Recently, Deputy Secretary of the Philippine Department of Trade and Industry Rudolph said that the Philippines has a lot of room to play an important role in the global battery field. However, when it comes to attracting investment, the Philippines is talking about China, saying that the goal is to establish a nickel supply chain without China and become another major nickel supplier after China. At the same time, Rudolph also stressed that Chinese investors are not welcome to join.
Then, the Philippines did not forget to throw an olive branch to the United States, hoping that the United States would agree to sign a mining development agreement with the Philippines, and the Philippines promised to give the United States rent-free and tax-free treatment. However, this proposal was rejected by the United States, citing concerns about the high cost of energy in the Philippines, and expressed its reluctance to sign a new agreement during the election.
After all, the United States keeps saying that the friendship between the United States and the Philippines is on its lips, so it made a request to test the attitude of the United States, but the result was still closed. Later, the Philippines may have tried to save its respect, revealing that in addition to the United States, the United Kingdom, Australia, Japan and South Korea are very interested in its nickel mines, but have not yet reached a concrete cooperation.
But let's be honest, even if the Philippines counts all these countries together, it is still fanciful to compete with China for the battery market.
[The Philippines pulls allies to invest in its own nickel mines]
First of all, in terms of production capacity, the Philippines is the world's second largest nickel ore producer, with a production capacity of 370,000 tons, which is also the source of confidence for the Philippines to compete with China for the battery market. Because nickel plays a vital role in battery production, especially in the manufacture of lithium-ion batteries, which are widely used in electric vehicles.
However, it should not be overlooked that even though the Philippines has the best nickel production capacity, it is still far from Indonesia, the world's largest nickel ore producer with an annual production capacity of more than one million tons. Unfortunately, most of Indonesia's nickel ore is in Chinese hands.
In recent years, the Indonesian government has attracted foreign direct investment (FDI) to downstream processing industries in order to promote local processing and increase value added. Chinese companies have responded to this policy by investing in facilities such as smelters to process raw nickel ore into higher-value products, such as battery-grade nickel compounds.
Later, as the global demand for electric vehicles and renewable energy increased, so did the demand for nickel as a key element in these technologies. China sees nickel as a key resource for expanding its EV industry, and has therefore established and invested in a large number of nickel mining and processing projects in Indonesia. In addition to China, companies from countries such as Japan and South Korea have also invested in Indonesia's nickel sector, but Chinese investment is much larger in comparison.
[China leads the development of global clean energy]
At the same time, China's share of Indonesia's nickel mines has also discouraged many investors. For example, recently, the German chemical giant BASF finally decided to cancel its US$2.6 billion nickel and cobalt investment project in Indonesia after a long period of deliberation.
Secondly, from the perspective of the construction of supporting facilities for nickel mining, the Philippines does not have the conditions to compete with China.
Because the nickel mining and refining process also faces environmental and social challenges, including ecological damage, greenhouse gas emissions, and worker health and safety issues. Therefore, while the United States rejects the Philippines, it also puts forward a demand for the Philippines, that is, to provide cleaner energy options first, such as wind, solar and natural gas.
But for a long time, the Philippines has relied heavily on fossil fuels, especially coal and oil, for energy production and consumption. This dependence not only leads to environmental pollution, but also exposes the country to the risk of uncertainty in energy supply and price fluctuations. The development of clean energy, especially solar and wind energy, requires relatively advanced infrastructure in terms of technical installation and maintenance. The Philippines is relatively backward in investment and construction in this area, resulting in the development and utilization of clean energy is not as good as that of traditional energy sources.
[The United States is unwilling to help the Philippines develop nickel]
More importantly, the development of clean energy requires a large amount of upfront investment. For a developing economy like the Philippines, funding is a significant obstacle. And we can also see from the attitude of the United States that it does not intend to make large-scale investments in the Philippines to help the Philippines develop renewable energy, and then develop nickel mines in the Philippines. Because with a little calculation, you can know that it is not a good deal.
For China, the development of clean energy is our strength. Therefore, if the Philippines wants to use its nickel mines to compete with China, it needs to make more investment, improve the policy and regulatory environment, and strengthen talent training. This incident also shows once again that the United States' support for the Philippines is often lip service, and the amount of US investment in the Philippines last year was even only half of that of Thailand's.
China, by contrast, has long pledged to help the Philippines develop clean energy and meet its renewable energy goals. However, with the repeated provocations of the Philippines in the South China Sea, the foundation of China-Philippines cooperation has been brutally undermined, and now the bitter fruit can only be swallowed by himself.