Flor G. Tarriela l October 13, 2023 l Business World
The Philippines is rich in mineral resources and is estimated have more than $1 trillion worth of mineral reserves but still undeveloped. Only about 3% of the land area is covered by mining claims or leases. In 2021, the estimated value produced for gold was at P72 billion, P90 billion for nickel, and P17 billion for copper. Mining’s contribution to the national economy was at 1.3%, very small relative to its potential. Economist Alvin Arogo, head of PNB’s Research Division, gave a “back of the envelope calculation” showing that if the $1 trillion or P56.8 trillion worth of mining reserves is correct, every 1% conversion of such reserves to mining and quarrying gross value added (GVA) is equivalent to P568 billion or roughly an additional 2.6% to the gross domestic product (GDP) growth. So, if we assume a GDP growth of 6% with 1% mining reserves conversion, the incremental 2.6% means GDP growth of 8.6%! Wow!
The first International Mining Conference and Exhibition after the pandemic was held on Sept. 19-20 at EDSA Shangri-La with the theme “Seeing Green: Shaping a Sustainable Minerals Development Industry.” Keynote speakers were Environment Secretary Maria Antonia Loyzaga, who was ably represented by licensed geologist Undersecretary Carlos David, and Trade Secretary Fred Pascual. Both said the government supports the mining industry as a key driver for the Philippines’ growth. Many relevant and updated topics were discussed by mining experts, such as the outlook for the industry, opportunities, and leveraging environment, social and governance, among others.
Australian Ambassador Hae Kyong Yu saw for herself first-hand how small towns were sustained by mining, such as the construction of roads, schools, hospitals, the improved skills of people, and the upliftment of their lives. She was enthusiastic about the strategic partnership between Australia and the Philippines on mining. Canadian Ambassador David Hartman also talked about their unwavering support for the mining sector.
Eon President Malyn Molina expounded on the importance of communications and perceptions. in overcoming negative sentiments against mining. People associate mining with destruction caused by climate change, with the industry’s positive contributions falling behind in terms of awareness. Nickel Asia’s Sustainability Officer Jose Baylon passionately talked about the critics, challenges and misconceptions faced by the industry. He gave a practical solution in opening the mines to tours, especially to younger generations, saying that “seeing is believing.”
Have you experienced renovating or constructing a new house? It’s like a junkyard and is unsightly while construction is ongoing. But when finished, it is nice and serves a purpose. Mining is a “temporary junkyard” while extraction is in progress. Don’t limit mining to only the time of extraction. Mining is not permanent land use. After extracting the minerals, the land can be a repurposed area — a park, forest, or botanical garden, among others. We need to see the complete picture and not just a partial view.
To allay fears, the Philippine’s Mining Law, Republic Act 7942 passed in 1995 with its environment and social programs comparable to those in developed countries. There are now enough safeguards and rules to ensure responsible mining and environmental protection. Implementation is key.
Finance Assistant Secretary Karlo Adriano presented the government’s mining tax reforms. He concluded that the government is open to negotiation. Thus, Chamber of Mines President Mike Toledo refrained from asking any more questions. Former Ambassador Delia Albert of DIWATA (Women in Resource Development) found “negotiation” as the most welcome word in the conference. She hopes that dialogue with the government can go beyond the fiscal regime and include regular sessions on current and anticipated issues.
The mining scenario reminds me of the Parable of the Talents. The master gave talents to his three servants to take care of. The third servant, being fearful, hid the talent and returned the talent as is. The two others used the talents and grew them, and the master was pleased and gave them more talents.
Will the Philippines keep its $1-trillion mineral resources hidden under the ground? Finance Secretary Ben Diokno assured that “the Marcos administration commits to create an enabling environment for mining to flourish in the country.” The government looks serious about mining now. The Tampakan project in Cotabato of Sagittarius Mines finally got regulatory approvals and is expected to be operational by 2026.
Let’s not waste the gifts God has blessed us with. Let’s mine our natural resources responsibly and uplift the lives of our people. God is good indeed!
*** Flor G. Tarriela is former PNB chairman. She is lead independent director of Nickel Asia, director of LTG and FINEX. A gardener and an environmentalist, she founded Flors’ Garden in Antipolo which practices natural farming technology.