Defensor hopes to restore luster of mining industry

Newly-appointed Environment and Natural Resources Secretary Michael "Mike" Defensor said he will push for the full-blast implementation of the Minerals Action Plan (MAP) which seeks to restore the lost luster of the local mining industry.

"We will certainly be pursuing all means possible to revitalize the mining industry since this will mean more revenues and jobs," said Defensor during an interview following the turnover ceremonies yesterday at the DENR. Defensor was named by President Arroyo to replace DENR Secretary Elisea Gozun.

Defensor said he will shortly be meeting stakeholders in the mining sector to determine concrete steps to be taken in implementing and improving the MAP.

"What is certain at this point, is that most of the stakeholders agree that we need to do something to revive the industry and put in place policies to attract foreign investors again," he added.

The most pressing concern facing the industry is the Jan. 27, 2004 Supreme Court decision that nullified the provisions of the Philippine Mining Act of 1995 which allowed the direct participation of foreign-owned corporations in mining. This has created policy instability and uncertainties in an industry that relies heavily on foreign capital.

The DENR through the Office of the Solicitor General immediately filed a motion for reconsideration and issued a so-called "comfort letter" to allay the fears of investors. These measures are intended to create stability in the industry.

The mining sector also suffers from instabilities in the policy environment, administrative processing bottlenecks and lack of support from some stakeholders which is a turnoff for investors.

The MAP provides for clear and predictable protocols on environmental and ecological concerns and pursues the development of downstream industries and small-scale mining.

Even while the SC has yet to issue its ruling, there are already pending applications for 22 large-scale metallic projects projected to yield $6.147 billion in foreign direct investments, and 25 exploration projects worth $62 million. With additional taxes and fees, new mining projects could bring in P3 billion annually to the government’s anemic coffers in the next six years, the Mines and Geosciences Bureau (MGB) said.

The mining industry has a multiplier effect. The mineral processing industries are important generators for other sectors and are among the best economy-wide creators of employment and personal income.

Backward linkages such as purchase of goods and services, forward linkages such as used mineral products and social multipliers such as development of human resources, schools, colleges, clinics – each additional 100 people employed by the mining industry translates into roughly 500 new jobs created elsewhere in the country.

Some of the scheduled mining projects are the Nonoc nickel project by Nonoc Processing Corp./Philnico in Nonoc Island, Surigao del Norte with potential investment’s of $1 billion projected to begin commercial operations by 2009; Pujada nickel project in Davao Oriental by Asiaticus, $1 billion, 2009; and Mindoro nickel project of Aglubang Mining Corp. in Mindoro Oriental, $1 billion, 2009.