Metal production piles up 12% in Q1

MANILA, Philippines — The value of the country’s metallic production in the first quarter grew 11.57 percent to P27.47 billion from P24.62 billion the previous year, despite lower world prices, the Mines and Geosciences Bureau (MGB) said.

”The good performance of mixed nickel-cobalt sulfide (MNCS) and gold were the drivers for this positive turnout,” the MGB said.

Production value of MNCS and gold went up by P1.83 billion and P1.12 billion, respectively, during the period.

Gold continued to dominate metal output as it accounted for 45 percent or P12.22 billion of total metal production.

The Masbate gold project of Filminera Mining Corp./Philippine Gold Processing and Refining Corp. produced the most gold at 1,788 kilograms with an estimated value of P3.92 billion. This was followed by the Didipio gold project of OceanaGold Philippines Inc. (OGPI) in Nueva Vizcaya or an 1,047 kilograms with estimated value of P2.3 billion.

“The combined gold output of the two projects accounted for more than 50 percent or 2,835 kilograms, of the country’s gold production,” the MGB said.

Following gold is the combined output of direct shipping nickel ore and MNCS, which produced 36 percent of total metals produced with a value of P9.81 billion.

The MGB said only 10 of the country’s nickel mines reported production during the period, with Coral Bay Nickel Corp. (CBNC) and Taganito HPAL Nickel Corp. (THPAL) producing 12,831 metric tons of MNCS valued at P7.10 billion.

The remaining 18 nickel mines reported zero production due to factors such as unfavorable weather conditions/intermittent rains; under maintenance/care status or program; and suspended operations due to environmental related issues.

Meanwhile, copper output accounted for 18 percent of the total metal production during the period with an estimated value of P5.06 billion.

Carmen Copper Corp. reported the largest output with 12,461 metric tons.

In terms of metal prices, precious metals gold and silver and the base metals copper and nickel were sluggish during the review period, according to the MGB.

The average price of gold went down from $1,329.89 to $1,304.15 per ounce in first quarter of the year, almost a $2 difference.

Similarly, the prices of copper declined from $6,956.02 per tonne to $6,216.65 per ton year on-year while nickel waned from $13,261.42 to $12,382.18 per ton year-on-year.

“In the local front, we still see gold dominating the production scene. This positive outlook is supported by the passage of Republic Act 11256 or An Act to Strengthen the Country’s Gross International Reserves (GIR), amending for the Purpose Sections 32 and 151 of the National Internal Revenue Code, as Amended, and for Other Purposes last 29 March 2019,” the MGB said.

Under the law, gold sold to the Bangko Sentral ng Pilipinas sourced from small-scale mining activities will be exempt from excise and income taxes.

“This tax incentive will encourage small scale miners and traders to once again sell their gold to BSP based on international market price instead of selling their gold elsewhere,” the MGB said.

In 2012, BSP gold purchases from small-scale miners and traders dropped 94 percent from 17,638 kilograms in 2011 to only 951 kilograms mainly due to the Bureau of Internal Revenue’s implementation of a two percent excise tax and five percent creditable withholding tax for small-scale gold producers/traders.

“At the end of the day, RA 11256 will not only boost the GIR of the country but also increase the country’s annual total metallic production value. Likewise, industries involved in jewelry making, medical and electronics stand to benefit from the passage of the law,” the MGB added.