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Mining industry seeks policy changes
THE MINING INDUSTRY is pushing for key policy changes that will boost the sector’s growth and help the economy recover faster from the coronavirus disease 2019 (COVID-19) pandemic.
Eulalio B. Austin, Jr., Philex Mining Corp. president and chief executive officer, said the government should harmonize all national laws and local government units’ (LGU) ordinances on mining.
“While the national law allows mining, there are LGUs that issue resolutions saying no to mining in their respective areas,” Mr. Austin said during a BusinessWorld Insights forum on Wednesday.
The Philex Mining official said there is a need to lift the foreign ownership restrictions on mining under the 1987 Constitution. Foreign investors are only allowed to own up to 40% of the capital of mining firms operating in the Philippines.
“Because we are opening big capital projects, the provision is needed so that more investors would come in the country,” Mr. Austin said.
Mr. Austin announced in a recent stockholders’ meeting that Philex Mining is seeking investors for its Silangan copper and gold project in Surigao del Norte, which requires a $758-million capital investment.
The Silangan project is seen as one of the big-ticket mining projects that can help the Philippine economy’s recovery, after Malacañang lifted the ban on new mineral agreements in April.
Mr. Austin also said there is a need to develop the downstream mining industry.
“There is a need to develop the downstream industries of copper so that we could maximize or create value on the copper that we will be mining in the future,” he said.
Dante R. Bravo, Global Ferronickel Holdings, Inc. president, said the government should also consider providing “stable” incentives for major mining projects.
“We have to be open in giving incentives to big investments. The incentive has to be stable and cannot be changed midway since it is going to affect the viability of the project,” Mr. Bravo said during the same forum.
“I think the current tax regime is almost prohibitive to the industry. We are already heavily taxed. If there are more taxes to be imposed, it would attract less investments into the country,” he added.
The mining industry has to pay various fees, taxes and royalties imposed by the Mines and Geosciences Bureau (MGB), Bureau of Internal Revenue, LGUs and other government agencies. The MGB recently proposed imposing royalties on miners operating outside designated mineral reservation areas. At present, only those operating within mineral reservations currently pay mineral royalties of 5%.
Meanwhile, Chamber of Mines of the Philippines (COMP) Executive Director Ronald S. Recidoro, said the Philippines should extract its mineral resources “responsibly.”
“If the minerals stay underground, it has very little value. It is better if we extract it responsibly and use the benefits and revenues of mining to move our economy forward,” Mr. Recidoro said.
“It is really up to us now to have that conviction and political will to do the same. Our mineral wealth will go to waste if we do not use it,” he added.
Based on an MGB report, the value of metallic mineral output rose 14.1% to P28.91 billion during the first quarter as a result of higher metal prices.
The mining sector contributed P102.3 billion, equivalent to 0.6% of gross domestic product (GDP) growth in 2020.
Philex Mining is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Metro Pacific Investments Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — R.M.D.Ochave