Now, the mining industry—at least the organized sector of the industry, otherwise known as “large scale” mining—is also turning to Congress for help.
Those who are active in the industry organization called CMP, or the Chamber of Mines of the Philippines, already sent word to Congress to amend RA 7076, or the small-scale mining law.
One of their proposals is to take away the authority over small-scale mining from the LGUs, the local government units, which under the law have the authority to issue all the permits, and also to regulate and supervise small mining operations.
Just how technically competent the LGUs are in dealing with, for instance, environmental issues in mining, is still anybody’s guess at this point, even as mechanized mining activities (still tagged as “small-scale”) are spreading fast.
Thanks of course to the aggressive buyers of minerals, mostly from China, who tie up with some local operators who in turn have connections in the provincial capitol or the town hall or the local warlords.
Anyway, put under the supervision of the DENR, small-scale mining operators now must go through tight scrutiny regarding environmental standards that the DENR has been imposing on large-scale miners.
Many small-scale mines, by the way, are no longer “artisan” work—the pick and shovel type of earth moving. Word goes around in the industry that small-scale mines now already use heavy machinery or even explosives.
Question: How do they clean up their mess?
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Perhaps emboldened by the entry of “small-scale” mining investors in their areas, bringing about untold wealth and fortune to some LGU officials, more and more LGUs are now seeking complete autonomy for them to regulate mining.
But there are a few LGUs that even want to impose “total ban” in their areas on all forms of mining activities, except quarrying and small-scale mining.
In other words, they just want the DENR and the “large scale” (i.e. organized) mining firms out of the picture.
On the other hand, the Aquino (part II) administration expressly supports investments in organized mining in the country. Our leader Benigno Simeon (a.k.a. BS) has been reiterating such a national policy in all sorts of forum.
And so the conflicting views in the government regarding mining activities in this country sparked the business sector into action.
The CMP, headed by Benjamin Philip Romualdez, already submitted a position paper to the Aquino (Part II) administration regarding the issue, noting that the national policy on “large-scale” seem to be at odds—to put it mildly—with the pronouncements and even the actuation at the local levels.
For instance, the provincial government of South Cotabato has passed a so-called Provincial Environment Code, which simply targeted “large-scale” mining in the province by imposing a ban on open-pit mining.
The provincial council of Zamboanga del Norte also issued an ordinance that banned open-pit mining in the province.
The provincial government of Romblon is calling for a national legislation that will declare the province a “mining-free zone.”
The supposed “ban” in South Cotabato already claimed a victim in the Tampakan gold and copper project, which actually straddles three provinces, including South Cotabato. To think, this huge investment is already in the pipeline.
Initial estimates put the investments in the Tampakan project at more than $5 billion. It is so far the single biggest direct foreign investment in the Philippines.
That is why, in its position paper submitted to the Palace, the CMP asked the government to take “deliberate and decisive action” regarding the opposing policies between the government and the LGUs. Reason: Such a conflict is bad for the economy.
In the position paper, the chamber said those in the mining industry feared that the conflict could drive away investors, who would “simply take their losses, run away and redirect their attention to more investment-friendly countries.”
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There is, however, a tax angle in the move of the CMP to amend the small scale mining law. Presidential Decree 1899, issued in the 1984 during the martial law rule, granted certain tax exemptions to small-scale mining, then defined as “manual” (i.e. pick and shovel) activity.
For instance, small-scale mining (or those mines under the LGUs) does not have to pay excise taxes, unlik large-scale operations (or those under the DENR); yet the “small-scale” mines are making a killing by the hundreds of millions of pesos. Thanks to the Chinese buyers, of course.
The Mining and Geosciences Bureau, which is under the DENR, estimated that the government can collect excise taxes from “small-scale” mining operations to the tune of about P857 million a year.
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That company much in the headlines recently—the publicly listed Philex Mining—will welcome 2012 with new president and COO named Eulalio Austin Jr., a home grown engineer in Philex who rose from the ranks since he started with the company some 28 years ago.
But here is the more interesting fact about the new top man in the company: He is an authentic member of the Kankanaey tribe of the western Mountain Province, born and raised in Benguet.
Actually Austin worked for more than 20 years in the underground tunnel operations of Philex starting in 1983. What I am saying is that the man knows the business!
As vice president of the company a couple of years ago, he got the assignment of developing the $1-billion project called “Silangan” in Surigao del Norte, targeted to start operations in 2016.
Judging by the size of the investment, I can safely that it is not a small-scale mining operation, meaning, Philex will have less problems dealing with the LGUs.