THE PHILIPPINE MINING INDUSTRY: Nowhere to Go But Up Atty. Ron S. Recidoro Executive Director, Chamber of Mines of the Philippines This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
The Philippines’ Estimate Mineral Inventory Volume of Mineral Resource (in MT) Mineral Commodity ORE MINERAL CONTENT Copper 8.0 billion 74.7 million Gold 4.9 billion 6,700 Nickel 811.6 million 10.2 million 480.3 million 177.8 million Iron 433.9 million 119.7 million Aluminum 306 million 245,000 Molybdenum Chromite 39.7 million 8.8 million 18.3 million 1.1 million Mercury 13.3 million 328,000 Zinc Manganese 2.7 million 1.2 million This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
METALLIC MINING INDUSTRY: FACTS AND FIGURES LARGE-SCALE EXPORTS GDP* METALLIC * $4.05B – 6.4% OF P134.5B – 0.85% OF MINING INDUSTRY 1 TOTAL EXPORTS TOTAL GDP Mines: Plants: (includes exports from (excludes contribution of plants) Nickel: 17 2 Nickel HPAL: 2 plants) Gold: 6 3 Gold: 2 Copper: 3 Copper Smelter: 1 Chromite: 1 TAXES* EMPLOYMENT* 1 From MGB (2017). Processing plant statistics are captured under Manufacturing. 203,000 – 0.5% OF 2 It is estimated that about 8 mines are currently P25.6B - 1.4% OF not operating. TOTAL TAXES TOTAL WORKFORCE 3 It is estimated that about 2 mines are currently not operating. (excludes taxes from from plants) (excludes workforce in plants) 4 This presentation is a property of the Chamber od Mines of the Philippines. * Source: PSA, 2017 figures This may not be reproduced or distributed without prior permission of the COMP.
THE METALLIC MINING INDUSTRY: FACTS AND FIGURES • • While the national impact of The impact is particularly evident in the wealth mining is small, in certain regions created in municipalities that host large-scale that host large-scale mining, the mining: impact is large (% contribution of Type of Municipality/Province Class mining to Regional GDP)*: Metal NICKEL: 1st Bataraza, Palawan Sta. Cruz, Zambales 1st Region 2017 1st Quezon, Palawan IV B MIMAROPA 29.0 1st Narra, Palawan XIII CARAGA 22.1 1st Claver, Surigao del Norte VI Western Visayas 13.7 1st Cantilan, Surigao del Sur I Ilocos 5.6 II Cagayan Valley 4.8 GOLD: 1st Aroroy, Masbate 1st Mankayan, Benguet * Contribution of Mining (includes Quarrying) to 1st Siocon, Zamboanga del Norte Regional GDP in Percent – Top Five Regions. Source: Phil Statistics Authority 1st Maco, Compostela Valley 1st Bunawan, Agusan del Sur COPPER: 1st Tuba, Benguet This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
THE METALLIC MINING INDUSTRY: FACTS AND FIGURES • The contribution of large-scale metallic mining to the development of host communities in remote areas becomes even evident when the following are considered: SOCIAL IP ROYALTIES LGU TAXES DEVELOPMENT Php300M+ ON ROYALTY Php4.3B* IN TAXES & Php1.7B ON MANDATED PAYMENTS TO IPs IN FEES TO LGUs EXPENDITURES TO HOST ANCESTRAL DOMAINS COMMUNITIES Source: EITI 2016 Country Report Source: EITI 2016 Country Report _____________________ Source: MGB, 2017 MULTIPLIER EFFECT *P2.9B in direct taxes and fees P0.9B in share of Excise Tax P0.5B in share of Royalties in DIRECT EMPLOYMENT: 203,000 Mineral Reservations INDIRECT EMPLOYMENT: 812,000 (4X) 6 MGB Estimate This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
Mining’s Footprint • The 43 operating large-scale metallic mines occupy less than 10,000 hectares of the country’s 30 million hectare land area (0.03%) ; • Future mining projects in the pipeline will only take up an additional 10,000 hectares ; • With mining contributing Php87.2 billion to GDP, mineral lands have a production value of nearly Php490 million per hectare , compared to agricultural lands at Php115,000/ha. This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
