RP, foreign firms still upbeat on mining sector

Concerns over global supply disruptions of precious metals such as gold and copper are keeping local and foreign companies bullish about the Philippine mining sector.

"We’re not really worried about the noise being made by those opposing mining activities, the situation is not unique to the Philippines. In fact, it happens to other rich mine prospects in other regions," said Benjamin Philip Romualdez, president of the Chamber of Mines of the Philippines (CMP).

Romualdez noted that even with the resurgent aggressiveness of groups resisting mining, investors’ confidence has not waned a bit.

"Investors are still willing to make substantial investments in the Philippine mining industry because of good mineral prospects. With the expected continuing increase in metal prices, the perceived gains will always outweigh the risks," said Romualdez.

Copper and gold futures have soared to all-time highs. Worries over global supply and geopolitical tensions have pushed prices to unprecedented levels. Copper futures hit $2.5960 a pound while gold prices soared to $600 an ounce last Thursday.

Several operating local mining companies are expected to take advantage of the uptrend in prices even as attractive prices encourage investors to firm up their exploration and production plans in the Philippines.

However, some sectors believe investors’ optimism is being tempered by raucous anti-mining groups threatening to stop mining activities at all costs.

Industry leaders like Romualdez, however, stressed that recent decisions issued by the Supreme Court upholding the mining law shows government will not be bullied into changing the rules midstream.

"It shows national policy on mining is stable and this is important for investors not to think twice about parking funds in the industry," Romualdez said.

Lafayette Philippines Inc. president and chief executive officer Carlos G. Dominguez said foreign mining companies are expected to continue pursuing mining projects in the country.

"Mining is location specific, investors will always want to go where the gold is," said Dominguez.

Dominguez said that even with the best mining laws, incentives or perks offered to investors, they would still scout for areas where potential mineral production would be high.

"I don’t think that current opposition to mining activities in the country will have a major impact on efforts to revive the industry. Investors‚ confidence remains high,"Dominguez pointed out.

For his part, lawyer Deogracias Contreras, vice president of Philex Mining Corp., said yesterday that inspite of opposition to mining activities, foreign investors are pragmatic creatures.

"With high metal prices, foreign investors are willing to overlook the risks involved because the gains, especially if all the committed mining projects push through, will be high. But even if we can’t immediately take advantage of the surge in metal prices, associated industries like construction, equipment and machinery suppliers are already gaining from the renewed interest in mining. Local jobs are created and responsible mining companies are aware they have to give back to their host communities," Contreras, pointed out.

He said Malacanang has created a fact-finding commission. "President Arroyo is trying to appease those resisting mining, Creating the commission means mining activities should be transparent. At the end of the day, it is hoped that reason would prevail and that the law should be upheld."

Contreras said that "investor confidence is high but guarded."

"The government is saying to investors that we are open for business. It is doing the right thing, but investors hope it would be strong enough to resist pressure from anti-mining groups. What would really be the tipping point is that if government goes to extremes like revoking licenses or denying permits without giving companies due process," said Contreras.

Indophil Resources NL managing director Tony Robbins, whose company is investing $18 million this year to beef up its exploration work at the Tampakan gold-copper project in South Cotabato, said ongoing opposition to mining activities will have no adverse effect in the short-term.

"Everything is still on track as far as mining activities are concerned. Investors are still committed to pursuing their exploration programs while those in production intend to expand their areas of coverage," said Robbins.

The thing that needs to be done is to speed up exploration activities so that production could begin.

"We can’t take advantage of the current surge in prices now, but we have to get going, catch up and still be in the game in the coming years. Metal prices will still increase and we hope to be ready by then," said Robbins.