Paje favors long-term predictability for mining investors

MANILA, Philippines - Environment and Natural Resources Secretary Ramon Paje said yesterday that he is in favor of offering long-term predictability for investors in the mining sector, so long as it is “within the legal framework of the Philippines.”

Paje was reacting to a request by the South African mining group Gold Fields for a 50-year mining permit if it decides to go ahead with its planned acquisition of Lepanto Consolidated’s and Liberty Express Assets 60 percent stake in the Far Southeast Gold project.

However, the Mines and Geosciences Bureau (MGB) told Gold Fields that it can issue only a 28-year permit – the three remaining years of Lepanto’s MPSA (mineral processing and sharing agreement) plus a renewal of another 25.

It was learned that Gold Fields is asking for a fresh 50-year permit and the conversion of the existing MPSA into a financial technical assistance agreement (FTAA).

Paje said the Department of Environment and Natural Resources (DENR) is bound by the limitation provided by existing laws.

However, Paje pointed out that while the allowable mining tenure is limited to 25 years, renewable for another 25 years – for a total of 50 years, there has been instances of an extension.

For instance, Paje cited the case of Benguet Corp. which has been able to operate for more than 50 years now due to the revision of the Mining Law.

MGB Director Leo Jasareno explained that Benguet’s first permit was issued when the governing mining law was a Commonwealth Act.

Benguet was able to secure a new permit under Presidential Decree 463 just as its old permit was set to expire, and then got another permit under the Mining Act of 1995.

   Paje acknowledged the need to provide predictability to long-term investors. “It is only fair to give the company confidence for long-term investments,” he said.

“Predictability in business, that is what the government is trying to do. There must be no uncertainty in business ,because if there is uncertainty they will not invest,” he added.

 Paje said, Gold Fields should accept the remaining 28 years and see what can be done under the law to extend its permit in the future.

Paje said the Philippine government would “always follow what is fair and not dislodge an existing investor.”