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HORACIO C. RAMOSDirectorMines and Geosciences BureauDepartment of Environment and Natural ResourcesRepublic of the Philippines
PROMOTING A RESPONSIBLE AND SUSTAINABLE MINERALS INDUSTRY
Mining ForumFrankfurt, GermanyJune 28, 2007
Some Key Dates in Philippine Mining
1974: Parity Rights expired; “Filipinization” of Philippine mining operations; 70’s considered as the “boom years”
1986/87: People Power; Freedom Constitution; general lack of exploration activities.
1991: Enactment of Local Government Code providing for local autonomy and wealth sharing from mining.
1995: Passage by Congress of the Philippine Mining Act of 1995 (RA7942); initial foreign investors interest; rise in environmental activism.
1996/97: Marcopper incident; challenge to the Constitutionality of the Mining Act; enactment of the Indigenous Peoples Rights Act.
2003: Start of Revitalization Program for the Philippine Minerals Industry; renewed investor interest.
2004/05: Affirmation by the Philippine Supreme Court of the Constitutionality of the Mining Act.
2008: Start of a new mining boom?
Mining Industry Indicators (2006)
3
PhP68.4 billion in 2006; up by 36.25% from 2005
Mining Industry Indicators (2006)
4
Highest in early to mid-70’s; 24.56% in 1973
Gradual growth since 2003; 4.46% for 2006
Mining Industry Indicators (2006)
5
Preliminary figure for 2006 is PhP4.9 billion
1992: The excise tax for metallic minerals was reduced from 5% to 2% of the gross value.
Mining Industry Indicators (2006)
2006: 141,000 directly employed or 0.43% of total
labor force
Mining Industry Indicators (2006)
7
2006: PhP59.7 billion at current prices
8
OPERATING MINESOPERATING MINES
2 Large – scale Mines2 Large – scale Mines::Lepanto’s Victoria Gold MineLepanto’s Victoria Gold Mine
Philex’s Padcal Copper MinePhilex’s Padcal Copper Mine
6 Medium-scale Nickel Mines6 Medium-scale Nickel MinesRio Tuba Nickel Mine Rio Tuba Nickel Mine
Cagdianao Nickel MineCagdianao Nickel Mine
Sigbanog Project, Hinatuan MiningSigbanog Project, Hinatuan Mining
Taganito Nickel MineTaganito Nickel Mine
4 Medium-scale Chromite Mines4 Medium-scale Chromite MinesMasinloc Project of Benguet Corp.,Omasdang Project of Crau MineralsHomonhon Project of Heritage Res.
5 Medium-scale Gold Mines5 Medium-scale Gold MinesCanatuan Project of TVIAcupan Gold Operations of Benguet
Diwalwal Direct State Development Project Banahaw Gold Project, Philsaga Mining Corp.
15 Cement Plants and Quarries15 Cement Plants and Quarries
1 Polymetallic Mine – Rapu rapu mine1 Polymetallic Mine – Rapu rapu mine
2000+ Quarries and small scale mines 2000+ Quarries and small scale mines
1 Nickel Processing Plant in Palawan1 Nickel Processing Plant in Palawan 1 Copper Smelter (PASAR) in Leyte1 Copper Smelter (PASAR) in Leyte
Redondo Project of Krominco, Inc.
Berong Nickel Project of TMMBerong Nickel Project of TMM
Masara Mine, Apex/Crew Minerals
Tagana-an Project, Hinatuan Mining Tagana-an Project, Hinatuan Mining
9
Philippine Mineral Potential
MINERAL ENDOWMENT
• 3rd for gold• 4th for copper• 5th for nickel • 6th for chromite
METALLIC MINERAL RESOURCES/
RESERVES 2005
10
Philippine Mineral Potential
Construction and cement raw materials predominate
NON-METALLIC MINERAL RESOURCES/ RESERVES
2005
11
Philippine Mineral Potential
PHILIPPINESPHILIPPINESPORPHYRY COPPER PORPHYRY COPPER
BELTSBELTS
PORPHYRY COPPER PORPHYRY COPPER BELTSBELTS
Philippine Mineral Potential
Mineral Land Distribution(As % of Total Philippine Land Area)
30% or 9 Million Hectares Approximately 2% currently covered
by permits
High-Potential
Low-Medium Potential
70%
1122
4433
66
7788
9910101212
55
1111
1. Luzon Central Cordillera – Au, Cu, Fe, Mn
2. Northern Sierra Madre – Cr, Ni, Cu
3. Zambales – Cr, Ni, Co, Pt, Cu, Au
4. Vizcaya-Aurora – Cu, Au
5. Bicol – Au, Fe, Cu
6. Southern Tagalog – Cu, Au, Ni, Co
7. Central Visayas – Cu, Au, Mn
8. Samar-Eastern Mindanao – Au, Cu, Fe, Cr, Ni, Co, Pt, Mn
