Philippines Looks to Critical Minerals Agreement with US to Reduce Dependence on China

A critical minerals agreement with the United States could help reduce the Philippines' dependence on Chinese and Indonesian exports and enable the country to focus on producing nickel suitable for battery use, according to Nickel Asia Corp. President and CEO Martin Antonio G. Zamora.

Speaking at the Pilipinas Conference 2024, Zamora explained that China, the largest producer of stainless steel, and Indonesia, another key producer, are the main buyers of the Philippines' nickel ore, which is predominantly class two nickel used in stainless steel production. To shift away from this reliance, Zamora stressed the need to focus on class one nickel, which is essential for battery manufacturing.

Zamora suggested that securing a critical minerals agreement with the United States would allow the Philippines to better compete in the battery market against China. He proposed potential partnerships with Japanese firms to invest in nickel processing facilities, along with collaborations with battery and electric vehicle manufacturers. In exchange for technology and capital investment, these partners could gain supply agreements for the nickel produced.

Zamora also highlighted the importance of achieving higher ESG (environmental, social, and governance) standards as a competitive advantage, noting that potential price disadvantages could be mitigated through incentives provided by the US government, such as consumer tax credits for electric vehicles.

He emphasized that successful agreements would require collaboration among multiple stakeholders, including government and industry partners. "We need the critical minerals agreement with the US so that we can supply to the US and enjoy subsidies," he said, noting that such partnerships could make the Philippines an attractive investment destination for stakeholders in the EV and battery sectors.

Earlier this year, the Philippine Department of Trade and Industry announced that the country had proposed joining a critical minerals agreement with both Japan and the United States. The US and Japan signed their agreement on March 28, 2023, with the goal of strengthening critical mineral supply chains and fostering the adoption of electric vehicle battery technology.