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Silangan Mindanao Mining Co., Inc. (SMMCI) marked another milestone on Thursday, August 28, 2025, completing the long-planned tunnel connection to the Exhaust Drive and establishing the project’s full underground ventilation series. The achievement, considered a critical safety and engineering requirement, was reached earlier than expected. Originally scheduled for September 6, the breakthrough was completed at 12:20 p.m. on August 28. “This is not just an engineering feat—it’s a commitment to our people,” SMMCI said in a statement. “After all, the most important thing to come out of the mine is the miner.” The breakthrough links the Level 95 underground workings to Shaft 2 bottom, which will serve as the main exhaust shaft of the mine. While Shaft 2 has not yet been activated for exhausting air, the tunnel now provides a crucial pathway for used air to exit the mine. Once the remaining drives from the South Ore perimeter are completed, the full ventilation cycle will be operational. Just hours after connecting Shaft 2 to the Exhaust Drive, another team completed the South Ore perimeter drive, achieving back-to-back breakthroughs ahead of schedule. These were made possible through the coordinated efforts of the survey team led by Engr. Benzyl Moran Metran, Mine Division Manager Engr. Efren R. Buada Jr., Operations Manager Engr. Wilfredo Mariano, and the support of the Mine Engineering, geology, and dewatering departments. Prior to the breakthrough, Philex Mining Corporation and SMMCI President and CEO Engr. Eulalio B. Austin Jr. conducted his regular monthly site walk at the Silangan Project. Donning boots and a hardhat, Austin reviewed underground progress with the technical team and project leaders, underscoring his hands-on leadership style. His visit came as construction advances on several fronts: the nearing completion of the tailings storage facility in Sison, the build-out of the process plant, and the underground development of the Sta. Barbara 1 deposit, where fresh ore production is targeted by late 2025. Austin reaffirmed that the Silangan Project remains on track to be commissioned by the end of this year, with first metals expected by March 2026. “We want to deliver a world-class project that meets the highest standards of efficiency, safety, and environmental responsibility,” he said. Beyond technical achievements, the company emphasized its broader mission to create opportunities for local communities, strengthen partnerships with host local government units, and contribute meaningfully to the Philippine economy. With its vast copper and gold deposits, SMMCI sees Silangan as a “blueprint for progress” — a venture that aspires to global competitiveness while practicing responsible mining and sharing long-term prosperity with its stakeholders.

By Ronald S. Recidoro, Executive Director, Chamber of Mines of the Philippines After more than a decade of uncertainty and policy flip-flops, the reconciled version of the Mining Fiscal Regime Bill, once signed, will mark a turning point in Philippine mineral policy. It is not just the culmination of years of legislative advocacy; it is the resolution to a long-standing national debate on how we can get the most out of our mineral wealth. The final measure, based largely on Senate Bill No. 2826 (with the ore export ban wisely removed), charts a pragmatic path forward. It aligns the government’s revenue ambitions with investor requirements and finally offers the mining sector the regulatory clarity it has long prayed for. A Law a Decade in the Making When President Aquino assumed office in 2010, the industry had high hopes that mining would get its fair share of the government’s attention. Riding on the 2004 Supreme Court decision upholding the constitutionality of RA 7942 in La Bugal-B’laan vs. Ramos, and the Arroyo administration’s full-throated call for investments in the mining industry, the sector was on an upswing, posting 9% growth in 2010–2011. This, plus the size of the country’s estimated mineral reserves, then valued at US$1.38 trillion (approx. ₱77.0 trillion), seemed to position the country for a mining revival not seen since the 1980s. But rather than continue the momentum, the Aquino administration slammed on the brakes, influenced by counter-narratives that emphasized mining’s environmental costs while overlooking its economic potential. In 2012, President Aquino issued Executive Order No. 79, imposing a moratorium on mining applications pending the passage of a new fiscal regime. While EO 79 recognized existing tenement rights, it also expanded no-go zones, created additional review layers, and generated policy confusion. That same year, the Department of Finance proposed a new fiscal regime under House Bill No. 5367, which sought to impose either a 10% royalty on gross output or 55% of adjusted net mining revenues, whichever yielded higher revenues for the government. Though the bill underscored the administration’s goal to extract a greater share in mineral resource revenues, its punitive structure failed to strike a balance between state interest and investor viability. No consensus was reached, and the bill languished. As policy drifted, mining investment collapsed by 43%, from US$1.37 billion projected in 2012 to just US$800 million by year-end. The de facto moratorium persisted, and by then, it was