Foreign mining firms, which previously expressed keen interest to explore new mines in the country, are likely to return to the Philippines if the court issues a decision in favor of the Mining Act, they said.
The Mining Act, which became law in 1995, allows up to 100 percent foreign equity in local projects, but it has been challenged by local tribesmen who say natural resources are a heritage which should not be exploited by foreign firms.
Before the passage of the Mining Act, foreign firms were allowed to own up to 40 percent of local mining projects.
The challenge to the Mining Act has been pending in the court since 1997, but Mines and Geosciences Bureau chief Horacio Ramos said he expected the Supreme Court to give its decision soon after receiving all the written comments from interested parties.
"We know for a fact that a decision is forthcoming, but we do not know exactly when," he told a mining conference.
Philippine Minerals Exploration Association president Tony Robbins said the legal challenge to the Mining Act has cast a pall of uncertainty on the local mining industry.
"We would like to see that resolved," he said, adding that when the Mining Act was passed about 50 foreign companies had expressed interest to explore for new mines in the country.
"A lot of those companies have left and gone home because they were frustrated with the delays... so we can’t really say how many are (still waiting) in the wings," said Robbins, whose group represents foreign exploration firms in the country.
The Philippines used to count among the world’s top 10 producers of gold, copper, nickel and chromite in 1980 and industry analysts say the country remains one of the least explored sites in the so-called ring of fire.
The ring of fire refers to an area experts say is susceptible to earthquakes and volcanic eruption but rich in mineral wealth.
"God has given you some great mineral deposits. I believe there’s a lot more to be discovered here...the mineral industry should be contributing about 10 percent of export earnings rather than one to two percent at the moment," said Robbins.
The country’s mineral export used to account for around 20 percent of total exports in 1980. Last year mineral exports made up only 1.7 percent of total exports, officials said.
"Due to institutional and legal impediments, exploration has not been very active in the past, particularly during the 80s, hence only a small number of projects were currently up to counter the fall in production," Ramos said.
Industry executives said the Philippines failed to join the exploration boom in the 80s because foreign firms were allowed to own up only to 40 percent equity in local mining projects.
"We were one of the last to liberalize mining," said Gerard Brimo, chairman of the Chamber of Mines of the Philippines.