the state and prospects of the philippine mining industry
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EO79 and Beyond: the State and Prospects of the Philippine Mining Industry
Atty. Ronald S. RecidoroVice President, Legal & Policy
Chamber of Mines of the Philippines
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Key Points in Mining History
1984 – President Marcos signs PD1899 defining small-scale mining.
1974 – President Marcos signs PD463, The Mineral Resources Dev’t Act
1991 – President Aquino signs RA7076 ‘People’s Small-scale Mining Act’
1995 – President Ramos signs RA7942 ‘The Philippine Mining Act’
1997 – President Ramos signs RA8371 ‘Indigenous Peoples’ Rights Act’
2004 – President Arroyo signs EO270
2004 – The Supreme Court declares the Mining Act constitutional.
2012 - President Aquino signs EO79 Institutionalizing Reforms in the Mining Industry
1995 – The Marcopper Tailings Disaster
2012– The Philex Tailings Spill
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The Current Situation
All signs point to a mineral resource boom;
CSOs have intensified their anti-mining campaign;
Many large-scale operations now in their twilight years with mining investments started in mid 2000s only now poised to take off;
However, with the issuance of EO79, the industry is in limbo;
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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
20-Year Copper Price$/lb.
A Mining Boom
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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20-Year Nickel Price$/lb.
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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
1,400.00
1,600.00
1,800.00
20-Year Gold Price$/tr.oz
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Large-scale Mining is still largely misunderstood.
Perceived environmental destruction of watershed and key biodiversity areas;
Pollution;
Displacement of indigenous peoples;
Violence and conflict in mining areas.
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The Philippines: A Poor Man Sitting on a Pot of Gold?
3rd in GOLD;
4th in COPPER;
5th in NICKEL.
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Our country’s mineral resource
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High-Potential
Only 2% are covered by mining contracts/ permits;
Our Total Land Area: 30 million hectares
Our Mining Potential
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Footprint of Major Operating MinesCOMPANY LOCATION FOOTPRINT
Lepanto Benguet TD 100 has
Philex Benguet TD 450 hasSubsidence 200 has
Rapu-Rapu Albay Open Pit, TD 230 hasFilminera Masbate Open Pit, TD 650 hasTaganito Surigao Open Pit 200 hasCagdianao Surigao Open Pit 200 hasCTP Surigao Open Pit 360 hasAtlas Cebu Open Pit 1200 hasRio Tuba Palawan Open Pit 1200 has
Other Mines ~3,700 hectares
Total 8,500 hectares
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Footprint of Future Mining ProjectsCOMPANY LOCATION FOOTPRINT
OceanaGold Cu, Au Nueva Vizcaya ~750 hectaresMaricalum Cu Negros Oriental ~750 hectares
Boyongan Cu, Au Surigao del Norte ~500 hectares
Batong-Buhay Cu, Au Kalinga-Apayao ~1,000 hectares
Far Southeast Cu, Au Benguet ~200 hectaresKingking Cu, Au Compostela Valley ~1,000 hectares
Tampakan Cu, Au South Cotabato ~2,000 hectaresRed5 Au Surigao del Norte ~300 hectares
Diwalwal Au Compostela Valley ~400 hectares
Runruno Au Nueva Viscaya ~700 hectares
Philnico Ni Surigao del Norte ~1,000 hectares
Mindoro Ni Mindoro ~700 hectares
Pujada Ni Davao Oriental ~700 hectares
Total 10,000 hectares
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Our Estimated Inventory
8.03 Billion tons of COPPER; 4.91 Billion tons of GOLD; 0.81 Billion tons of NICKEL; 480.26 Million tons of IRON; 39.66 Million tons of CHROMITE; 433.88 Million tons of ALUMINUM.
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US$1,000,000,000,000.00(Yes, that’s TRILLION, with a T.)
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The Philippine Mining Industry
In 2011, all mines in the Philippines had a total GROSS MINERAL PRODUCTION of Php163.2 Billion;
Large-scale mines accounted for Php88 Billion;
Small-scale mines and non-metallic mines produced Php75.2 Billion;
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Philippine Mining Now
Operating metallic mines = 35 Nickel processing plant = 1 Gold refinery
= 1 Copper Smelter = 1
Approved/registered tenements = 730
Some 1,818 mining and exploration applications are currently under process.-------------------------
As of October 2012, based on MGB data.
