Strategic Advantages of Operating an MHP (Mixed Hydroxide Precipitate) Production Plant in the Philippines

Operating an MHP (Mixed Hydroxide Precipitate) production facility in the Philippines offers a wide range of advantages from geographical, economic, political, and process-technology perspectives.
These strategic factors create a highly favorable environment for Korean companies, enabling stable supply chain construction and enhanced global competitiveness.

1. Proximity to Ore Resources – Securing Raw Material Stability

The Philippines is the world’s second-largest nickel ore producer, with abundant reserves of medium- and low-grade laterite ores.

Most nickel mining operations are concentrated in southern Mindanao (Surigao, Zamboanga, Cotabato, etc.), allowing for stable and continuous raw material supply.

Korea relies entirely on imported nickel ore. Establishing an MHP plant near the mining sites provides not only logistical efficiency but also ensures raw material freshness and supply stability.

• Shorter transportation distance → reduced logistics costs

• Local sourcing → stable and reliable raw material supply
  
  

2. Geographical Advantage – Close Logistics Link to Korea

Maritime transportation from the Philippines to Korea typically takes 5–7 days, covering a distance of approximately 2,600 km, which is relatively short.

This significantly lowers logistics costs for MHP exports and enables fast and flexible supply response.

• Improved logistics efficiency → minimized inventory burden

• Favorable for meeting real-time demand from Korean battery manufacturers
  
  

3. FTAs and Diplomatic Relations – Potential for Tariff-Free Exports

With the Korea–Philippines Free Trade Agreement (FTA) entering into force in December 2024, the likelihood of tariff-free exports for secondary battery intermediates such as MHP and nickel sulfate has increased substantially.

Additional benefits are available through multilateral agreements such as the Korea–ASEAN FTA and RCEP. Diplomatically, the two countries maintain a long-standing and friendly relationship.

• Reduced export tariff burden

• Low diplomatic risk → suitable for long-term investment
  
  

4. Cost Competitiveness – Production Cost Reduction

The Philippines offers significantly lower production costs compared to Korea across labor, electricity, and facility construction.

• Industrial electricity cost: USD 0.12–0.15 per kWh

• Labor cost: approximately one-quarter of Korea’s level

• CAPEX / OPEX: potential reduction of 30–50%
  
  

At the same time, Korea possesses world-class refining and cathode material manufacturing technology, enabling a value-added structure where only MHP is imported while high-value processing is conducted domestically.

5. Environmentally Friendly Processes and Regulatory Flexibility

While environmental regulations exist in the Philippines, they are relatively less stringent compared to Europe or Korea.

By adopting environmentally friendly technologies such as bio-leaching or low-carbon HPAL, carbon emissions can be reduced while still meeting global ESG standards.

• Environmentally friendly production → carbon credit 대응 가능

• Relatively flexible regulations → reduced operational burden
  
  

6. Demand Responsiveness – Synergy with the Korean Battery Industry

Global EV battery demand continues to grow rapidly, intensifying competition for key raw materials for ternary (NCM) cathode materials, including nickel.

Major Korean battery manufacturers such as LG Energy Solution, SK On, and Samsung SDI are securing MHP and nickel sulfate through long-term contracts, yet supply shortages persist.

Local production in the Philippines enables Korean companies to respond to demand without competing directly with China and Indonesia, ensuring a more stable and diversified supply structure.

“MHP production in the Philippines goes beyond being a simple manufacturing base—it is a core strategic pillar that strengthens the global competitiveness of Korean companies.”

It represents the optimal choice for building a sustainable supply chain and securing long-term export competitiveness.