A PROPOSAL which requires miners to seek a legislative franchise and bans exports of raw ore is raising concerns within the industry, which said such a law is unnecessary.
“We are concerned about the bill and will study it closely,” said Chamber of Mines of the Philippines Officer-in-charge President Ronald S. Recidoro in a mobile message over the weekend.
“We need to know what the bill’s objectives are and whether the proposed measures in the bill will achieve these objectives. We hope that there will be opportunity for stakeholders to provide inputs to the bill so the Chamber can participate,” the official added.
Nickel Asia Corporate Communications Vice-President Jose Bayani D. Baylon said that such proposed policies will require “extensive discussions” before they can be put in place.
“Once and for all, we need to have a wide-ranging discussion on mining as an industry and make clear the parameters within which we will allow it,” said Mr. Baylon in a mobile message over the weekend.
Speaker Pantaleon D. Alvarez, one of the authors of the bill, said it will require mining investors to obtain legislative approval, to promote a “more rigid and transparent process” and weed out “undeserving” companies.
“The law is sufficient,” said Lawyer Dante R. Bravo, president of Global Ferronickel Holdings, Inc. in a text message over the weekend.
“If our government will not allow new mining agreements, the executive department can simply stop processing applications,” Mr. Bravo said.
“If it wants to approve new mining agreements, it can always enter into terms and conditions that it deems mutually beneficial to the contracting parties and protective of all other stakeholders. No need for new law on that,” he added.
A clear definition of the type of watershed in which mining activities should not occur should also be firmed up, according to Nickel Asia’s Mr. Baylon, as the bill filed also seeks to ban mining in “watersheds,” in general, as well as “critical watersheds.”
The policy was imposed by former Environment Secretary Regina Paz L. Lopez who was replaced by retired general Roy A. Cimatu who has so far not reversed any of her measures, including her decision to suspend and shut down mines found to be violating environmental rules.
“Any land mass where water can be collected from rain is a watershed,” Mr. Baylon said.
The Philippine Mining Act of 1995 banned mining only in declared watersheds, among other areas.
Mr. Baylon also said the reduced duration of mining agreements to 10 years from the current 25-year maximum period is “too short for some investments required to make a mining operation viable.”
He also questioned a proposed ban on raw ore shipments.
Nickel Asia, the country’s top producer, reported a 3.4% decline in net profit to 1.97 billion in 2016.
The nickel industry obtained lower nickel prices during the period amid an economic slowdown in China, the top buyer of the ore.
In the last quarter of 2016, the firm which previously had a 22.5% equity interest in the Taganito plant, sold 12.5% of it to Japan’s Sumitomo Metal Mining Co. Ltd. for $42 million, leaving it with a 10% stake in the hydrometallurgical nickel processing facility.
The purpose of banning exports, according to Mr. Alvarez, is “to help develop the mineral processing industry in the Philippines and to benefit the localities where the minerals came from.”
However, miners have long raised the issue of high power costs, among other factors, as a hurdle in the way of investing in downstream industries.
Previously the world’s top nickel exporter before it decided in 2014 to halt shipments of semi-processed ores, Indonesia recently relaxed its ban by allowing the outbound shipments of excess raw ore production. — Janina C. Lim
