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How Should the Philippines Develop Its Mining Industry?

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A brief introduction of its ore resources

The unique geographical environment and geological conditions provide Philippines rich natural minerals in a relatively small land area; hence its industry plays an important role in the world's mineral resources reserves. According to the data of the Mines and Geosciences Bureau of the Philippines, calculated in terms of mineral reserves per unit area, the reserves of mineral gold rank third in the world, the fourth largest in terms of copper, the fifth in terms of nickel, and sixth in terms of chromium. Of the mines with proven reserves, there are 13 metal mines and 29 non-metal mines.

Philippine Mining

Philippine Mining

After a period of brilliant development before the 1980s, the Philippines mining industry has developed slowly in recent years. The role of mining in the national economy is far from its rich reserves. In the past ten years, the annual output value of the Philippines' mining industry accounted for 1.01% to 1.58% of the GDP; the proportion of mineral exports to the total exports of the Philippines was 1.47% to 6.38%; the proportion of the direct employment of the mining industry to the total employment of the Philippines was 0.3% to 0.6%, which mean that the multiplier effect produced by the mining industry is about 4-10. Most of the mineral products in the Philippines are exported, especially for metal minerals. The main exported county is Japan, and the remaining export regions and countries include Asia, North America, Europe and China. Mining is a stable source of foreign exchange for the Philippines' economic development.

In recent years, the Philippines government has vigorously advocated mining reforms in accordance with the needs of the country's economic development. And a mining revitalization plan was proposed to foster a prosperous and competitive modern mining system that is expected to revitalize the Philippines mining industry, hoping to attract more investment and create jobs, so that the national economy can be developed with more government revenue and less poverty.

Rich mineral resources in the Philippines

The Philippines has many world-class mineral deposits with large reserves and extensive distribution of mineral resources. They are mainly divided into six categories: precious metal ore, ferroalloy, base metal ore, fertilizer ore, industrial ore, gemstone and decorative stone. According to the needs of economic development and the constraints of mining conditions, only metal ores including gold, chromium, nickel, copper and non-metallic minerals including feldspar, limestone, marble, perlite, silica, stone, sand, salt, diorite, serpentinite, etc. are currently selectively mined.

The main metal mineral products in the Philippines are directly sold ore (ORES) and concentrate (CONCENTRATE) processed by crushing, washing, drying and classifying. Non-metallic mineral products are processed according to the requirements of different technical indicators on the market.

A Wide Variety of Minerals in the Philippines

A wide variety of minerals in the Philippines

Among the metal minerals in the Philippines, copper reserves are 4.8 billion tons, accounting for 67.5% of the total metal reserves. Gold mines exist in the form of complex ore and impact ore, with the main mining area in Baguio, Paracale, Masbate, Surigao and Masara. The total reserves of nickel are about 1.09 billion tons, accounting for 15.5% of the total metal reserves, among which, the proven reserves are 1.02 billion tons, accounting for 93.72% of the total, and the average quality range is 0.23% to 2.47%. The recoverable reserves is 56.30 million tons, accounting for 5.17%, and the quality range is 0.36% to 1.24% and the probable reserves are 12.1 million tons with the quality ranging from 0.23% to 2.27% (Note: The total reserves are the sum of proven reserves, recoverable reserves and probable reserves). Chromite mines are mainly found in the Zambales province and Dinagat Island in the Surigao del Norte province. In addition, the Philippines' bauxite resources are also very rich.

The non-metallic mineral is an important source of construction, agriculture and electricity in the Philippines. Limestone is the largest non-metallic mineral in the Philippines, with reserves of 29 billion metric tons, accounting for 57% of the total non-metallic mineral reserves, marble reserves being 8.5 billion metric tons, accounting for 16.7%. The Philippines’ coal reserves are poor in quality, mainly existed in the provinces of Surigao and Zamboanga del Norte; the phosphate mine mainly in Lligan; and the silicon in the province of Zamboanga del Norte. The world's largest magnesium mine is found near Davao.

The Philippines' mining development history

The development of the Philippines mining industry is subject to large fluctuations caused by the domestic political and economic environment, mining technology, international market, and environmental protection.

Before the 1980s, the Philippines adopted an open-door economic policy and actively attracted foreign investment. As a result, It made great achievements in economic development and was listed as a middle-income country by the World Bank in 1982. From the mid-1980s to the early 1990s, the Philippines' mining industry reached its peak. However, since the mid-1990s, due to the problems of political instability, fluctuations in the price of metal minerals of the international market, backward mining technology, shortage of funds and environmental protection, the Philippines has closed several major metal mines, making the production of metal mines plummet. When President Arroyo comes to power, he has placed great hopes on mining development, proposed a mining revitalization plan, and actively encouraged foreign investment in the development of the Philippines mining industry, which shows signs of recovery in the Philippines mining industry. 

