Duterte lifts nine-year ban on new mining deals

President Rodrigo Duterte has lifted a moratorium on new mineral agreements, allowing the government to enter into new mineral agreements, provided that these would comply with the country’s mining laws, Malacanang said.

The Chamber of Mines of the Philippines, the umbrella organization of mining, mineral quarrying and processing companies in the country, cheered the lifting of the nine-year ban on new mining projects through Executive Order No. 130 signed on April 14.

“A major roadblock to the huge potential of the Philippine mining industry to contribute to socio-economic growth has been removed,” COMP said in a statement.

“We welcome the lifting of the moratorium on new mining projects – in place for nearly nine years – in this time of great national difficulty as a result of the COVID-19 pandemic,” the miners group said.

In the House of Representatives, the chair of the committee on ways and means said Duterte’s order lifting the nine-year ban on granting new mining agreements to maximize government revenues and stir economic growth was a “welcome news.”

Albay Rep. Joey Sarte Salceda said the establishment of new mining agreements will pave the way for the country’s bid for competitiveness in the electric vehicle and renewable energy battery sector, as well as the country’s long-term economic recovery.

“We are currently in a mineral boom, and metallic resources that we have in abundance, like gold and silver, are at elevated prices. Because there has been much monetary expansion all over the world, investors want to hedge their bets on some store of value. Gold has been the first choice for that, historically.”

According to EO 130, “The Government may enter into new mineral agreements, subject to compliance with the Philippine Mining Act of 1995 and other applicable laws, rules, and regulations.

“The mining industry can support various government projects such as the Build, Build, Build Program by providing raw materials for the construction and development of other countries; and the Balik

Probinsya, Bagong Pag-asa Program, by increasing employment opportunities in remote rural areas where there are mining activities thereby stimulating countryside development,” the EO said.

The moratorium had been imposed while the government worked on legislation to boost the state’s share of mining revenues in one of the world’s top producers of nickel, copper and gold.

Under a tax reform law that took effect in 2018, the excise tax on minerals, mineral products and quarry resources has been doubled to 4 percent.

The executive order also  directed the Department of Environment and Natural Resources to formulate the terms and conditions in the new mineral agreements in order to maximise government revenues.

The DENR  is also tasked with strictly implementing rules on mine safety and environmental policies with the lifting of the ban.

Duterte permitted new mining deals, believing this will usher “significant economic benefits” to the country.

“Mining projects that will be allowed to operate following this development will provide additional government revenues in the form of taxes and fees, royalty fees, and increase in export value, as well as employment opportunities for thousands of Filipinos, especially those in rural areas,” COMP said.

Meanwhile, the Philippine Nickel Industry Association welcomed the amendment of Section 4 of the Executive Order 79, S. 2012 and appreciated the government’s recognition of the industry’s role in economic recovery and development.

“PNIA has always maintained the industry’s contribution to countryside development by providing employment opportunities and livelihood, and ensuring the sustainability of our host communities.

We remain steadfast in our thrust to adhere to the highest safety standards in our operations and to deliver beyond compliance on environmental safety and protection.”

Given the President’s order, Salceda said the Philippines should now develop a plan to aggressively play a role in developing inputs to electric vehicles using its mineral resources.

“In the past, renewable energy was not always relied upon because of fluctuations in supply. When there’s no wind, there is little wind-powered energy supply. Solar energy requires consistent sunlight, and so on,” he added.

With powerful battery technology, driven by nickel and cobalt—another Philippine product—renewable energy can be stored better, so that fluctuations are managed, the lawmaker said.

“In other words, we now have the power and the prospects to create millions of jobs in renewable energy, battery manufacturing, sustainable mining, and related sectors. This will be a key driver of economic recovery post-COVID, but we have to be very wise with our policies,” Salceda said.

Over the next 10 years, the House leader added, some 1.3 million jobs await the country in nickel-related industries.

“The world appears to see that this is the future. Top nickel buyer and electric vehicle manufacturer Tesla is already larger in market cap than all other major car manufacturers combined. Chinese electric vehicle manufacturers are also rising. Nickel will be very big, and as one of the world’s largest producers of nickel, we will be very important, if we will be wise,” he said.

Salceda added the country “can become a global power in renewable energy and in the electric vehicle supply chain, but only if it makes the right policy moves.”