Riding the clean energy and AI wave: Marcos wants to go beyond ore exports

MANILA, Philippines – All critical mineral projects are now considered national priority projects as the Philippines vie for a piece of the pie in the global race for critical minerals.

The Marcos administration wants the domestic critical minerals industry boosted as the world shifts to clean energy and responds to the artificial intelligence boom. The two phenomena require critical minerals such as lithium, nickel, and cobalt.

The status quo in Philippine mining business is to export the mineral resources extracted from the country. Marcos wants this changed, signing the Executive Order 122 on August 18.

In the EO, Marcos directed his Cabinet to focus on two things: find more critical mineral reservations that can be developed and establish the downstream industries that create value and jobs.

This means creating firms that engage in refining, processing, and manufacturing of electronic and renewable energy components. Think Pax Silica, its proposed semiconductor plants, critical mineral processing centers, and data centers. (READ: Pax Silica: BCDA’s claims and the counterarguments)

Some environmental advocates are skeptical of the policy as it opens up “a potential 1,000% increase of mining land area compared to the present total hectarage of approved mining projects,” according to the Legal Rights and Natural Resources Center.

A new venture: downstream industries

The Philippines is one of the world’s top producers of nickel, but exports most of it for processing. The country has around $170 billion in nickel deposits and processing opportunities in Zambales, Palawan, and parts of the Caraga region, including Dinagat, according to the US International Trade Administration.

The creation of downstream industries, as Marcos directed, is supposed to fill this gap. With the establishment of these industries, the Philippines can extract the minerals needed and process them, becoming a supplier for the world’s clean energy transition and artificial intelligence needs.

Nickel mining firms lauded the “forward-looking policy.”

“It recognizes that our mineral resources are not simply commodities to extract, but strategic national assets that can support industrialization, infrastructure, energy security, digital transformation, and the clean energy transition,” read part of a Philippine Nickel Industry Association statement.

According to the association, the policy strongly defines the role of government. It said, “Responsible mining is not solely a private-sector undertaking. It is a national development endeavor in which government and industry have distinct but complementary responsibilities.”

The Board of Investment of the Department of Trade and Industry has to come up with incentives, grant domestic firms priority access to critical mineral ores, and ensure ore supply is steady despite unavailable local supply or global disruptions.

DENR: Steward and developer?

The Department of Environment and Natural Resources (DENR) and the Mines and Geosciences Bureau (MGB) are central to this state endeavor.

The MGB will have to identify new critical mineral deposits under the new National Exploration and Mineral Reservation Program. This includes prospective mining areas that had expired or canceled tenements.

According to MGB director Larry Herardez, millions of hectares of prospective mining areas have been identified.

“The country has identified at least nine million hectares of highly prospective areas with potential to host various mineral resources that could position the Philippines as an important player in the critical minerals value chain,” Herardez said.

Within 30 days since the effectivity of the order, the DENR should issue a Philippine Critical Minerals list. Marcos will declare as mineral reservations the identified mining assets through the recommendation of the environment chief.

If there are critical minerals mining tenements that do not follow approved timelines and work programs, the DENR can cancel these tenements.

The environment department and the MGB will have to make a new “streamlined procedure” to process mining permitting through a virtual one-stop shop. This will eventually replace the current process and “set clear timelines and establish performance-based accountability” of agencies concerned in giving permits.

Climate groups, however, urged caution on the pursuit of industrialization. Aksyon Klima in particular said just transition should be at the heart of these thrust, specifically the Pax Silica plan.

“While semiconductors, artificial intelligence, and advanced technologies can contribute to climate solutions, their climate value depends on how they are produced, powered, and governed,” read an Aksyon Klima statement. – Rappler.com