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Mining’s Contribution to the Economy
Mining’s contribution to GDP: 2011: Php99.2 Billion (1.00% of GDP)
Mineral Exports 2011: US$ 2.659 Billion (5.6% of Total Exports)
Taxes, Fees & Royalties from Mining 2010: Php17.364 Billion
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*Mining Industry Statistics Table of MGB (Release Date: May 6, 2011)
The people we employ.
340,000 jobs as of 2010.
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The Taxes we pay.
Corporate Income Tax Excise Tax Withholding taxes Customs Duties Value-added Tax
Mineral Reservation Royalty Additional Government Share in FTAAs
Local Business Tax Real Property Tax
Social Development Management Program Indigenous People’s Royalty Landowner’s Royalty
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COPPER PROJECTS
Far Southeast Project 2018 $1.5B
Philex (Operating)
Oceana Project 2013 $320m
Atlas Copper Project (Operating)
Maricalum Project 2016 $250m
Boyongan Project 2014 $1.5B
TVI (Operating)
Kingking Project 2016 $1.3B
Tampakan Project 2017 $5.9B
3 operating mines6 large scale projects in the pipeline
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GOLD PROJECTS
Victoria Gold Project (Operating)
Runruno Gold Project 2014 $150m
Masbate Gold Project (Operating)
RED5 Gold Project 2014 $83M
Philsaga Mining (Operating)
Apex Gold Project (Operating)
4 operating mines2 gold projects in the pipeline
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NICKEL PROJECTS
• Eramen Nickel Project (Operating)
• Sta. Cruz Nickel Project 2011
• Mindoro Nickel Project 2015
• Philnico Nickel Project 2013
• Berong Nickel (Operating)
• Coral Bay (Operating)
• Taganito Project (NA) 2012
• Carrascal (Operating)
• Marcventures (Operating)
• Pujada Nickel Project 2016
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Potential Growth for 17 New Projects
Philippine Metallic Investments and Revenues
2011 2012 2013 2014 2015 2016 2017 2018
Total Investment (Million $)
730 1,369 2,072 3,302 3,995 2,892 812
Total Revenues**(Million $)
2,820 2,820 3,955 4,954 7,163 9,248 11,171 12,114
Total investments from 2011 to 2018: US$15.2 billion
Total Annual Revenue: US$2.8 billion in 2011, ramps up to $12.1 billion in 2018;
Mining contribution to GDP: 1.7% in 2011, increases to 5-6% in 2018
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Opportunities
Construction companies to do contract work for infra-structure projects;
Service contractors for open pit and underground mines;
Foundry and steel fabrication shops; Suppliers of heavy equipment, explosives, steel
balls/rods, and lime plants.
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Challenges & Roadblocks to Growth
Need for clear, stable and predictable policies on minerals development;
LGU ordinances banning open pit mining;
Illegal SSMs that give mining a negative image;
Heightened opposition from CSOs;
Security issues for mining investors.
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The Latest Challenge: A New Mining Policy.
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E.O. 79 and its IRR: The Good, the Bad, and the Ugly.
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The Aquino Administration’s Mining Policy: A case of Waiting for Godot?
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The GOOD: It mostly reiterates existing laws, rules and
regulations on mining; It recognizes and upholds existing mining tenement
rights; It takes steps to improve the small-scale mining
industry; It has a clear aspiration for consistency and
harmonization of laws; It makes a clear commitment for the PHL to join the
EITI;
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The BAD: It expands “no-go” areas for mining
applications;
It disqualifies applicants with previous “record(s) of environmental incidents”;
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The UGLY: It imposes an indefinite moratorium on new mining
agreements until a new revenue sharing law is passed;
It manifests Government’s intention to review and renegotiate all existing contracts;
It says nothing about promoting mining as a driver for the Philippine economy.
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The Challenges Continue
Meanwhile…
The moratorium on new permits continues; An Alternative Mining Bill in Congress; Tedious permitting process: NCIP Guidelines
on FPIC; LGUs continue to ban mining in their
jurisdictions.
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THANK YOU.
The Chamber of Mines of the Philippines. Working for responsible mining.