P10.4-B Investments fled in 2011

The mining industry suffered a P10.4-billion foreign direct investment (FDI) outflow last year due to the suspended issuance of mining permits by the Department of Environment and Natural Resources (DENR) for more than a year and uncertainties in the mining policy that will have shaped the industry’s development under the Aquino administration.

The Chamber of Mines of the Philippines (CMP) said foreign investors opted to place their capital elsewhere instead of parking their money in the banks. Citing data from the Bangko Sentral ng Pilipinas (BSP), it added that figures would show that there was a “mining FDI outflow” of $240.43 million or P10.4 billion in 2011, a reversal of the $282.08 million or P12.2 billion that came in during the previous year.

“Companies that are going on exploration activities have stalled, as their permits have not been acted upon. Those with existing contracts have been on a wait-and-see mode for the issuance of the mining policy that may affect their future operations.  Most of the investors would rather see the final policy out before moving their projects forward,” CMP said in a statement.

The Mines and Geosciences Bureau (MGB) under the DENR has suspended the issuance of mining permit applications since the implementation of the “use it, lose it” policy in 2010.

In February last year, Environment Secretary Ramon Paje directed all regional directors of the MGB to refrain from accepting and processing new mining applications nationwide.

Paje cited the “cleansing” of pending and inactive mining projects nationwide by the mines bureau.

MGB records show there are more than 2,000 pending mining applications filed in various MGB regional offices.

Apart from the existing moratorium on the issuance of new mining permits, CMP said the mining moratorium in some provinces and the open-pit mining ban in South Cotabato are additional concerns for potential investors.

The group projected that for 2011-16, increased production from several gold, nickel and copper projects when pursued can bring about an increase of up to 4 percent to 5 percent to the gross value added (GVA) of the mining industry.

CMP said that  with P5.2-billion capital investments in 2011 increasing to P17 billion in 2016, a 5 percent or 6 percent in GVA from the mining sector can be expected in 2016.

Miners are hoping that their concerns could be addressed by the new mining policy that is yet to be issued by Malacañang. –Jennifer A. Ng / Reporter, Businessmirror