The government is carrying out an inventory of all defunct and non-performing mining areas which it will subject to public bidding as investment prospects soar due to high metal prices.
The Department of Environment and Natural Resources-Mines and Geosciences Bureau (DENR-MGB) is now identifying and putting an economic value on mines whose ores have previously been extracted but which were eventually abandoned by their contract holders.
“There are previously operating mines where there are still tailings or stockpiles that didn’t have value before but have become valuable due to high prices. The government is taking over these abandoned ores and mine wastes for public bidding,” said MGB Mineral Economics Chief Manuel A. Banaag in an interview.
Government is also putting in place the mechanism by which to dispose these of.
These mining properties must generate a huge amount of income that may cut national budgetary deficit.
For the non-performing areas – those that have not been operated at all – DENR has already cancelled 2,800 mining permits under its “use it or lose it” policy. The initial 65 cancelled mining permits alone first cancelled by DENR in 2005 covers a total of 68,750 hectares of mining tenements.
These areas will be subjected to bidding either by the DENR itself or by the Philippine Mining Dev’t. Corp. (PMDC), a state-run firm managing mineral reservations, Privatization Management Office (PMO) assets, and cancelled tenements.
MGB has been pushing for President Benigno S. Aquino III’s signing of an executive order (EO) which will generate income from these mining projects through public bidding.
The improper valuation of mineral lands is believed by DENR to be one of the sources of “leaks” in government’s ability to realize potential income. Other leaks are non-collection of excise tax from small scale miners, low valuation of
direct shipping ores (DSO), excessive incentives due to ecozones, and failure to declare more mineral reservations.
DENR has been proposing the generation of higher income from the country’s minerals, arguing that first, these are a national treasury, and second, mines are non-renewable and are forever lost once extracted. Any present income must thus be used for public welfare and poverty reduction.
Under the proposed EO on “Increasing Mining Revenues,” government will also map a program restricting the shipment of raw materials or DSO of certain metallic ores. This policy should encourage value adding and mineral processing.
“We will come up with an industrialization plan that will limit export of DSO,” Banaag said.
DENR asserted that government’s generation of an additional income from raising excise tax (tax on gross value of production) from the prevailing two percent to seven percent is sanctioned by the Philippine Mining Act of 1995.
The implementing rules and regulations of the mining act indicate that government should earn a “royalty of not less than five percent of the market value of the gross output of the minerals and mineral products extracted or produced from mineral reservations exclusive of all other taxes.”-By Melody M. Aguiba