There is a wide variation of product classification in the non-metallic minerals group. Their products are directed dependent on the market needs. For example blocks, slabs, titles, chips and powder are used for marbles; S1 and S2 for sand; G1, G2 nd G3 for gravel or rock aggregates. Some non-metallics, such as limestone or rock phosphate, are classified based on the grade analysis of the most relevant chemical compounds they possess. This analysis is largely dictated by specifications sought in the market.

The metallic mining group consist of eighteen large scale mines and an undetermined number of small scale mines. The small scale mining group consists principally of gold and chromite producers - both from the formal and informal sectors. A breakdown of the industry structure for the major producing minerals is shown in the table below.

The listing of the key players in the industry which are mostly metallic mineral producers is shown in the table below.

1. Production

The mining industry in the Philippines posted an overall 1% shortfall in production value in 2000 due to the sluggish performance of the non-metallic sector. Except for coal and silica sand, all the other major sub-sectors like salt, and sand & gravel, limestone and shale clay registered output deficit. After several years of being in the upswing and embracing 54% to 59% share in the minerals industry production value. The non-metallic sector incurred a 26% decline in the production vlue. Surprisingly, on the other hand, despite the numerous setback that befall the metallic sector it was able to pull-off a 31% growth in the production value. This was due to the impressive gains posted by nickel, gold and silver sectors.

The production of copper during the past ten years have consistently dropped in volume due mainly to a host of technical, economic and environmental factors that befell the industry. Before 1997, the country's biggest mining projects such as the Atlas mine in Cebu Island, North Davao mine in Mindanao and Marcopper mine in Marinduque Island have shut down operations causing a decline of 51% in production volume compared to 1993. In 1998, another two major copper mines, namely: the Enargite Project of Lepanto Consolidated Mining Company in Benguet and the Dizon Copper Operations causing a further drop of 10% in production volume. Nevertheless, the entry of Manila Mining Corporation (Copper Project) and Lepanto Consolidated Mining Corporation (Copper Project) in 1999 and 2000, respectively, has narrow down the margin of decrease. This is not enough, however, to reverse the declining trend since 1996.

The case of gold, however, was the exact opposite. Despite the decline in copper production, gold production consistently increased due to renewed interest on this metal by mining investors. The entry of four new projects in the gold sub-sector, namely: Bulawan and Subutad Mines of Philex Mining Corporation and Victoria Mine of Lepanto Consolidated Mining Corporation and Placer Copper Project of Manila Mining Corporation; and the increased contribution of small scale mines significantly pushed production level to 36.51 MT in 2000 compared to only 25.95 MT in 1991.

Nickel also exhibited an unprecedented increase in prodution in 2000. It has grown by leaps and bounds from about 7.9 thousand metric tons in 1993 to 16 thousand metric tons in 2000 - more than twice the figure in six years time. The positive showing can be attributed to the long dry season brought about by the El Niņo phenomenon. This weather situation enables more operating days for nickel producers in Surigao. In addition, the entry of Cagdianao Mining Corporation to the production stream in 2000 also helped boost the production of the nickel sub-sector.

Chromite, on the other hand, have shown a very erratic behaviour over the past ten years. Between 1993 to 1996, production volume consistently increasing by an annual average of 22%. However, by 1997 there was a 16.7% decline in production due to the downscaling of several small metalurgical chromite mines in the Visayas and Mindanao area. In 1998, production declined further by 58%. The resumption in operations of Masinloc Chromite Project of Benguet Corporation last April 2000 was a breather to the chromite sub-sector. Benguet Corporation, the sole local producer of refractory chromite in the Philippines, suspended its operations in 1999.

The non-metallic sector has been an active component of the local mining industry in the country. In 1998, it contributed about 55% of the total production value of the mining industry. The major non-metallic commodities are sand and gravel, coal and cement. However, in 2000, contribution in terms of value eased down to 42%.

