2012 mining investment target seen too high

MANILA, Philippines - Mines and Geosciences Bureau (MGB) director Leo L. Jasareno yesterday expressed doubt about hitting the $1.2- billion mining investment target this year due to the existing moratorium on acceptance of mining license applications.

The moratorium has been in effect for two years now and will end once a revised mining policy is in place.

In an interview with reporters, Jasareno said they have stopped accepting applications for mining licenses.

The moratorium, Jasareno assured, would be lifted once the new mining policy is released.

Jasareno said based on the pronouncements of Malacanang, the policy would be issued within the month. Before the policy is issued, he said, the DENR-MGB would conduct public consultations.

With the MGB not issuing mining permits, Jasareno admitted it would be “hypocritical” for them to assume that the investment figures for mining this year would be good.

The DENR-MGB’s target for mining investments this year is P1.2 billion. He questioned how the target for mining would be met given the moratorium.

At the same time, Jasareno pointed out, the mining policy includes provisions that is directed towards small-scale miners.

According to the MGB official, illegal small-scale mining should not be allowed. He explained that small-scale mining is illegal when the permit is from the city mayor and not from the provincial governor.

Likewise, small-scale mining is considered illegal if the small- scale miners use heavy machinery.

Small-scale miners, Jasareno said, must secure a permit from the provincial governor of the specific area.

Under the new mining policy, Jasareno said, small-scale miners would have a specific area which would be known as the “minahan ng bayan”.

The national anti-illegal mining task force would implement the ban on illegal mining. Currently, Jasareno said, small-scale illegal miners operate with impunity.

To stop the illegal miners, Jasareno said, they would concentrate on banning dynamite and mercury. Once there is no supply of such hazardous materials, then miners would not be able to use them.

Likewise, Jasareno said, the mining policy would address the issue of open pit mining in Surigao.

On the issue of an income tax holiday (ITH) for mining firms, Jasareno said there are some who feel that miners should not be given a seven year ITH.

The argument is that sometimes the life of a mine is just seven years and the grant of a seven year ITH would mean that the government does not earn any tax revenue from the mining firm.

The ITH for mining is in the mandatory list of the Investment Priorities Plan (IPP) of the Board of Investments (BOI). This means that the BOI is required to give mining firms an ITH, and unlike other items in the IPP it is not subject for review.

However, Jasareno said that the law on the ITH is not absolute because it is given under certain conditions.

Jasareno clarified that they did not release any draft mining policy and they do not accept ownership of the draft.

However, Jasareno acknowledged that since the mining industry reacted to the draft mining policy, the DENR-MGB is carefully considering some of the sectors’ suggestions.