Ensuring the promise of open-pit mining

A couple of weeks ago, the Philippines lifted a four-year ban on open-pit mining. In doing so, it also re-opened the debate on the mining method’s perceived environmental impact and its promising economic benefits. This debate is by no means new and will undoubtedly continue. 

Nevertheless, this recent policy change is significant since it has created an opportunity for the proponents of open-pit mining to debunk public misconceptions about the method's environmental impact and deliver tangible economic benefits.

Critics of open-pit mining warn against the environmental damage that it can cause. Over the years, anti-mining groups have raised concerns about the industry’s use of hazardous chemicals, the welfare of affected communities, and deforestation concerns that have long been associated with mining operations. However, many of these concerns trace their roots back to pre-Philippine Mining Act of 1995 practices that are no longer being used by modern-day large-scale mining operations.

In actuality, open-pit mining, or open-cast mining, is an internationally accepted mining technique of extracting surface minerals and shallow ore deposits. This mining method is used when deposits are found too near the surface that it is structurally unsuitable for tunneling and underground mining methods. The point here is, the decision to use the open-pit method is scientifically based on technical considerations that rule out underground mining methods.

In addition, this mining method does not use dangerous chemicals like mercury to separate ore from the soil. Mercury is a highly toxic chemical that can contaminate soil and water sources that it comes in contact with. 

For this reason, the Philippine government has been working to eliminate the use of mercury in mining. Large-scale open-pit mining operations do not use this toxic chemical, but since mercury acts like a magnet to some minerals, many small-scale miners continue to illicitly use it despite its health risks.

When it comes to the method’s environmental impact, according to the Foundation for Economic Freedom, “Any negative effects on the environment can be mitigated with rehabilitation measures and other environmental safeguards that mining companies using the open-pit method must adhere to.” The group also pointed out that open-pit mining is used worldwide, even in countries with strict environmental laws like the United States, Australia, and Canada.

In the Philippines, all large-scale mining operations, including open-pit mines, are required by law to rehabilitate the excavated, mined-out, and any disturbed areas covered by their operations. In fact, it is probably compliance with this requirement that has led to this somewhat unexpected factoid: Philippine mining companies are officially recognized as some of the most significant contributors to the country’s reforestation initiative— the National Greening Program. 

Over the years, the Philippines’ large-scale mining industry has also made strides in institutionalizing proper environmental management and social responsibility practices in its operations. For instance, one of the recent initiatives of the Chamber of Mines of the Philippines was the implementation of the Towards Sustainable Mining (TSM) initiative for member companies.

TSM is a Canadian mining model that sets strict environmental, social, health, safety, innovation, and human rights standards for mining operators to follow. The process also involves a yearly self-assessment by mining companies and an external verification process. It incorporates civil-society oversight through a Community of Interest Advisory Panel. This panel oversees the development and implementation of TSM and serves as a venue for the industry and civil society to engage with each other. 

Now that the open-pit mining ban has been lifted, its proponents have a real opportunity to clear up public misconceptions surrounding the method and demonstrate that mining can be done responsibly through rehabilitation and environmental safeguards. 

At the same time, it must also deliver the foreseen economic benefits to the country. According to Mines and Geosciences Bureau (MGB) Director Wilfredo Moncano, the Philippines is one of the most highly mineralized countries globally, having mineral resources estimated at P68 trillion. Furthermore, according to the MGB, more than a third of the Philippines' total land area of 30 million hectares has been identified as having "high mineral potential,” but 95% of mineral deposits still remain untapped.

Because of its economic potential, the lifting of the ban also has the support of the Department of Finance (DOF). According to the DOF, now that the ban has been lifted, data shows that there are at least 11 pending open-pit mining projects that, if pursued, could infuse about P11 billion worth of revenues to state resources. These pending mining projects, the DOF said, could increase annual exports by around P36 billion and create 22,880 jobs for local mining communities. 

“More importantly, the lifting of the ban on open-pit mining will help revitalize the economy as we begin to recover from the pandemic by generating additional revenues, royalty fees, export value, and even more jobs in related industries,” Finance Secretary Carlos Dominguez said.

The economic benefits of a revitalized mining industry are promising. However, for Filipinos. to reap the benefits of its high mineral potential, there must be a stable and predictable policy and regulatory environment for the mining sector to operate in. 

Keep in mind, unlike the more industrialized United States, Australia, and Canada, the Philippine mining industry has barely had time to build momentum. Since the Philippine Mining Act was passed into law in 1995, key provisions have been questioned in the courts or put on hold by regulators.

We must remember that large-scale mining— done responsibly— is capital and time intensive. If the policy environment is not stable, investors will be wary of coming in. As a result, the expected job creation, government revenue, and economic benefits from the mining industry will not be realized. 

Now that the open-pit ban has been lifted, proponents of open-pit mining in both the government and the industry have a new opportunity to work together to pro-actively correct misconceptions, address concerns, and deliver economic benefits. However, the only way to do this is by ensuring that both the government’s and industry’s policies and practices live up to the promises.

Paco Pangalangan is the executive director of think tank Stratbase ADR Institute.