickel ore exports to China amounted to $2.67 billion in 2022, according to data from China's General Administration of Customs. That is 96.5% of the Philippines' nickel ore exports according to the Philippine Statistics Authority.[1] Nickel laterites or nickel oxides are low-grade, high-tonnage ore that accounts for 62.4% of the global supply. Chinese steel uses the typical products of nickel laterites such as nickel pig iron and ferronickel. The remaining 37.5% nickel supply is nickel sulfide, which is high-grade but rare nickel found in countries like Canada, Australia, China, Russia, and Greenland. Their products are typically nickel metal and sulfate, primarily used in electroplating and lithium-ion cathode
01. Source:
Sumitomo Metal Mining. HPAL Technology for Nickel Recovery. [3]
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