Prospects of a major takeoff in the minerals industry next year yields another boost as metallic production value posted a robust 56% growth during the first quarter of 2007 to P17.38 billion from P11.13 billion the same period last year due to continuing rise in world metal prices.

Department of Environment and Natural Resources (DENR) Secretary Angelo T. Reyes made the announcement Wednesday, a day after he led the Philippine minerals industry in welcoming global mining players visiting the country for the Asia Pacific Mining Conference and Exhibition (APMCE) 2007 at the Shangri-la Hotel in Makati City. The conference is expected to bring in fresh interests and more active investments in the mining industry, which the government is expecting to bring in US$6.7 billion in investments by 2010.

Reyes said sustained growth in metallic output proves that the revitalization program for the minerals industry is on the right track, and further builds up the prospects of a mining boom next year.

“With more mining projects either expanding or going on stream in the next months, we could see the industry further growing in terms of production and the prospects of a mining boom next year is becoming more apparent,” Reyes said.

The current production loop of 14 medium and large-scale mines include four (4) of the 24 priority development projects under the revitalization program. These are: Palawan HPP Project of Coral Bay Nickel Corp.; Canatuan Gold Project of TVI Resources Development Phils.; Teresa Gold Project of Lepanto Consolidated Mining Co.; and Santo Tomas Copper Project of Philex Mining Corp. The expansion programs of the Palawan HPP and Canatuan Gold projects, and the entry of Berong Nickel Project of Atlas Consolidated Mining and Development Corp. into production stream are seen to further boost this year’s total production.

“The continuing good performance of the industry is a positive indication that, slowly but surely, the government is realizing its expectations from the mining sector as key driver for growth and development,” Reyes said.

On Tuesday, the Environment chief encouraged mining investors to take a serious look at the Philippines for their mining prospects citing the rich mineral resources of the country and the government’s commitment to further improve the investment climate for mining projects.

To emphasize this, Reyes told the crowd of over 400 mining honchos that the DENR is coming up with a number of major policy reforms in a few months, in a bid to boost further the revitalization program.

The reforms, he said, would focus on facilitating the grant of mining tenements, making available mining areas to serious and capable investors, and providing security of mining tenements to investors.

He also announced the approval of 11 mining contracts that include 6 Mineral Production Sharing and 5 Exploration Permits, a move that is seen to further boost the mining activities all over the country.

The APMCE 2007 was organized by the ASEAN Federation of Mining Associations and the Chamber of Mines of the Philippines. The well-attended Conference, which was fully endorsed by the Philippine government, also had Vice President Noli de Castro as special guest for the inauguration of the Mining Exhibition. President Gloria Macapagal-Arroyo is also hosting a dinner reception for the speakers and participants of the events, which includes the world’s biggest and most active major and junior mining players.

Gold on the lead

DENR’s Mines and Geosciences Bureau (MGB) data showed that the yet lean metals production loop composed of five (5) nickel mines, four (4) gold mines, three (3) chromite mines, one (1) copper mine, one (1) nickel plant, and numerous small-scale gold mines continued to benefit from the spiraling world metal prices.

Aside from Palawan HPP, Canatuan Gold, Teresa Gold and Santo Tomas Copper projects, the first quarter production loop also include: Victoria Gold Project of Lepanto; Acupan Contract Mining Project of Benguet Corp.; Banahaw Gold Project of Philsaga Mining Corp.; Padcal Copper Project of Philex ; Cagdianao Nickel Project of Cagdianao Mining Corp.; South Dinagat and Tagana-an Nickel Projects of Hinatuan Mining Corp. ; Rio Tuba Nickel Project of Rio Tuba Nickel Mining Corp.; and Claver Nickel Project of Taganito Mining Corp.

The Rapu-Rapu Polymetallic Project of Lafayette, whose operations were given go signal to proceed after 15 months of suspension, has no reported production in the first quarter. The Paracale Gold Project of Johson Gold Mining Corp., the nickel project of CRAU Mineral Resources and the Diwalwal State Development Project of the Philippine Mining Development Corp. also had no operations during the said period.

DENR-MGB said the driving force for the sustained metal price rise is the current supply and demand imbalance wherein present supply cannot keep pace with the fast rising demand for metals. Leading minerals like nickel, silver, copper and gold continued to enjoy better prices in the first three months of 2007 as against last year; prices were up by 180%, 38%, 18% and 17%, respectively.

Gold, nickel and copper producers were the key players, with gold taking the lead part with 63% of the total production value, followed by nickel concentrate with 19%, copper with 9% and close behind is nickel direct shipping ore with 8%.

Gold production volume increased by 6% from 9,730 kilograms in the first quarter of 2006 to 10,308 kilograms the same period. At the same time, production value grew by 29% from P8.46 billion to P10.92 billion.

Silver production volume and value remained aggressive registering a 37% and 78%, increase, respectively. Volume climbed to 7,560 kilograms in the first three months from 5,532 kilograms in last year, while production value surged to P146 million from P82 million in the same period last year.

Copper production quantity stood at 18,667 dry metric tons in the first quarter, a moderate gain from the same period last year at 17,232 dry metric tons. Production value ballooned to as high as 61% from P958 million in 2006 to P1.45 billion in 2007.

Production volume and value of nickel direct shipping ore soared by 166% and 215%, respectively. This positive turnout is traceable to the favorable weather conditions that prevailed in the mining areas during the period. Overall direct shipping ore production reached 639,448 dry metric tons from the period January to March 2007 valued at PhP1,338 million, up from last year’s production of 240,489 dry metric tons worth PhP425 million.

On the contrary, chromite production was 11,023 dry metric tons, down by 1,472 dry metric tons from the 12,495 dry metric tons in the first quarter of 2006, or 12% less. Both metallurgical chromite and refractory chromite incurred production deficits of 33% and 22%, respectively.

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June 6 , 2007