DTI: Only 2% of RP land covered by mining permits

THE Philippines’ vast area of untapped mineral resources can be converted to multiple investment opportunities in the areas of exploration, development and mineral processing, trade secretary Gregory L. Domingo said.

“We have a land area of some 30 million hectares, but only 2 percent is covered by mining permits.  The Mines and Geosciences Bureau [MGB] estimates that there is about nine million hectares more that is geologically prospective for metallic minerals,” Domingo said in a speech during the on-going Mining Philippines 2010 Conference and Exhibition at the Manila Hotel, which highlighted the Philippine mining industry’s role in industrialization.

He challenged the industry to further develop the mining industry, especially its midstream and downstream areas, promising that the Department of Trade and Industry (DTI) through the Board of Investment (BOI) and other government agencies will continue to help the industry to sustain growth.

Domingo said mining is considered a very attractive investment area in the Philippines because of that.

The DTI chief said the attractiveness of the industry can be attributed to the fruits of the revitalization program initiated by the previous administration, which identified priority projects in the areas of mineral development, mineral processing and exploration, and expedited the processing of applications for mining tenements. 

He said such initiatives contributed much to the global competitiveness of mining in the Philippines and resulted in a very significant increase in investments in the industry.

Since the start of the revitalization program in 2004 up to the first quarter of 2010, investments in mining have reached a total of $2.8 billion, which created about 190,000 jobs for Filipinos all over the country, especially in the areas where mining projects are located, Domingo said.

Such huge investments, he said, contributed to the earnings of the national government in terms of taxes, fees and royalties. 

He said the national government alone was able to collect $204 million from existing mining operations.

“With the good performance of the mining industry last year, the government is confident that potential investments in the industry would reach as much as $13.5 billion by 2013,” he said.

  According to Domingo, by the end of the year, the contribution of the mining industry to total exports would be over 6 percent which classifies the Philippines as a mining country.

According to Domingo, the development of downstream industries is another avenue worth looking into by prospective investors.

He said the development of downstream industries will allow the country to manufacture products that will be used by other industries, within and outside the country, citing the case of copper.

According to Domingo, the Philippines has both significant amount of copper deposits as well as a copper smelting plant operated by the Philippine Associated Smelting and Refinery, which produces pure copper for export to other countries as raw materials.

The copper is manufactured into several end products, such as copper wires, which can be manufactured in the Philippines to supply the country’s electronics industry.

“It is important that we now give focus on this final stage of the mining process—the establishment and development of manufacturing plants that will enable us to utilize our locally processed materials,” he said.

He encouraged the establishment of manufacturing plants which he said is the final state of the mining process. 

“Once these plants are established, we do not need to export our raw materials to other countries so that they will do the manufacturing for us. 

We can do it ourselves.  Instead of importing products like gold and thin wires and copper wires for making semiconducts and conductors, stainless steel and cooper tubes, we can just produce them locally,” he said.

Doing so, he said, will minimize the cost of production of industries that use the products while developing at the same time at a great extent the mining industry, which will pave the way for the industrialization of the Philippines.

“By developing the downstream industries of mining, we gear toward not only on the industrialization of the said industry but of the country’s economy as well,” he said.

Domingo said the industrialization of the Philippine mineral industry is included in the long-term plan of action of the MGB.  Such, he said, could be done by promoting downstream processing and manufacturing of metals such as copper, nickel, gold and chromite; development of community-based supplier industries and or services; improvement of government benefits for the mining industry; and control on the exports of unprocessed minerals.

The BOI, he said, has included a specific guideline in the 2010 Investment Priorities Philippine Plan such as similar incentives geared toward the development of downstream mining industries such as income tax holiday for new process or technology for the excavation  and processing of minerals. For nickel, chromite and iron projects, an additional processing step will add value to the mineral end product.

The move, he said, is to encourage mining firms to process mineral ores first before exporting them to other countries. 

“This will increase their worth and value both in the domestic and world market,” he said. –Jonathan L. Mayuga / Correspondent, Businessmirror