News & Events

September 8, 2017

Domestic processing of minerals needs incentives, support–solon

Business Mirror
Published September 5, 2017
By Jonathan L. Mayuga  
Party-List Rep. Arnel U. Ty of LPGMA, the chairman of the Committee on Natural Resources of the House of Representatives, underscored the need for more incentives to promote domestic processing of minerals. 
During his speech at a mining conference on Tuesday, Ty said calls to put up more mineral-processing plants in the country should be backed by incentives and assistance to achieve sustainability in the mining sector. 
The solon said there’s a measure proposed in the Lower House to ban the export of raw ores, coupled with the necessity of putting up processing plants. 
“There should be proper assistance and incentives to make investments in mineral processing attractive and competitive with other countries in the region,” Ty said during the opening ceremonies of the Mining Philippines 2017 International Conference and Exhibition at a hotel in Pasay City. He added there must be a balance in determining a new revenue-sharing scheme between the mining sector and the government. 
The Philippines is still the world’s top supplier of nickel ore while it remains to be one of the major producers of copper and gold. 
Currently, the Mining Industry Coordinating Council is reviewing the mining industry’s current fiscal regime. 
Meanwhile, Ty also emphasized the need for the government to step up its implementation of the mining law. 
“Legislative reforms will be use-less if we cannot implement them. Mining needs heavy regulation because of the high risks involved in its operations,” Ty said. “The ability of the government to strictly regulate mining operations will be critical.” 
Sphere of influence 
ACCORDING to Ty, the Department of Environment and Natural Resources (DENR) must be fully equipped with the best technology and professionals to strictly monitor and enforce regulations to all mineral-extraction operations, from the biggest to the smallest mining company.  “This gravity of the DENR’s mission cannot be over-emphasized, as the consequences of failure threaten not just economic damage but can lead to tragic loss of lives,” Ty said. 
“As legislators, this is beyond our sphere of influence. We can only benefit from mining if the government can enforce mining laws.” 
Meanwhile, Ronaldo Recidoro, executive director of the Chamber of Mines of the Philippines (COMP), said incentives needed by mining companies to invest in downstream processing include tax holidays, power subsidy, as well as shipping of ores from one island to another, citing the high cost of power and interisland shipping costs. He also cautioned the Duterte administration against imposing a nickel-ore export ban like Indonesia. 
The policy, he said, “will not work”, citing the case of Indonesia, which imposed a nickel-ore export ban in 2014. 
Early this year Indonesia started to roll back partially its policy to ban export of nickel ore to China. 
“We don’t want that to happen in the Philippines,” Recidoro said. 
More mining 
ACCORDING to Recidoro, to promote downstream processing in the Philippines, mining companies would look at, first, adequate supply, such as in the case of steel manufacturing. 
“To encourage processing of iron, we need to mine more iron,” he said. “We only have one. So we need to issue permits.” Recidoro added this year’s conference on mining will focus on re-defining responsible mining and going beyond compliance. 
“In the coming days, we will be hearing stakeholders from various fields discuss what we are already doing on the grounds and what we should be doing to enhance our impact not just on the environment but also in the communities that host our operations,” he added. 
According to Recidoro, for the past two years, the industry has been at the center of a policy storm after President Duterte made his inaugural speech ranting about the environmental destruction caused by irresponsible mining operations. 
“He really wanted to overturn the mining industry. He wanted a more responsible mining industry, one that is patterned after Australia, Canada and American standards.” 
Palace meeting 
RECIDORO said Duterte called COMP members to a meeting in Malacañang in August. “It was a surprising meeting. We were expecting a dressing down. But, contrary to our expectations, he was like a father.” 
He added the President was “very fatherly” in his approach. 
“He reminded us of the facts, that No. 1, he cannot stop mining because of the law and, No. 2, since there is the law, he wanted us not make him look stupid.  He wanted 
us to plant trees and take care of the communities,” Recidoro said. “So we decided, let us show the President and the Filipino public that we are listening and we plan to redefine what responsible mining is. We just not comply with the law, but we go beyond.” He added that under the new leadership, COMP will now be more aggressive in self-policing. 
“We will be increasing or improving our current operating standards, not just for mining operations but for social development and environmental protection,” he said. “Those are three thematic areas we want to see marked improvement among our members.” 
Cautiously optimistic 
ACCORDING to Recidoro, this year’s conference on mining is more dynamic, noting the increased number of participants and exhibitors. 
“We are seeing a pivot; a slow pivot from negative to, hopefully, positive.” 
Recidoro said COMP is optimistic to see clarity on the audits, open-pit ban, perhaps on pending legislation, such as the proposal to require legislative franchise on mining operation. 
“We are still cautiously optimistic. While the situation has vastly improved from the time of Secretary Lopez, there is still a little doubt but better than what we experienced under Lopez. Considering that secretary [Frank] Cimatu is a more sober Secretary, we are keen to participate,” he added. 
COMP, he said, is hopeful about the reversal of the ban on open-pit mining method soon, but was quick to say that the defining moment for the industry is when the moratorium on new mining projects is finally lifted. 
“No matter if the open-pit mining ban is lifted, if the DENR is not lifting the moratorium and not accepting new application, [there’s nothing],” he said. 
According to Recidoro, lifting the moratorium on new mining projects will allow investment to flow in, hence, enhancing economic opportunities in the countryside. 
Meanwhile, he said most players in the mining industry support Cimatu’s confirmation by the Commission on Appointments. 
“He is very sober, very intelligent who can appreciate what is mining technology,” he said. “If you notice, we are really reaching out. This will be a very different Chamber of Mines moving forward,” he said. “We will be very active in our outreach activities. We will be very active in self-policing.” 
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