Philippines still among least attractive mining territories

THE PHILIPPINES remains near the bottom of a list of areas rated yearly on having policies conducive to mining investments.

The Fraser Institute Annual Survey of Mining Companies 2010/2011, published last March 3, showed the Philippines in 66th place out of 79 such territories rated against a Policy Potential Index (PPI). The country last year ranked 70th out of 72 jurisdictions.

Unlike last year, however, the Philippines was no longer counted among the bottom 10 areas. Moreover, it improved its score to 27.3, out of a maximum of 100, from 14.0 last year.

The PPI is a composite index that measures overall policy attractiveness, based on indicators like taxation, infrastructure, political stability, labor issues, security, environmental regulations as well as uncertainty over regulations and native land claims.

For this year, the 10 areas on the list with the most conducive policies were, in descending order: Alberta (Canada), Nevada (USA), Saskatchewan (Canada), Quebec (Canada), Finland, Utah (USA), Sweden, Chile, Manitoba (Canada) and Wyoming (USA).

In the bottom 10, also in descending order, were: Indonesia, Zimbabwe, Wisconsin (USA), Madagascar, India, Guatemala, Bolivia, Congo, Venezuela and Honduras.

The survey showed that, for the Philippines, indicators which were considered either “mild” or “strong” deterrents by more than 40% of respondents were: uncertainty over disputed land claims; uncertainty over which areas will be protected as wilderness, parks, or archeological sites; uncertainty over the administration, interpretation and enforcement of existing regulations; quality of infrastructure like roads and power; trade barriers (tariff and non-tariff barriers, restrictions on profit repatriation, currency restrictions, etc.); socioeconomic agreements/community development conditions (including local purchasing, processing requirements, or supplying social infrastructure such as schools or hospitals, etc.); security situation; regulatory duplication and inconsistencies between the national and local governments and inter-departmental overlap; and legal processes that are fair, transparent, non-corrupt, timely and efficiently administered.

Other indicators worth noting for the Philippines were: policy/mineral potential, “assuming no land use restrictions in place and assuming industry best practices,” which 68% of respondents said encourages investments; political stability, which 38% and 23% cited as a “strong” and “mild” deterrent, respectively, but which 27% said is “not a deterrent”; labor regulations, employment agreements, and labor militancy/work disruptions, which 39% said are not a deterrent, but which 22% cited as a “mild” deterrent; and taxation regime, which 38% said was not a deterrent, but which 27% said was a “mild” deterrent.

The survey polled executives and exploration managers in 494 mining and mining consulting firms worldwide from Oct. 19-Dec. 23 last year, the report said. –Businessworld