Mineral resources for sustainable and inclusive prosperity
January 10, 2022originally published in The Manila Standard
“The mining sector can now start developing a critical mass of responsible operations.”
Throughout history, thriving mining industries all over the world have been a critical contributor in generating revenues for the government. They support local industries, create quality employment, and build progressive communities in the most remote and underdeveloped areas. As for the Philippines, its rich endowment of mineral resources are highly valuable national assets that remain to be an underdeveloped cross-industry driver that could have cushioned the impact of the economic damage caused by the pandemic.
This policy impasse has finally been remedied with the lifting of the moratorium on new mining permits and the ban on open-pit mining. These are two ill-advised policies that stopped what could have been a wave of multi-billion dollar investments that by now would be thriving centers of growth even with the ongoing pandemic.
Department of Environment and Natural Resources DENR Administrative Order (DAO) 2021-40 signed (December 29, 2021) by DENR Secretary Roy Cimatu pointed out that the “open-pit mining method is a globally-accepted method of mining, considered to be the most feasible option for mining near-surface or shallow ore deposits.” A scientific fact that was somehow overpowered by the hard-line environmental posturing of former Environment Secretary Regina Paz Lopez and her advisers.
According to the DAO the rectifying policy aims: “To revitalize the mining industry and usher in significant economic benefits to the country by providing raw materials for the construction and development of other industries and by increasing employment opportunities in rural areas where there are mining activities thereby stimulating countryside development.”
Now the Philippine mining industry can restart and hopefully sustain an accelerating momentum of expansion to catch up with economies that have taken maximum advantage of their mineral riches such as, Australia, Indonesia, and South American countries. Becoming a new powerhouse in this trillion-dollar global mineral ecosystem aligns perfectly to our dire need to recover towards inclusive economic growth, infrastructure development, and poverty reduction.
The Philippine mining sector proved to be resilient to the ongoing economic doldrums and posted increases in its production value. According to data from the Mines and Geoscience Bureau (MGB), the country’s metallic mineral production value managed to gain 22.34 percent from P99.03 billion the previous year. This illustrates the huge opportunity loss through these years when these two policy walls stopped what could have been some billions of dollars’ worth of investments in new large-scale mining projects.
In a 2016 list of only 11 pending mining projects, the total capital investments valued at that time was already at US$ 23 billion. This is more than double compared with 2017 data from the American Chamber of Commerce of the Philippines that reported total Foreign Direct Investments of only US$ 10 billion.
To further illustrate, the US$ 5.9-billion project in the Tampakan copper-gold deposit in South Cotabato, reputed to be one of the largest undeveloped deposits in the world with 2.94 billion tons of copper and gold ore, would have already been benefiting not just its host communities but also the adjacent regions in Mindanao and the national government. With a projected average yield of 375,000 tonnes per annum of copper and 36,000 ounces per annum of gold in concentrate over a 17-year period, a simple computation based on recent copper and gold prices translates to some P1.25 billion and P3.2 billion in annual potential respectively.
Philex Mining’s Silangan project in Surigao del Norte with estimated mineable reserves (2019) of 917.67 million pounds of copper and 2.995 million ounces of gold, is valued at approximately P205.9 billion and P274 billion respectively. Mindoro Nickel’s $2.5-billion project has estimated reserves of some 2.9 million tonnes or 6.6 billion pounds of nickel.
Other multi-billion-dollar investments that would hopefully see a restart are: Nadecor’s Kingking project in Davao del Norte, Davao Oriental’s Asiaticus project, Lepanto Mining’s FSE project in Benguet, and Masbate’s Philsaga Mining contract, among others.
These impressive figures of the legitimate large scale mining companies under the Chamber of Mines of the Philippine (CoMP) does not account for the multiplier effects that would greatly benefit the national and local economy in terms of taxes, infrastructure development, employment, and linked industries needed to support each project. Even if all these projects are in full operation, we would only be scratching the surface of the country’s vast mineral wealth with a footprint below 1 percent of the country’s total land mass.
With these policy walls demolished, the mining sector can now start developing a critical mass of responsible mining operations that will simultaneously lead long term development for millions of families in the remote countryside and without expense to government. As the CoMP has successfully led a science based advocacy to reverse these bad policies, there are great expectations for its members to lead a renaissance of the mineral development industry and for the Philippine mining sector and its linked industries to be a leading force in harnessing our mineral resources for sustainable and inclusive prosperity.