Mining investments seen reaching $1B this year

MANILA, Philippines - The Chamber of Mines of the Philippines expects mining investments this year to reach $1 billion, chamber president Benjamin Philip Romualdez said.

Last year, mining investments in the country reached $955.85 million and could have easily gone over the $1-billion mark had some projects not been delayed.

In a briefing to members of the Economic Journalists Association of the Philippines, Romualdez said mining investments could be much higher if controversial issues and concerns are resolved by the government.

The economic issues include government plans to increase to five percent the royalty on mineral reservations and unregulated imposition of mining taxes by local government units (LGUs).

According to Romualdez, the government has to be careful in changing the rules of the game midstream as it is turning off investors.

Likewise, Romualdez expressed strong criticism about the corruption in the local government level, even more than at the National Government level which continues to remain supportive of the mining industry.

One particular environmental issue that is closely being watched by potential investors, Romualdez said, is the open pit mining ban to be imposed in Mindanao and proclamation of protected areas covering mineral reservations and mining tenements.

The open pit mining ban in Mindanao could threaten the $5.9-billion investment of the Swiss-based Xstrata Group in the Sagitarrious Mines, Inc. (SMI) Tampakan copper-gold project in South Cotabato.

A separate move to ban mining in Palawan could also affect the mining project of Nickel Asia Corp. - specifically the Coral Bay Nickel Corp.’s Rio Tuba mine project and nickel processing plant.

Gerard H. Brimo, president and chief executive officer of NAC, warned that those issues could lead to the demise of the mining industry in the Philippines.

The mining sector continues to await a stronger policy statement from the Aquino administration regarding the SMI issue.

Romualdez pointed out that should the Philippine government cancel the SMI Tampakan project, the government would have a contractual obligation to reimburse SMI for expenses incurred.