2. Gross Value-Added Contribution

The gross value added contribution of mining is 10.5 billion pesos representing 1.2% of the total gross national product of the country. Historically, this contribution declined by as much as 600 million since 1993 due to closure of several major mines in the country. Its highest recorded contribution to the GDP was in 1986 which was 12.3 billion pesos or 2% of the nation GDP. Nevertheless, in 2000 Gross Value Added (GVA) from mining increased by 844 million pesos.

3. Exports

The industry was a substantial producer of foreign exchange to the economy because most of its products, particularly the metallic group, are exported abroad. Total industry export for 1997 was US$ 764 million. A major portion of the exported minerals went to Japan. The rest of the exports went to trading partners in Asia, North America, Europe China.

The mining industry has been growing consistently from 1992 to 1995. Nevertheless, since 1996, it has been on a downward trend due to the closure of several major producing mines in the country. All in all, from 1991 to 2000, mineral exportsranges from 592 - 893 million US dollors. Mining has its largest contribution to total exports (15%-25%) during the period 1970 to 1981. Its peak year was in 1974 when mining contributed almost one quarter of the total philippine exports.

Since 1996, the mineral industry has been registering export deficit. Nonetheless ,finally in 20900, a 0.7% growth was experienced, minimal but still an additional $5 million US dollars worth of mineral export.

It should be noted that metallic mining products are all export products, hence tariffs do not apply. there are no benefits gained from tariff protecttion in the case of metallics. Only the non-metallic groups are protected by tarriffs as shown in table.

In 2000, the formal sector of the mining industry employed a total of 109,500 individuals: Historically, employment in the mining industry declined by an average of 9.8% per year from 1993 to 1995. This trend was reveresed in 1996 and 1997 due to the increase in exploration activities in the metallics group and the increase in production activities in the non-metallics group.

• Western Mining Corporation of Australia announced its discovery of a world class copper-gold deposit in its Tampakan Project in South Cotabato. The deposit is estimated to contain 8-13 million ounces of gold and up to 23 billion pounds of copper that may be worth at least US$ 10-20 billion.



• Base Metals Mineral Resources Corporation concluded its feasibility study of the former Masbate Gold Project for a 10,000 tons per day mining operation that is expected to produce 138,000 ounces of gold and 115,400 ounces of silver per year.



• Climax-Arimco Mining Corporation also completed a feasibility study for at least 17 million tons of copper ore from its Dinkidi Project in Nueva Vizcaya. It is now raising funds to finance development and construction of the project.



• Philex Gold (Philippines), Incorporated suspended its gold mining and processing operations in Sibutad, Zamboanga del Norte due to the low price of gold. Before its temporary suspension, it has applied for an environmental clearance certificate to expand its gold operations from 2,000 to 10,000 tons per day to bring its production from 0.4 to 1.4 tons of gold per year.



• Manila Mining Corporation's gold operations in its Placer Project in Surigao del Norte was expanded to include copper concentrate production at 18,000 tons per year in addition to the existing gold production.



• Lepanto Consolidated Mining Corporation's newest project - the Victoria Gold Project in Benguet, sustained a production rate 4.2 tons of gold per year.



• The gold mining operations of United Paragon Mining Corporation was temporalily suspended due to the low price of gold and financial problems recently encounterd by the company.



• Mindex ASA, a Norwegian exploration company, is currently working full time on its EIA scooping and preparation of a full feasibility study on its Mindoro Nickel Project which was foud by exploration to contain total resources of 225 million DMT with 1% nickel and 0.1% cobalt.



• Lafayette Philippines, Inc., An Australian-based exploration company, which is currently conducting drilling activities in the Ungay Malabago deposit at Rapu-Rapu Island is expecting a mineral resources in excess of 6 million tonnes at 3 grams gold/ton, 37 grams silver/ton, 1.46% copper and 2.33% zinc. This resources is initially estimated to generate a gross revenue of 1.4 billion pesos annually.