9. North Central Mindanao – Cr, Cu, Au
10. Zamboanga Peninsula – Au, Cu, Cr, Fe
11. Southern Mindanao – Cu, Au
12. Palawan – Cr, Ni, Co, Pt, Au, Rare Earth Elements
Potential Areas and Potential Areas and DepositsDeposits
NEAR-COAST AND OFFSHORE RESOURCES
Manganese
Magnetite
Magnetite
Magnetite
Chromite
Chromite
Chromite
Chromite
Gold
Gold
Philippines offshore area including EEZ is 2.2 million Km2
• Placer minerals including gold, chromite, magnetite, silica
Potential offshore mineral resources:
• Aggregate resources (sand & gravel)
• Decorative stones, manganese nodules/encrustrations with associated copper, gold, zinc, cobalt
• Offshore Palawan also holds resources of manganese
Global exploration expenditures bottomed in 2002 at US$1.9 billion but with better metal prices, improving investment conditions and “awakening’ of junior companies as risen to the current high of US$7.5 billion
Philippine Mineral Potential
Exploration Expenditures (1997 - 2006):
≈ US$200 million
Recent Discoveries:
• Far Southeast Copper Orebody
• Tampakan Copper-Gold Orebody
• Boyongan Gold Orebody
NICKELNICKEL• The Philippine nickel resource is the biggest in Southeast Asia• Improved technology makes low-grade lateritic ore viable
• Improving chromite prices could revive Philippine chromite mines in Zambales, Palawan, Samar, Dinagat and Zamboanga.
CHROMITECHROMITE
IRONIRON• The increasing demand for iron is reviving exploration for the commodity in the Philippines• The spatial relationship of carbonate rocks with younger intrusives in the
Philippines offers the possibility of finding new skarn deposits
LEAD and ZINCLEAD and ZINC• Ophiolitic and Early Tertiary arc terranes in the Philippines holds much
promise for deposits similar to those of Lafayette in Rapu-Rapu island.
Philippine Mineral Potential
PHILIPPINE NATIONAL MINING POLICY FOUNDATIONS
– Enshrined the principles of sustainable mining and concept of planning for mine closure/integrated mine closure planning;
– Strong focus on life of mine environmental and social responsibilities
A. Philippine Mining Act and RIRR
– Exploration Permit (EP)– Mineral Agreement (MA)
Mineral Production Sharing Agreement (MPSA)
Joint Venture Agreement Co-Production Agreement
– Financial or Technical Assistance Agreement (FTAA)
– Mineral Processing Permit (MPP)
Major Types of Mining Tenements Major Types of Mining Tenements
Exploration/Feasibility
Period
STAGE
Development
and Construction
Period
Operating Period Mine
Closure
• PRE-EXPLORATION Certificate of Satisfactory Environmental Management and Community Relations Record (CEMCRR)
• Preparation of Environmental Impact Statement (EIS) as basis for an Environmental Compliance Certificate (ECC)
Environmental Protection and Enhancement Program (EPEP) with Final Mine Rehabilitation and Decommissioning Plan (FMR/DP)
Prepare Social Development and Management Program (SDMP)
Prepare Safety and Health Program (SHP)
Implement Annual SDMP
Implement Annual SHP
Implement Annual EPEP
Establish the Contingent Liability and Rehabilitation Fund (CLRF)
Implement Final Mine Rehabilitation & Decommissioning Plan (FMR/DP)
•Decommissioning
•Rehabilitation
•Social
•Maintenance and Monitoring
POST CLOSURE - Implement Site Management Plan (SMP)
SHES Monitoring and Audit
• Environmental Work Program (EnWP)
• Safety and Health Program (integrated with the EnWP)
• Host Community Devt. (voluntary)
– Indigenous Peoples Rights Act of 1997– Local Government Code of 1991– National Integrated Protected Areas
System– Environmental Laws, Rules and
Regulations– Small Scale Mining Laws
Other Relevant Laws Affecting MiningOther Relevant Laws Affecting Mining
– Based on the policy declaration of H.E. President Arroyo in 2003;
– Product of a 10-month consultation process among the 3 key stakeholders;
– Called for the development of the Mineral Action Plan, the current industry roadmap; and
– Led to the Creation of the Mineral Development Council .
