Philippine mining revenue to top US$10b pa by 2012
Mining is a high-capital venture that needs the unqualified support of its host government to get its projects off the ground. Although it still has some complaints about government support, the Philippine mining sector is determined to help make this “a mining country” and usher in a mining boom. Industry executives are optimistic that it mining will generate earnings of at least US$10 billion by 2012—or even as early as 2010. This figure dwarfs earlier forecasts, buoyed up by the recent influx of big-ticket projects.
Speaking to reporters at the start of the 7th Asia Pacific Mining Conference held recently at the Makati Shangri-La, the country’s top mining industrialist, Benjamin Philip Romual-dez of Benguet, who is president of the Asean Federation of Mining Associations (AFMA) and the Chamber of Mines of the Philippines, said the initial target of US$400 million to US$500 million new investments for the industry must be revised.
“It will go higher,” he said as he estimated 2007 investments alone to total US$700 million as BHP Billiton expressed interest in infusing US$1 billion, while Japanese firm Sumitomo Metal Mining Co Ltd signified interest in spending US$1 billion for a nickel and cobalt smelter project in Mindanao.
Sumitomo said they are currently in the process of completing the expansion of its Coral Bay nickel mining and processing project in Palawan. The expansion project, worth US$300 million, is expected to double the project’s capacity by 2009.
Romualdez said “the Philippines will be a major contributor to the expansion of mining in the Asia-Pacific region.”
He projected that mineral exports of the country may hit US$2 billion by the end of this year. Likewise, he projects the industry’s dollar earnings would reach as high as US$10 billion by 2012 or even sooner, by 2010.
The Chamber of Mines expects a mining boom in 2008 and 2009 with investments forecast at US$1.55 billion in 2008, and US$2.76 billion in 2009, compared with a projected US$348 million this year. The year 2010 is significant in that it will be the period when most of the 24 priority minerals development projects will be on stream.
Romualdez told the media that the robust mining industry in the Philippines is a result of the good partnership between the private sector and the government. “We are all working together toward the revitalisation of the mining industry,” he said. He cited Aseancountries like Indonesia, Philippines, Vietnam and Cambodia as best poised to serve the need for minerals of the fast-paced growth emerging economies and even the traditional establish users of minerals—Japan and Western Europe. Asean’s mining countries will provide a significant resource block in East Asia.
However, he conceded that there will be a lot of challenges ahead, specifically from non-government organisations that oppose mining in general. Just the same, Romualdez said that the mining sector is willing to work with “reasonable, moderate conservatives” but that the sector cannot please everyone.
The Philippines should immediately tap opportunities in the next two to three-years to solidify potential investments in the mining sector, Romual-dez added. In an interview with another paper, Romualdez pointed out that the Philippines currently has a short window of opportunity to overtake its closest rival, Indonesia, in terms of attracting mining investments and actual mineral production and export. Indonesia is currently in turmoil in terms of the legal structure for its mining sector.
The Philippines, on the other hand, has finally resolved legal impediments for the mining sector and is now ready to accept more investors in the sector, Romualdez said. He added that this policy direction is well set and the only way the Philippines could reverse this momentum is to change its current mining policies.
Romualdez said Indonesia currently earns about US$7 billion from its mineral exports while the Philippines only earns US$2 billion. Because of its current legal infirmities, Romualdez said, the Philippines should try to attract mining investments that could allow the country to overtake Indonesia.
Romualdez also noted that the Philippines also faces collective competition from the Indo-Chinese countries of Cambodia, Laos and Vietnam, plus Myan-mar, in attracting potential mining investments. But he maintained the Philippines is currently the best country for mining investments because of its current policies.
Besides existing policies, Romualdez stressed the need for the Philippine government to ensure that local governments adhere or follow the same policies to ensure that the individual mining companies don’t get irked into leaving.
On the part of the mining firms, Romualdez advised them to observe “best practices” to allay the fears of local, ethnic and indigenous communities.
Perhaps to allay some business concerns and prove that the government is moving heaven and earth to get mining projects started, the Department of Environment and Natural Resources (DENR) has lately approved additional 11 mineral agreements and exploration permits, a move designed to prop up more activities in the mining industry. From these projects alone, some P224.7 million in investments are expected to stream into the country in the next two-years.
Expectedly, DENR Secretary Angelo Reyes made the announcement before global mining leaders in the Philippines for the Asia Pacific Mining Conference and Exhibition 2007 in early June. The conference was organised by the Asean Federation of Mining Associations and the Chamber of Mines of the Philippines to showcase the mining industries of the various Asia-Pacific countries, including the Philippines.
The Philippines is serious in its effort to build up a competitive mining industry, and to prove this, Secretary Reyes also announced three more crucial policy reforms that would facilitate the grant of mining contracts, as suggested by the industry.
Topping these reforms is the simplification of procedures in the grant of mining permits, particularly by reducing the time for posting of mining application, and streamlining the requirements on National Commission on Indigenous Peoples (NCIP) clearance and endorsements from local government units.
Category: ResourceAsia
