Normandy Metal Industry Co., Ltd.
Normandy Metal Industry Co., Ltd.

International News | The Philippines Cannot Copy Indonesia’s Mining Ban Model

May 08 , 2024

According to news from the Philippine Business World on May 5, 2024, a Philippine mining executive said that the Indonesian-style iron ore export ban will not work for the Philippines. The country has smaller nickel reserves and lower quality.

“The ban on ore exports will be detrimental to the industry, which is still plagued by decade-long policy obstacles,” Philippine Mining Association president Michael Toledo told BusinessWorld reporters, referring to industry closures to check the environmental protection of miners. compliance, and the uncertainty caused by the government not issuing mining licenses as it seeks appropriate ways to tax miners. "Our nickel resources - mainly limonite - are also much smaller and have lower average ore grades than Indonesia's," he added in an email.

Indonesia banned nickel ore exports in 2020, pushing the Philippines to become the number one nickel exporter by 2022. Indonesia says it needs to process more iron ore domestically to extract greater added value from its natural resources. The ban was imposed by outgoing Indonesian President Joko Widodo. It is uncertain whether his successor will continue the policy.

Toledo said efforts to make Philippine mining more attractive to investors will depend on improving the stability of power supplies and reducing costs. Industrial electricity prices in the Philippines are the second highest in the region, making it less attractive for potential mining investors to set up shop in the country, he added. “Electricity is a key production input,” he said.

“High energy costs and unreliable power supplies put the Philippines at a disadvantage compared to other mining jurisdictions.” Unreliability of energy supplies, along with high production costs, has impacted the profitability of domestic mining companies, scaring away potential invest. The government should consider providing incentives to renewable energy developers to expand power generation and should continue to be encouraged through fiscal and non-fiscal incentives.

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