Mining sector frets over declining investments

Mining investments have fallen far short of forecasts, raising grave concerns over the sector’s future among mining executives.

The Mines and Geosciences Bureau (MGB) recorded a total of $693 million in mining investments in 2014, 76 percent short of its original projection of $3 billion.

“We need to help overcome this declining trend,” said Benjamin Philip Romualdez, Chamber of Mines of the Philippines (COMP) president, in his opening speech Tuesday at the Mining Philippines 2015 Conference & Exhibition.

“The Philippines is lagging behind its Asean neighbors in terms of foreign direct investments. Had the big-ticket (mining) projects in the pipeline pushed through, we would have obtained almost $20 billion in investments, and thousands of people would have been employed, with more businesses established to meet the needs of these new mines,” Romualdez added.

The huge decline in mining investments was attributed to President Aquino issuance of Executive Order 79, which forbids the signing of new mineral agreements until a new mining revenue sharing scheme is legislated.

Romualdez said the last five years have not been encouraging for the country’s mining industry.

“Yes, we continued with our respective company activities but beyond that, there were no significant industry news except for the operation of Nickel Asia’s second HPAL (high pressure acid leach) project,” he said.

While mining permit issuances are on hold, the government is mulling over the possibility of increase mining taxes by as much as 71 percent, the highest among Asean countries.

“On the global scene, with Europe still struggling to recover from the debt crisis and China’s economic slowdown affecting demand for commodities, the prices of copper, gold and nickel have been steadily going down in the last two years. There are forecasts that prices will rise in 2019 but we only hope this will come soonest,” Romualdez said.

The elections next year provide some optimism, he said.

“We hope to have a more pragmatic vision and plan for the mining industry and a doable action plan,” he said.