The National Policy Agenda on Revitalizing Mining in the Philippines
B. Executive Order No. 270
SOCIAL
GOVERNANCE
ENVIRONMENT
ECONOMIC
Fair and equitable sharing of benefits among the company, government and the mining communities
Adequate protection of the environment, not only before and during mining operations but even long after mining has ceased
Recognition of the rights and participation of the communities and indigenous peoples in mining operations
Competitive investment climate and adequate protection of the rights and privileges of mining investors
Objectives of EO No. 270
23 Mining Development Projects23 Mining Development Projects(Original – 2004)(Original – 2004)
11 Copper Projects11 Copper ProjectsTampakan Copper ProjectFar Southeast Copper ProjectBoyongan Copper ProjectCarmen Copper ProjectBatong Buhay Copper ProjectSan Antonio Copper Project
Amacan Copper ProjectRapu-Rapu Polymetallic Didipio Cu-Au ProjectKingking Cu-Au ProjectPadcal Expansion Project
6 Gold Projects6 Gold ProjectsItogon Gold ProjectMasbate Gold ProjectTeresa Gold Project
Diwalwal Gold ProjectSiana Gold ProjectCanatuan Au-Cu Project
5 Nickel Projects5 Nickel ProjectsMindoro Nickel ProjectPalawan HPAL Project Nonoc Nickel Project
ACT Nickel ProjectPujada Nickel Project
1 Cement Project1 Cement ProjectAkle Cement, Project
12 Copper/Copper-Gold Projects12 Copper/Copper-Gold ProjectsAmpucao Proj.(Benguet)Paco Proj.(Surigao Norte)Tabuk Proj. (Kalinga)Gambang Proj.(Benguet)
Sogod Proj. (S. Leyte)Tagpura Proj. (Compostela)Hixbar Proj. (Rapu-Rapu Is)Manat Proj. (Compostela)
Colet Proj.(Negros Occ.)Claveria Proj.(Cagayan)Papaya Proj.(N. Vizcaya)Conner Proj. (Apayao)
24 Gold Projects24 Gold ProjectsKingking Proj. (Davao Or.)Panag Proj. (Compostela)Del Gallego Proj. (Quezon)Negros Proj. (Negros Or.)Alicia Proj. (Zamboanga Sur)Kalaya-an Proj. (Surigao N.)Pana-on Proj. (Leyte)Tongonan Proj. (Leyte)Surigao Proj. (Surigao N.)Pao Proj. (Nueva Vizcaya)Road 5 M Proj. (Davao Or.)Camp 3 Proj. (Benguet)
Pantuyan Proj. (Leyte) Batoto Proj.(Compostela)Mabuhay Proj. (Surigao Norte)Kematu Proj. (South Cotabato)Archangel Proj. (Batangas)Hinonangan Proj. (S. Leyte)Labo Proj. (Camarines Norte)Nalesbitan Proj.(Camarines Norte)Cordon Proj. (Isabela)Pantingan Proj. (Bataan)Agata Proj. (Agusan del Norte)TMC Proj. (Antique-Iloilo)
3 Nickel (-PGE) Projects3 Nickel (-PGE) ProjectsAcoje Proj. (Zambales)Sta. Cruz Proj. (Zambales)Berong Proj. (Palawan)
1 Bauxite Project1 Bauxite ProjectSamar Bauxite Project, (Samar)
1 Sulfur Project1 Sulfur ProjectPamplona, Negros Oriental
41 Exploration Projects 41 Exploration Projects (Original-2004)(Original-2004)
• US $ 6.5 B - Foreign direct investments
• US $ 3.4 B - Annual sales/foreign
exchange
• US $ 61.4 M - Annual excise tax on
minerals
• US $ 432 M - Annual corporate income
tax
• 200,000 - Additional direct and
indirect
employment
Economic Potential Economic Potential
UPDATES ON THE PRIORITY MINING
PROJECTS
Mining Projects For DevelopmentMining Projects For Development
9 Copper Projects9 Copper ProjectsTampakan Copper ProjectFar Southeast Copper ProjectBoyongan Copper ProjectCarmen Copper ProjectBatong Buhay Copper Project
Amacan Copper ProjectDidipio Cu-Au ProjectKingking Cu-Au ProjectColet Copper Project
6 Gold Projects6 Gold ProjectsItogon Gold ProjectMasbate Gold ProjectMasara Gold Project
Diwalwal Gold ProjectSiana Gold ProjectCanatuan Expansion Proj
5 Nickel Projects5 Nickel ProjectsMindoro Nickel ProjectPalawan HPP Expansion Nonoc Nickel Project
ACT Nickel ProjectHallmark Nickel Project
1 Cement Project1 Cement ProjectAkle Cement, Project
STATUS PROJECT 2006 2007 2008 2009 2010 2011 REMARKS
OPERATING / EXPANSION
Palawan HPP
Rapu-Rapu Cu-Au-Zn
Canatuan Ag-Au
Teresa Gold
Sto. Tomas II Cu
Berong Nickel
Operating/Expansion
Operating
Operating/Expansion
Operating
Operating
Operating
CONSTRUCTION & DEVELOPMENT
ACT Nickel
Didipio Cu-Au
For test shipment
Pre-development
FEASIBILITY / FINANCING
Masbate Gold
