Are Aussie mining firms still eyeing RP?
07-OCT-2008 Intellasia | Inquirer.net
Oct 7, 2008 - 7:00:00 AM
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According to Mitchell H. Hooke, chief executive officer of the Minerals Council of Australia (MCA), mining firms from Down Under are still keen on Philippine prospects.
"But that [interest] has been somewhat qualified by sovereign risk issues, uncertainty of the [Philippine] mining act, provincial regulations, role of the Catholic bishops, role of stability of taxation regimes and fiscal stability," Hooke said, summing up the sentiments of major mining companies in Australia.
The MCA represents Australia's exploration, mining and minerals processing industry internationally, with member companies producing more than 85 percent of Australia's annual mineral output.
During an interview with Business Monday in his office at the Walter Turnbull Building in Canberra, Australia, Hooke said that there is "big interest" because there is a "lot of prospectivity," the Philippines being the fifth largest mineral rich country in the world.
"But you need to look in the mirror," he said. "There is no shortage of prospective minerals in the world."
Hooke estimated that there is an estimated $850 billion to $900 billion worth of mineral deposits in the country.
"That's a lot of prospective wealth. If done right, that natural capital can be converted into societal capital. It does a lot to improve the livelihood of the local community in the Philippines. It will contribute to socio-economic growth."
Hooke recalled that during the Asian Mining Congress in Manila last year, representatives of Australia's mining companies as well as top government officials who attended the event were very enthusiastic of the country's mineral prospects.
"But that optimism has been tempered somewhat," Hooke said. "It is hard for me to put my fingers on the reasons why, but I suspect it goes the extent to which change in national policies are being revisited. And there are strong opposition on the ground, particularly from church leaders, provincial governments, nongovernment organizations."
Hooked emphasized that these considerations are taken into account when investment decisions are made. Environmental factors also do not help the Philippines' case.
"Not only is there no shortage of mineral resources to be exploited. There is no shortage in mobility in the strategic deployment of capital and resources. These people can move very quickly, more so than at any time in history."
Hooke further cited a survey of CEOs made by the Fraser Institute of Canada, a research group. It shows that the Philippines is not a priority investment area. Australian mining companies looking for valuable minerals such as gold, copper, silver and nickel in the Philippines have not been given warm welcome. Some have even encountered obstacles so great that they have decided to just drop their Philippine operations.
More Filipinos are now fearful of the consequences of mining activities, citing the destruction of the environment and endangering the lives of humans and animals as what had happened in the past.
Most people recall the tragic incidents involving Marcopper and Lafayette.
The Catholic Church has been very vocal against mining companies.
But Hooke tries to dispel these fears by saying that members of the council are all bound by what they call the Enduring Value, or the Australian Minerals Industry Framework for Sustainable Development. The principle is that "investments in minerals projects should be financially profitable, technically appropriate, environmentally sound and socially responsible."
He explained that the future of the Australian minerals industry "is inseparable from the global pursuit of sustainable development.
"Through the integration of economic progress, responsible social development and effective environmental management, the industry is committed to contributing to the sustained growth and prosperity of current and future generations."
Hooke argues that mining firms have more to lose if they violate this social contract. All sectors involved need not be adversely affected in a mining venture.
"To us the social license is unwritten, but the social contract is more enduring," he said.
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