April 15, 2024
WASHINGTON – Japan, the United States and the Philippines agreed to forge ties to strengthen supply chains of nickel — a critical mineral essential for the batteries used in electric vehicles — at a trilateral summit at the White House on Thursday.
The Philippines is the world’s second-largest producer of nickel ore, and China is the second-largest producer of refined nickel.
The three countries will accelerate the creation of a supply chain that is not overly dependent on China to bolster their economic security.
Economic security
“The three countries shared an awareness of the issues and agreed on the need for economic security, while the stable supply of critical minerals needs to be discussed,” Economy, Trade and Industry Minister Ken Saito said at a press conference in Washington on Thursday.
He attended the U.S.-Japan-Philippines Commerce and Industry Ministerial meeting in Washington ahead of the trilateral leaders’ summit meeting.
The joint statement issued after the summit meeting clearly stated, “Japan, the Philippines and the United States support critical minerals industries in all of our countries.”
The three countries will promote discussions on the stable supply of nickel through a framework in which resource-rich countries and high-consumption countries in Europe, Africa and other regions work together to share information and invest in developing critical minerals.
They also intend to move to expand the refining process to extract the metal from nickel ore beyond countries such as China and discuss effective policy support.
High market share
The Philippines is the world’s second-largest producer of nickel ore after Indonesia. However, Indonesia and China have a larger market share of smelted and refined nickel. While Indonesia has banned the export of minerals, China is acquiring mining rights and interests in Indonesia and other Southeast Asian countries, increasing its influence in the international market.
China is also acquiring concessions in Africa and other regions and holds a high share of the refined products of critical minerals such as lithium and cobalt.
It is essential to build a supply network of nickel and other critical minerals that is not overly dependent on China, in order to counter the economic pressure it can place through trade restrictions. Companies are also under pressure to diversify their sourcing.
Meanwhile, reducing the carbon dioxide emissions and costs of producing mineral smelting products is a challenge.
As Chinese products are very price-competitive, it is also necessary to “take supportive measures to encourage companies to buy [alternative] products even if the price is higher due to environmental considerations,” a government official said.