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Province Representative Applauds Lifting of Mining Ban

by Philippine Resources - April 19, 2021

Representative Robert Ace Barbers of Surigao del Norte applauded President Duterte's decision to lift the ban on new mining deals on Friday, April 16.

The President's announcement was the thing he had been hoping for since last year, Barbers said, with the nation submerged in trillions of pesos of debt due to the novel coronavirus disease (COVID-19) pandemic.

“I have been hoping for this since last year.  I have been saying that mining is the only way out of this debt trap we have found ourselves in by reason of the pandemic.  Mining pays, and it will help us pay our debts. The royalties, revenues, taxes will all contribute to our economic recovery,” said the lawmaker.

“There is no other industry aside from our BPO (business process outsourcing) and OFWs (overseas Filipino workers) that can bring much revenue.  Sadly, these two have been on the losing end since the pandemic began,’’ he pointed out.

He further said: “We should start thinking global – by tapping the industries in the country with which we have a competitive advantage on such as mining and tourism. It is now high time to tap on foreign mining investors that have espoused balanced and non-destructive practices in extracting mineral resources.”

“As people need vaccines, our economy needs it too, and mining it is,’’ Barbers said.

The congressman, furthermore, said that the government “should be very careful in getting investors and vet them properly and thoroughly so we don’t end up with ‘hawshao’ miners in our desire for revenues.” 

“We must look into their financial capacity, viability, and track record.  The DENR (Department of Environment and Natural Resources) should scrutinize them and come up with a non-sense standard patterned after the best practices in the world,” he added.

Foreign mining firms have been eager to invest and participate in the Philippines' mining industry, according to Barbers.

‘’If these undertakings push through, the projections are mining will contribute as much as six to 10 per cent in our GDP.  Currently, its contribution is 0.6 per cent,’’ he said.

“Prominent mining countries such as Canada and Australia have mining contributing six per cent to their GDP.  With Australia’s GDP at $.37 trillion, this translates to $82 billion, almost 38 times the value of our mining output.  If we indeed believe that our resources are among the best in the world, then the solution is obvious,’’ he noted.

According to Barbers, the President's announcement is timely because the sector will provide opportunities in remote areas.

‘’Imagine the number of jobs that will be created in the rural areas where these mining sites are located. The locals will be gainfully employed and the host communities will be developed as part of the corporate social responsibility of these companies. Schools, roads, and other infrastructure will be built on the host communities,’’ he stressed. 

‘’This is the much-needed stimulus that is not based on loans that the people will eventually shoulder.  It is the only industry that can put our economy back on its feet,” he claimed.

“Today, the price of gold is very high at around US$ 1,700 per ounce.  We have plenty of gold, estimated at 16 to 18 million ounces. In the coming years, it is projected that 50% of car sales will be on electric cars.  These cars need a lot of copper and nickel to run.  We have all these minerals here, more than two billion tons of copper and nickel.  Imagine the returns if we are to start now,” Barbers explained.