clear: without a rational and competitive fiscal framework, there could be no future for large-scale mining in the Philippines. The Duterte administration offered little reprieve. It began with a crackdown under then-DENR Secretary Gina Lopez. Suspensions, closures, and a biased audit process reaffirmed investors’ fears that the government still pushed the anti-mining narrative. However, a glimmer of reform emerged in Congress through House Bill No. 288, authored by Rep. Estrellita Suansing. The bill introduced, for the first time, a progressive margin-based royalty and a windfall profits tax. Though the bill failed to pass during that 18th Congress, it laid the groundwork for what would eventually become House Bill No. 8936 and Senate Bill No. 2826. Armed with nothing but patience, the industry waited. Instead of fighting City Hall, mining companies followed instructions by improving their technical capacities and raising their standards, implementing ISO 14001, EITI, and TSM standards, all while lobbying for change. But as the Industry tread water, the window of opportunity narrowed further, and we fell behind our peer countries in attracting quality investment. While President Duterte did lift his mining moratorium in the waning days of his term, it wasn’t until the Marcos administration that we saw real momentum. With a practical view of mining as a key driver of economic resilience, the administration reopened the door. Through sustained efforts by the Department of Finance, DENR, MGB, and industry stakeholders, we now have a reconciled fiscal regime bill that achieves what EO 79 never did: a coherent, progressive, and competitive law that balances risk and reward for all stakeholders. The bill introduces a modern fiscal structure intended to make government revenue from mining operations more responsive to profitability, while also addressing long-standing demands for greater transparency, equity, and local benefit sharing. At its core, the bill adds to the current mineral excise tax system a new, progressive royalty regime. It also introduces a windfall profits tax (WPT), applies project-level ring-fencing, and enhances the revenue-sharing mechanism for local governments. Notably, the bicameral committee removed the proposed ore export ban, acknowledging real gaps in local processing capacity, power infrastructure, and investor readiness, thereby allowing the country to continue exporting ores while addressing the real challenges to attracting downstream investments. Key Features of the Consolidated Bill The consolidated mining fiscal regime bill introduces a more progressive and responsive framework for taxing the mining industry, one that aligns the Philippines with global best practices in extractives taxation. Projects located within mineral reservations will continue to pay a fixed royalty of 5% on gross output, while those operating outside reservations will be subject to a flexible, margin-based royalty structure ranging from 1% to 5%, depending on operating profit margins. Importantly, in cases where a project records zero or even negative margins, a minimum royalty of 0.1% on gross output still applies. This minimum royalty further affirms the State as owner of the minerals, ensuring that it receives a baseline share from all operations, even in downturns. This mechanism avoids the rigidity of flat-rate systems like Zambia’s and introduces fiscal resilience in both high and low commodity price cycles. At the upper end of the scale, the bill introduces a windfall profits tax (WPT) that applies to net income once a project’s profit margin exceeds 30%. The WPT starts at 1% and increases progressively to a maximum of 10% for margins above 75%. This structure is broadly consistent with the approaches taken by countries like Chile and Peru, which tax extraordinary profits during commodity booms while maintaining competitiveness during normal years. To ensure integrity in the tax system, the bill incorporates a ring-fencing provision that treats each mining project or agreement as a separate taxable unit. This prohibits cross-project cost offsets and promotes clearer, project-level revenue attribution, a practice aligned with OECD recommendations on project-based reporting. The bill also tightens restrictions on related-party debt through a thin capitalization rule that caps interest deductions at a debt-to-equity ratio of 2:1. This cap is stricter than Indonesia’s, consistent with Brazil’s, and more conservative than Australia’s, reflecting a deliberate effort to prevent base erosion and profit shifting while remaining within globally accepted norms. The bill also seeks to equitably distribute mining revenues across levels of government. Forty percent of total government revenues from mining operations will be allocated to host local government units (LGUs), with a mandated release period of no more than six months after receipt of payment. Additionally, 10% of collected royalties will go to the Mines and Geosciences Bureau (MGB) and the Metals Industry Research and Development Center (MIRDC), reinforcing the state’s ability to regulate, monitor, and develop the industry effectively. Transparency is institutionalized as a core principle of the regime. The Department of Finance is mandated to establish a fiscal transparency mechanism specific to the extractive sector, with an obligation for annual disclosure of