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INTERNATIONAL NICKEL STUDY GROUP Ni/EE/303

24 March 2025

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ENVIRONMENTAL AND ECONOMICS COMMITTEE

Fifty-Fourth Meeting
Lisbon
Wednesday 23 April 2025
14:00 to 16:00

2025 Environmental and Economics Committee Work Program Update

The Environmental and Economic Committee was established to provide a forum for reporting
and discussions on economic, environmental, market access, and related issues concerning
nickel, to deepen knowledge about these issues and their consequences for nickel markets and to
consider the need for and nature of specific initiatives and responses.

This document summarizes the progress made in the Committee´s work program and informs the
members of the Secretariat´s ongoing activities in fulfilling the above-stated role of the
Committee. Delegates are kindly requested to consider the current activities and recommend
additional topics for future work programs.

A. Completed Activities since the INSG´s last meeting in September 2024

1. INSG Articles, Insights and Newsletters

The Metals Despatch Newsletter was produced to report on the Study Groups’ most recent
meetings, work undertaken, publications available as well as other information of iterest to
member countries and industry representatives.

The secretariat has continued to produce concise briefing notes (“INSG Insights”) on a variety of
topics that may have implications for the nickel industries in INSG member countries. Member
countries are invited to propose specific topics of interest.

❖ Global Critical Minerals Initiatives

Critical Minerals are essential for a range of key industries including solar photovoltaic,
wind farms, EV batteries, grid upgrading, hydrogen, geothermal collection, chips, and
defence. These industries are in turn dictating the speed and scale at which the energy
transition, green transition, and digital transition will take place. These timely, efficient,
and sustainable transitions will be essential in determining whether humans can win the
battle against the triple crisis: climate change, nature and biodiversity loss, waste and
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pollution. Governments all over the world are increasingly prioritising these issues in
their agendas and have identified a plethora of critically important minerals that are
indispensable for these efforts. This Insight paper provided a holistic look at the current
regulations, acts, and initiatives in securing the availability, affordability, and
sustainability of critical minerals. The 33-page in-depth Insight Paper was written by
the ILZSG/INSG Director of Economics and Environment, and the final paper was
sent to members in January 2025.

❖ An Analysis of China’s Economic Situation and the Implications for the Global
Minerals and Base Metals Markets
China is currently the second-largest economy globally in nominal terms and is the
largest in terms of purchasing power parity (PPP). Commensurate with its economic
stature, China currently uses more than 50% of the world´s base metals output.
Accommodative monetary and fiscal policies favouring investment and consumption, and
a sustained export market for goods made in China will all determine China´s appetite for
minerals and base metals in the future. The accelerating aging of its population,
dwindling birth rate, crisis-affected real estate sector, anemic domestic consumption,
scepticism of investment prospects, and the deteriorating geopolitical environment are all
clouding the confidence of consumers and investors.

However, the fundamentals of China´s economy are still very strong taking into account
the size of its economy and population, factoring in its inextricable links in the global
supply chains and value chains, and reconciling China´s leading role in producing and
employing renewable energies, EVs, and EV batteries. For the foreseeable future, the
global minerals and base metals industries will not be able to find a substitute for China´s
role in their markets and will need to examine the overall outlook for China´s
policymaking and the implications on the sectors that are minerals and metals intensive.
This Insight paper dissects various concerns regarding China´s economic policies and
prospects so as to enable readers to accurately position their respective views on the
development of China´s minerals and base metals industry and the implications for the
global base metals market. The 50-page in-depth Insight was written by the
ILZSG/INSG Director of Economics and Environment, and the final paper was sent
to members in December 2024.

❖ Metals Despatch Newsletter

The Joint Study Groups’ Metals Despatch Newsletter is published periodically. The
Director of Economics and Environment coordinated the editing of Issue No.35 for the
three Study Groups, and the Newsletter was disseminated to members in January
2025.

2. Presentations and Meetings

Since the Committee´s last session in September 2024, the Director of Economics and
Environment participated in the following meetings and webinars.

