MGB decries SC decision on Mining Act

The Mines and Geosciences Bureau (MGB) said the Supreme Court’s (SC) declaration of the Philippine Mining Act (PMA) of 1995 as unconstitutional will affect not only the mining sector but the entire economy as well.

"The decision may have far-reaching implications on investments not only on the minerals industry but in the economy at large as well," said MGB director Horacio Ramos.

Ramos said the MGB and the Department of Environment and Natural Resources (DENR) will issue a detailed statement as soon the agencies have studied and assessed the extent of the implications of the SC’s decision.

DENR Secretary Elisea Gozun said earlier the department is consulting the Office of the Solicitor General, the MGB, Department of Trade and Industry and the Board of Investments on how to craft their motion for reconsideration before the SC.

In a landmark decision, the SC issued its resolution on the appeal of environment groups blocking the implementation of the PMA, questioning several provisions among them an agreement signed by the government allowing Australian firm Western Mining Corp. (WMC) in 1995, just months after the PMA was passed, that allowed the company 100 percent ownership of a mining project.

In a 95-page decision penned by Justice Conchita Carpio-Morales, the SC said the agreement between the government and WMC was invalid because the financial and technical assistance agreement (FTAA) was similar to the service contracts allowed under the PMA but are prohibited under the 1987 Constitution.

Ramos said that as a result of the decision, several pending mining projects now hang in the balance.

These projects include the Kingking copper-gold project of Benguet Corp. in Compostella Valley; the Tampakan copper project of the Western Mining Corp in South Cotabato; Boyongan copper-gold project of Philex Mining in Surigao del Norte; and Far Southeast copper project of Lepanto Consolidated Mining Co. in Benguet province.

Ramos said that if these big mining projects push through, the country’s annual mineral exports would jump by $2.5 billion to $3 billion from only $500 million last year.

At the same time, the decision may affect existing FTAAs with a number of foreign-controlled mining companies, among them the Australian mining companies Climax Arimco Mining Corp. and Sagittarius Mines.

DENR signed an FTAA with Climax-Arimco in 1994 for the exploration of gold prospects in Nueva Vizcaya and Quirino provinces. Another FTAA was entered into with Sagittarius Mines in March 1995 for the exploration of gold and copper prospects in North and South Cotabato, Sultan Kudarat and Davao del Sur.

Foreign mining companies have been wanting to invest in the mineral-rich local mining sector but have gone on to countries that provide more incentives.