• Mineral Mount Isa Philippines, Inc. recently pulled out its exploration in Capiz as part of its exploration cost reduction program.

A. Mineral Potential

• The Philippine geological setting, considered young and complex, offers many of the rest potential sites for mineral resources development. Its track record in mineral production, dating back in the pre-Spanish era speaks of its bountiful mineral wealth bestowed by mother nature. This is well confirmed and recognized by many geologist not only in the Asia-Pasific region but also in many parts of the world.

B. Mineral Endownment

• The Philippines has establishment reserves of about 13 known metallic and 29 non-metallic minerals. In 1996, the Mines and Geosciences Bureau's recorded a total of 7.1 billion metric tons of metallic and 51 billion metric tons of non-metallic reported reserves.



• Copper dominates the metallic reserves, comprising 4.8 billion metric tons or 67.5% of the total.



• Limestone, the largest non-metallic mineral deposit reported, accounts for 57% of the total non-metallic reserves, or 29 billion metric tons, followed by marble which accounts for 16.7, or 8.5 billion metric tons



• The country plays an important role in the world mineral resources due its relatively high mineral endowment ranking compared to its small land area. Based on past production and defined resources, the Philippine mineral endowment is second in the world for gold and third for copper, truly enticing figures that lagely account for increasing investment interest in the Philippines.

C. Metallic Mineral Resources

• Porphyry copper plays a major role in the country's mineral industry. It was a major commodity mined with the introduction of bulk or large scale methods of mining. While disseminated copper is the most popular, deposits of vein, contact metasomatic, Cyprus, Kuroko and Besshi type are also of economic significance. In the past, 35 percent of the country's production value comes from copper.



• Gold is found throughout the country in the form of lode or placer deposit. The peincipal gold-producing districts are Baguio, Paracale, Masbate, Surigao and Masara. Experts have observed that the largest and richest gold deposits tend to lie in the vicinity od the Philippine fault zone, but there are many exceptions. Recently gold exploration has been directed towards epithermal deposits. Silver is a by-product of copper and gold mining.



• The bulk of Chromite deposites in the country are found in Zambales Province and Dinagat Island, off northeastern Mindanao. Individual chromite bodies are of various sizes from small pods to several million tons. The chromite deposit in Coto, Zambales was believed to be the largest known deposit of refractory chromite in the whole world.



• The country is also greatly endowed with nickel-rich deposits of laterites which are currently the source of its nickel export. The vast laterite deposits of Surigao in northeastern Mindanao were first reported in 1912, but were not exploited until 1975. While primary and epithermal nickel deposits are known, the bulk of the country's deposit are lateric type, formed by concentration during the processes of tropical weathering. Cobalt is an important by-product of nickel.



• Other metallic mineral deposits such as platinum, iron, manganese, lead, zinc, molybdenum, mercury and aluminum were also to exist in the Philippines. They are dispersed throughout the favorable geological terrane of the Philippines.

D. Nonmetallic Mineral Resources

• Non-metallic deposites such as coal, fertiliser, salt, sand and gravel, marble, clay limestone feldspar, dolomite, magnesite, phosphate rock, guano, sulfur, industrial gemstone and decorative minerals also abound in the country as a major and important source of raw material for construction, agriculture, and power generation.

1. Forms Of Agreements, Contracts And Permits

• Exploration Permit (PE) - a permit that grants the holder the right to conduct exploration work for all minerals within a specified ore.



• Mineral Production Sharing Agreement (MPSA) - an agreement where the Government grants the Contractor the exclusive roght to conduct mining operations within a specified contract area and shares in the gross output.



• Co-Production Sharing Agreement (CPA) - an Agreement between the Government and the contractor, wherein the Government shall provide inputs to the mining operations other than the mineral resource.



