THE Chamber of Mines of the Philippines (CMP) appealed to the government to lift the moratorium imposed in February on all forms of mining-related and exploration-related permits, which it said threatens $20 billion investments in the next five years.
The plea appeals to have fallen on deaf ears, however. Environment Secretary Ramon J.P. Paje told reporters he was not inclined to recommend a lifting of the moratorium.
CMP President Benjamin Philip G. Romualdez said the industry may be hard-pressed to contribute to the country’s economic growth if the moratorium continues indefinitely.
“The moratorium [on processing mining applications] is stalling the industry’s growth—or can even potentially lead to a decline—and consequently, diminish mining’s contribution to our gross domestic product [GDP],” Romualdez said in his speech during the formal opening of the Mining Philippines 2011 Conference on Wednesday.
He estimated that the moratorium is threatening investments amounting to between $14 billion to $20 billion in the next five years.
“Please put a stop to the moratorium. We are ready to help our economy and invest in our country, but we also need the Department of Environment and Natural Resources [DENR] to act on the permits to enable the industry to move forward,” he said.
Paje told reporters during a press briefing on Wednesday that of the 476 existing mining permits issued to various mining companies, only 30 companies are actually operating metallic mines.
“Only 6 percent of the 476 mining permits are generating revenue for the government. Where is the other 94 percent? The industry should look into this,” he said.
Still, he said once the DENR receives a directive from the Office of the President, the department would immediately start processing applications. Only through an executive order will he lift the moratorium in the processing of new mining applications, Paje said.
Paje said the DENR is now reviewing existing mining applications as part of the “use it or lose it” policy being implemented to make sure that only mining firms that are serious in doing business will be granted the necessary permits.
He alleged that some companies are only securing permits to sell them later—for as high as $10 million—to companies that are interested really in doing mining.
The DENR chief said the government is not earning from these kinds of transactions, as under the Philippine Mining Act of 1995, the government is entitled to 2 percent of the gross production of mining companies.
Paje is also pushing for the declaration of more mineral areas in the Philippines to allow the government to generate an estimated additional P7 billion in revenues annually. Once a mining area has been declared, mining companies are required to pay a 5-percent royalty to the government, he said.
But apart from the moratorium, Romualdez noted that the delay in projects caused by a concerted effort to stop the growth of mining on its tracks resulted in the failure of mining investments to breach the $1-billion mark.
Last year mining investments in the Philippines reached $955.85 million.
“Despite the industry’s continuing efforts to meet the expectations of society as regards the impact of minerals development on communities and on the environment, some sectors continue to lay roadblocks against mining,” he said. “Notable among these roadblocks are, of course, the ‘No to Mining in Palawan movement,’ the alternative mining bills in Congress, the ban on open-pit mining in South Cotabato and the Writ of Kalikasan against mining firms in the Zamboanga Peninsula.”
Romualdez also noted that 15 mining companies joined President Aquino’s delegation to China two weeks ago and that Mr. Aquino personally witnessed the signing of four investment agreements between Filipino firms and their Chinese counterparts.
However, Romualdez said three of those four agreements are for projects in Palawan, where there is an “orchestrated campaign” against mining.
Still, the CMP chief remains upbeat about the prospects of the country’s minerals industry, citing, for one, the “unparalleled” increase in metal prices in the international market.
“[Also], mining appears to be regaining lost ground. With the country posting in 2010 the highest GDP growth rate since 1986 at 7.3 percent, the mining industry rebounded to a growth rate of 12.1 percent. Mineral exports, led by copper and gold, grew over 27 percent to $1.87 billion from $1.47 billion in 2009,” he said.
In the first quarter of 2011, mining accounted for 4.3 percent of the country’s total exports at $513 million.
“While it was agriculture that helped keep the economy afloat in the first half of 2011, it was mining, along with manufacturing, that provided the much-needed boost to our economy against the backdrop of a global economic downturn in the second half of the year,” Romualdez said.
Meanwhile, the government said further reforms are needed to make mining more acceptable and turn it into a major driver of economic growth.
Executive Secretary Paquito Ochoa Jr. noted that high on the agenda of the government is the transparency in revenues derived from mining.
“We may have to consider beginning the process for the Philippines’ participation in the Extractive Industry Transparency Initiative [EITI],” said Ochoa in his speech. The EITI is a global initiative on transparency in revenue management derived from extractive industries like mining, oil and gas.
“The EITI requires extractive industry companies to publish what they pay and for governments to publish what they receive,” Ochoa said.
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By: Jennifer A. Ng and Jonathan Mayuga
Source: Business Mirror, Sept. 14, 2011
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