Funding constraints hit local mining

LOCAL mining executives said the global credit crunch has constrained funding for projects.

“Funding has become limited due to the global financial crisis, and yet the Philippine mining industry remains,” said Benjamin Philip Romualdez, Chamber of Mines of the Philippines president.

“There still are a few funding sources, such as private equity and sovereign funds. While sovereign funds are limited to large-scale projects, we have many local mining investments which are in the billion-dollars mark which could avail of such,” he said. “There’s a lot of money out there, and we should just find the conduit to get them,” he said.

The chamber official said Chinese investors are looking for mining properties here, especially these days when investing in mining has become cheaper.

Romualdez said mining ventures could also tap local banks.

Roberto Borromeo, Financial Executives Institute of the Philippines president, also said retail investors, especially overseas Filipino workers, should be encouraged to invest in mining.

“Financing might take a little adjustment, but its there,” said Environment Secretary Jose Atienza Jr.

Romualdez said many mining companies and potential investors at the moment are also assessing prospects, as operations are likely to be constrained by the global economic crisis and other factors, such as the declining prices of copper and nickel recently.

He said the government should extend the mining industry assistance. “We might be needing some relief in time given the government’s expectations of our sector. We are hoping that the mining industry gets from the government a little reprieve,” Romualdez, who is also Benguet Corp. chairman, said.

Atienza said the mining industry’s total investment target for 2009 is still being worked out, and there may be a “minimal” shift in the goal.

Horacio Ramos, Mines and Geosciences Bureau director, told reporters this year’s pegged target of $1-billion worth of investments could be adjusted to $800 million, just as last year’s mining investments goal of $850 million was reduced to $650 million. –Ben Arnold O. De Vera, Reporter, Manila Times