company-level financial, tax, and environmental information. This mirrors the evolving international emphasis on open data and public oversight in natural resource governance, as championed by initiatives such as the Extractive Industries Transparency Initiative (EITI). Taken together, these features position the Philippines to both increase government revenue from mining and offer a stable, predictable framework for investors, while reinforcing transparency, fairness, and alignment with global benchmarks. From a national fiscal standpoint, the Department of Finance estimates that the new regime will yield ₱6.26 billion in incremental revenues annually between 2025 and 2028, a figure higher than the House version and reflective of a more nuanced approach to taxing operating margins. At the local level, the law also promises to generate substantial developmental gains. Forty percent of government revenues from mining will be remitted directly to host local government units (LGUs), with mandated release within six months of collection. With reliable and regular releases of LGU shares ensured, this provision should enable mineral-rich provinces like Palawan, CARAGA, and South Cotabato to make sustainable development plans using their shares. Moreover, 10% of all royalties collected will be earmarked for the MGB and MIRDC to strengthen their regulatory, monitoring, and developmental functions. With only 50 or so large-scale metallic mines currently operating in the Philippines but occupying less than 0.02% of the country’s land area, this law has the potential to scale up both revenue and employment from mining without expanding the industry’s physical footprint. Some Policy Concerns Despite these gains, a cautious reading of the bill raises several serious concerns. First, the revenue forecasts assume stable metal prices, an expanding project pipeline, and improved investor confidence. Given the current global geo-political dynamics and our own government’s penchant for flip-flopping on mining policies every change of administration, these assumptions may not always hold. High-profile projects such as Tampakan, Kingking, and the Far SouthEast Project remain stalled due to unresolved permitting issues, regulatory flip-flopping, and legacy LGU and IP issues. Without a concerted effort to streamline permitting, lift outdated restrictions, and enforce clear policy alignment across agencies and local governments, the envisioned revenue gains may never materialize. Second, the structure of the minimum royalty imposes a troubling distortion. When a mining project with high gross output but temporarily negative margins falls below zero profit, it must still pay 0.1% of gross output as a minimum royalty. This can result in higher tax obligations than if it had posted a narrow profit. For example, a company with ₱10 billion in gross output and a -0.5% margin would owe ₱10 million in royalty. In contrast, the same company with a +0.5% margin might owe significantly less under the margin-based sliding scale. This absurd but plausible scenario effectively penalizes distressed or reinvesting mines, contradicting the policy’s stated intent to support marginal operations and manage cyclical risk. A deferred royalty mechanism, or one based on net smelter return rather than gross output, may have offered a more rational approach. Third, ring-fencing and thin capitalization rules, while sound in theory, may impose unintended costs. By disallowing cross-project costs and restricting intercompany financing flexibility, these provisions could deter companies from developing higher-risk or early-stage projects. They may also raise financing costs, especially for companies relying on intra-group lending to absorb high upfront capital expenditures common in exploration and development. Fourth, while LGU revenue sharing is a welcome reform, the actual absorptive capacity of many host LGUs to plan and make the best use of their shares in national wealth taxes remains weak. These expedited releases must translate into tangible community investments, especially in health, education, and resilience. However, without meaningful capacity-building, fiscal transparency measures, or development planning support, there is a risk that windfall revenues could be poorly managed or diverted to non-priority expenditures, undermining the very goal of inclusive development. The implementation of the windfall profits tax is also likely to be complex. Accurately assessing profit margins in mining is notoriously difficult due to fluctuating costs, commodity price volatility, and varying interpretations of deductible expenses. Without significant upgrades to the BIR’s technical capacity and the issuance of clear, administratively feasible rules, the WPT could become a source of protracted audit disputes, uncertainty, and litigation. Finally, while the bill correctly deleted the export ban, it fails to put forward a coherent strategy for downstream processing. The problems and challenges to competitiveness that the industry flagged during the Duterte administration are still unaddressed. There is still no national roadmap for value-adding through domestic refining or smelting. Without one, the Philippines risks being locked as a raw material exporter in an increasingly competitive regional market where countries like Indonesia and Australia are aligning their mineral policies with