Greetings.

Levity aside, I am most grateful for your invitation to join you here tonight and talk about mining in the Philippines. To be with the distinguished members of the Australian-New Zealand Chamber of Commerce, known to be one of the most dynamic Chambers in the country (with a membership of over 250 top corporations from varied industries ranging from banking, infrastructure, tourism and information technology), is both an honor and a privilege.

As you all know, this Administration considers the mining sector as a key contributor to our economic progress. And of the 24 priority mining projects, six (6) have Australian or New Zealand interests. These are the:

• Rapu-Rapu Polymetallic Project in Albay, which is a major investment area of Australia’s Lafayette Mining Limited;
• Tampakan Copper Project in South Cotabato with Indophil Resources as one of the major stockholders;
• Didipio Copper-Gold Project of Australasia Philippines Mining Inc. (APMI) in Nueva Vizcaya;
• Siana Gold Project in Surigao with Red 5 Limited of Australia as partner;
• Adlay-Cagdianao-Tandawa Nickel Project also in Surigao with Queensland Nickel Inc. (QNI) Philippines and BHP Billiton as foreign partners; and
• The Hallmark (Pujada) Nickel Project in Davao Oriental with Austral-Asia Link Mining Corp., BHP-Billiton and QNI as partners.

These projects will generate US$ 926.4 Million in foreign direct investments, US$ 1.3 Billion in revenues and will help create 10,000 direct and indirect jobs. Apart from the projects I mentioned, there are also 18 ongoing active drilling explorations being conducted by similar groups all over the country.

Some of your members also provide crucial services to the mining industry such as Leighton Contractors, and ANZ Bank, which has been recently appointed as lead arranger of debt financing for the multi-million Didipio project.

We thank you for your confidence in the Philippines. However, we also acknowledge your concerns about political instability, corruption, uncertainty in policy implementation, inadequate infrastructure, slow economic growth and high power rates as indicated in the 2004 Survey of the Wallace Business Forum.

The clamor for improved governance also applies to the issues confronting mining today such as the bishops’ anti-mining stand, the review of the Mining Act and the Rapu-rapu tailings spill incidents.

Bishops’ anti-mining stand

We know that the pastoral statement of the Catholic Bishops’ Conference of the Philippines (CBCP) urging the repeal of the Mining Act and the revocation of existing mining licenses unduly alarmed the investors. Being a predominantly Catholic country, the bishops have some influence over the people even if they do not have any legal mandate with regard to the utilization of our mineral resources. It did not help any that there were unverified reports that the government imposed a moratorium on mining applications as a compromise to the bishops.

There is no moratorium on mining. My Department continues to process and approve mining applications in accordance with existing laws and streamlined procedures.

What I have done since I assumed the DENR post is to pursue a dialogue with non-government organizations and the bishops to identify their real issues and concerns. They told me that they were not against mining per se, but they were against the “irresponsible way” mining is being conducted.

When asked about the specifics, the bishops would say “ito yung mga sinusumbong sa amin,” meaning that that was what the people told them. To me, this means that the lines of communication are still open. If mining companies and their local stakeholders can prove to the bishops that what the anti-mining groups are telling them are wrong, then there might still be a chance that we can soften their stand.

This issue will not be solved by a series of debates on the pros and cons of developing our mineral resources. The government and the private sector must jointly prove their position with concrete examples of responsible mining practices.

Mining Act Review

Instead of repealing the Mining Act, the government agreed to a Congressional review of the law because we are confident that we have the best mining law. The Mining Act has been lauded internationally as having put in all the environmental protection and safety measures.

My understanding is that the review being initiated by Speaker Jose de Venecia will only focus on further strengthening the environmental provisions, ensuring the safety of existing and proposed projects and to guarantee that the benefits will be shared by local communities.

I assure you that the ongoing review will not result in any revocation or ownership changes because the Supreme Court has already ruled on this issue and has allowed foreign-controlled corporations to participate in the exploration, development and utilization of our minerals resources.