• The INSG/ILZSG Director of Economics and Environment represented the Secretariat at

the EU Raw Materials Week 2024 organized by the EU Commission in Belgium in
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December 2024. During the week, the Director of Economics and Environment
participated in a series of events including the 11th Annual High-Level Conference on
Raw Materials, Equitable and Just Energy Transition: Implementing UN Principles on
Critical Energy Transition Minerals, United Nations Tools for Resource Management,
Critical Raw Materials Intelligence, Raw Materials Business Opportunities in Strategic
Partner Countries, and Towards Greater Circularity in Critical Raw Materials. Besides
participating in the discussions at those meetings, the Director of Economics and
Environment discussed with participants and speakers a variety of issues related to the
supply of critical raw materials and the role of the Study Groups in the provision of
market transparency in the process.
• Mr. Jianbin Meng, Director of Economics and Environment at INSG/ILZSG, participated
in the 20th Annual General Meeting (AGM) of the Intergovernmental Forum on Mining,
Minerals, Metals and Sustainable Development (IGF) held from November 18 to 20,
2024, at the Palais des Nations in Geneva. Representing the Study Groups, Mr. Meng
attended key sessions, including Accelerating the Production of Critical Minerals, which
focused on increasing supply through legal frameworks and partnerships; Trade and
Investment Agreements for Critical Mineral Supply Chains, exploring secure supply and
investment; and Can Circularity Help Bridge the Supply Gap, addressing recycling and
waste management. He also engaged in discussions on Fiscal Policies to Incentivize
Value Addition, Putting People First (on human rights in mining), Critical Minerals and
Gender Equality, Navigating Global Mining Standards, Protecting Nature Amid the
Energy Transition, Regional Dialogue on Mineral Supply Chains, and The Future of
Mining and Official Closing. His active participation highlighted the Study Groups’
commitment to responsible resource management, sustainable mining practices, and
informed policy-making.
• Mr. Jianbin Meng, Director of Economics and Environment at INSG/ILZSG, participated
in the CBI Conference held in Guangzhou in October 2024, where he delivered a
presentation titled "The Economic Situation in China and the Implications for Base
Metals Market." In his presentation, Mr. Meng analyzed China’s economic growth since
1978, highlighting the country’s rise to become the second-largest economy globally and
its dominant role in the base metals market, consuming over 50% of global output. He
discussed the key drivers of China’s economic expansion, including exports, investment,
and consumption, and examined the current economic and geopolitical challenges, such
as demographic shifts, real estate crises, trade tensions, and deflationary pressures. Mr.
Meng also outlined the future prospects for China’s economy, emphasizing the growing
demand for base metals driven by renewable energy and electric vehicle (EV) production,
and China’s strategy to diversify trade partnerships and strengthen domestic supply
chains. His presentation reinforced the strategic importance of China’s economic policies
and their impact on the global base metals market.
• Road to OEWG 3.2 Series for the Science-Policy Panel on Chemicals, Waste and
Pollution Prevention | Information Session on Foundational Document and Rules of
Procedure in October 2024 – Online.
• BMI - Global Energy Transition: Peak Emissions and The Path to Net Zero in
October2024 – Online.
• Briefing on the 2025 Meetings of the Conferences of the Parties to the Basel, Rotterdam
and Stockholm Conventions in December 2024 – Online.
• Exporting Lead Poisoning: The Toxic Trade in Lead Chromates | Road to 2025 BRS
COPs in February 2024 – Online.
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• Energy Transition Scenarios and Shifting Commodity Demand by CRU in February –

Online.
• Fitch Solutions - BMI Global Macroeconomic Update: Navigating Policy Risks in March
– Online.
• The impact of the EV transition: to what extent will it reshape the automotive value
chain? By CRU in April – Online.

3. The World Nickel Factbook

Based on its many years of experience in closely tracking and monitoring the international nickel
market, the secretariat has developed a Nickel Factbook to provide member countries, the
industry, and the broader public with a better understanding of nickel´s role and importance in
the global economy. This Factbook provides a clear picture of the essential nature of nickel (and
stainless steel) across a range of applications that are important in daily life. It also highlights the
work of INSG and helps publicize the Group.

The inaugural World Nickel Factbook was published in 2021. Since its publication, there have
been many significant developments regarding both nickel production and usage. In order to take
into account these changes, the secretariat proposed to review and update the World Nickel
Factbook in 2024. The update has been undertaken utilizing INSG´s internal resources without
any additional budgetary requirements. The Director of Economics and Environment reported
the key findings in the new edition of the Factbook at the Standing Committee Meeting, and the
final version was distributed to members during and after the 2024 September meetings.

4. Team Stainless Meetings in 2024 and 2025

Team Stainless is a cross-organization working group engaged in promoting the application of

stainless steel. Its members include the International Nickel Study Group, Nickel Institute,
International Stainless Steel Forum, International Chromium Development Association and
International Molybdenum Association. The secretariat participated in web meetings in October
2024 and January 2025. The INSG Secretariat will host the in-person meeting in June 2025.

