Government eyes P7-B royalties from 21 mineral reservations next year

MANILA, Philippines - Environment and Natural Resources Secretary Ramon J. P. Paje is set to recommend to President Aquino before the year ends the declaration of 21 mining operations as mineral reservation areas.

This will give the government some P7 billion in royalty collections in 2011, Paje said. This will come from a mandated five-percent royalty share from the mine operators.

According to Paje, the government collected last year a more P390 million in royalties from the operations of three designated mineral reservations: by Coral Bay Nickel Corp., the Taganito mines and the Dinagat mineral reservation.

For this year, Paje said the government’s royalty would be anywhere from P390 million to P410 million.

Paje pointed out that the government is not getting the full benefits from the current regime of high global metal prices which has seen gold prices reaching $1,500 per troy ounce.

“Are we not going to get our share?” Paje asked.

Only President Aquino, however, under the law can declare an area as a mineral reservation area.

Paje has directed the Mines and Geosciences Bureau (MGB) to identify more mineralized areas throughout the country for possible declaration into mineral reservations.

Paje said the move to declare additional mineral reservations is to provide equitable access to mineral resources and to generate additional non-tax revenues for the government.

“Currently, the government only gets only a two-percent excise tax levied on the gross sales from mining operations in areas covered by mining agreements. If the mining operations are held in declared mineral reservation areas, the government will get an additional five percent in royalties for a total of seven percent,” Paje said.

Paje said there are currently nine mineral reservations throughout the country located in Ilocos Norte, Zambales, Bulacan, Camarines Sur, Samar Island, Surigao del Norte, Compostela Valley, Zamboanga del Norte, and all offshore areas throughout the country.