Philippines missed ’11 mining investments goal
The Philippines missed its mining investment target for 2011 due to the deferred development of major projects, but mineral sales grew as existing mines continued to be productive, according to data from the Mines and Geosciences Bureau (MGB).
The government had projected mining investments to reach $1.44 billion in 2011, and most of the targeted investments were to come from ongoing development of the Surigao Sumitomo HPAL Project, Didipio copper-gold project, Siana gold project and the Runruno gold project.
However, actual investments reached only $618.5 million.
Environment Secretary Ramon J.P. Paje said in a phone interview that the MGB target for mining investments was actually “conservative” given that it was based on expected development and expansion works for ongoing projects.
Paje noted that a big chunk of the missed investments (of about $600 million) would have come from the construction work for the Sumitomo HPAL project and less than $200 million was spent.
It may be recalled that the nickel processing plant, as well as nearby facilities of other mining companies, in Surigao del Norte was attacked by armed insurgents last year. Structures were burned and equipments were damaged.
“It’s understandable that the investor would have needed to rehabilitate the damaged structures, which may have deferred their construction works,” Paje said.
Paje also disputed comments from some sectors that the government is taking too long in releasing its final mining policy directions and that this is making miners invest outside the Philippines or at least more cautious in their local investments.
The ongoing moratorium on new mining applications, which will be lifted when the policy directions are out, coupled with the intense public scrutiny of mining and uncertainties presented by local government ordinances against mining in general, and the open pit method, in particular, were also cited as factors for lukewarm interest in mining investments.
“It’s apparent from the figures that the contraction in investments came from existing projects, which means it’s not really the mining policy that caused the drop,” Paje said.
Gross mineral sales, grew, reaching $3.51 billion from $3.2 billion in 2010, according to MGB data.
Asked whether mining investments were affected by the moratorium on new exploration, MGB director Leo L. Jasareno, in a phone interview, said new exploration works could have boosted mining investments “a little.”
Looking ahead, Paje and Jasareno both said mining investments are expected to “stabilize” starting this year, although they did not give figures.
Also, MGB projects mining output to increase for “most minerals.” However, Jasareno said, gold production could go down.
“We have reported earlier that gold sales of small scale miners to the Bangko Sentral ng Pilipinas went down in 2011 as the government started collecting excise tax and withholding taxes. This may spill over to 2012,” Jasareno said.
Gold production may reach 756,482 ounces this year from a little over 1 million ounces in 2011.
Copper concentrate production is expected to reach 82,935 metric tons this 2012 from 63,834 metric tons. Silver output may reach 1.47 million ounces from a little over 1.46 million ounces and zinc concentrates may grow to 24,874 dry metric tons (DMT) from 18,170 DMT
Nickel ore production is expected to increase to almost 20.83 million DMT from a little over 20.29 million. Mixed nickel sulphides may shrink to 23,800 DMT in production from 38,798 DMT. Cobalt concentrate production is expected to start in 2012 with 1,552 DMT from zero. Chromite output may also shrink to 280,000 from 40,437 DMT and iron ore output may surge to 1.1 million DMT from 126,177 DMT.