Mining and Nickel

As of 2026-08-30 · Updated 2026-08-30 · Section: Mineral Resources · 日本語版

The Philippines is the world's second-largest producer of nickel ore, and the world's largest exporter of unprocessed nickel ore. Yet mining's contribution to GDP is under 1% (0.51% in 2024, per MGB). This gap between geological wealth and economic weight is the starting point for every issue in this field.

1. The big picture — Philippine mining in numbers

In 2024, gold overtook nickel as the top production item (gold: ₱126.36 billion / gold output: 28,870 kg). This was driven by soaring gold prices, and the pattern has continued since.

Nickel direct-shipping ore (DSO) has surged since the start of 2026. The reason, discussed below, is production quota cuts in Indonesia.

2. The ban on unprocessed nickel-ore exports — the story of how it was dropped

注 A common misconception is that "the export-ban provision was removed in 2026," but the removal actually happened in 2025. What is happening in 2026 are the subsequent market and policy developments (Executive Order No. 122). Getting the timeline right matters.

  July 2021        House Bill 9775 (a phased ban on unprocessed ore
                    exports) is filed in the House of Representatives
                    → does not pass

  3 February 2025  The Senate passes Senate Bill No. 2826 on third
                    reading — the "Enhanced Fiscal Regime for Large-
                    Scale Metallic Mining" bill
                    Contains a provision banning unprocessed ore
                    exports 5 years after signing (i.e., 2030)
                    Senate President Escudero explicitly calls it
                    the "Indonesian approach"

  11 June 2025    The bicameral conference committee removes the
                    ban provision in reconciling the bill
                    The Senate approves the conference report
                    (only Senator Hontiveros votes against)

  4 September 2025 President Marcos signs it into law
                    → Republic Act No. 12253 (RA 12253)
                    The export-ban provision did not make it in

Why it was dropped — the industry's reasoning

The Philippine Nickel Industry Association (PNIA) praised the removal as "a prudent and forward-looking decision that protects jobs and preserves investor confidence." The core of the association's argument runs as follows.

The Chamber of Mines of the Philippines (COMP) held its industry-wide event, "Mining Philippines 2025" (themed "From Policy to Progress"), in November 2025 for the first time in two years. Chairman Toledo said "the Philippines needs another pillar of growth" and that "mining once accounted for over 20% of export revenue," arguing that if stalled large-scale projects (Tampakan, King-king, Silangan) move forward, mining's export contribution could reach 9% and its GDP contribution 1.5%. COMP has adopted the Mining Association of Canada's "Towards Sustainable Mining" standard.

3. The substance of RA 12253 (the Enhanced Fiscal Regime)

Signed 4 September 2025. Originated as Senate Bill No. 2826.

This law also closes out roughly a decade of legislative stalemate, dating back to when Executive Order No. 79 (2012) froze new mining contracts.

4. Comparison with Indonesia — can the Philippines follow "the same path"?

The ironic result: because Indonesia cut back its own mining, Indonesian smelters have started buying up Philippine ore. Having chosen not to ban exports, the Philippines has instead become a raw-material supplier to Indonesia.

Nickel ore export value in 2025 reached US$1.47 billion (+40.8%), the highest in over a decade (Philippine Statistics Authority). In H1 2026, shipments to Indonesia are reported to have risen roughly 65% year-on-year.

注 The understanding that "Philippine nickel goes to China" was true only through 2023. China's relative share has since fallen, while shipments to Indonesia have expanded sharply.

Nickel prices (LME), 2025-2026

  2025           Opened at $15,295/t. The Senate's export-ban bill
                 and US tariffs caused sharp swings in the first
                 half; the second half traded in the $15,000-15,500/t
                 range

  Late Dec 2025  Indonesian Energy and Mineral Resources Minister
                 Bahlil signals a production cut
                 → surges to $16,560/t

  29 Jan 2026   $18,950/t (an 18-month high)
  11 Feb 2026   Above $17,000/t
  May 2026      Multi-year high territory (around $19,000)
  June 2026     Down about 14% month-on-month; combined LME +
                 Shanghai inventory peaks at 468,600 tons
  Jul-Aug 2026   Adjusting in the low $16,000s, weighed down by
                 speculation of an upward quota revision

The International Nickel Study Group (INSG) has revised its 2026 supply-demand outlook from a "283,000-ton surplus" to a "32,000-ton deficit." Given the weight of inventories, however, some institutions still see a continuing surplus, and views remain divided.

5. Nickel intermediate products — the two HPAL plants

The only real "downstream" activity in the Philippines consists of two HPAL (High Pressure Acid Leach) plants operated by Sumitomo Metal Mining. These produce mixed nickel-cobalt sulfide (MS, with Ni content of 55-57%) from low-grade limonite ore (roughly 0.8-1.5% Ni), which is then finished into electrolytic nickel and nickel sulfate at Sumitomo's Japanese smelters (Niihama, Harima).

