The Philippines, the second-largest nickel producer in the world, is mulling imposing tariffs up to 10% on nickel ore exports, in order to encourage local miners to expand investment in nickel processing plants rather than merely selling raw ore.

However, the head of the Philippine nickel mining industry warned that such an imposition is likely to lead to a rise in local factory closures.

According to analysts, nickel prices might be pushed up by higher export costs from a major raw material supplier and the supply would be tightened as well. The Philippines’ supply accounts for around 11% of global nickel supply, compared to Indonesia’s 48%.