Gov’t to take over old, abandoned mines

The government has moved to take over old and abandoned mines to exploit the high prices of metal in the world market, an official of the Department of Environment and Natural Resources (DENR) said.

The Mines and Geosciences Bureau, a DENR agency, said the agency had endorsed to President Benigno Aquino III the proposal to declare old and closed mine sites scattered all over the country as state assets.

“The review is ongoing in Malacañang,” Mines and Geosciences Director Leo Jasareno said in an interview Tuesday.

Tailings from old mines still contain plenty of metals like nickel, iron and gold. “We have to take advantage of the high prices of metals. We get more revenues,” Jasareno said.

The price of gold is expected to hit $2,000 per ounce toward the end of the year, according to Environment Secretary Ramon Paje, amid the financial volatility in the United States and Europe.

Paje and other officials have warned against the proliferation of illegal and dangerous mining as more people engage in mining, including going to abandoned mine sites, to take advantage of high gold prices.

Jasareno said the President only needed to issue an executive order that would put the old mines under the custody of the government.

The value of the old mines was initially placed at P88 billion, he said.

Under the DENR proposal, processing and developing the wastes of the abandoned mines will be bid out to mining companies.

Jasareno said the auction was one way for the government to earn revenue from the scheme. Apart from that, the government will impose a 2-percent excise tax on mining firms.

The DENR is bullish on the mining sector as investors turn to gold and other precious metals due to the debt crisis in Europe and United States.

As developed nations find themselves on the brink of bankruptcy and credit downgrade, the market’s confidence in the dollar and euro has eroded, prompting investors to put their money in gold and other metals.

Boom

As a result, the mining sector in the Philippine is booming. Production value of the metal sector rose to P63.92 billion in the first semester from P48.73 billion in the same period last year. About two-thirds of the total production value came from the gold subsector, which earned P42.18 billion.

The Philippine government is targeting $1.4 billion in investments in the mining sector this year. So far, the DENR has reached 40 percent of the goal, according to Jasareno.

The DENR said the skyrocketing metal prices had heightened interest in large-scale and small-scale mining in the Philippines.

Nueva Vizcaya mine

Jasareno said several gold mining projects were firmly in the pipeline.

One project, the $150-million Runruno mine site in Nueva Vizcaya province of FCF Minerals Corp., the local subsidiary of Australian firm Metals Exploration Plc., is set to operate in 2012.

The mine could produce an average of 96,700 ounces of gold in 10 years, the company said.

Slow approval

At the start of a three-day mining conference at Manila Sofitel, the Chamber of Mines of the Philippines on Tuesday blasted the DENR for its slow approval of permits.

Chamber of Mines president Philip Romualdez said the DENR inaction was costing the country billions of pesos in investments.

This year, the DENR approved only one mining permit. It has not approved applications for renewal and revoked 900 permits, Romualdez said at a conference.

“Things have come to a grinding halt,” he said. He added that several projects worth $13 billion were in the pipeline but could not move forward because of the DENR “inaction.”

Protest

The start of the conference itself was greeted with protests. Defend Patrimony Alliance said the mining industry was not only damaging the environment but was also causing conflicts in the provinces.

“The government is opening these small-scale mining areas because there are proven gold reserves which ensure mining companies of huge profits. Small-scale miners and indigenous people in these areas are sure to be victims of displacements and livelihood dislocations,” said Clemente Bautista, Defend Patrimony convenor.

Palace review

The Aquino administration, meanwhile, is reviewing the role of local government units in giving permits to small-scale mining operations, according to presidential spokesperson Edwin Lacierda.

“It’s being studied that local governments should not be allowed to regulate small-scale mining to make sure that it complies with the environmental safeguards,” Lacierda said at a news briefing in Malacañang.

Small-scale miners are not observing proper environmental procedures because they throw poison used in their operations into waterways, Lacierda said. With a report from Norman Bordadora