Lackluster mining industry seen this year

MANILA, Philippines — The country’s mining industry will unlikely see a better 2018 amid unresolved government orders and the impact of the new tax regime, the Mines and Geosciences Bureau (MGB) said.

The Department of Environment and Natural Resources-attached agency said the sluggish mine output in 2017 may continue this year but may be slightly offset improving global prices.

“The string of mine suspension due to environmental-related issues and mine imposed non-operations due to unfavorable weather conditions and maintenance status that clearly dominated the production scene in 2017 are expected to spill over in 2018,” the MGB said.

“But mineral analysts are projecting that metal prices will gain more ground this year given the strong global demand and production shortfall,” it added.

Apart from metal prices, the agency emphasized that the government’s implementation of the Tax Reform for Acceleration and Inclusion law will impact in the overall performance of the sector.

“Mining is a fuel-intensive industry and the increased tax rates for diesel, gasoline and other fuel products will increase the operating cost in mining operations,” MGB said.

All metallic minerals are now levied four percent based on the actual market value of the gross output, double the previous two percent tax.

“But on the part of the government, there will be an increase in the revenues collected from mining as a result of the increase in the excise tax rate for minerals and mineral products,” MGB said.

The agency emphasized that the overall performance of the minerals sector will hugely depend on the policy directions that the government will be pursuing in order to realize the sector’s potential toward a long-term and stable policy environment.

Currently, MGB is focused on strengthening the progressive rehabilitation and temporary restoration regulations and implementation, as well as minerals and metal-led industrialization initiatives.

The government is also streamlining application procedures and initiating interagency coordination of regulatory agencies in mining projects.

It is also prioritizing community relations programs and final land use options of mineral lands.

The country’s metallic production started weak in the first quarter of the year as it went down six percent to P22.5 billion amid shortfall in output of mining companies.

Data showed that aggregate value of metal production in the January to March 2018 period was lower than the P24 billion recorded in 2017.

To date, the country hosts 50 operating metallic mines consisting of 30 nickel, eight gold with silver as co-product, four copper with gold and silver as co-products, three chromite, and five iron mines.

These are in addition to the numerous small-scale gold mining operations across the country.