News article from Inquirer.net

Philippines is one of the few countries in the world richly blessed with mineral resources. It has large mineral reserves that are potent tools for economic development most especially when mined responsibly. Benefits derived from mining must balance its costs on the country, people and the environment, however, there are people who do not observe and consider this.

Like in Sta. Cruz, Zambales, Mayor Luisito Marty seemingly misleading the public on his illegal activities in the area. He actually wanted not to allow anybody to establish ports integral for nickel mining operation so that anyone who needs one will be forced to use his ‘favored’ port which will benefit him by commanding a very high price. This merely showed an abuse of authority and oppression.

It is a good thing that the administration monitors such kind of activity. This shows how serious they are in mining industry especially as President Benigno Aquino III defended the new mining policy he signed, saying it was for the benefit of the Philippines. Also, it is important to consider that the industry is a good foreign investments earner, particularly now that there are news reports proving that there is a strong demand for nickel. Zambales, being one of the good sites for nickel mining, should be protected and monitored.  Further research showed that mining industry had higher foreign direct investments or FDIs relative to agriculture and services sectors over the past decade. On the average, mining had 65.95% FDI’s in comparison to 0.59% and 15.85% FDIs of agriculture and services sectors respectively.

Minerals are non-renewable resources. Therefore, mining operations should be limited because overutilization of resources would actually lead to the depletion of resources that would eventually incur an increase in cost of production which is associated with productivity decline. Yes, Philippines is unique when it comes to mineral deposits. But then, minerals have no significant value if left underground, however they should be mined responsibly.


Authors:
Cabangbang, Grace Key
De Luna, Francis Noah
Rimando, Larissa


 

News article from Philstar.com by Zinnia dela Peña

Two of Nickel Asia’s operating mines consist of the Hinatuan Mining Corporation in Surigao del Sur, and Cagdianao Mining Corporation, in Surigao del Norte. These two are the leading nickel companies in the Philippines. The rise of 19% for the sales of nickel could then be attributed to the Philippines. Both companies shipped saprolite and limonite ore, which are rich in mineral content, particularly that of iron and nickel.

The value of the shipment for the first semester is $129.88 million. The rise of sales in nickel in particular, is a positive outcome since it proves that the demand for nickel is strong. It was mentioned in the article that there was a slowdown in the growth rate of China, and that this resulted to the weakening of metal prices. The rise in sales of nickel proved this otherwise. The Philippines is a major exporter of metals to China, and their growth rate has been related to the export of nickel. Further research showed that during the boom of China’s growth rate in 2006, the export of nickel in the Philippines also went up dramatically. China uses the raw materials to create new products, and then sells these finished products. The rise of the sales of nickel for the first half of the year then, may be proof that China is not the only factor that contributes to the production and sales of nickel in general. There are a lot of other countries that can contribute to the rise of nickel sales. Japan used to be one of them, until the recent boom of nickel sales in China in 2006, which could be related to the Olympics in Beijing then.

Authors:
Cabangbang, Grace Key
De Luna, Francis Noah
Rimando, Larissa
 

News article from Philstar.com by Czeriza Valencia

The news is about the players of the mining industry welcoming the much-awaited EO on mining policy which was signed last July 9, 2012. Private Companies and some representatives said that they are all willing to cooperate with the government in developing a national revenue sharing scheme. They were looking forward to the new policy with regard to the conflicting interests of the different stakeholders, encourage investments, and foster sustainable development for the country. 

Under the EO, the government imposes a moratorium on the approval of new mineral agreements. Smale scale mining activities will also be limited to areas declared as "Minahan ng Bayan" which also limiting the areas where there are nickel operations. With regards to the environmental concerns, the EO bans the use of mercury in small scale mining which is part of the "Minahan ng Bayan" areas. A mining Industry Coordinating Council (MICC) is created to implement the EO and other reforms in the industry. They will be the ones who will be conducting talks with stakeholders as well as reviewing all the existing mining-related laws and rules. This council will co-chaired by the chairpersons of the Climate Change Adaptation and Mitigation and the Economic Development clusters of the Cabinet. Other members will include the Justice Secretary, the chairperson of the National Commission on Indigenous Peoples (NCIP) and the president of the Union of Local Authorities of the Philippines (ULAP). Also, the EO says that all mining contracts before the EO was released are considered valid. 

What does this mining got to do with the Philippine Economy? 

This EO is expected to increase the investments and government earnings as well as cater the environmental issues imposing more restrictions to protect the environment and local communities. The total contribution of Mining Industry since 2005 accounted for less than 1% of GDP. From 2005 up to 2009, the mining contribution increased to 1%. On average from 2000 to 2009 accounts for 0.91% of the Philippine GDP (MGB, Mining Industry Statistics released on February 10, 2010). Another significant contribution of the industry is in the Philippine exports. The export shares of metallic and non-metallic minerals have increased from 1.7% of the total exports in 2000, to 2% in 2004, to 4.5% in 2006 and over 5% by 2007. On the average, from 2000-2009, mineral exports accounted for approximately 3% of total Philippine exports. 

Commentary: 
The EO received positive and negative comments from the mining companies, local representatives and governors, CBCP and environmental advocates. Mining companies and other government sectors approved this, but the CBCP, environmentalists and other local governors are not satisfied with the EO. Some governors are pushing on a new mining law which will be called "People's Mining Bill". One of the aspects of this bill is that the tax rate will increase from 2% to 10% 
Before the actual EO 79 was released, the initial amount of tax in mining is said to be about 2%. The total operating and related expenses of the mining companies amounts to about 50% of the total value of the minerals leaving only 48% of the earnings for the companies as their profit after deducting 2% tax. 
Focusing on increasing the amount of tax in mining from 2% to 10%, a lot can already be said. Although the government will get higher revenue, there are a lot of other concerns. Increasing the tax rate may be approved by the mining industry, but foreign companies may pull out their investments in the mining industry of the country since they feel that they will be better off if they just invest in another industry. One has to remember that the mining industry, while it is capital intensive, has a very high degree of risk. The government must also take into account the communities that are greatly affected by the mining operations. Just compensation is expected by those who are affected by mining activities. 
With EO 79, a new mining policy has been effectively put into place by a president who clearly means business. The challenge now, as always, whenever our country enacts or adopts progressive legislation and policies, is the implementation. 


Authors:
Cabangbang, Grace Key
De Luna, Francis Noah
Rimando, Larissa