• Joint Venture Agreement (JVA) - an agreement where a joint venture company is organized by the Government and the Contractor with both parties having equity share. Aside from the earnings in equity, the Government shall be entitled to a share in the gross output.



Financial Or Technical Assistance (FTAA) - a contract involving financial or technical assistance for large-scale exploration, development, and utilization of mineral resources.


• Quarry Permit (QP) - a mining permit for the extraction of quarry resources on privately-owned lands and/or public lands for building and construction materials.



• Sand And Gravel (SAG) Permits - a mining permit for the extraction and removal of sand and gravel or other loose or unconsolidated materials.
  
  
  • Commercial SAG Permit - For SAG materials in their natural state, without undergoing processing, form an area of not more than 5 has. and in such quantities as maybe specified in the permit.
  
  
  
  • Industrial SAG Permit - For SAG materials that necessitate the use of mechanic processing (i.e. mechanical classifiers and crushers).
  
  
  
  • Exclusive SAG Permit - For the extraction of SAG materials from public lands exclusively for personal use, without commercial disposition. Limitations: Not more than one (1) hectare; for not more than sixty (60) days; maximum of fifty (50) cubic meters.
  
  
  
  • Government Gratuitous Permit - For SAG materials in the construction of building and.or infrastructure for public use or other purposes over an area of not more than two (2) hectares, and for the period co-terminus with said construction.
  
  
  
  • Private Gratuitous Permit - For SAG materials extracted by the private owner from his own land, and for personal use only.


• Small Scale Mining Permit - a permit to explore, develop and utilize small-scale mineral deposits, in areas 20 hectares or less. Permit are issued by the Provincial Governor or City Mayor.
  
  
  • Guano Permit - Permission to extract and utilize loose unconsolidated guano and other organic fertilizer materials from specified caves. Such permits are subject to limitations under the NIPAS law, rules and regulations.
  
  
  
  • Gemstone Gathering Permit - For non-exclusive permit to gather looses stones useful as gemstone, in rivers and other locations.
  
  
  
  • Pebble Gathering Permit - For permission on handsorting or manual gathering of pebbles from permitted areas along the beaches or shorelines, without the aid of any mechanized equipment.


• Other Permits:
  
  
  • Mineral Processing Permit - permit granted for the milling, beneficiation, leaching, smelting, cyanidation, calcination or upgrading of ores, minerals, rocks, mill tailings, mine waste and/ore other metallurgical by-products or by similar means to convert the same into marketable products. The term of an MPP is for a period of 5 years and renewable for like period.
  
  
  
  • Ore Transport Permit - a requirement necessary for the transport of ores and minerals, specifying their origin and quantity.

2. Mining Rights Issued/Endorsed by DENR And MGB

As of December 31, 2000, sixty-one (61) EP's covering 436,942 hectares have been granted. Approved MPSA's, as of December 31, 2000 already total to 154 which covers 234,896.69 hectares. While, two (2) FTAA's have been endorsed and approved covering a total of 54,385 hectares.

1. Projected Mining Investments

Based on known exploration projects in the country and asuming a favorable economic scenario in the international minerals market, a projection was made to predict the possible volume of investment in the minerals industry during the next two decades.

2. Projected Benefits from One Class Mine

Ultimately, with the full, unconstrained implementation of the Mining Act of 1995, the government foresees to set a "learn but mean" mineral industry with about ten (10) world class mining operations which will be able to provide our expected economic benefits. With this setting, the government anticipates to generate about $400 million annual contribution to foreign exchange, an amount equivalent to the remittances of our Overseas Filipino Workers (OFW).

A financial model of one "world class" copper-gold mine with a projected milling rate of 25 million tonnes per year and a projected commercial life of 20 years would generate an average of over US$100 million per year in taxes and other benefits to the community.

The government maintains high hopes for such scenario when no Filipino mother and father will have to work in Saudi, Singapore and London only to find a living - a task that it positively entrusts to the mining industry.