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According to the Philippine Stock Exchange, Inc., full enforcement of the amendments to the 2007 Philippine Mineral Reporting Code (PMRC) to conform with international reporting requirements is planned within the year (PSE). At a virtual briefing on Thursday, PSE Chief Operating Officer Roel A. Refran stated that the proposed 2020 version of the PMRC could be introduced within that timeline. “The full implementation, hopefully, will take effect within the year, including the provision for the transitory period which is two years from approval by the Securities and Exchange Commission (SEC),” Refran said. “We are already in discussions with the SEC on the finalized version. We are just going to finalize a couple of regulatory issues as they pertain to PSE,” he added. In February 2019, the PMRC Committee began a review of the new reporting code in order to make it more international compliant. The 2007 PMRC, according to Ciceron A. Angeles, Jr., chair of the PMRC Committee, establishes minimum requirements, recommendations, and guidance for public reporting of exploration findings, mineral deposits, and ore reserves. The 2007 PMRC, according to Angeles, applies to all solid mineral raw materials such as lead, gold, nickel, and chromite, but not liquid or gaseous materials like oil. “It is required for all listed mining and mineral exploration companies in the PSE or when applying for listing with the PSE,” Angeles said. Angeles, on the other hand, believed the 2007 PMRC should be revised to put it in line with major global mineral reporting codes like the 2019 Committee for Mineral Reserves International Reporting Standards. The planned 2020 PMRC includes reforms such as changing the term "competent person" to "accredited competent person," changing reporting terms from mining reserve to mineral reserve, including technical tests such as scoping, pre-feasibility, and feasibility studies, and adding non-technical aspects to reporting such as product pricing. The PSE has suggested amendments to the 2007 PMRC, including mitigation and remediation measures to address financial, socioeconomic, and health and safety consequences, as well as the addition of a consent form indicating that the certified qualified individual agrees to the report's public dissemination. The mining industry accounts for 6.3 per cent of Philippine exports, or $4.38 billion, according to Dennis A. Quintero, chairman of the Philippines Australia Business Council, although its share of GDP is 0.6 per cent, or P124.5 billion. After the signing of Executive Order (EO) No. 130 on April 14, which lifted the nine-year ban on new mining ventures, Chamber of Mines of the Philippines Chairman Gerard H. Brimo said the amendment to the PMRC is timely. Brimo, however, believes that after the lifting of the moratorium, international investors will take time to return and that the ban on open-pit mining should be lifted as well. He cited a study from the Fraser Institute, a Canadian think tank, that found the Philippines to be unranked in its surveys for attractive and stable mining jurisdictions in 2019 and 2020. “The ban on open-pit mining, a standard mining method practised all over the mining world, needs to be lifted, as, without this, the lifting of the moratorium on new mining projects alone will not allow the industry to achieve its full potential,” Brimo said. “We want to be able to attract quality investors with substantial resources and expertise. We can only achieve that if the fiscal regime for mining is competitive, keeping in mind that we are competing with other mineralized countries for investment in this sector,” he added. Due to its negative environmental effects, the late former Environment Secretary Regina Paz L. Lopez introduced an open-pit mining ban in 2017. Meanwhile, Director of the Mines and Geosciences Bureau (MGB) Wilfredo G. Moncano said the draft EO 130 incorporating rules and regulations (IRR) is progressing, adding that he was recently able to review the draft with Environment Secretary Roy A. Cimatu. “Mr. Cimatu said the IRR should be issued soon and he is ready to sign it. We shall soon be inviting stakeholders as part of due process to hear their comments, suggestions, and inputs to this draft IRR. It may (happen) next week or the following week,” Moncano said. “The MGB will strive to have this IRR forwarded to the Office of the Secretary for his signature as soon as possible. This IRR will come in the form of a department administrative order,” he added. When asked if the MGB would issue a list of businesses or ventures impacted by the removal of the moratorium, Moncano said the MGB is still debating whether to do so. “We need to balance the interests of the mining companies. There were opinions that if we publicized these names to the media, they might be targets of anti-mining protests,” Moncano said. “We are seriously looking at providing these names to the media and to the public but we are also looking at the possibility that these mining projects will be opposed by these anti-mining groups,” he added. The MGB predicted that the volume of metallic mining production will increase 1.13 per cent to P132.21 billion in 2020, with nickel ore and by-products accounting for 51.8 per cent (P68.48 billion), gold 36 per cent (P47.60 billion), copper 11.25 per cent (P14.88 billion), and silver, chromite, and iron accounting for P1.26 billion.

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After years of intensive criticism under Duterte's leadership, the mining industry is now benefiting from a string of unexpectedly optimistic policy decisions and considerations. More than two weeks after President Rodrigo Duterte ended the moratorium on new mining operations, the government is considering repealing the ban on open-pit mining. “It is being considered,” Mines and Geosciences Bureau (MGB) Director Wilfredo Moncano said in a text exchange when asked if the government will soon lift the ban on open-pit mines. The Department of Environment and Natural Resources (DENR) Administrative Order (DAO) No. 2017-10, which was signed by former DENR Secretary Gina Lopez-Roy prohibits open-pit mining for copper, gold, silver, and/or complex ores. Based on DAO 2017-10, open-pit mines “have ended up as perpetual liabilities [for the government], causing adverse impacts to the environment, particularly due to the generation of acidic and/or heavy metal-laden water, erosion of mine waste dumps and/or vulnerability of tailings dams to geological hazards”. “The records attest that most of the mining disasters in the country were due to tailings spills associated with open pit mining,” it added.  However, at the time, organizations such as the Chamber of Mines of the Philippines (COMP) said that most copper and nickel ore deposits in the Philippines are near the surface of the planet, and that open pit mining is the only way to exploit them. COMP also stated that their members, who include the Philippines' largest mining firms, adhere to the highest requirements in any of the tools they use in retrieving minerals in their respective areas. This order has so far placed three major open pit projects on hold: the Tampakan Copper Project, the King-king Copper Gold Project, and the Silangan Copper and Gold Project. COMP Chairman Gerald Brimo previously stated that these ventures alone could boost the mining sector's overall contribution to the country's GDP to 1.5 trillion, up from less than 1% now. The Tampakan mine, for example, is the country's biggest stalled mine, requiring a $5.9 billion investment. The project has been on hold since 2010, when the South Cotabato local government unit (LGU) barred open-pit mining in the province. Meanwhile, Moncano stated that the government has begun drafting the implementing rules and regulations (IRR) for EO 130, which amends the controversial EO 79 of the Aquino Administration, which was released in 2012 and prohibited the approval of new mining licenses before new revenue-sharing legislation was implemented. The President ordered authorities to continue to rationalize the proposed revenue-sharing arrangement, but without the moratorium on new mining ventures, under Executive Order 130. This is done when adhering to stringent mining protection and environmental policies. EO 130 further directs that current mineral agreements be reviewed for future renegotiation. The government is considering putting further conditions on new mining applications, according to Environment Secretary Roy Cimatu, and this will be included in the draft IRR of EO 130. In a previous text exchange, Moncano stated that the DENR is now “linking up with Congress” on the current mining fiscal regime. He stated that the government prefers that the current mining fiscal regime be incorporated into package 2 of the government's tax reform policy, known as the Comprehensive Tax Reform Program (CTRP). This is amid the fact that many bills relating to the controversial new mining levy have already been filed and are pending in the House and Senate.

