The Philippines could be elevated to a “mining country” by 2010 if the country’s metallic producing mines could sustain its output growth at its current pace, Environment and Natural Resources Secretary Angelo T. Reyes said.

DENR-Mines and Geosciences Bureau (MGB) earlier revealed that Philippine metallic production value posted a strong 56% growth during the first quarter of the year from P11.13 billion to P17.38 billion the same period last year. The country’s mineral production value has been on upward trend since 2002 due to the demand-driven rise in world metal prices.

“With the continuing increase in production value, we are optimistic on achieving a projected 8.6% mining exports share to total exports by 2010—a figure that would elevate the Philippines to a ‘mining country,’” Reyes said.

Based on a 2002 World Bank study, a country can be called a “mining country” if it has a large domestic sector and its mining industry contributes at least 6% to the total exports.

The DENR-MGB had initially projected that mining’s contribution to exports would be on upward trend beginning next year at about 2.8% and at 2.9% in 2009. A big jump in exports contribution is projected in 2010 at 8.6% with all of the priority mining projects already on stream. The projections were based on production and exports data of current producing mines and the schedules set by the 23 priority minerals development projects.

But MGB Director Horacio C. Ramos, who presented an update on the country’s minerals industry at the ongoing Asia Pacific Mining Conference and Exhibition (APMCE) 2007 in Makati City, said the growth in mining exports had already began last year as total exports of mineral and mineral products reached about US$2.06 billion, more than double of 2005’s US$820 million, increasing the industry’s percentage share from just 2% to a remarkable 4.5%.

This, the MGB chief said, as exports value of all commodities except for chromium skyrocketed last year because of the country’s improved production. Data showed that exports of copper metal rose from US$361 million to US$1.1 billion; copper concentrates increased from US$37 million to US$84 million; gold swelled from US$58 million to US$227 million; iron ore agglomerates increased from US$110 to US$153 million; and other commodities including nickel ores and concentrates almost doubled from US$257 to US$402 million. Exports from chromium were flat at US$5million.

Ramos said the government is optimistic that the growth in production and exports would be sustained as more and more mining projects go on stream and expand their production this year.

The Palawan HPP Project of Coral Bay Nickel Corp. and the Canatuan Gold Project of TVI Resources Development Phils. are expanding production, while Berong Nickel Project of Atlas Consolidated Mining and Development Corp. and London-listed Toledo Mining Corp. recently came on stream.

The Adlay-Cagdianao-Tandawa (ACT) Project of Surigao Integrated Resources Corp. is scheduled to start producing late this year for test shipment, while the Didipio Copper Project of OceanaGold and the Masbate Gold Project of Filminera Resources Inc. are eyeing to produce by the second quarter of 2008. The Carmen Copper Project of Atlas Consolidated Mining Corp. is coming on stream by the fourth quarter of next year.

Substantial inroads:

In his presentation, Ramos also emphasized the achievements of the government’s revitalization program, particularly in terms of attracting some of the world’s biggest mining players to invest in the country.

“Two and half years into the government’s revitalization program, we believe that we have made substantial inroads,” Ramos said. “A total of US$694 million in investments have been placed in the local mining industry during the past two and a half years of the program. This is projected to rise in the coming years with significant inflow anticipated in 2008 to 2010,” he added.

Investment inflow is projected to reach US$348 million this year. Some $154 million will come from the expansion of the Palawan HPP Project in Palawan, $23 million from the construction of the base metal plant of the Canatuan Project in Zamboanga del Norte, $21 million from the construction and development of the Didipio Copper-Gold Project in Nueva Vizcaya; $36 million from the Masbate Gold Project in Masbate Island and $97 million from the continuing rehabilitation of the Carmen Copper Project in Cebu.

Since the start of the revitalization program, around 6,500 new jobs have been generated with an additional 3,000 plus jobs are projected for 2007. Another 30,000 plus is projected between 2008 and 2010. Employment in mining is currently pegged at 141,000, up from 2002’s 101,000.

The minerals industry’s estimated gross production value as of 2006 is P68.4 billion which is almost double from 2002’s P35.2 billion, while contribution to the gross domestic product in 2005 was equivalent to P14.8 billion or 1.2% of the national GDP.

Taxes, fees and royalties from mining totaled to P3.1 billion, slightly higher from 2005’s P2.9 billion but more than double from 2002’s P1.4 billion.

Ramos, however, stressed that while the Philippines is bullish on its prospects for the minerals industry, the government remains cautious of the challenges that comes with increasing mining activities.

“The bottom line, we in the government believes, is that for as long as done responsibly, mining can be pro-people and pro-environment in creating wealth and improving the quality of life of the Filipinos,” Ramos said.

The Revitalization of the Minerals Industry Program, which is anchored on the principles of sustainable development, was launched in 2003 in line with the President Arroyo’s policy shift from tolerance to promotion of responsible mining. The policy shift considered the potential of mining as a catalyst to economic growth and development, and helping poverty reduction particularly in the countryside.

June 7, 2007