the global transition to clean energy, electric vehicles, and battery manufacturing. A practical critical minerals roadmap, similar to Indonesia’s EV-battery strategy, is urgently needed to jumpstart the vision of adding more value to our raw minerals. It is also important that we not oversell the idea of mining being an economic game-changer for the Philippines. While the reform does enhance our fiscal and policy stability, it cannot compensate for the fact that the Philippines lacks large reserves of rare earths or critical minerals beyond lateritic nickel. Indonesia, on the other hand, not only boasts the world’s largest nickel reserves but also holds a dominant 61% share of global refined nickel production. By comparison, the Philippines has about 4.8 million tonnes of contained nickel (≈3.7% of global reserves), ranking sixth globally, and produced 330,000 tonnes of contained nickel ore in 2024, about 9% of global output. In sum, while the mining fiscal regime bill brings long-overdue stability and clarity to an industry paralyzed by policy ambiguity, its economic potential will only be realized through aggressive implementation, regulatory reform, and a broader national minerals development strategy. The government must now move swiftly to issue clear rules, build institutional capacity, and lift the remaining non-fiscal constraints on mining. Only then can the Philippines harness its mineral wealth not just as a revenue stream, but as a platform for industrial transformation and inclusive growth. This reform is a critical first step, but it does not make us a mining powerhouse. With realistic expectations and focused implementation, however, the Philippines can still become a credible and responsible player in the global minerals supply chain. Next Steps and Recommendations Moving forward, the Industry must engage actively with the government in the drafting of the law’s implementing rules, with particular focus on clarifying how margins will be calculated and what deductions will be allowed, how the windfall tax thresholds will be applied and phased in, and how ring-fencing rules will treat co-located projects sharing the same manpower, equipment, and infrastructure. We will need to coordinate closely with the DOF, MGB, and BIR to ensure that compliance tools are practical and that there is adequate transitional support for projects that may be significantly affected. At the same time, we need to keep pushing the government to address existing challenges and create stronger incentives for downstream processing. This can be achieved through future legislation or administrative policies to enhance the Philippines’ competitiveness in mineral value-adding. Finally, we should keep a close watch on how this new fiscal regime impacts marginal projects on the ground and be ready to advocate for appropriate forms of transitional relief where justified. Conclusion The passage of the reconciled mining fiscal regime bill marks a pivotal moment in the long and difficult effort to craft a fair, forward-looking policy for the mining sector. The framework it offers is progressive yet pragmatic. It is designed to give the government a greater share when profits surge, while offering protection and predictability for investors during leaner periods. Crucially, it acknowledges the high-risk, capital-intensive nature of exploration and development. Without globally competitive returns, responsible players will continue to look elsewhere. The bicameral version of Senate Bill No. 2826 represents real progress. It removes the contentious ore export ban while putting in place a more balanced and transparent tax structure. But its passage is not the finish line. The real work begins with implementation: ensuring that the IRR is clear and practical, that agencies are adequately resourced, and that transition measures are in place for marginal or legacy projects. If we are serious about making mining a real contributor to national development, the government and private sector must now work even harder to address long-standing structural issues: streamlining permitting, fixing inter-agency bottlenecks, aligning national and local development goals, and ensuring the highest standards of environmental and social responsibility. From the issuance of EO 79 in 2012 to the finalization of this bill, the road has been long, often uncertain, and politically fraught. But we have finally arrived at a point of clarity. We now have a fiscal regime that reflects hard-won compromise, sound economics, and, above all, a vision for shared prosperity. This is our opportunity to restore trust between the government and investors, between industry and communities, between economic growth and environmental integrity. It is now up to all of us to follow through with good governance, targeted investment promotion, and a deep commitment to sustainability.   For those who want to better understand what this new fiscal regime means, not just for government or industry, but for communities, investors, and the broader development agenda, we invite you to join us at MINING PHILIPPINES 2025, happening on October 22–23, 2025, at the Grand Hyatt Manila, Bonifacio Global City. This will be the first major industry gathering following the law’s passage, and it promises to be an important venue for dialogue, clarification, and collaboration as we move from policy to implementation.