First quarter investments into the Philippine mining sector reached only 8% of an overall target of US$838 million for the year, government data showed on Wednesday.
In January to March, seven mining companies spent just US$68 million expanding, exploring and preparing new mining sites in the Philippines, according to the Philippines Mines and Geosciences Bureau.
However, Horacio Ramos, director of the bureau, said he was confident the overall target, which is 38% higher than the US$605 million that flowed into the local mining industry last year, would be met as investors have committed to infuse additional resources this year.
“They assured us they will invest that within the year, except that there have been delays,” he told Reuters.
The Southeast Asian country, which is reliant on foreign investors to develop its once booming-mining sector, says it has US$1 trillion worth of unexplored mineral wealth.
In 2005, the Philippine Supreme Court allowed foreign companies 100% ownership in local projects, but legal uncertainties, opposition from the Catholic Church, land ownership disputes and communist and Muslim insurgencies have made the local mining sector a hard sell.
Over US$1 billion has been invested into the industry since 2004 but the government is hoping this will surge to around US$10 billion within the next three-years due to record commodity prices and the country’s proximity to resource-hungry China.
Philex Mining Corp PX.PS, the Philippines’ most valuable listed mining firm, also said on Wednesday, it was allotting 624 million pesos in capital expenditures this year to fund, among others, existing exploration projects.
Walter Brown, chair of Philex, told reporters he also expects the firm to start producing high-grade coal at its 2,000 hectare mine in Zamboanga Sibugay province on Mindanao island by next year, and take advantage of strong local demand.
The mine has a capacity to produce 100,000 tonnes to 150,000 tonnes of coal every year, he said.