DENR firming up appeal to High Court

The Department of Environment and Natural Resources (DENR) is firming up its appeal to the Supreme Court (SC) which voided critical  provisions of Republic Act No. 7942, or the  Philippine Mining Act (PMA) of 1995.

"We have to make an urgent appeal if we are to convince potential investors not to strike out the Philippines from its plans," said Mines and Geosciences Bureau director Horacio Ramos.

In a 95-page decision issued last week, the SC  declared Sections 3(aq), 23, 33 to 41, 56, 90 and the second and third paragraphs of Section 81 of RA 9742 as unconstitutional.

All provisions concerning the financial or technical assistance agreement (FTAA) and other permits that can be granted to foreign corporations such as the exploration permits, mineral processing permits have been nullified. The decision also declared the FTAA of Western Mining Corp (Philippines) as void.

"The Supreme Court decision will adversely affect the government’s revitalization program for the minerals industry. Specifically, it would impact on several investment projects that are being funded by foreign companies due to limited local capital," stressed Ramos. 

Ramos added  the SC ruling may threaten both existing and proposed minerals development projects with foreign participation, such as the Palawan Nickel Processing Plant, Rapu-Rapu Polymetallic Project and the Masbate Gold Project.

He said these projects, along with others in advanced stages of exploration, including closed mines that will be re-opened into commercial operation in the next 10 years, are estimated to bring in $5 billion in total potential investments.

"The decision of the Supreme Court sends a negative signal to the international investment community that may further drag down the competitiveness of the country’s minerals industry." 

Ramos pointed out the SC ruling could adversely affect the whole minerals industry because in nullifying Section 90 of RA 7942, the SC decision has, in effect, scrapped the whole section on incentives that not only applies to the FTAA but also covers mineral production sharing agreements (MPSAs), joint venture agreements (JVAs) and co-production agreements (CPAs) for Filipino corporations.

Previously, 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.

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 Corporation and Sagittarius Mines.

The 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 other countries that provide more incentives.