Miners want a closer look at a measure filed last month at the Senate that seeks to effectively ban exports of unprocessed mineral ore from the country, officials yesterday said.
“We should study (the bill),” Philex Mining Corp. President Eulalio B. Austin, Jr. said at the sidelines of the Mining Philippines 2014 Conference in Pasay City.
Senate Bill No. 2374, filed by Senator Paolo Benigno “Bam” A. Aquino IV, requires domestic processing of all mineral extracts in the country prior to export, which may push miners to acquire more processors.
As of now, the measure is pending at the Senate committee on environment and natural resources.
According to Mr. Austin, building mineral processors would greatly contribute to the local economy’s growth.
However, he noted that one question that should be answered is if mining companies could fund the construction of downstream technologies while operating their respective mines.
In addition, Mr. Austin said that there must also be a clear definition of raw and processed ore.
“Raw ore is not allowed to be exported. We export concentrates,” he said.
“We have to define what is processed ore and what is raw ore,” the official noted. “Processed ore has gone through some grinding, milling, or treatment,” as compared to the raw ore which is harvested and shipped directly.
Canadian Chamber of Commerce of the Philippines, Inc. President Julian H. Payne also expressed concerns about the proposed bill.
“The proposed ban on export of raw ore will block opportunities for foreign investment in the related ore-processing that it seeks to promote,” Mr. Payne said in a speech at the same event.
According to the official, “mining and processing are almost always done by separate companies” and investing in one would ransom the approval and investment in the other, creating problems.
He added that certain factors should be looked into, such as the country’s restrictions on foreign investment and the availability of infrastructure and skilled labor.
“Forcing a processing operation to locate in the same country may force it into an uncompetitive situation,” Mr. Payne said.
“In terms of being resilient in this changing environment, the better solution to a negative ban on export of raw ore would be to ease foreign investment restrictions on foreign investment in processing operations,” he added.
The same sentiments were shared by the Chamber of Mines of the Philippines (CoMP) Executive Vice-President Nelia C. Halcon.
“On a short-term perspective, a number of factors should be taken into consideration particularly the capital investment involved, the ore reserve specifications, economies of scale, and the investment environment,” Ms. Halcon said.
“This should be well planned. Indonesia lost $12.5 billion in implementing the export ban,” she said, citing news reports.
Indonesia, the world’s largest nickel producer, imposed a similar ban on mineral ore exports in January, which pushed nickel prices up by as much as 37% this year.
However, the CoMP’s Ms. Halcon noted that, eventually, the proposed measure could help drive economic growth.
“Viewed on a longer-term perspective, the policy can be considered to further increase the industry’s contribution in achieving the status of an industrializing economy, if the country has such a strategic plan,” she said.
“At the end of the day, it will always be the economics and the market that will dictate particularly in a globalized world.”
According to a Mines and Geosciences Bureau (MGB) report released last month, the country currently has five processing plants — two for nickel, two for gold, and one for copper.
The MGB report also showed that the country has 46 operating metallic mines and 55 non-metallic mines.
Meanwhile, in his keynote speech in the same conference, Vice President Jejomar C. Binay pushed for the harmonization of national and local mining laws.
“We have a mining law that is considered to be one of the most sophisticated and well-crafted pieces of legislation worldwide,” Mr. Binay said, noting that it requires social development programs, ensures environmental protection, and guarantees the mine’s rehabilitation after its lifetime. “This should supersede local laws that run contrary to what the mining law seeks to achieve,” the official said.
Mr. Binay noted the case of Sagittarius Mines, Inc.’s (SMI) Tampakan copper-gold project in Mindanao, which has yet to begin operations as the firm and the government have yet to resolve issues hounding the venture, such as the conflicts between certificate of land ownership awards and Tampakan mining tenements, the potential liabilities for environmental damage arising from project operations, the open-pit mining ban in South Cotabato, and securing the requisite free and prior informed consent (FPIC) of affected indigenous communities.
Issued by the South Cotabato local government in 2010, the open-pit mining ban there continues to be a contentious issue as it was among the reasons cited by the Department of Environment and Natural Resources (DENR) when it initially rejected SMI’s application for an environmental compliance certificate (ECC) for Tampakan in January 2012. National laws do not ban open-pit mining.
The DENR finally issued the long-awaited ECC for Tampakan in February last year on a conditional basis. SMI signed the ECC in August 2013. SMI is now working on securing other permits for the project, such as the FPIC.
“What could have been one of the largest copper mines in the world, with tangible economic impact on the region is still on hold, awaiting a resolution on local permits,” Mr. Binay said. “Let’s hope and pray (that operations push through).”