On 2 June 2026, Nickel Asia Corporation (NIKL) disclosed that it had received notice from CBNC that the Palawan HPAL plant would be shut down once the Tailings Storage Facility (TSF No. 3) reaches capacity. This is expected around 2028. The background is that building a new tailings storage facility does not pencil out at current nickel prices. The Board of Investments (BOI) has been sounding out overseas investors about taking over this facility and other existing assets at an investment forum with Canada in March 2026.

注 This is a story about the possible disappearance of a facility that symbolized "Philippine downstreaming." Coming right after Executive Order No. 122 championed "downstreaming," the gap between policy and reality stands out sharply.

Nickel Asia Corporation

The country's largest nickel ore producer — a conglomerate with 7 operating mines, a stake in THPAL, and a renewable-energy subsidiary (Emerging Power Inc.). In April 2026 it signed an agreement to acquire a 20% stake in a copper operation in eastern Kazakhstan (East Copper Production LLP), part of an effort to diversify away from being solely dependent on nickel. Listed on the PSE (ticker: NIKL).

New HPAL proposals

The Board of Investments (BOI) has stated it expects 3 additional plants (in Zambales, Surigao, and Palawan) under the Marcos administration, together worth roughly US$12 billion. Nickel Asia is reportedly considering a roughly 30,000-ton-per-year plant (over US$1 billion) on the Pujada Peninsula in Davao Oriental, and Global Ferronickel Holdings is reportedly weighing a roughly 40,000-ton-per-year plant in Surigao with a Chinese partner. As of August 2026, neither has reached a final investment decision (some details remain unconfirmed).

6. Gold and copper — the fate of the three big projects

Gold is tied to the central bank's (BSP) gold-purchase program. Republic Act No. 11256 (2019) exempts small-scale miners and gold traders from income tax and excise tax on gold sold to the BSP. OceanaGold Philippines sold approximately 6,684 ounces of gold doré to the BSP in 2025, exceeding its minimum 25% commitment. 注The often-cited figure of "approximately 31% of annual production" is a ratio against gold-doré production specifically — against Didipio's total 2025 gold output of 90,700 ounces, it is actually only 7.4% (the remainder is exported as gold contained within copper concentrate). This should not be confused with total gold production (noted during the 2026-08-25 cross-check). An estimated 200,000-300,000 people work in small-scale gold mining, and outflow to the black market continues (per PIDS research).

7. The Mining Act (RA 7942) and the history of regulation

  1987 Constitution   All natural resources are state-owned
                       (the Regalian Doctrine)

  1995               Republic Act No. 7942, the "Philippine
                       Mining Act of 1995"
                       Implementing rules: DENR Administrative
                       Order 2010-21

  24 March 1996        The Marcopper mining disaster (Marinduque
                        Island)
                        A drainage tunnel plug at the Tapian open
                        pit fails,
                        spilling over 1.6 million m³ of mine
                        tailings into the Boac River. Roughly 27 km
                        contaminated
                        20 villages evacuated; 59 children treated
                        for lead poisoning
                        注Death tolls of "3 people" (immediately
                        after the accident) and "at least 36 people
                        (from heavy-metal contamination)" both
                        appear (field article "General Review of
                        Underground Resources" §5-1) — the
                        difference likely reflects differing scope
                        (presented together following the
                        2026-08-25 cross-check)
                        A US$100 million (approximately ₱5.8
                        billion) settlement was reached on 3 October
                        2025, with US$50 million placed in escrow in
                        March 2026
                        Co-owned by Canadian firm Placer Dome;
                        litigation continues 30 years on

  2012                  Executive Order No. 79 — freezes new mining
                         contracts (pending tax reform)

  July 2016            Environment Secretary Gina Lopez orders an
                         audit of 41 large-scale mines
                         28 of them nickel mines → international
                         nickel prices spike
  2 February 2017      Closure orders for 23 mines, suspension
                         orders for 5 mines,
                         an open-pit mining ban, and cancellation
                         of 75 MPSAs
                         Only 13 of the 41 companies were allowed
                         to keep operating
  May 2017              The Commission on Appointments rejects
                         her confirmation → she is removed from
                         office
                         The closure orders were subsequently
                         barely enforced; 5 years later, 15 of the
                         28 cases remained under dispute (per PCIJ)

  14 April 2021          Executive Order No. 130 — lifts the 9-year
                          freeze on new mining contracts (under
                          Duterte)
                          注EO 130 lifted the moratorium, not the
                          open-pit ban
  23 December 2021      DENR repeals the open-pit ban (DAO
                          2017-10) — via DAO 2021-40
                          (Signed by Secretary Roy Cimatu;
                          covers copper, gold, silver, and complex
                          ores. Published 25 December, takes effect
                          15 days later)
                          (corrected in the 2026-08-25 cross-check
                          pass; the earlier draft's "28 December"
                          conflated the publication date. Source:
                          field articles "Gold — Institutions, Tax,
                          and BSP" Chapter 3 and "Gold and
                          Investment/Japanese Companies" §9-3, both
                          of which give 23 December 2021 as the
                          signing date of DAO 2021-40)