The Development of Philippine Mining

The development of Philippine mining

Since Rodrigo Duterte is in power, several large mining companies have been closed due to environmental and other issues, but recent signs indicate that the Philippines intends to lift mine closure ban and relax the restrictions on the small mining industry. Roy Cimatu, Minister of the Department of Environment and Natural Resources (DENR) of the Philippines, replaces former Minister Regina Lopez. The major shift has made the Philippines slightly less lenient about its mining policy. Simatu has recently changed the status of the mine from permanent closure to suspension of operations.

Mining problems faced by the Philippines

The primary problem in the development of the Philippines’ mining industry is the opposition of the Philippines public, especially from the deep-rooted anti-mining sentiments of local governments, tribes and social groups. These strong oppositions have forced many foreign investors to abandon the exploration licenses they have acquired, thus seriously hampering the development of the Philippines mining industry. There are many reasons that cause this kind of situation. 

Firstly, the public misunderstands the Philippines Mining Law. The Financial and Technical Assistance Agreement in the Philippine Mining Act of 1995 stipulates that foreign investment in the Philippines mining industry is up to 100% (the general mining project can only account for 40% for foreign investment). The local tribes and social groups in the mining area strongly oppose it, which is thought to allow foreign countries to plunder the Philippines' mining resources, damage the long-term interests of the Philippines, and endanger the survival and development of the Philippines descendants. 

Secondly, some companies operate illegally, seriously damaging the living environment of local people. In addition, the casualties caused by the illegal operation have also had a great negative impact, exacerbating local anti-mining sentiment. 

Thirdly, the distribution of mining interests is distorted. Since most of the benefits arising from mining are obtained by contractors and governments at all levels, little contribution has been made to improving local living conditions. Fourthly, the local government's mistakes in mining management and the corruption of some government officials have damaged the overall image of government and caused public dissatisfaction and criticism. 

Last but not least, lack of funds is a bottleneck in the development of the mining industry in the Philippines. The turbulent social environment and poor investment environment have discouraged foreign investors from the Philippines, which has affected the entry of foreign capital into the Philippines mining industry and delayed the development of the mining industry. 

Besides, backward technology and management are difficult to adapt to the requirements of modern mining; low value-added raw ore can not be converted into high value-added mineral exports, affecting the value of the mining industry, therefore, it is difficult to obtain the best economic benefits for the Philippines.

This shows that the development of the mining industry in the Philippines not only requires policy support, but also the use of advanced and environmentally friendly mining equipment. The two can work together to promote the sustainable development of the Philippines mining industry.

Environmental Pollution

Environmental pollution

The solutions made by the Philippines government

With the increase in mining investment, the Department of Environment and Natural Resources (DENR) and the Department of Trade and Industry (DTI) have been directed by the President to set up a Mining Investment Assistance Center (MIAC). According to the Joint DENR-DTI Memorandum Circular No. 2003-02 document, the MIAC shall provide potential investors with the following: 

  1. Technical, geological, legal and investment information on potential mining investment opportunities in the country;

  2. Forms and other documents required in the application of various permits, clearances, mining agreements/contracts, etc.;

  3. Facilitation services in the access to vital information and guidance on laws and procedures in doing business in the Philippines such as investment information and advisories on the registration and availment of incentives with BOI;

  4. Technical and legal advisory and referral services on the various requirements, systems and procedures for the application, processing, evaluation and approval of mining rights;

  5. Environmental and social acceptability counseling; 

  6. Addressing issues on mining activities."[1]

The DENR also collaborates with the National Committee of the Philippines (NCIP) to coordinate the environmental and natural resources laws with the Philippine Native Human Rights Act (IPRA) and strive to create a good social and legal environment for the development of the mining industry.

Promoting Development

Promoting development

The need for advanced mining equipment

The abundant minerals in the Philippines and the infrastructure currently under construction and planned in the future make the demand for construction machinery and equipment growing, especially for mining equipment. It means that the market of mining machinery in the Philippines will be prosperous in the near future, especially in drilling, mining and much other equipment.

In order to achieve the goal of high efficiency, more and more mines are beginning to use mechanized operations to increase the mining rate and eliminate potential safety hazards, such as jaw crushers, impact crushers and cone crushers which are efficient and environmentally friendly crushing equipment. This not only ensures the personal safety of the mining workers, but also achieves efficient operation of the mine production. Therefore, in order to ensure efficient and safe mining activities to gain the support of the public, it is imperative to encourage the Philippines mining companies to achieve mechanization.

The Use of Mining Equipment

The use of mining equipment

The R&D of high-efficiency, energy-saving and environmentally-friendly equipment by mining machinery and mining machinery manufacturers has also enabled mining companies to have more choices in production and environmental protection. This means that even under the most stringent regulation of the government, companies can still choose equipment suitable for mining, achieving a win-win situation in production and environmental protection, and ultimately winning the full support of local residents and the government.

In addition, with the support of multi-disciplinary integration of computer technology and network technology, mining machinery is oriented to economic construction. Driven by market demand, in the harmonious development of human and nature, mining machinery has developed toward digitization, intelligence and ecologicalization.

Steven

Steven is a professional writer in mining industry. He is wise and virtuous with extensive knowledge about this industry. And He will be very happy if he can help you.

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