Key environmental, scientific, technical, social, and legislative issues related to the application of
stainless steel were discussed at the meetings. They are the Classification of Cobalt, the FIOH
Project, Recycling Rates, ASTM and E60 Work, Stainless Steel in the ABC Sector of China,
Preventing Water Losses due to Leaking Water Pipes, Promotion of the Structural Stainless
Steel, Stainless Steel in Swimming Pools and Stainless Steel Reinforcing Bar. The
communication work and other administrative work were also discussed during the meeting.

5. Activities Related to Minamata Convention, UNEP, and ISA

The Study Groups have been admitted as Intergovernmental Observers to the Conference of
Parties to the Minamata Convention on Mercury. The Director of Economics and Environment
has represented the Study Groups at meetings of the Minamata Convention and was actively
involved in discussions on issues related to non-ferrous minerals and metals.

The Study Groups currently participate in the work of the UNEP Global Mercury Partnership.
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Currently, the Global Mercury Partnership covers eight partnership areas including Artisanal and
small-scale gold mining (ASGM), Mercury releases from coal combustion, Mercury cell chlor-
alkali production, Mercury in products, Eliminating Mercury Skin Lightening Products, phasing
down the Use of Dental Amalgam, Mercury air transport and fate research, Mercury waste
management, Mercury supply and storage, and Mercury releases from the cement industry.
Interest in developing a new working area covering Mercury from Non-ferrous Metals has been
growing in recent years marked by the report Mercury from Non-ferrous Metals Mining and
Smelting which the ILZSG has contributed to through participating in the expert group and a
series of online discussions organized by UNEP.

The Study Groups have been invited by UNEP to participate in the ad hoc open-ended working
group (OEWG) to prepare proposals for the “Science-policy panel to contribute further to the
sound management of chemicals and waste and to prevent pollution” and the ILZSG Director of
Economics and Environment participated in the Ad Hoc Open-Ended Working Group on the
Science-Policy Panel to contribute further to the sound management of chemicals and waste and
to prevent pollution (OEWG-3).

The International Seabed Authority (ISA) is an autonomous international organization. ISA has
the mandate to ensure the effective protection of the marine environment from harmful effects
that may arise from deep-seabed-related activities. Further to the presentation by the Secretary-
General of the ISA at the Study Groups’ Joint Seminar in April 2024, the Groups were invited to
apply to be an official observer to the ISA and subsequently submitted an application.

6. Response to Inquiries from the Industry and Government

Following the publication of Study on Carbon Emissions from Nickel Mining, Smelting/Refining
and Recycling, the secretariat had several discussions with member governments and industry
readers of the report on related issues in the report in order to better understand the complexity in
estimating the carbon emissions along the nickel supply and value chains. For instance, the
consultation between INSG, BRGM, and Minviro.

At the request of the Directorate of Industry, Mines and Energy of New Caledonia (DIMENC),
the INSG Director of Economics and Environment had provided ESG and EHS related
consultancies to DIMENC´s contractors: ORE, a design, audit, consulting and training office
specializing in environmental engineering, mining and in the management of Health, Safety and
the Environment (HSE), and Energy and Finance Consulting.

7. Study on Carbon Emissions from Nickel Mining, Smelting/Refining and Recycling

With its growing importance in enabling automobile electrification, nickel comes to the forefront
of attention. Environmental groups, governments, industries, and other stakeholders are all eager
to quantify nickel´s carbon footprint to understand to what extent the use of nickel contributes to
the green transition and how much carbon the nickel mining, smelting/refining, and recycling
emit to the atmosphere, directly and indirectly.

In order to assist member governments in understanding the complexity of this issue, it was
agreed that the secretariat would commission a study on Carbon Emissions from Nickel Mining,
Smelting/Refining, and Recycling and that the work would be undertaken by an external
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consultant using finances from the INSG projects fund up to a maximum amount of €30,000.
Besides measuring the carbon footprint of nickel production by different processes at different
stages, the report will also discuss the best available technologies and best environmental
practices for the reduction of carbon emissions.

The Director of Economics and Environment developed the detailed terms of reference for the
project and contacted potential bidders. Following a series of meetings, the tender was sent to 5
potential contractors. After carefully considering all the returned proposals, the contract was
awarded to the specialist consultant Minviro.

The Director of Economics and Environment, together with the Secretary-General has had
meetings with Minviro regularly to steer the project development.

The consultant reported report on the preliminary findings of the project at the EEC Meeting in
April 2024, thereafter comments and inputs were sought from both members and the secretariat
prior to the finalization of the report and dissemination to members. The final report was
disseminated to members during and after the 2024 September meeting.

