Thursday September 20, 2012
Philippine mining freeze costs millions
MANILA: The Philippines is losing hundreds of millions of dollars in mining investments amid a government freeze on new projects while it strives to increase royalties, an industry chief said.
Ten billion pesos (US$239.5mil) in investments were pulled from the sector last year after a moratorium on new projects was introduced, Chamber of Mines of the Philippines president Benjamin Romualdez said.
He said another two billion pesos in investments planned for this year would also not occur as the freeze continued, with a fall in global commodity prices compounding the industry's problems.
“The Philippine mining industry is at a crossroads. After being the raging bull of the Philippine stock exchange from 2008 to early 2010, mining stocks have sputtered to become a sitting bull,” Romualdez told a mining conference.
“The 16 billion pesos in mining investments we are expecting in this administration will not happen,” he said, referring to President Benigno Aquino's six-year term that ends in mid-2016.
Aquino issued the freeze on new projects at the start of 2011 as he undertook a major review of the industry.
He finally issued an executive order in July this year aimed at boosting revenues from the sector while increasing environmental safeguards.
He extended the ban on new mining permits until Congress passed a law raising royalties on the sector from 2% to 5%. However there is no sign of that legislation being passed.
The government estimates the Philippines has at least US$840bil in gold, copper, nickel and other deposits but this has largely been untapped due to a strong anti-mining lobby, poor infrastructure and security concerns. - AFP