MANILA, Philippines - Investments in the country’s mining sector fell short of the government’s projection last year as firms opted to put on hold funds for ongoing projects.
Data from the Mines and Geosciences Bureau (MGB) obtained over the weekend showed that mining investments reached $618.50 million last year, below the government’s $1.4 billion projection.
Mining investments last year were also lower than the $968.29 million in 2010.
In a telephone interview, MGB director Leo Jasareno said the country missed the $1.4 billion projection last year as firms deferred investments for ongoing projects.
“The bulk of decline is attributable to the Sumitomo HPAL project, which can be traced to the NPA (New People’s Army) attack during the year,” he said.
In October last year, rebels burned equipment and facilities of Taganito HPAL Nickel Corp. and two mining firms in Surigao del Norte.
Japanese firm Sumitomo Metal Mining Co. Ltd. is a shareholder of the Taganito HPAL Nickel Corp., in partnership with Nickel Asia Corp. and Mitsui & Co.
Despite the lower than expected mining investments last year, Jasareno said the government expects mining investments this year to reach $2.27 billion.
“In 2012, the mining policy will be released so we expect investments to normalize,” he said.
The government is set to release a mining policy statement followed by a series of policies for the regulation of the industry this year.
The policy statement will focus on ensuring the contribution of mining to sustainable development and protection of the environment, as well as affirm the primacy of national over local laws, among others.
The MGB data showed that mining investments are seen to reach $2.03 billion next year.
Jasareno said lower mining investments are expected next year with the closing of two major mines.
MGB data also showed mining investments are seen to rise to $2.47 billion in 2014, increase further to $2.99 billion in 2015 and reach $2.35 billion in 2016.
The MGB data also showed that mineral sales or gross production value of the mining sector are seen to reach $3.26 billion this year.
Jasareno said the projections for the production of all metals are seen to rise this year “except for gold due to spillover effect of BSP (Bangko Sentral ng Pilipinas) policy to collect withholding and excise taxes from small-scale miners.”
Small-scale miners have to pay two percent excise tax and five percent withholding tax on gold produced and sold to the BSP.