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Monday, April 22, 2024

Make it mine: Better days ahead?

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AS the country struggles to recover from the adverse economic impact of the global pandemic, the big players in the country’s mining industry are optimistic of better days ahead with the recent pronouncements of support for mining by the government.

No less than the Department of Trade and Industry (DTI) said the country can be a “vital partner” for mining, not only as an exporter of raw ores like nickel and copper but as a processor and producer of semifinished and finished products, underscoring that mineral processing is crucial given the country’s resources of green metals—referring to nickel, copper and cobalt.

Toledo: “[The Philippine Mining Act of 1995]
holds the distinction of being one, if not the only one, of the mining legislations in the world that has built-in provisions for the protection of the rights of indigenous peoples. Its social and environmental provisions are comparable to measures formulated in industrialized nations. This law is supported by many other environmental, social and governance laws, rules and regulations that are fully responsive to the needs of the times.”

The country’s top trade official said these minerals can be used for downstream industries such as electric vehicle (EV) battery manufacturing, hyper-scale data centers, and renewable energy projects.

Positive pronouncements

MICHAEL Toledo, chairman of the Chamber of Mines of the Philippines (COMP), in particular, welcomes the pronouncements of the DTI chief, Department of Finance (DOF) Secretary Benjamin Diokno, and Department of Environment and Natural Resources (DENR) Secretary Maria Antonia Yulo-Loyzaga.

Recent pronouncements of government regulators under the Marcos administration recognize mining as a potential source of sustained economic growth, says Toledo.

Indeed, he said the concerns of the minerals sector are multifaceted and can be better addressed through the close coordination of various government departments and agencies, and not the DENR alone.

“It would be good to see this coordination work continue through the Mining Industry Coordinating Council (MICC), this time not only to assess and review the compliance of mining operations with existing laws and regulations but, equally important, to deal with the challenges confronting the mining industry and to enable it to achieve its full potential in a responsible, sustainable manner,” says Toledo.

He noted that Secretaries Pascual and Diokno in particular underscored the benefit of mobilizing investments for mine development.

“They reflect the Marcos administration’s broad-minded view on our industry.  They also come on the heels of the removal of mining policy roadblocks—notably the ban on open-pit mining and the moratorium on new mining projects—in 2021 after a terribly restrictive regulatory environment that began in 2012.  Clearly, these developments are timely.  The government needs all the help it can get in these unsettling times as we continue to experience the ill effects on the global economy of the Covid-19 pandemic and the Ukraine crisis,” said Toledo.

According to Toledo, the Philippine Mining Act of 1995 is considered by many industry experts to be one of the most advanced mining laws in the world.

“It holds the distinction of being one, if not the only one, of the mining legislations in the world that has built-in provisions for the protection of the rights of indigenous peoples. Its social and environmental provisions are comparable to measures formulated in industrialized nations. This law is supported by many other environmental, social and governance laws, rules and regulations that are fully responsive to the needs of the times,” he pointed out.

Toledo said the industry fully supports Secretary Loyzaga’s initiatives to consult various stakeholders, including mining, as part of her efforts to achieve the sustainable use of the country’s natural wealth.

“We have said time and again that what is needed is to increase the capability of government, both national and local—and the political will—to fully implement the provisions of the Mining Act.

Mining’s huge potential

TOLEDO noted that the Philippines is richly endowed with mineral resources, with nickel and nickel products that were produced in 2021 having an estimated value of over P89 billion; and copper, more than P17 billion.  As such, he said, the potential for the Philippines to be a major minerals processor can be huge.

For downstream processing to be economically viable, however, the right kind of investors who will be willing to put up extremely expensive facilities to process the type of mineral ores that we have is needed.

“Our investment environment, therefore, should be attractive and competitive—comparable with, if not better than, other mining jurisdictions with equally rich mineral resources.

“We can learn from Indonesia’s experience in transitioning to downstream processing and take stock of our situation vis-à-vis theirs.  For nickel, a roadmap can be drawn similar to the one the government did for copper.  The roadmap could provide our policymakers, industry players, potential investors, and all mining stakeholders the guide from where we can build our strengths and address our weaknesses as we move along,” said Toledo.

Stable business environment

TOLEDO said COMP has never wavered in advocating for a business environment that is both stable and predictable for both current and potential investors in a way that investments are protected and constantly ensure a fair return to all stakeholders.

“Only in such an environment will we be able to develop and encourage investments in mining and in minerals processing. We shall continue this thrust, fully aware of—and always striving to meet, even exceed—the expectations of society on the impact of our operations on the environment and our gracious host communities,” he said.

