Gov’t may lift ban on mining permits–Paje

/ 05:51 AM September 15, 2011

The government plans to resume accepting and processing mining applications to attract investors, Environment Secretary Ramon Paje said on Wednesday at the mining industry’s annual conference.

“The immediate action plan now is to lift the moratorium on the acceptance and grant of mining applications,” Paje said.


He said the Department of Environment and Natural Resources (DENR) would review appeals from 30 percent of the rejected applications, and formulate guidelines for public bidding of exploration areas and joint ventures in mining deals.

Paje issued the statement after the mining industry complained that the moratorium was stalling growth in the sector and hurting the broader economy.


The Mines and Geosciences Bureau (MGB) last month rejected more than two-thirds of pending mining applications after an eight-month review aimed at getting rid of mining speculators.

The MGB suspended the acceptance and granting of mining permits during the review.

Investors have expressed concern that permit delays and policy discord between national and local governments may trip up pending and new investments estimated at around $20 billion in the next five to six years, including Xstrata Plc’s  $5.9-billion Tampakan project.

Policy discord

Philip Romualdez, president of the Chamber of Mines of the Philippines, said the domestic economy was unlikely to hit a government growth estimate of at least 5 percent this year if the moratorium was not lifted immediately.

“The moratorium is stalling the industry’s growth, or can even lead to a decline, and consequently diminish mining’s contribution to our GDP,” Romualdez said.


The moratorium on all forms of mining and exploration permits began in February.

Clear roadblocks

Romualdez also asked Malacañang to help clear other “roadblocks” being put in the way of the mining industry by its critics’ “well-orchestrated campaign.”

He enumerated these as the No to Mining in Palawan movement, the alternative mining bill in Congress, the ban on open-pit mining in South Cotabato, the writ of kalikasan (environment) against mining firms in the Zamboanga Peninsula following a petition filed by a Cebu-based nongovernment organization, and the “seeming bias against the mining industry by National Commission on Indigenous Peoples officials.”

Ready to listen

In his keynote address on behalf of President Aquino, Executive Secretary Paquito Ochoa said Malacañang welcomed the mining industry’s drive toward helping the economy grow and was “ready to listen” to its needs.

Ochoa pointed out, however, that the industry must also help itself by giving renewed emphasis on and highlighting its contributions to environmental protection to help assuage the concerns of its critics.

“For mining to be acceptable, it must be guided by the principles of sustainable economic development, environmental protection, social equity and, of course, good governance,” he said.

Royalty tax

Paje said the government was also planning to declare more mines as mineral reservation areas in a bid to collect a 5-percent royalty tax and raise an additional P7 billion annually, a move opposed by the mining industry. There are currently nine mineral reservation areas in the country.

“I want all operating mines to be covered by royalty tax. We are waiting for an EO (executive order) on this,” Paje said, adding miners in China, Indonesia and Chile pay a royalty tax ranging from 4 percent to 7 percent.

Like rent

The environment secretary said the imposition of the royalty was akin to renting out a house.

“The miner has exclusive rights to a mining area so the state should earn from its assets even if a company takes its time exploring and developing a mine,” Paje said.

As things stand, the government only earns when a company goes into production, Paje said. “But what about the period before that? No other company can occupy its mining area even if it delays exploration or development. That is not good for the country.”

Industry officials have said more taxes on top of a 2-percent excise tax would discourage investments in the sector.

Impasse on Tampakan

The government is studying how to converge local and national policies on mining, with the impasse over the Xstrata Tampakan project, Southeast Asia’s largest undeveloped copper-gold prospect, worrying prospective mining investors.

More than a year after South Cotabato banned open-pit mining, the method to be used at the Tampakan mine, the national government and provincial officials are still at odds on which policy has primacy.

The national government insists the mining law, which was upheld by the Supreme Court in 2004, supersedes any local policy.

South Cotabato approved the ban because of worries over the environmental impact of the extraction method, but the province is reviewing the measure.

“I’m hoping that the ban will be lifted this year. The mere fact that they are reviewing it is a good sign,” Paje said. Reports from Riza T. Olchondra, Daxim L. Lucas and Reuters

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TAGS: Department of Environment and Natural Resources (DENR), Environment Secretary Ramon Paje, investors, Mines and Geosciences Bureau (MGB), mining applications, mining industry
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