  4 September 2025       Republic Act No. 12253 (fiscal regime)
  21 August 2026        Executive Order No. 122 (critical minerals)

Tenement types and foreign-ownership rules

The structure whereby "100% foreign ownership is possible only through an FTAA, which additionally requires the President's own signature" has repeatedly been cited as the biggest institutional bottleneck holding back exploration investment.

8. Executive Order No. 122 (EO 122, signed 21 August 2026)

The "Unified National Policy Framework for Developing the Critical Minerals Industry."

MGB Director Elades described it as "shifting national strategy beyond raw-ore exports, toward building an integrated ecosystem of processing and manufacturing." The Mindanao Development Authority (MinDA) positioned the region as "a strategic gateway to the critical-minerals and clean-energy economy."

注 Pushback followed immediately. ACT Teachers party-list Representative Antonio Tinio called it "a wholesale handover of mineral resources to foreigners" that would trigger large-scale displacement of farmers and indigenous peoples.

9. Environmental and indigenous-rights conflicts

FPIC (Free, Prior and Informed Consent)

Section 59 of the Indigenous Peoples' Rights Act (IPRA, 1997, RA 8371) provides that no concession or license may be issued or renewed without a certification from the National Commission on Indigenous Peoples (NCIP), and that this certification is issued only where FPIC has been obtained. Section 16 of the Mining Act similarly requires prior consent for mining on ancestral lands.

The Lepanto case (Lepanto Consolidated Mining): the government required FPIC compliance for a 1990 MPSA renewal, but the company argued that "the agreement predates IPRA and constitutes a vested right" and that "the dispute should be handled through arbitration." The Supreme Court vacated the arbitral ruling in the company's favor and held that MPSA renewal also requires FPIC and NCIP certification. 注 The key point is that the notion of "an arbitration clause can be used to bypass indigenous rights" was rejected.

Conflicts on the ground (2025-2026)

Palawan's 50-year moratorium

On 13 March 2025, the province of Palawan signed Provincial Ordinance No. 3646, suspending barangay/municipal/provincial endorsements for both small- and large-scale mining applications for 50 years (renewable). Approved unanimously by all 14 provincial board members. This caused 67 applications to lapse, halting plans covering over 200,000 ha. Operations already underway in the six existing districts (Bataraza, Brooke's Point, Española, Narra, Quezon, Aborlan) continue. PNIA opposed the ordinance as "exceeding local government authority and conflicting with the Constitution and the Mining Act."

注 The Supreme Court struck down Occidental Mindoro's 25-year mining moratorium as inconsistent with the Mining Act (RA 7942), in Province of Occidental Mindoro v. Agusan Petroleum, G.R. No. 248932 (decided 14 January 2025 / published 14 May 2025). (Corrected in the 2026-08-25 cross-check pass; the earlier draft treated "14 May 2025" as the decision date. Source: field article "Gold and Investment/Japanese Companies" §9-1 and "General Review of Underground Resources" §4-2.) Industry groups have cited this precedent in seeking to invalidate the Palawan ordinance. "A province can unilaterally halt mining" does not hold under current law — that is the operative understanding.

10. Practical takeaways

• Investment gateways: MGB (tenements/technical matters), BOI (incentives), NCIP (FPIC), DENR-EMB (Environmental Compliance Certificate, ECC), and local government units (endorsement resolutions). LGU endorsement is the de facto chokepoint, as the Palawan example shows.
• Taxation: Under RA 12253, a profit-linked royalty plus a windfall-profits tax plus project-level ring-fencing. This raises the effective tax burden for companies with multiple mines.
• Electricity: Smelting and HPAL operations require large amounts of power and sulfuric acid. Southeast Asia's highest electricity price (₱12.43/kWh, June 2026, DOE) is a core factor holding back Philippine downstreaming (see the field article "Electricity and Power Rates"). (Corrected from "among the highest in Asia," with the metric and source made explicit, in the 2026-08-25 cross-check pass)
• 注 Do not build business plans on the assumption that "the Philippines will eventually halt exports like Indonesia." The ban provision was dropped in 2025, and Executive Order No. 122 in 2026 is also framed around incentives and "use it or lose it," not prohibition.
• 注 Conversely, the risk of future re-legislation is not zero. The Senate has passed such a provision once already, and the possibility of it being refiled in the current Congress remains open (as of August 2026, no specific bill with a realistic chance of passage has been confirmed).

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