DENR chief wants mining to flourish but OK’s review

The Philippines is considered the fifth richest mineral resources in the world with a mineral wealth worth more than $840 billion—equivalent to at least 10 times its annual gross domestic product (GDP) and more than 15 times its total foreign debt—remained untapped. Government data show the country to have substantial mineral deposits including copper, gold, nickel, chromite, limestone and semi precious stones that can be found in the Sierra Madre mountain range in Luzon and in the Mindanao region.

In Mindanao, the area from Davao to Butuan is believed to be the richest mineralized area of the country.

Among other areas believed to be rich in gold and copper deposits is Mount Diwalwal in Compostela Valley in Central Mindanao, Benguet in Northern Luzon and Rapu Rapu Island in Bicol. The provinces of Mindoro, Benguet, Zambales, Nueva Vizcaya, Cebu and Leyte also have rich mineral deposits.

Philippine coal deposits are also substantial.

The Philippines, however, has not been able to realize the full economic potential of these mineral resources. The mining industry has been prevented from going full blast by a wide range of setbacks including environmental and bureaucracy issues, court challenges, conflicting political views on what mining policy and problematic behavior of local governments some of which lend problematic support and others openly siding with anti-mining lobby groups.

The latest of many concerns of foreign and local investors are the Supreme Court’s issuance in April of the “Writ of Kalikasan,” the ban on open pit mining in South Cotabato, and proposals to repeal the Philippine Mining Act of 1995.

The Supreme Court’s Writ of Kalikasan provides a set of remedies that individuals or groups can resort to in the face of violations to their right to a healthy and balanced environment.

The previous provincial government in South Cotabato, exercising of its prerogative under the Local Government Code, banned on open pit mining project into which the investors had poured much money and expert time.

Foreign investors say the Mining Act of 1995 “is at par with best international practice, hence, it does not need to be repealed or reviewed, but rather be strictly enforced.”

These loose ends in the implementation of the country’s mining policy is unsettling the investor community at a time when the government is courting private sector support for the Philippines’ infrastructure development in the next six years under the administration of President Benigno Aquino 3rd.

These also raised the concerns about the country’s ability to move forward with a healthy, reliable and transparent mining industry policy.

In order to achieve its goal, the Department of Environment and Natural Resources (DENR) is now banking on responsible and sustainable mining in line with President Aquino’s policy to make the Philippines a “predictable and consistent place for investment.”

The Aquino government eyes the mining sector as one of the brighter spots in its development of new revenue collection streams amid ongoing fiscal and budgetary constraints.

Environment Secretary Ramon Paje said that various government policies are now directed at removing these hurdles to investments, adding that the country will not survive without mining.

He also assured foreign investors, especially in the mining sector, that the government will provide an enabling environment for them.

Paje said that a breakthrough is expected soon in the resumption of talks in the local level to lift the open-pit mining ban in South Cotabato, which is derailing the $5.2-billion Tampakan copper-gold project.

He also said that the national government has opted to keep its distance from the issue following the request of the project proponent Xstrata Plc through its local subsidiary Sagittarius Mines Inc.

“We want a win-win solution to the Tampakan mine,” Paje said, adding that the Environment department will only intervene should talks fail.

In July, Paje had said that the government would try to facilitate a “compromise” on the open pit-mining ban in South Cotabato that has affected the Tampakan project, as it found the need to protect this mining investment.

He also reiterated the agency’s stand that local and provincial government units cannot pass ordinances that would go against a national policy, especially on mining.

In June, the provincial board of South Cotabato passed an environmental code that banned open pit mining. The ordinance was signed by former Gov. Daisy Avance-Fuentes before moving on to represent the second district of her province in Congress.

Paje said that the Minerals Development Council has already expressed willingness to review the ban or at least qualify which projects should be affected.

Meanwhile, the environment chief said that the Aquino government supports legislative efforts to review and improve the Philippine Mining Act, but stressing that he is not for the abrogation of the law.

Paje said the department welcomes the bill filed in Congress that seeks a review of the Mining Act and put in place “responsible mining” in the country. “We can’t prevent Congress from reviewing its law,” he stressed.

Mining is among the foreign chambers’ “seven big winners.” These are economic sectors projected to generate about $75 billion in foreign direct investment and at least 10 million jobs in the next decade.

Paje also reaffirmed the role of the mining industry in national development, noting that mining has a multiplier effect of six times and can add up an incremental economic activity of at least $40 billion.

Paje said that from 2003 to 2009, investments in the minerals industry reached $2.8 billion, with a target of reaching $13 billion by 2013.

The minerals industry has grown to comprise 5.4 percent of our total exports for 2009, while the increase in Gross Production Value in the industry has increased by 159 percent from 2003 to 2009.

Earlier, the Environment department said that Philippine metallic mineral sector is expected to continue posting double-digit growth rate in its output for the next five years as demand for metal in the emerging markets in Asia grow in an outstanding pace.

The agency said that the country’s mining output has been steadily growing in the past two years and would continue to do so as demand for consumer goods and construction materials in the emerging market in Asia, particularly in China and India, increase.

Paje also noted that investors from China, India and the Middle East are lining up to invest in the Philippines as their infrastructure growth will inevitably need new sources for their demand for base metals. –JAMES KONSTANTIN GALVEZ REPORTER, Manila Times