B. Ongoing Activities

8. ILZSG/INSG/ICSG Joint Study on Taxation and Fiscal Policies Impacting the Mining and
Metals Sector

The mining and metals sector plays a pivotal role in the economy of many countries, providing
essential raw materials for industries, creating jobs, and contributing significantly to GDP.
However, the mining and metals sector is subject to a complex array of taxation and fiscal
policies that significantly influence its operations, profitability, and sustainability. Key tax
burdens include corporate income taxes, royalties, and export taxes, which vary widely across
jurisdictions. Royalties, often calculated as a percentage of the value of extracted resources, are a
significant cost for mining companies and can be structured either as fixed rates or as sliding
scales tied to commodity prices. Additionally, the sector may face value-added tax (VAT) on
goods and services, import duties on equipment and materials, and environmental taxes aimed at
mitigating the sector's ecological impact.

Fiscal policies also include incentives designed to attract investment and promote growth in the
sector. These incentives can take the form of tax holidays, reduced tax rates, accelerated
depreciation of capital investments, and exemptions or reductions in royalties and duties. Some
countries offer specific incentives for exploration activities or for developing mines in remote or
challenging locations. Governments may also provide stability agreements to protect investors
from abrupt changes in fiscal policies.

However, the sector also faces challenges from unstable and unpredictable fiscal environments,
particularly in developing countries, where frequent changes in tax laws can deter long-term
investment. The overall tax burden in some regions can be high, impacting the competitiveness
of the sector and discouraging both local and foreign investment.

Balancing these fiscal burdens and incentives is crucial for ensuring that the mining and metals
sector can contribute to economic development while also generating fair revenue for
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governments. Effective fiscal policies should aim to create a stable, predictable, and fair
environment that supports sustainable development and responsible mining practices.

To evaluate the taxation and fiscal policies affecting the mining and metals sector, and examine
their implications on investment, revenue generation, operational efficiency, and long-term
sustainability, it was agreed at the September 2024 meetings of the Study Group that a report
analyzing the impact of taxation and fiscal policies on the mining and metals sector and
providing insights that could inform policy recommendations should be developed. The study
would also provide a comparative analysis of different fiscal regimes, assess the effectiveness of
existing policies, and suggest potential reforms.

It was further agreed that this report be carried out by an external consultant, funded by the
ILZSG/INSG/ICSG Project Funds, with a budget of up to €30,000 shared equally among the
Groups. The execution of the project will be under the auspices of ILZSG/INSG Director of
Economics and Environment. Mr. Jianbin Meng will report on the draft Terms of
Reference for the project at the ILZSG/INSG EEC Meetings. The work on identifying
potential contractor for the project is currently under way.

9. INSG Articles, Insights and Newsletter

The Metals Despatch Newsletter was produced to report on the Study Groups’ most recent
meetings, work undertaken, publications available as well as other information of interest to
member countries and industry representatives.

The secretariat has continued to produce concise briefing notes (“INSG Insights”) on a variety of
topics that may have implications for the lead and zinc industries in INSG member countries.
Member countries are invited to propose specific topics of interest.

Following the Joint Seminar on the Impact of Policy on Base Metal Trade Flows in April
2025, an insight papers will be written on the topics of The Role of Trade Policy in Shaping
the Global Minerals and Base Metals Trade

Trade policy encompasses the rules and strategies that a country adopts to regulate its
international trade. It includes a range of measures designed to manage imports, exports, and the
flow of foreign investments. These policies shape the terms of trade, determining how countries
interact with global markets and with each other. Through tariffs, trade agreements, and various
regulatory frameworks, trade policies influence the movement of goods, services, and capital
across borders. They are key in fostering economic growth, protecting domestic industries, and
promoting international cooperation.

The main contents of trade policy include tariffs, duties, and non-tariff barriers (NTBs). Tariffs
are taxes imposed on imports to protect domestic industries or generate revenue, while NTBs
may include quotas, licensing requirements, and regulatory standards. Additionally, trade
agreements, such as bilateral or multilateral deals, help reduce barriers and increase market
access. Countries also implement export incentives and import restrictions, along with measures
like subsidies to enhance domestic competitiveness. Intellectual property rights (IPR) protection
and trade remedies, such as anti-dumping and countervailing duties, ensure fair trade practices.
Strategic trade policies, including support for emerging industries and resource management, are
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often used to achieve long-term economic objectives.

