RP lost $25B in potential revenues since 1995, says mining exec

The country has lost about $25 billion in potential mining revenues since 1995 as the Supreme Court (SC) has yet to resolve questions about the constitutionality of Republic Act 7942 or the Philippine Mining Act (PMA) of 1995.

"The court’s indecision has been a major stumbling block to the resurgence of the mining industry," said Benjamin Philip B. Romualdez, president of Benguet Mining Corp. and incoming president of Chamber of Mines of the Philippines (CMP).

In yesterday’s ceremonies marking the 50th Annual Mine Safety and Environment Conference, Romualdez said the CMP has been urging the SC to hasten its decision on the constitutional challenge to the PMA.

"The industry has already lost so much because both local and foreign investors are awaiting the court’s ruling," said Romualdez.

The challenge posed by non-government organizations (NGOs) and environmental groups, and the subsequent delay, is giving an air of discomforting uncertainty to investors, he observed.

A study by the Australia-New Zealand Chamber of Commerce (ANZCC) shows that if currently known gold and copper projects in the country were developed, an estimated $3.2 billion in new revenues could be invested annually over the next five years, with majority of investments going to less developed rural areas such as Mindanao and the Cordillera regions. This does not even include undiscovered ore bodies.

The Mines and Geosciences Bureau added that an additional $3.5 billion in export revenues could be generated yearly if four new mining prospects begin operations. These are Tampacan Mining project in So. Cotabato; King King project of Benguet Mining Corp.; Boyongan Mining project of Philex Mining Corp. and Far Southeast Mining project of Lepanto Mining Corp.

ANZCC said that if these investments are in place, this would make the industry the second largest capital infusion sector in the country next to manufacturing.

Other potential benefits of correcting the flaws that have stopped the flow of investments in the sector are export earnings of at least $1.2 billion yearly, adding six percent to total exports and ranking the Philippines among the top 10 gold producers and top eight copper producers in the world.

In terms of tax revenues, P8.5 billion could go to the National Government, P3.6 billion, P5.3 billion and P3.6 billion for the provincial, municipal and barangay levels, respectively.

Romualdez said there are other factors or irritants that have stymied the mining sector.

"There is so much obstructionism going on, add to these the uncertainties in the political front," said Romualdez.

In recent years, NGOs’ opposition to PMA has forced mining companies to close shop, and to date, about 22,000 employees have been out of work. Despite modern mining already using best-techonlogy practices, NGOs and local government units have been preventing mining firms from setting foot in their area.

Another major deterrent is the 60-40 Filipino-foreign ratio requirement of the Philippine Constitution which foreign mining companies find inconsistent since the 100-percent foreign equity is also allowed by the Constitution under the financial technical assistance grant.

Investors are also concerned about the implications of the Indigenous People Rights Act (IPRA) or Republic Act 8731. Under the IPRA, the National Commission on Indigenous Peoples, has the power to issue certifications as a precondition to the grant of permits or leases for any activity within the ancestral domains, and has jurisdiction to decide over all claims and disputes involving indigenous peoples.

Mining and logging firms have pending applications that are within the ancestral domains of various tribal peoples in Northern Luzon, Palawan, Mindoro and Mindanao.