Posted on February 09, 2015 10:07:00 PM
THE CANADIAN Chamber of Commerce of the Philippines (CanCham) joined other business groups and companies in opposing a new mining revenue-sharing scheme as contained in a proposed law.
The new sharing scheme for the Philippine mining industry would defeat its purpose of boosting investments and increasing government revenues, CanCham President Julian H. Payne said in an e-mail sent last Sunday.
“Any increase in the revenue-sharing rate for large-scale mining imposed by the Philippine government will result in decreased new foreign investment in mining because it will make the Philippines less competitive and less attractive than other countries with mineral reserves,” Mr. Payne’s e-mail said.
Mr. Payne expressed these sentiments after a proposed law was filed at the House of Representatives last Tuesday which contained a draft measure that was the product of deliberations of the Malacañang-created Mining Industry Coordinating Council.
Once passed, the new bill will lift the government’s moratorium on new exploration permits, a move largely anticipated by local and foreign miners. However, the new scheme gives the government a 55% share in adjusted net mining revenue, or 10% of the company’s gross revenues, whichever is higher; and 60% of any windfall profit above the net revenue threshold, with the state deemed the “owner of the minerals.”
“If there is less new foreign investment in new mining, there will be less new mining and less (rather than more) mining revenue to share than is possible with a competitive revenue-sharing rate that stimulates a growing mining industry,” Mr. Payne said.
CanCham is home to the biggest investors in the Philippines’ mining sector, among them OceanaGold Corp., the sole company operating in the Philippines under a Financial and Technical Assistance Agreement; and gold extractor Lepanto Consolidated Mining Co.
The current rates — a 50% government share in profits of foreign miners under Financial and Technical Assistance Agreement, and a 2% excise tax on actual market value of output under Mineral Production Sharing Agreements — are already among the highest among mineralized countries, Mr. Payne said. Increasing the government share would turn off more investors, effectively foregoing investments, he added.
The government, Mr. Payne said, should instead focus on improving regulations for the industry to ensure fiscal and environmental compliance.
“Large-scale mining can be well-regulated (as in Australia and Canada) to assure not only that it is environmentally and socially responsible but also that it pays all legal taxes required with revenue-sharing,” he said.
The mining fiscal regime bill is a priority of Malacañang and Congress. However, lawmakers said exhaustive consultations and amendments will be conducted before it is approved. —Melissa Luz T. Lopez
Source: http://www.bworldonline.com/content.php?section=Nation&title=canadian-chamber-also-opposes-mining-scheme&id=102425
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