Toledo Mining Corporation

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Don't bet on mine revenue, gov't urged
Posted: 2:34 AM | Dec. 30, 2004


Inquirer News Service

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THE PHILIPPINE Chamber of Mines has urged the government not to expect too much revenue from mining projects.

According to the Chamber of Mines president Benjamin Philip Romualdez, the estimated revenue to be generated by mining projects may come in trickles beginning next year.



"While there is a feeling of euphoria [with the reversal of the Supreme Court ruling on the constitutionality of the Philippine Mining Law], they [the government] may be expecting too much too soon," said Romualdez. "There are issues still to be resolved."

He said that national and local government units could expect revenue to come from mining exploration, construction and actual mining production.

According to Walter Brown, Philex Mining Corp. president, mining projects have long "gestating periods."

He said the entire project--from the exploration phase to the conduct of feasibility studies, construction and actual mining production--may take six to seven years.

And due to the protracted court battle over the legality of the Philippine mining law, as well as other issues, the country now ranks last, in terms of mineral exports, among Southeast Asian countries, Brown said.

Data from the Mines Bureau indicated that from a peak of $1.2 billion in 1980, mineral export revenues declined to less than $500 million beginning 2000.

The Mines Bureau also showed that only 30 percent of the country's land area has been explored for mineral deposits.

If the mining projects now in the pipeline are not derailed over the next six years, the Philippines may expect revenue of at least $2.814 billion each year from the sale of gold, copper, nickel and other minerals, according to the study of the Mines and Geosciences Bureau.

"Large scale mining projects now in the exploration and development stage will hopefully generate the needed revenues for the government," said Leo Jasareno, head engineer of the Mining Tenements Division.

In her 10-point agenda, President Macapagal-Arroyo listed down the mining projects to be pursued: the Rapu Rapu Polymetallic Project, the Rio Tuba Nickel Project, the Masbate Gold Project, the Diwalwal Direct State Development Project, the Adlay Project, the Nonoc Iron Fines Project, the Didipio Copper-Gold Project, the Victoria II Gold Project, Padcal Copper Expansion Project, the King King Copper Gold Project, the Tampacan Copper Project, Itogon Gold Project, the Canatuan Gold Project, Far-Southeast Gold Project, Boyungan Copper Project, Pujada Nickel Project, Toledo Copper Project, San Antonio Copper Project, Mindoro Nickel Project, Nonoc Nickel Project, Batong Buhay Gold Project and the Amacan Copper Project.

"However, to develop the mines there is a need for foreign capital," Jasareno said.

The 22 identified mining projects would need capital investments of at least $6 billion in the next six years. The projects are expected to generate some 41,400 jobs during the construction phase and a total of 210,426 during the commercial phase.

The Philippines is one of the least explored countries in the so-called ring of fire, an area of the Asia-Pacific said to be rich in mineral resources but vulnerable to volcanic eruptions.

In 1995, the Philippine government tried to attract more investment in the mining industry when it allowed foreign firms up to 100 percent equity in mining projects as compared to the 40 percent that was previously allowed.

However, the liberalization was stalled when tribal groups challenged the legality of the Mining Act, and a mining firm accidentally dumped tailings into the Boac River in Marinduque.