The Department of Trade and Industry is rushing the submission of a Congressional bill that details the government’s revenue-sharing scheme with the mining sector to allay the fears of local and foreign investors in the country.
“We will file as soon as the Mining Industry Coordinating Council (MICC) approves the proposed draft bill on revenue sharing. Although the provisions have been approved by the MICC in principle, we are still in the midst of crafting the list,” said Trade Secretary Gregory L. Domingo, citing the mining regulation side of the DTI, the Department of Finance, and to a certain extent, the Department of Environment and Natural Resources.
“We’re almost done with the proposed draft bill. There’s just one minor issue being debated, which I think can be decided soon. We want to submit this to Congress as soon as possible because we want to allay the anxiety of the industry. We don’t want the mining industry to be too anxious,” Domingo explained.
But the trade chief denied that the pullout and layoffs made by some mining companies in the country was due to the country’s mining regime.
He said the concerned companies made those decisions citing internal reasons.
Earlier this month, Swiss mining giant Glencore Xstrata was reported to be on the verge of pulling out of the $5.9-billion Tampakan gold-copper mining project in South Cotabato. This was revealed by its Australian partner Indophil Resources NL.
The possible divestment was said to be part of some conditions set by the Chinese government before it could approve the merger of commodities giant Glencore and mining company Xstrata.
Meanwhile, Domingo explained that the proposed structure would assure the government of a minimum share, or a percentage of the gross revenues, as well as a percentage of the net profits.
The new revenue sharing scheme will also feature a “windfall profit kicker,” which basically allows the Philippine government to secure a percentage share when a mining company benefits from “extraordinary” profits. Such an occasion may arise should metal prices spike in the global market. The government may start collecting from windfall profits once a company exceeds a certain level of returns.
But Domingo admitted that the increase in the government’s share in mining revenues is being opposed by some of the investors.