Cautious resurgence in mining

The local mining sector has something to look forward to after some painful experiences last year with the resurgence of anti-mining sentiments that forced the Chamber of Mines of the Philippines to shelve a regional conference intended to showcase the mining opportunities in the country.

Various groups took every opportunity to pounce on the unfortunate mining spill at the tailings pond of Lafayette Philippines’ polymetallic project in Rapu-Rapu Island.

In postponing the regional conference, Benjamin Philip Romualdez of the Chamber of Mines reportedly told President Arroyo that the industry wanted to spare the administration of a possible embarrassing situation. Apparently, the foreign investment community was starting to doubt if the government had again decided to change the rules midstream. This has happened before in other so-called priority programs that went pfftt after the administration gave in to pressure from sectors it was beholden to.

The mining industry submitted a litany of complaints to President Arroyo, from the long wait for mining permits to be issued, to the ban on new mining projects outside of those prioritized by the Department of Environment and Natural Resources.

Back on track

It seems the local mining industry is back on track again. For instance, after more than a year of being subjected to rigid environmental tests and standards, Lafayette is finally ready to run full steam this quarter. Let’s hope no incident will take place to derail the momentum.

The lure of rising metal prices in the global market fueled by the demand from India and China, are driving investors to come back amidst government assurance of support to foreign mining companies.

Just recently, our sources have confirmed that Compania Vale do Rio Doce or CVRD, the world’s third largest mining company which last year bought Inco of Canada, is eyeing the Philippines and exploring copper-silver mining prospects.

Moreover, Canada’s Chemical Vapour Metal Refinery Co. (CVMR), which sunk in huge money for a nickel refinery in China, is proposing a $3.3-billion nickel refining plant in the Philippines.

CVMR looks like a serious investor. It has put up two companies in the country, CVMR Resources Phils. and CVMR Exploration and Development Phils., and is now in the process of negotiating supply contracts with at least five Filipino nickel mining companies: Benguet Corp., Eramen Minerals, Comet Mining Exploration Corp., MacroAsia Corp., and Platinum Group Metals Corp.

Other investors now keen

Of course, now that the regulatory environment is more stable, formerly less active investors that have been around for some time are renewing interest in their projects.

London and Sydney-listed miner Xstrata Plc. finally exercised its option to acquire a 62.5-percent controlling stake in the Tampakan copper-gold mine project in South Cotabato, which is recognized as the largest untapped copper-gold deposit in Southeast Asia. By March, Xstrata Plc. will take over management of the $2-billion project, and solely fund the final pre-feasibility study of the mine to be completed late this year or early 2008.

Firm investments are also expected from the joint venture of Climax Mining and Oceana Gold Ltd. of New Zealand which will shell out $100 million for the Didipio copper-gold project in Nueva Vizcaya.

There is also Japan’s Sumitomo Corp which is raising $210 million to increase the capacity of its nickel refinery plant in Palawan, while Atlas Consolidated Mining and Development Corp.’s unit Carmen Copper Corp. is hounding banks for a $100-million loan to fund the rehabilitation of its copper mines in Toledo, Cebu.

Non-operating mining companies

Perhaps now is the time for the many other mining interests that still have to seriously pursue exploration and development work in their assigned mining concessions to get going. Metal prices are currently hitting the roof, but – as has been experienced in the past – there will always come a time when a change in demand will cause prices to drop.

DENR should now be more resolute in making sure that non-performing concessions are quickly terminated and opened to companies that have genuine interest, resources as well as expertise to bring out those minerals from below the ground.

The Supreme Court-upheld mining law may have brought in foreign investment and big mining companies to take a keener look at prospects here in the country, but complaints abound as to the still slow pace and rather tedious process in acquiring mining permits.

Heck, even the number of permits required, sometimes even conflicting, at various levels of government has a dizzying effect on prospective mining investors. Can’t this be streamlined by the DENR. No wonder law firms are setting up departments that specialize in processing business permits.

March mining conference

Finally in March, the chamber will proceed with the Asian Pacific Mining Conference that it postponed last year. Hopefully, this time around, the false starts and restarts will be a thing of the past. It would be a waste if we missed the boat again.

The country has undoubtedly one of the richest, undeveloped mining resources in the world and the industry has the opportunity to sustain, even build on, the momentum achieved since the Supreme Court in late 2005 ended a long legal battle over the constitutionality of the country’s Mining Act.

With metal prices remaining high in the foreseeable future, the potential of the mining sector as a major contributor to the local economy is huge. Provided of course, we play our cards right and don’t shoot our foot again.

Sir Cliff Richard for Valentine

As chilly nights usher in February, the month of love, several shows are being promoted to lure the romantics and non-romantics. For me, the show not to be missed is the Sir Cliff Richard concert on 13th February at Araneta Coliseum.

Definitely, my wife and I will wander down memory lane with the unforgettable Cliff Richard melodies such as, "When The Girl In Your Arms Is The Girl In Your Heart," "The Young Ones," "Bachelor Boy," "Summer Holiday," "On The Beach," and "Constantly."

Sir Cliff Richards first performed in the Philippines more than 20 years ago, a show which we unfortunately missed. Since then, Sir Richards had sold more singles in England than any other artist, ahead of The Beatles and Elvis Presley. In 1995, he was knighted by the Queen of England at Buckingham Palace in recognition of his achievements in music as a pop singer and for bringing honor to the British Empire.

Luke Pasiliao, one of the top executives of Solar Entertainment, is grinning ear to ear as he watches the brisk sales of the Sir Cliff Richards show at Ticketnet outlets and at the Araneta Coliseum ticket office.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected] or at [email protected]. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.