Morexette Marie B. Erram, Cebu – Demand for electric vehicles (EVs) and renewable energy has dramatically increased following the war in the Middle East, which led to significant disruptions in fuel supplies.
That's why two of the world's largest producers of nickel – Indonesia and the Philippines – have entered into an agreement that could reshape the global supply chain for this critical mineral.
The Philippine Chamber of Commerce and Industry and the Indonesian Chamber of Commerce and Industry, known as Kadin Indonesia, have entered into multiple agreements to boost economic ties.
Top executives of PCCI and Kadin Indonesia formally met and signed the Memorandums of Understanding (MOUs) on the sidelines of the Asean (Association of Southeast Asian Nations) Summit held here.
Technical working groups will be formed to develop concrete projects under the agreements, including knowledge-sharing on processing technology, joint investments, and market coordination.
The economic cooperation between the two countries covered four key areas, all of which align with the summit's core discussions: food security, energy security, circular economy, and critical minerals, particularly nickel.
Strategic partnership
Considered a critical mineral, nickel serves as a key component in manufacturing EVs and lithium-ion batteries, superalloys in jet engines, electroplating, and specialty alloys for infrastructure and electronics.
Together, Indonesia and the Philippines account for roughly 70 to 75 percent of the world's nickel supply.
That makes any coordinated strategy highly consequential for global manufacturers, said Bernardino Vega, vice chair for foreign relations at Kadin Indonesia.
"The world needs us... Now it's time we recognize that," said Vega.
The alliance comes as both countries seek to move beyond exporting raw ore and capture more value from mineral processing, battery materials, and advanced manufacturing.
Currently, Indonesia controls about 65 percent of global nickel production. Yet the country's massive downstream processing industry still relies on Philippine ore to optimize production.
But if the two countries join forces, they would not only enhance production but also corner the global market, according to Meidy Katrin Lengkey, secretary general of the Indonesian Nickel Miners Association (APNI).
"Philippine nickel may be lower grade, but it acts as a 'sweetener' for Indonesian processing plants because of its chemistry. (But) that makes this partnership complementary, not competitive," Lengkey told reporters.
Lessons
For the Philippines, the collaboration offers a shortcut to learning from Indonesia's rapid rise as the world's dominant nickel processor.
"In just a decade, Indonesia transformed itself from a raw nickel exporter into a global processing powerhouse. That's the model we want to learn from," said Dante Bravo, president of the Philippine Nickel Industry Association.
Indonesia banned raw nickel exports in 2020, forcing foreign investors to build domestic smelters and processing plants.
The strategy sparked billions of dollars in investments and dramatically expanded its role in the global EV battery supply chain.
Philippine business leaders now hope to replicate parts of that success while leveraging Indonesia's expertise in value-added processing.
"This partnership could become the bridge that finally turns the Philippines' industrial ambitions into reality," Bravo added.
Resource sovereignty
But the collaboration goes beyond economics. Leaders from both countries framed the nickel alliance as part of a broader push for "resource sovereignty," the idea that mineral-rich nations should have greater control over how their resources are priced, processed, and traded.
"Why should countries without these minerals dictate the price? We should have a greater voice in determining the value of our own resources," Vega said, referencing the London Metals Exchange.
Currently, China serves as the biggest buyer of Indonesia-produced nickel, he added.
While executives stopped short of saying they intend to manipulate prices, they acknowledged that closer coordination between the world's two biggest nickel-producing nations could influence supply and pricing dynamics.
"And I can say we are the two countries OPEC of nickel," said Lengkey./with reports from Philippine News Agency