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Mining offers golden opportunities

The mining industry is viewed as the “next big thing” for the Philippines, but a host of regulatory and social issues continue to prevent local and foreign companies from extracting gold and other minerals that can lift the conditions of poor communities.

Mining employs some 247,000 workers in the Philippines. The country exports $2.7 billion worth of minerals to major countries such as Japan, Australia, Canada and China annually.

With the implementation of the Asean integration in the late part of 2015, the government and the private sector are preparing for stronger competition. Former Asean secretary-general Ong Keng Yong said during the Sixth Asia-Pacific Mining Conference and Exhibition in 2005 the mining industry would play a very important role in supporting Asean towards establishing an economic community.

“Without minerals and minerals related materials such as—aluminium, bauxite, lead, zinc, iron ore, tin, nickel, copper, gold, etc., no construction and manufacturing industries and other industries and services would be possible to exist in the economy,” Yong said.

Yong expressed confidence that high demand for minerals would continue in the coming years. “We are confident that the demand for minerals will continue to grow on the back of rising external demand, especially from China and India as well as continued market expansion within the Asean member countries,” he said.

For the Philippines, the Chamber of Mines of the Philippines expressed hope the country would have a competitive advantage.  “The Philippines has a competitive advantage in terms of mineral potential which we must maximize under a framework industrial complementation with our Asean neighbors,” said CoMP vice president for legal policy Ronald Recidoro.

Recidoro said the country’s copper smelter had a big advantage for the mining industry. Currently, the Philippines has one copper smelter and refinery in Leyte.

The Philippine Associated Smelting and Refining Corp.,  which is 78-percent owned by Glencore International, has been producing copper cathodes for export since 1976.

“The copper smelter plant can take on additional capacity from other Asean countries,” Recidoro said.

Senator Grace Poe said mining could be the “next big thing” for the Philippines, as the country has the second-largest deposit of gold in the world, after South Africa.

“In fact, we used to be the biggest producer of gold in Asia and we continue to be among the top 10 gold producers in the world today,” Poe said. Aside from gold, the Philippines also has vast deposits of silver, copper, nickel, iron, lead, chromite and zinc.

According to one study, the total aggregate value of the minerals under Philippine soil is estimated to be $1.4 trillion.

The mining industry, however, continues to face a number of issues, including a negative public perception, policy inconsistencies between the national and local agencies, taxation and the government’s declaration of no-go zones.

Environment Secretary Ramon Paje said a lot of mining projects have been delayed due to the conflicting national and local laws.

“We have seen several mining projects not being able to prosper because of local policies prohibiting mining,” Paje said.

One of them is the Tampakan mining project in South Cotabato. Discovered in 1992, the Tampakan project is a 2.9 billion metric ton deposit, containing 15 million tons of copper and 18 million ounces of gold.

The $5.9-billion mining project has been delayed for years due to major issues including the delays in permit approvals and the open pit mining ban. Sagittarius Mines Inc. obtained the environmental compliance certificate for the Tampakan project, but the mining company could only proceed with the implementation of the project, once it submitted all other necessary government permits and clearances.

Currently, the project still has no free prior and informed consent.

To address the issues of the Tampakan mine, the Environment Department created an inter-agency working group.  “The message is clear that this administration is out to protect legitimate and responsible investments. For now, the project is moving as the issues with the indigenous peoples, the agrarian reform program, the environmental code of South Cotabato and security are being addressed,” Paje said.

Vice President Jejomar Binay said in order to address conflicting laws, there should be a harmonization between the national and local ordinances.

“We have a Mining Law [Philippine Mining Act] that is considered to be one of the most sophisticated and well-crafted pieces of legislation worldwide. It ensures the protection of the environment, and requires companies to institute social development programs, and guarantee the rehabilitation of a mine after its lifetime. This should supersede local laws that run contrary to what the Mining Law seeks to achieve,” Binay said.

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