MINING SECTOR EXPECTS $3-BILLION INFLOWS THIS YEAR
MANILA, February 3, 2005 (STAR) By Rocel C. Felix - After a decline in the last 20 years, the local mining industry is regaining its lost luster, with onstream investments this year alone by both local and foreign mining companies expected to reach $3.077 billion.
Five mining companies based in Australia, the US, Canada and China, have confirmed their investments in the Philippine mining sector in yesterday’s opening of the 2005 Philippine Mining Congress. Heads of domestic and foreign mining companies noted the Philippines’ potential to become a leading producer of minerals, particularly gold, copper, nickel and chromite.
"The winds of change are sweeping the Philippine mining industry," said Tony Robbins, managing director of Indophil Resources, noting, that the favorable decision of the Supreme Court upholding the legitimacy of the Philippine Mining Act of 1995 has brought back investors.
The court’s decision included allowing 100-percent foreign participation in Philippine mining activities.
Robbins’ company, in joint venture with local mining company Sagittarius Mines chaired by Paul Dominguez, is investing $650 million in the Tampakan Copper Project in Tampakan, South Cotabato. The other local investors include Alsons Development Corp. and Lyon Selection.
Indophil, said Robbins, is currently conducting detailed exploration drilling and feasibility studies and is scheduled to start commercial operation by 2009. He added that the Tampakan mine is expected to yield 140,000 ounces of gold and another 140,000 metric (MT) tons of copper yearly.
On the other hand, members of the China Chambers of Metals, Minerals and Chemical Importers and Exporters (CCMMC) have pledged combined investments of about $1.3 billion in the next six years.
CCMMC head Chen Haoran, and Chamber of Mines of the Philippines (CMP) chairman Philip Romualdez, signed yesterday a memorandum of understanding to promote cooperation between the Philippine and Chinese mining industries.
Haoran who hosted the Philippine mining delegation to China recently, said one Chinese minerals company is expected to firm up its $1-billion investment in a glass-making joint venture project at the Subic Bay Freeport Zone in the next two weeks.
Another Chinese firm, Hebei Zing Tai Cyrstal Bull Mining Corp.which is investing $200 million, while Jinchuan Non-Ferrous Metals Corp., the biggest nickel mining company in China, and Shanghai Baosteel Group Corp., are negotiating to invest in Philnico, a mining firm located in Surigao del Norte.
Crew Development Corp. (CDC), the local unit of Crew Gold Corp. of Canada, is also putting up $1 billion in the next five to six years for its Mindoro Nickel Project in Victoria, Mindoro Oriental.
"We have a very viable project as shown by our initial pre-feasibility studies. We are projecting to begin commercial operations by 2010 and hope to extract four million tons of copper per year," said Jan Vestrum, president of CDC.
On the other hand, Climax-Arimco Mining, an Australian company listed in the Australian Stock Exchange, will be investing $85 million in the Dinkidi Copper Project in Northern Luzon.
Company president Jim Askew said that project feasibility studies of the gold vein in Dinkidi which straddles Nueva Vizcaya and Quirino provinces indicated that the mine area could produce 150,000 ounces of gold per year, with a mine life of 14 years.
Askew said that aside from the Dinkidi project, the company will also be developing the Didipio copper project in Kasibu, Nueva Viscaya.
Another Australian mining company, Lafayette NL, is investing $42 million on the Rapu-Rapu Polymettalic Project in Rapu-Rapu, Albay.
Rod Watt, Philippine country manager of Lafayette said the company is close to completing its mill plant and is scheduled to start commercial operations by May or June this year. He said the mine area of 4,663 hectares has estimated combined reserves of 5.9 million MT of copper, gold, silver and zinc.
"We are given the second chance to do it right this time, and we are pursuing responsible mining to be able to sustain development that will create more jobs in the countryside and eventually reduce poverty and increase incomes," said Romualdez.
Mining industry observers are bullish about the sector, saying the SC ruling will also add stock or value to the otherwise struggling mining sector, especially listed companies. The inconsistent policies led to the downhill of the mining sector in recent years. From 27 mines in 1997, this went down to 12 mines this year. Subsequently, its share to total exports skidded to only 1.5 percent in 2003.
The Department of Environment and Natural Resources has programmed 23 flagship mining projects that are expected to bring in fresh investments of about $6 billion, $7 billion in foreign exchange, P5 billion in excise taxes alone and about 210,000 in direct and indirect employment in the next six years.
Some of the scheduled large-scale mining projects under the MTDP are the Nonoc nickel project by Nonoc Processing Corp./Philnico in Nonoc Island, Surigao del Norte with potential investment of $1 billion projected to begin commercial operations by 2009; Pujada nickel project in Davao Oriental by Asiaticus, $1 billion, 2009; Mindoro nickel project of Aglubang Mining Corp. in Mindoro Oriental, $1 billion, 2009; Boyungan copper project by Silangan Mindanao Mining Corp. in Surigao del Norte, $500 million, 2009; King King copper-gold project by Benguet Corp. and Nationwide Development Corp. in Compostela Valley, $532 million, 2007 Victoria II gold project by Lepanto Consolidated Mining Corp. in Mankayan, Benguet, $80 million, 2004.
The Philippines is considered a highly mineralized area with mineral resources estimated to cover nine million hectares or about 30 percent of the country’s total land area. Currently however, less than half a million hectares are being explored or developed.
The minerals industry offers huge untapped potentials. For 2003 alone, the mining sector employed 104,000 workers and provided P4 billion to P5 billion in wages and benefits. For each direct job in the mining sector, four to 100 allied jobs are created.
The DENR noted that the country’s mineral wealth is estimated at $800 billion to $1 trillion.
Reported by: Sol Jose Vanzi
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