Government cuts H2 mining target by P14.3B

The steep drop in actual mining investment during the first half of this year compared to the same period in 2011 forced the government to slash its target for the second half to $349 million (P14.360 billion) from the original $1.1 billion (P45.262 billion).

Environment Secretary Ramon J.P. Paje attributed the mining-investment drop to individual business decisions of mining companies to postpone or delay ongoing projects.

But many believe it was either because of the result of the mining moratorium or the issuance of Executive Order 79 and its controversial implementing rules or both, a belief Paje flatly rejected.

In another development, Paje also rejected as unacceptable the argument of Philex Mining Corp., the country’s largest mining firm, that the tailings-pond leak in its Padcal mine in August was the result of “force majeure” so the company should not be fined.

The Department of Environment and Natural Resources (DENR) has imposed a hefty fine of P1.034 billion on the mining company, in accordance, Paje said, with the Philippine Mining Act of 1995.

A letter dated November 21 formally denying Philex’s appeal was sent to Philex President Eulalio B. Austin Jr. It gave Philex 45 days upon receipt to pay the penalty.

Michael Toledo, vice president for corporate communications of Philex, said his firm would appeal. “There is a procedure in the DENR. We will follow up. The principle of exhaustion of administrative remedies will apply. We will appeal and or submit a proposal,” he said.

As a result of the huge investment drop, government targets for 2013 up to 2016 were also lowered.

For 2013, from the original investment target of $2 billion, the government target is now $718 million. For 2014, the target is now $851 million; the original target was $2.47 billion.

For 2015, the investment target was reduced to $757.6 million from the original $3 billion. For 2016 the investment target is now $619 million compared to the original investment target of $2.35 billion.

According to the Mines and Geosciences Bureau (MGB), 30 projects are currently on their operation and expansion stages; nine on their construction and development stages; another nine on their feasibility and financing stages; and four on their advance exploration stage.

The new targets were made on assumptions based on the current situation, according to MGB Director Leo Jasareno, wherein the government’s moratorium on new mining permits is in effect.

In an earlier interview, Jasareno said with the new mining policy in place and the issues on its implementing rules settled and clarified, the minerals sector would bounce back next year.

Among the big-ticket projects that are expected to boost mining investments in the coming years is the “problematic” Tampakan copper-gold project in Mindanao. The $5.9-billion project is expected to contribute an additional one percent to gross domestic product and spur economic development in Mindanao, with its promised infrastructure projects in preparation for full-scale operation.

The project is being stymied by a provincial ordinance that bans open-pit mining in South Cotabato, one of three provinces where Sagittarius Mines Inc., the government contractor for the project, intends to operate its open-pit mine. –Jonathan L. Mayuga | Reporter, Businessmirror