Carmen Copper
King King Cu-Au
Far Southeast Cu
Itogon Gold
Tampakan Copper
Colet Copper
Siana Gold
Nonoc Nickel
Akle Cement
Final feasibility
Rehabilitation
FinancingTechReview/financing
Mine rehab/financing
Final Feasibility
Final Feasibility
Pre-Feasibility
Under negotiation
Plant site preparation
EXPLORATION Boyongan Copper
Mindoro Nickel
Hallmark Nickel
Drilling
Social Prep’n/Drilling
Drilling
FOR BIDDING Diwalwal Gold
Amacan Copper
BatongBuhay Cu-Au
Tech review/Bidding
Tech review/Bidding
Tech review/Bidding
Q4- 2007
By 2009
By 2010
By 2011
Q2 -. 2008
By 2010
Q2 -. 2008Q4 - 2008
By 2009By 2009
By 2009
By 2009
By 2009
By 2010
By 2009
By 2009
By 2010
By 2010
THE MINING INDUSTRY TO 2011
31
REPORTED AND PROJECTED INVESTMENTS (2004-2010)
139
447
108348
1,559 1,602
2,762
-
500
1,000
1,500
2,000
2,500
3,000
2004 2005 2006 2007 2008 2009 2010Year
Inve
stm
ents
(U
S$
Mil
lio
n)
Reported
32
REPORTED AND PROJECTED NEW JOBS (2004-2010)
2,0003,041 3,250
11,854
4,800
1,540
14,047
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2004 2005 2006 2007 2008 2009 2010
Year
Ne
w J
ob
s
Reported
33
ACTUAL AND PROJECTED COPPER, GOLD AND SILVER SALES ACTUAL AND PROJECTED COPPER, GOLD AND SILVER SALES VOLUME FROM EXISTING AND NEW PROJECTS (2007-2011)VOLUME FROM EXISTING AND NEW PROJECTS (2007-2011)
ACTUAL AND PROJECTED VOLUME OF SALES OF GOLD AND SILVER (2004-2011)
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2004 2005 2006 2007 2008 2009 2010 2011
YEAR
VOLU
ME
OF
SALE
S (T
ROY
OUN
CES)
Gold
Silver
Actual
ACTUAL AND PROJECTED VOLUME OF SALES OF COPPER (2004-2011)
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2004 2005 2006 2007 2008 2009 2010 2011
YEAR
VOLU
ME
OF
SALE
S (D
MT)
Actual
34
ACTUAL AND PROJECTED CHROMITE, ZINC AND NICKEL SALES ACTUAL AND PROJECTED CHROMITE, ZINC AND NICKEL SALES VOLUME FROM EXISTING AND NEW PROJECTS (2007-2011)VOLUME FROM EXISTING AND NEW PROJECTS (2007-2011)
ACTUAL AND PROJECTED VOLUME OF SALES OF CHROMITE, ZINC AND NICKEL (2004-2011)
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2004 2005 2006 2007 2008 2009 2010 2011
YEAR
VO
LU
ME
OF
SA
LE
S (D
MT
)
Chromite
Zinc
Nickel
ACTUAL AND PROJECTED VOLUME OF SALES OF NICKEL ORE (2004-2011)
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
2004 2005 2006 2007 2008 2009 2010 2011
YEAR
VOLU
ME
OF
SALE
S (D
MT)
Actual
– Revisiting of the 24 Priority Mining Projects to include new projects that have potentials of contributing to the goals of the program.
– Review of the Mineral Action Plan to track down accomplishments and to review and identify gaps/concerns that need attention.
– Preparation of an Industrialization Plan for the development of upstream and downstream industries.
Policy Reforms Policy Reforms
– Full activation of the Minerals Development Council (MDC); establishment of regional MDCs;
– Conduct of legal study by MDC on the mining moratoriums;
– Touching base with civil society groups (e.g. Bishops-Businessmen’s Conference) for stakeholder dialogues.
– Further amendments to DAO 96-40 (e.g. Increase in SDMP Allocation and Simplification of Procedures) and FTAA Fiscal Regime.
– Addressing investor’s concern on exploration/mining area availability and non-performing mining tenements.
Policy Reforms Policy Reforms
Combined with positive developments in the local scene and the so-called period of prosperity for the global minerals industry that resulted in increased exploration spending and higher demands and prices for metals, the Philippines is both bullish and cautious.
Bullish about prospects for an industry take off next year and cautious of the challenges that comes with increasing mining activities.
But in the bottom-line, the Philippines believes that, for as long as done responsibly, mining can be pro-people and pro-environment in creating wealth and improving the quality of life of the Filipinos consistent with the principles of...
Concluding Statement
www.MGB.gov.phMines and Geosciences Bureau