Gov’t mining take dips 18% | Inquirer Business

Gov’t mining take dips 18%

/ 02:54 AM September 27, 2013

The government’s take on mining in terms of royalties fell by 18.4 percent year on year in the first semester to P577.55 million, according to the Mines and Geosciences Bureau (MGB).

Royalties that mining companies paid during the period fell much short of the P707.4 million collected in the first six months of 2012.

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The companies operate in government-declared mineral reservations. The mines are located in Zambales, Surigao del Norte, Surigao del Sur and Dinagat Islands.

MGB director Leo L. Jasareno said the decrease may be attributed to the lower price of nickel, which is used in making stainless steel.

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“Nickel prices have been under significant downward pressure as the market is suffering from weak demand (and) abundant supply,” FastMarket Ltd. said in its report, Nickel Analysis and Forecast for the second quarter of 2013.

“Investment sentiment is negative towards the outlook—even at these already low prices,” the London-based market research firm added.

The report shows that the average price of refined nickel was estimated at $17,535 per ton in 2012, falling from the $22,853 recorded in 2011.

The forecast for 2013 is for an even lower average of $15,565 per ton of nickel.

Jasareno said the full-year government take on mining royalties is expected to settle at P1.17 billion, representing a 25.5-percent drop from the P1.57 billion registered in 2012.

In the first half of this year, royalties represented 5 percent of the value of gross output of minerals.

Under the Mining Act, a tenth of the royalties collected is earmarked to the MGB for “special projects and other administrative expenses related to the exploration and development of other mineral reservations.”

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Of the remainder, three-fifths goes to the national treasury and two-fifths to local government units that host mining projects.

The Philippines is currently working on gaining full compliance with global mining standards promoted by the Extractive Industry Transparency Initiative.

The Norway-based policy institute advocates a global standard that is meant to ensure transparency of revenues—in the form of taxes, royalties, signature bonuses and other payments—from natural resources, particularly petroleum and minerals.

Last June, Environment Secretary Ramon J. Paje said the country may be compliant with the EITI standard by 2015.

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TAGS: Earnings, Mining and quarrying, mining take, Philippines, royalties
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