THE MINING INDUSTRY • CTP Construction NICKEL (12) • Marcventures • Cagdianao Mining • Pacific Nickel • Hinatuan Mining COPPER (3) GOLD (5) • Eramen Minerals • Rio Tuba Nickel • Philex Mining Corp. • Lepanto Cons. • LNL Archipelago Mining Corp. • Carmen Copper Mining Co. • Benguet Nickel • Taganito Mining • Benguet Corp. Corp. Corp. • OceanGold Phils. • Philsaga Mining ▪ Adnama • Berong Nickel Inc. Corp. Mining • Platinum Group • Greenstone Resources Inc. Metals Corp. Resources Corp. ▪ Sinosteel • FCF Minerals Philippines NICKEL (14) H.Y. Mining ▪ Zambales ▪ Libjo Mining Corp. IRON (3) Diversified ▪ • Techiron Resources Agata Mining Metals Ventures, Inc ▪ Carrascal Nickel Inc. • Krominco Inc. ▪ SR Metals Inc. ▪ Wellex • Ore Asia Mining & ▪ Minahang Mining Corp. Dev't. Corp. GOLD (2) Bayan ng ▪ Oriental Vision • Johnson Gold Mamamayan Mining Phils. ▪ Mining Corp. Claver Minerals Corp. • Apex Mining Co. ▪ AAM-PHIL ▪ Century Inc. Natural Peak Corp. Resources ▪ Citinickel 7 26 This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
Production Values • In 2016, the mining industry produced P176.3 billion worth of minerals, and contributed P81 billion (0.6%) to Philippines GDP; • Mining activities are currently concentrated in only 13 provinces: Benguet, Zambales, N. Vizcaya, Palawan, Masbate, E. Samar, Leyte, Cebu, Agusan del Norte, Surigao del Norte, Surigao del Sur, Dinagat Islands, and Compostela Valley. • In MIMAROPA - Region 4B and CARAGA - Region 13, the mining industry contributes approximately 25% of their regional GDP. This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
So what’s the problem? • Policy uncertainties abound. since 2011, government has not actively pursued investments in minerals development, focusing instead on reviewing the fiscal regime for mining; • EO79 (2012) Moratorium on new mining permits until a new mining tax regime is legislated. In the TRAIN 1 package of tax reforms, the excise tax on mining has doubled from 2% to 4% of gross output. The MICC has stated that such increase is not enough to recommend the lifting of the moratorium. • DENR AO 2017-10 : Ban on open pit mining, instituted during the time of the former DENR Secretary, but currently remains in place. • MINE CLOSURES ORDERED BY SEC. GINA LOPEZ. Over 20 mines were served with closure orders following an audit. With closure orders on appeal, these mines continue to operate, albeit under a cloud. • LEGACY MINES: Quite a number of old, closed-down mines have not undergone rehabilitation. Although belonging to a different era, they remain as points of attack for the anti-mining groups. This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
So what’s the problem? • The three years of the Duterte administration have been a mixed bag for the • mining industry. The DENR and MGB have yet to come out with a clear policy to promote and reinvigorate investments in the mining and minerals processing sector. • SINGLE VIEW OF THE INDUSTRY: No distinction among the general public of the difference between the formal large-scale sector and the largely illegal small-scale, another contributor to the poor image of the industry. • PERCEPTION THAT THE INDUSTRY IS NOT PAYING ENOUGH TAXES. As a result, the DOF and Congress have pushed for an overhaul of the fiscal regime for mining, proposing a new royalty and windfall profits tax • As a result, the Philippine mining industry is now in deep freeze. No new mining agreements have been approved and even projects with approved ECCs and DMPFs have not moved forward. • Investors have largely taken a wait-and- see posture , unwilling to risk their capital under such uncertain conditions. This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
A “Silver Lining”? • Government’s thrust towards industrialization and its Build! Build! Build! Program will necessitate a strong mining industry; • Roadmaps and development plans have been, and are still being crafted, for copper, iron and steel, and cement; • Global commodities prices are slowly recovering and are on their way up from the lows of 2014-15; Philippine mines are relatively well-positioned to take advantage of increased demand; This presentation is a property of the Chamber od Mines of the Philippines. This may not be reproduced or distributed without prior permission of the COMP.
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