Philippines wants to leverage on its critical minerals

The Philippines wants to go beyond mineral extraction and be further involved in the value adding part, as it secured its first electric motorcycle manufacturing deal with US firm Zero Motorcycles.

"As I said, we would like to go beyond just the phase of just extracting the minerals and to actually go vertically integrate that entire activity all the way down to actual battery production," said Philippine President Ferdinand Marcos Jr in Washington on 3 May.

"The increased deployment of clean technologies comes with an increase in demand for inputs of crucial energy resource minerals, including cobalt, nickel, which just happens to be very abundant in the Philippines," he added. He highlighted the country's willingness to work with the US with its Inflation Reduction Act by helping with the sourcing and processing of battery materials.

Marcos' visit to Washington during 1-4 May led to the country bringing home at least $1.3bn worth of investment pledges across different sectors, according to its presidential communications office, with US solar firm Maxeon Solar Technologies eyeing investment of $900mn in solar energy in the country.

Zero Motorcycles signed a deal with Integrated Micro-Electronics, a subsidiary of the Philippines' conglomerate Ayala, to set up the country's first electric motorcycle manufacturing site.

The deal will lead to a site in central Philippines' Laguna province that will be an assembly line to manufacture, pack and ship around 18,000 units/yr of electric motorcycles. Mass production is expected to be by July 2023.

The country released a national electric vehicle (EV) roadmap in April. The roadmap highlighted that a key driver for EV adoptions in the country will be the lower upfront cost of tricycle and motorcycle EVs when compared with four-wheeled EVs, as they are more accessible to consumers and are the primary transportation choices across the country.

The roadmap also suggested solutions like encouraging investments in high-pressure acid leaching to transform the laterite ores for battery production by limiting raw nickel ore exports and providing sufficient manufacturing incentives, which echo previous proposals.

The Philippines was the largest nickel ore exporter to China during January-March. It delivered 3.48mn t of nickel ore to China during the period, up by 66pc from a year earlier, accounting for 69pc of China's total imports.

The Philippines, being the world's second-largest nickel supplier, is increasingly playing a greater role in the critical minerals market in Asia-Pacific. The Regional Comprehensive Economic Partnership agreement is to take effect for the Philippines on 2 June, which will lead to the cutting of various tariffs, including those on metals and metal derivatives.

By Joseph Ho