Rapu-Rapu tailings spill incidents

The renewed clamor of the bishops and some NGOs against mining unfortunately gained momentum after the Rapu-Rapu tailings spills in October last year.

While the volume of tailings involved in the two spill incidents in Rapu-Rapu is miniscule compared to the Marcopper tailings spill in 1996 that released some 1.6 million cubic meters of tailings, the event had a major impact on the efforts of government to prove the case for responsible mining. Our credibility in enforcing the Mining Act and all its environmental safeguards was seriously put in questioImmediately after the tailings spill incidents, the government stopped the operations of the company, imposed the appropriate penalties and compelled the company to implement the necessary remedial and rehabilitation measures.

For its part, the company also admitted that there were serious operational lapses but they are committed to complying with the government prescriptions to be able to resume operations.

This event however only highlighted the remedial measures under the Mining Act and not the preventive ones.

Lafayette has recently submitted a 115-page Environmental Management System for the Rapu-Rapu Polymetallic Project. The document contains the comprehensive pollution control program that they will implement. While the DENR acknowledges Lafayette’s efforts to address its pollution problems, we still need to determine the adequacy of their anti-pollution efforts and programs.

Before they can resume their operations, we also need to wait for the report of the Rapu-Rapu Fact-Finding Commission, which was created by the President on March 10, 2006. They are expected to submit their findings anytime soon.

7-Point Program

I believe that improved governance must start within one’s own backyard and as leader of the DENR, I am guided by my own convictions. I am pro-environment and I am also pro-responsible mining. On one hand, we have to strictly protect the environment but we also have to develop our natural resources properly so that our people can benefit from them.

Under my tenure at the Department, I will focus on seven priority areas:

• Control air and water pollution especially in key urban centers;
• Close all open and controlled dumps nationwide;
• Arrest forest denudation;
• Complete the geohazard maps to forewarn communities of potential landslides and flashfloods;
• Revive the Pasig River;
• Pursue responsible mining and accelerate the rehabilitation of abandoned and idle mines; and
• Fully enforce the laws, rules and regulations, with the help of the National Anti-Environmental Crime Task Force.

I believe that we can strengthen and improve our enforcement activities. We have sufficient laws, and DENR already possesses extensive powers. Through the Task Force, we will be able to mobilize all government resources to effectively put a stop to the violation and degradation of our environment.

By enforcing the law especially the Mining Act, we will be able to improve our credibility with the public and would thus be more effective in promoting responsible mining.

Boosting Investors Confidence

In the international conferences I have attended, I have stressed that there are four reasons why they should invest in the Philippines. First, we have the resources and reserves; second, we have the strategic geographical location; third, we have the human resources with proper experience and skills, and; fourth, we have a conducive legal system and clear policy environment.

We will continue to pursue the reforms under Executive Order No. 270 and the Minerals Action Plan (MAP), which we hope will encourage new investments and restore public sector confidence.

We have appointed “high-level action officers”, whose task is to shepherd the priority mining projects. This is a recognition that government has evolved from being mere “regulators” into more active partners of responsible projects.

Last year, we made a major policy reform to allow only Exploration Permit or the Financial or Technical Assistance Agreement (FTAA) as the initial mode of entry in the conduct of mineral exploration.

We have also conducted an inventory of mining tenements and have identified non-performing mining contracts and agreements. Last year, we have cancelled 83 non-performing mining tenements following due process and we are opening them up for new investors.

The Philippine Stock Exchange (PSE) has liberalized its rules to allow more exploration and mining companies to be listed in order to raise capital through the stock market without the 3-year profitability requirement. In relation to this, we are about to finalize the first ever Philippine Mineral Reserves and Resources Classification System (basically patterned after Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, or the “JORC Code”), compatible with global standards.

More importantly, we now have the Minerals Development Council (MDC) created by the President, and which I chair, to coordinate all government efforts and addressing all your concerns through investment promotions, processing, public information and stakeholder dialogues.

The government will continue to create the most conducive environment for businesses to thrive but we need your help to prove that we can make responsible mining work for the benefit of our people.

Maraming salamat at Mabuhay kayong lahat!