End to mining moratorium tied to legislation

End to mining moratorium tied to legislation -- Aquino


THE LIFTING of an 18-month moratorium on new mining projects is likely to be delayed until lawmakers approve new legislation on mineral revenues and an executive order (EO) is signed, President Benigno S. C. Aquino III yesterday said.
 Mining industry officials have expressed frustration over the delay in the granting of permits for new projects, and the need for Congressional approval is likely to hold up permits further, stalling up to $12 billion in new investments planned over the next five years.
The new investments include Southeast Asia’s biggest undeveloped copper-gold mine, the $5.9-billion Tampakan project by global miner Xstrata Plc and Australia’s Indophil Resources NL, which has so far failed to get an environmental clearance from the government.
Asked when the moratorium would be lifted, Mr. Aquino told Reuters in an interview that it would need “the EO plus the necessary changes to the legislation.”
The executive order is a presidential directive which can impose new rules but not new taxes.
“The revenue portion is actually something that has to be spelled out by the new legislation,” he said.
Manila wants to extract more revenues from the mining industry to offset the environmental risks involved, Mr. Aquino said.
“[It is] 100% ours in terms of the resources, 100% of the risk, 100% of the catastrophe, then we get less than 10% of the proceeds -- that doesn’t seem to be a good equation,” he said.
He said the government earned just P13.4 billion in mining taxes in 2010, less than 10% of the industry’s total revenue of P145 billion.
Manila also wants to see more mineral processing in the country, Mr. Aquino said. At present, most mining firms ship ore to their clients, many of whom are in China and Japan, due to a lack of processing facilities in the country.
The Philippines, which sits on an estimated $1 trillion worth of untapped metal resources -- mostly gold, nickel and copper -- expects to attract about $2.3 billion in investment in new and existing projects this year if the moratorium is lifted by the third quarter.
A major mining reform was undertaken last year when hundreds of permits for defunct projects were canceled, opening about five million hectares of potentially mineralized areas across the archipelago to new investors who are waiting for the government to lift the moratorium.
Mr. Aquino said he expects to get the final draft of a new executive order clarifying the government’s mining policy this week. The draft has been revised “to ensure that even the smallest of the loopholes will not exist,” he said.
He also said the policy would declare 78 eco-tourism areas around the country where a total ban on mining would be imposed.
At least 14 provinces, mostly mineral-rich areas, have issued ordinances and resolutions against mining, according to the Mines and Geosciences Bureau. These include South Cotabato, host of the Tampakan mine which is under threat from a two-year-old provincial ordinance banning open-pit mining. The local government bans run counter to the national mining law, which does not restrict mining exploration methods. -- Reuters