Canada’s mining industry is buoyed by optimism in light of its top 100 mining companies’ success in reducing their debt levels. According to an executive of Ernst & Young, more than 60 percent of these companies saw their stocks rising to 300 percent, highlighting the openness of the Canadian mining industry to foreign investments as a major factor.
The Philippines can benefit from this renewed optimism, with several Canadian firms eyeing investments into the country’s mining industry such as Coronado Resources Ltd. and Crazy Horse Resources Inc. Coronado is particularly interested in Masbate’s gold reserves and has already acquired three mining concessions. Crazy Horse, a mineral exploration firm with interests in the Iron River Property in Vancouver, is interested in the Kayapa copper-gold project in Nueva Vizcaya.
Investors from India, China and Japan are also keen in exploring more prospects in mining. But I am told a lot of potential investors are turned off by the red-tape, with so many requirements that take so long to process – with corrupt mining officials taking advantage by asking for advance payments for “securing and releasing” documents.
According to sources, crooked employees at the Mines and Geosciences Bureau can make a killing by asking for several thousands of dollars to release the environmental Compliance Certificate or ECC for a small-scale mining project. There are even allegations that local politicians are making it difficult for investors by asking the latter to cough up hundreds of thousands of dollars to facilitate the release of mining permits.
The Philippines is acknowledged as the 5th richest country in the world in terms of mineral resources. Our gold reserves are is said to be the third richest; 4th in copper and 5thin nickel, with untapped resources estimated at almost $1 trillion. Government says the Philippines sits on 83 billion tons of mineral ore deposits, with gold ore deposits placed at about four billion tons.
Senate President Juan Ponce Enrile said the country’s mining industry experienced its peak during the 1970s and 1980s and ranked as one of the 10 leading producers of gold and copper in the world. The industry experienced a decline sometime in the 1990s, but hopes were raised for its resurgence after the Supreme Court ruling in 2004 that upheld the constitutionality of the Mining Act of 1995 which allowed 100-percent foreign equity in the industry through financial and technical agreements with local mining firms.
As Enrile had stressed, the economic benefits can far outweigh potential adverse effects – especially with mining companies exercising prudence and caution and applying best practices in their operations that take into consideration the social and environmental impact of projects particularly on the locals living in the area. With more investments pouring in, the mining industry can become one of the drivers of the Philippine economy, he said.
This is the sentiment echoed by the president of the Chamber of Mines of the Philippines Phillip Romualdez, who happens to be a cousin. Phillip said enhanced industry outlook can sustain double-digit growths in the mining sector. Last year, some $640 million in investments were recorded, with the mining and quarrying sectors increasing their contribution to GDP from P21.6 billion in 2000 to P110.5 billion last year.
The Philippines is targeting to reach a “mining country status” by 2011 – which according to the World Bank is a condition in which a country’s total exports reach six percent (or higher) of its total exports. With more projects in the pipeline, investments in the mining sector are also expected to reach $13.5 billion by 2013.
No doubt the mining sector has the potential to drive economic growth and create as much as one million jobs all over the country – which is why government has to fast-track developments and cut out on bureaucratic red tape in releasing permits and other documentation requirements. As Phillip had pointed out, the next administration will benefit from the fact that a lot of the difficult issues and decisions relative to the industry have been worked out in the past, and this should redound to the economy with more jobs and development in rural areas where there is a lot of poverty.
This is one area that candidates can look into since the money that can be generated from mining investments can be used for poverty alleviation, healthcare, education and other basic needs of Filipinos especially with the continued surge in the country’s population – in direct contrast to our tax base which continues to be very low.
Even Noynoy Aquino, who has initially declared that he will not raise taxes, has made a turnaround, realizing that under current circumstances, it would be impossible to keep the economy afloat without raising taxes. But one cannot keep squeezing blood out of a turnip – and with our OFWs already remitting taxes in their host country, a lot of them certainly resent being slapped with “double taxation.”
The only way government can keep the Philippines from going bankrupt is to develop the mining industry – dubbed as a “star performer” in the economy. Nature has gifted this country with so much, with nine million hectares mapped out as having high mineral potential such as gold, copper, and nickel that are major national assets. Yet only 1.4 percent of this area is exploited for its mineral deposits. We must utilize these natural assets to save this country from the “fires of poverty.”
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Email: babe_tcb@yahoo.com