Trade policy serves as a critical tool for managing a country's economic relations with the rest of
the world. By setting the rules for trade, investment, and competition, it ensures that both
domestic and global markets operate efficiently and equitably. Trade policies also adapt over
time to reflect changing economic priorities, global trends, and geopolitical factors. Effective
trade policies can foster sustainable growth, encourage innovation, and promote the fair
exchange of goods and services internationally.

In order to assist member countries to explore how trade policy impacts the global minerals and
base metals trade and to understand its broader economic, geopolitical, and environmental
implications, the secretariat propose to develop an Insight Paper examining how trade policy
mechanisms such as tariffs, export restrictions, trade agreements, and foreign direct investment
(FDI) regulations influence the minerals market and providing a comprehensive analysis of the
ways in which trade policy shapes the global flow of critical resources. At the same time, this
paper aims to contribute to a deeper understanding of how nations and industries can navigate
the evolving landscape of mineral trade. This is increasingly crucial in the context of the green
energy transition and the growing demand for critical minerals. The Insight Paper will be
written by the ILZSG/INSG Director of Economics and Environment.

10. Environment, Health and Safety-Related Activities

The Director of Economics and Environment continuously monitors the recent changes and
developments in the legislation and regulations in different regions and countries that have
implications for the nickel industry. Such changes will be included in the Study Group´s Health,
Safety, and Environment Data Base. The Director of Economics and Environment keeps liaison
with UNEP, Minamata Convention, and BRS Conventions on issues related to chemicals, waste,
and pollution in the minerals and metals sector.

11. Recycling

The secretariat continuously monitors issues related to the recycling of nickel. Contacts with
major associations and institutions involved in the metal recycling business such as the Bureau of
International Recycling (BIR), Institute of Scrap Recycling Industries (ISRI), and other national-
level organizations were established in order to gain first-hand information regarding the latest
statistics as well as market, environment and policy issues. The Director of Economics and
Environment was invited to participate in the BIR Spring Convention in May 2023. Following
the discussion with BIR in 2023, the Director of Economics and Environment had follow-up
meetings with BIR Secretariat on a variety of potential collaborations including presentations at
each other´s events and establishing a Data Collection Collaboration Framework on non-ferrous
metals and stainless steel scrap.

The Director of Economics and Environment works on a continuous basis in estimating the scrap
nickel content in stainless steel production.

The INSG also continues to work in conjunction with the other Study Groups on the topic of
recycling. One aspect of this is working to ensure a consistent and cooperative approach
regarding the calculation of recycling rates across different metals as well as considering ways in
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which metals recycling can be optimized. The INSG also is active within the Team Stainless
group which gathers information in order to better understand the recycling of stainless steel.

12. Sustainable Development

Sustainable development encompasses a wide range of topics many of which have the potential
to impact the nickel industry. In response to sustainable development initiatives, new regulations
may emerge in such areas as recycling, mine restoration, the social impact of mining, and the
availability of mineral resources. The secretariat continues to monitor these issues and to work
with industry associations, national governments, international organizations, and private
companies to identify specific areas where changes in regulations or practice can be expected
and to bring this information to the attention of members.

In addition to the joint study on Mining and Smelting/Refining Waste that was recently
published, the secretariat proposes to prepare an INSG Survey on World Nickel Resources. The
Secretariat will continue to work with the Intergovernmental Forum on Mining, Minerals, Metals
and Sustainable Development, and the International Council on Mining and Metals (ICMM). In
its Joint Study on Current Responsible Sourcing Initiatives along Minerals and Metals Supply
Chains, the secretariat has also linked its work on responsible sourcing with the UN Sustainable
Development Goals. To further the understanding of responsible sourcing issues, the Director of
Economics and Environment has included several presentations in the EEC meetings following
the Joint Seminar “The Growing Importance of Responsible Minerals and Metals Supply
Chains” in April 2018. To reflect the latest developments and provide the members with a
holistic view of responsible sourcing issues, the Secretariat is going to organize its second Joint
Seminar on the topic “Responsible Sourcing of Base Metals – Latest Developments” in April
2024.

13. Identify and Confirm Suitable Speakers for the Group’s Meetings

The Director of Economics and Environment maintains close contact with a variety of
associations, NGOs, IGOs, academia, and consultancies and brings them to the Study Group´s
meetings to share their expertise on issues related to minerals and metals with member
governments. The Director of Economics and Environment follows closely the trends in the
minerals and metals sector to identify the priority matters to be addressed at the Study Group´s
EEC meeting and assist the Secretary-General regarding the organization of the Study Groups’
Joint Seminars.

ACTION TO BE TAKEN

Delegates are invited to propose any new items to be considered in the future Work Program for
the Environmental and Economic Committee.