Mining impact on jobs, economy limited–NEDA

ALTHOUGH the mining industry’s contributions to economic growth have been cited as among the largest, the industry’s full impact particularly on employment and the domestic economy continues to be limited, according to an assessment made by the National Economic and Development Authority (Neda).

The Neda made the assessment as a geologist from the University of the Philippines-National Institute of Geological Science appealed to anti-mining groups on Tuesday to refrain from creating scare scenarios about the mining industry.

In a presentation to President Aquino, the Neda said with the Mines and Geosciences Bureau (MGB) estimating that the value of mineral production will reach $1.7 billion in 2012 and $3 billion in 2013, the industry’s impact on the country’s gross domestic product (GDP) is less than P200 billion and fewer than half a million in direct and indirect jobs this year and next year.

“The [industry’s] contribution could be higher. In percent, the mining and quarrying sector has a large percentage in terms of net FDI [foreign direct investments],” Neda Assistant Director General Ruperto Majuca said.

But, Macuja added, “considering the large net FDI share of total like 33 percent in 2010, the employment generation is very low and the real GDP of the sector is very low.”

That poor impact, he said, can be explained by the mining output being just extracted material and “exported without much intermediate processing.”

The Neda estimated that with the MGB’s estimated mineral production this year, it expects the mining industry to contribute only 0.74 percent or around P66.6 billion of GDP. Next year the Neda estimates the sector to contribute 1.17 percent or some P105.3 billion of GDP.

GDP is the total value of goods and services produced in a country in a year.

In terms of jobs, the Neda said, new direct and indirect employment to be generated by the industry through increased mineral production will reach only 276,000 this year while for 2013, jobs to be generated may only reach 485,000.

“The Neda supports more value-addition and intermediate processing steps in order to increase the [mining industry’s] impact on the domestic economy and employment,” Majuca said, adding that the Neda could not say at this time how much more the industry can contribute if there is an increase in processing and value-addition.

Increasing processing and value-addition, Majuca said, is being studied by the Department of Trade and Industry (DTI). He added that this study, which is intended not only for the mining industry, includes policy changes and implications as well as a complete value-chain analysis.

In 2011 the industry had a lackluster performance mainly due to a slowdown in the manufacturing industry and, in part, the weak performance of the mining and quarrying sector. This sector contracted by 2.1 percent in the fourth quarter and a full-year growth of only 4.1 percent.

This sector, in the GDP data, showed a growth of only 2.5 percent in the fourth quarter of 2011 and full-year growth of only 1.9 percent.

The actual growth figures for 2011 were at 3.7 percent for the full year and another 3.7 percent in the fourth quarter. While these expectations were within the Neda’s estimates, these were below the official 4.5 percent to 5.5 percent estimated by the Development and Budget Coordination Committee.

Anti-mining groups, apparently, are not helping the country’s mining industry.

These groups have prompted a geologist from the University of the Philippines-National Institute of Geological Science to appeal to them on Tuesday to refrain from creating scenarios that only serve to frighten people.

Only experts with extensive knowledge in science and engineering relevant to mining operations can make a credible assessment of the level of safety or danger posed by mining after a thorough evaluation of various factors, geologist Carlo Arcilla said in a statement.

He cited, for instance, the debate on the proposed Tampakan mine project, which should be discussed reasonably by all stakeholders.

“Debate on mining issues should be based on actual field work by actual geologists,” Arcilla said, adding that statements “should not be made to scare people but to challenge issues on safety and environmental management”.

“I encourage environmentalists like Clive Wicks and Gina Lopez to visit large-scale mining operations in the country that practice responsible mining,” the geologist said.

Wicks and Lopez are opposing large-scale mining activities, citing their adverse impact on the environment and food-production capacity in mining-affected areas.

“Mining activities and food production can co-exist,” Arcilla said.

“In Japan, the Hishikari mine, which has the world’s richest gold deposit, is operating beside farm lands,” he added.

Arcilla said that because of “scare tactics” by anti-mining groups, the proposed Tampakan project is now the subject of spirited debate.

Nevertheless, he added, the debate is good for the project and for the entire mining industry as well because project proponents being under the microscope will have no choice but to practice responsible mining. –Cai U. Ordinario and Jonathan L. Mayuga / Reporters, Businessmirror