ComVal braces for impact of global crisis on mining

DAVAO CITY, Philippines — The provincial government of Compostela Valley, which counts mining as its "champion industry," is bracing for tough times ahead as prices of metallic and non-metallic minerals drop in the global market. Compostela Gov. Arturo T. Uy said the prospects this year would be dismal and with the prices of minerals plunging, the local government expects mining companies to slow down operations. There could also be no new investors. Apex Mining Co. in Maco town has served notice that it would be laying off workers this month, he said. Apex management has been taken over by the partnership of Crew Gold Corp. and Mapula Greek Gold Corp., Inc. Apex estimates gold resources at Maco at 1.462 million tons. The company officially started production in mid-December. The company recovered 7,000 ounces of gold during commissioning in 2007 and is aiming at 16,000 ounces for 2008. The operations of the Kingking Copper-Gold Project in Pantukan town were also halted due to the ongoing dispute between Benguet Corp. and its local partner, Nationwide Development Corp., over management of the project. The site has a reported gold and copper resource of 353 million tons. "The one or two big-scale mining companies have about 1,000 workers," Mr. Uy said, adding that the province has 40,000 small-scale miners inside the 729-hectare Diwalwal State Utilization Project in Mt. Diwata of the Philippine Mining Development Corp. (PMDC). The Amacan Copper Project, which lists North Davao Mining Corp. as tenement holder, has the potential to add revenues to the local government’s coffers but there are no interested bidders. The company, said Edilberto L. Arreza, Davao Region’s Mines and Geosciences Bureau chief, will schedule another bidding and to start exploration this year. The Amacan project is one of the Department of Environment and Natural Resources’ Priority Mineral Development Projects with an estimated investment of $100 million and gross sales of $150 million each year based on its financial projections in 2006. For now the Compostella Valley provincial government has tweaked the tax code to plug leaks in revenue collections, the provincial governor said. "We will start monitoring the sand and gravel extraction and we’ll see another P20 million in local revenue this year," he said. Last year, the local government collected P60 million, or P20 million over revenues in 2007. Mr. Uy said the income is not nearly enough and Compostela Valley is still heavily reliant on internal revenue allotment from Manila, which he said was P550 million in 2008. Income from excise taxes was only over P300,000 over the past nine years after the National Government failed to remit the province’s rightful share, he said. The provincial government has been fighting the state-run PMDC for its share in excise taxes which the governor said could now run to millions of pesos. — J.B. Escovilla, BusinessWorld