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Government won’t back down on Executive Order 130

The government has stated that it would not bow to calls to rethink Executive Order (EO) No. 130, which lifted the ban on new mining deals, noting the need for new revenue in the wake of the pandemic. “We are not paying attention to those calling for the EO to be withdrawn because the country is facing many problems. We need to find a source of funds and this is one path to recovery,” Environment Undersecretary Jonas R. Leones said in a Laging Handa briefing. Funds provided by new mining deals, according to Mr. Leones, can be used to combat the coronavirus disease 2019 (COVID-19) and provide financial assistance to the sick. He went on to say that EO 130 is one of the government's measures to resolve its financial problems during the public health emergency. President Rodrigo R. Duterte signed Executive Order 130 on April 14, allowing the government to review active mining agreements for future renegotiation. The EO modifies a 2012 order by former President Benigno S. C. Aquino III that halted the issuance of new mining agreements. The EO has been met with opposition based on concerns that it would damage the climate and indigenous communities. Mr. Leones stated that there are 100 mining ventures in the works, with total revenue of P21 billion for the government. “We can use the country’s resources to generate the necessary income for our economy,” Mr. Leones said. Mr. Leones went on to say that the forthcoming mining deals are divided into two phases, with Phase 1 containing 35 mining projects that are able to be launched quickly and Phase 2 containing 65 projects. Director of the Mines and Geosciences Bureau (MGB) Wilfredo G. Moncano said Phase 1 projects are scheduled to begin within months and are in the process of securing the required approvals before moving forward with mining. Phase 2 projects, according to Mr. Moncano, are those that can be mobilized by next year and have reached benchmarks such as the Declaration of Mining Project Feasibility. Significant investments have been made in three projects in the pipeline, according to Ronald S. Recidoro, executive director of the Chamber of Mines of the Philippines, who said in a cell phone message that the Tampakan Copper Project of Sagittarius Mines, Inc.; the King-King Copper-Gold Project of the Nationwide Development Corp. and St. Augustine Gold & Copper Ltd.; and the Silangan Copper and Gold Project of Philex Mining Corp. “We are already looking at over $4 billion in capital expenditure, with over P40 billion in local government unit (LGU) taxes, P20 billion in social development projects, and P15 billion paid to indigenous peoples as royalties,” Mr. Recidoro said. “Of course, this will not come immediately, or in one go, but it will be spread over the life of the mining project. But to get this significant amount of revenue spread over years, and spent in the remote areas that need it most, is definitely a plus,” he added. Francis Joseph G. Ballesteros, Jr., Philex Mining's Head of Public and Regulatory Affairs, said in a text message that the firm is also searching for a commercial partner for its Silangan project in Surigao del Norte. “We are still aggressively on the lookout for a business partner for Silangan. Perhaps, with this new EO 130, investor interest will be encouraged. We hope that we can accomplish this within the year,” Mr. Ballesteros said. The MGB predicted that the size of the metallic mining industry's production will rise 1.13 per cent to P132.21 billion in 2020, with nickel ore and its by-products accounting for 51.8 per cent (P68.48 billion), gold 36 per cent (P47.60 billion), copper 11.25 per cent (P14.88 billion), and silver, chromite, and iron accounting for P1.26 billion.

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