Metal output to decline this year

MANILA, Philippines - The value of the country’s metal output is expected to decline nine percent this year on the back of lower gold purchases of the central bank from small-scale miners and as world metal prices are not likely to reach the levels seen in previous years, an official said yesterday.

Mines and Geosciences Bureau director Leo Jasareno told reporters that the value of the metallic mineral production is projected to reach P110.57 billion this year, lower than the P121.99 billion in 2011.

“This lackluster outlook can be attributed to the expected lower turnout in the gold purchases of Bangko Sentral ng Pilipinas (BSP) from small-scale miners,” he said.

He said they expect lower gold purchases to be made by the BSP as the Bureau of Internal Revenue (BIR) has imposed new taxes on gold bought from small-scale miners.

In the third quarter of last year, the BIR started collecting a two percent excise tax and 10 percent creditable withholding tax from small-scale miners under Revenue Regulations No. 7-2008 or the “Taxation on the Sales of Gold and Other Metallic Mineral Products or Produced by Small Scale Miners.”

Jasareno said the BSP’s gold purchases from small-scale miners are expected to fall by as much as 79 percent to 3,658 kilograms (kg) this year from a year ago.

Total production of gold, he said, is expected to drop both in terms of value and volume.

Production volume and value of gold is seen to go down 24 percent and 39 percent, respectively to 23,527 kg worth P38.64 billion this year against year-ago levels.

Jasareno said mine output for other base metals like copper, nickel, chromite, zinc and iron, meanwhile, are seen to rise this year as new projects go into production.

He said projects that would be entering the production stream are the Casiguran Nickel Project of Century Peak Corp. in Quezon, the Sta. Cruz Candelaria project of Eramen Minerals Inc. in Zambales, the HY nickel-chromite project of Sinosteel Philippines HY Mining Corp. in Dinagat Island, the Elluvial chromite mining and concentration project of Mt. Sinai Mining Exploration and Development Corp. in Eastern Samar, and the Leyte iron sand project of Strong Built Mining Development Corp.

He said the expected decline in metal production value this year would likewise be driven by the price movement of metals in the world market.

“In terms of metal price, although there is consensus among experts that prices will remain at favorable levels, movements will not be as upbeat as the recent years,” he said.