According to Toledo, the existence of 7 mineral processing plants (4 gold, 2 nickel, 1 copper) in the Philippines proves that we have the technical capability to become a major mineral processor.

“Filipino miners in direct and related fields here and abroad have a proven and demonstrated track record in expertise, professionalism, adaptability and capacity to absorb new and emerging technologies,” he said.

To truly revitalize the country’s mining industry—which includes attracting investments in mining and encouraging the building of enormously expensive mineral processing facilities and manufacturing plants for electric vehicles and for renewable power projects—the industry needs full government support in terms of stable mining and investment policies that do not change mid-stream, lower power costs, infrastructure, harmonized local and national laws. Moreover, he said it also calls for a fiscal regime that considers the Philippines’s competitiveness vis-à-vis other mining jurisdictions, and incentives.

“As mentioned earlier, all these require close coordination between and among government departments and agencies. The scope and magnitude of these concerns also require the support and cooperation of the executive and legislative branches of government, as well as of the national and local government units,” he explained.

Fight illegal mining

ACCORDING to Toledo, the government should intensify the campaign against illegal mining operations, which he blamed for the industry’s negative image, explaining why COMP continues to prod the government to take a tougher stance against illegal mining activities, particularly unregulated small-scale mining (SSM).

“Illegal SSM does not employ the same stringent safety practices required of legitimate large-scale mining operators. We thus applaud President Ferdinand R. Marcos Jr.’s recent order for the DENR to strengthen its regulatory powers on small-scale mining so the government can provide miners with social protection plus skills training and even financial incentives for their operations,” he said.

Toledo said COMP looks forward to further full and meaningful consultations with the government, and to working closely with both legislators and executive officials so that, ultimately, the country will see more investments in mining coming to our shores, to help unlock the industry’s huge economic potential.

Increase mining benefits

ANTI-MINING groups likewise endorse the idea of increasing the benefits from mining by discouraging the wholesale export of raw minerals.

“In general, ATM welcomes the idea that mineral processing is being considered by the Department of Trade and Industry to increase the benefits from mining and possibly contribute to an energy transition as a response to climate-change impacts. This is, after all, part of a set of strategies that must be explored for proper minerals management, that includes the option of keeping the minerals on the ground if it is more costly to extract them,” said Jaybee Garganera, national coordinator of ATM.

However, he counsels the government to ensure that such a track does not remain myopic and imbalanced in its long-term goal to make minerals play a key role in the country’s industrialization while complying with the rigorous framework of sustainable development.

“Our alliance believes that the Philippine government must first ensure that we have a clear definition of a ‘just energy transition’ and what are the contribution and roles of Philippine minerals towards this. This means that mining is part of a system that will ensure that everyone benefits from the production and deployment of renewable energy, without harming the environment and communities that are hosting or providing the raw materials for RE technologies.”

Garganera draws attention to the inspiring comment of Earth Justice in 2021 that “we cannot justly move to a clean energy future at the cost of harming people or the environment.”

Circular economy, sustainable consumption

ACCORDING to Garganera, ATM believes that any discussion about additional extraction of transition minerals should be informed by the principles of the circular economy and sustainable material consumption.

“We believe that any initiative on ‘transition minerals’ can benefit from a general framework that we shouldn’t open up more mines in the Philippines to simply respond to the growing energy demands, especially of developed countries and the Asian giant economies such as China and India. We must prioritize a robust and expanded cost-benefit analysis (CBA) applicable to directly affected host communities, the local governments, and the nation as a whole. And this CBA must factor in the environmental, social, cultural and human-rights cost of mining,” he explained.

According to Garganera, it doesn’t make sense that the Philippines is prioritizing an industry (mining) that merely contributes 1 percent of the GDP but threatens the other combined 14-17 percent of GDP from agriculture, forestry, and tourism—this, especially in the context of climate change and extreme weather events.

“Any policy reform in mining should adequately address the question, ‘Who benefits from this, both during the mine life and the generation after the mine is closed down?’” he pointed out.

ATM suggested that DTI, DOF and the DENR put in place policy reforms, particularly in operationalizing what the mining industry claims as responsible mining, before any expansion of mineral processing and additional mining projects for transition minerals.

“Right now, the Alternative Minerals Management Bill (AMMB) that has been languishing in Congress is the most comprehensive legislative proposal that should be prioritized,” he said.

“Finally, we emphasize the general call of environmental defenders—“for this just transition to happen, we cannot allow more sacrifice zones in the name of mining, to provide the raw materials for renewable and clean energy,” he ended.

Image credits: Dreamstime.com

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