PHL losing $4B in foreign investments as mining ban bites — miner
The Philippines is losing up to $4 billion in foreign investments this year and the next with the moratorium on new mining projects enforced by government until a new revenue measure is in place, the country’s main industry group claimed on Wednesday.
"The $2 billion in mining investments we are expecting this year will not happen,” Chamber of Mines president Benjamin Philip Romualdez ranted in his speech on the first day of the 2012 Mining Conference at Sofitel Plaza in Pasay City.
“The $2 billion in mining investments we are expecting next year will not happen... The $16 billion in mining investments we are expecting in this administration will not happen," Romualdez said.
The timing of a ban on new projects could not have come at a worse time, since the Philippine government is groping for increased revenues from the industry, according to the mining chamber official.
However, the Mines and Geo-Sciences Bureau is debunking the numbers from the Chamber of Mines.
“We are still reviewing the targets for 2012… for projects already covered by MPSAs,” MGB director Leo Jasareno told GMA News Online. “Later this week, we are coming up with the numbers.”
Jasareno said he would rather wait for the review results than give out a tentative figure.
“What I want is to disclose the final numbers of our review for 2012,” he added.
“We are rejecting the claims of Romualdez – in fact – with a statement from Secretary [Ramon] Paje of [the Department of Environment and Natural Resources], and the title of that press statement is, ‘Paje rejects pressure from the Chamber of Mines’,” Jasareno said.
MGB is an agency of the DENR.
In the DENR statement, Paje emphasized that no new mineral sharing agreements would be signed until the existing profit-sharing scheme between government and mining companies – now at a “measly” 2 percent of gross sales – is increased in favor of government, environment, and Filipinos.
Reacting to the statements of the Chamber of Mines at the ongoing Mining Philippines Conference 2012 in Manila, Paje said, "There is no way the department can go against Executive Order No. 79."
President Benigno Aquino III signed EO 79 on July 9, which expounds on and at the same time delineates the administration policy on mining by permitting only projects that give government higher revenues and operate within the framework of genuinely stringent environmental standards.
But the mines chamber said it is counting on the government to review Section 9 of EO 79’s implementing rules and regulations – which Paje signed on Sept. 11 – mandating the terms and conditions on renegotiation with government on the second 25-year term of mining contracts.
"This effectively shortens mining contracts to a mere 25 years in violation of Section 32 of the Mining Act, which guarantees the mining companies of a second 25-year term under the same terms and conditions,” Romualdez claimed.
“This provision is patently illegal and contrary to the assurances of government that mining contracts will be respected," he added.
In his keynote speech during the miners’ conference, Vice President Jejomar C. Binay said the gains from mining should trickle down to the poor and improve the lives of Filipinos who are the true owners of the country’s mineral resources.
"Let social justice be one of the hands that shape the future of Philippine mining," the vice president added.
Paje, however, reiterated that the government's 2-percent share is simply disadvantageous. "it is not even enough to pay for the environmental impacts of mining," he said.
A fundamental intention of EO 79 is to protect the state and future generations from the menace of a one-sided approach to mineral resources development, considering the 50-year term of mining contracts.
“There has to be new terms and conditions in order to optimize revenues from mining," Paje noted.
“In fact, the International Monetary Fund has just disclosed in its report on the current fiscal regime of mining in the country and it is recommending that a 7-percent flat sharing scheme be adopted and that the existing incentives for mining projects be removed,” Paje noted.
"We can achieve sustainable, environmentally sound mining principles and continuously refine such a framework that upholds both economic and social justice," Binay said in his speech, footnoting on the fact that Philippines sits on 21.5 billion tons of metal deposits including nickel, iron, copper, and gold.
"But for all the wealth that lies waiting to be unleashed for the benefit of its true owners, mineral extraction has not been as great an economic driver as it could be," Binay added. — BM, GMA News
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