Philippines looking to revamp mining rules in latest example of resource nationalism
The Philippines is taking a cue from South Africa, Australia and Zambia, all recent examples of government attempts to extract more revenues from their mining sectors and add more controls.
Bloomberg reports that the Asian archipelago is looking at a major revamp of its mining sector that could include reviewing resource contracts, tightening rules and cutting tax breaks:
President Benigno Aquino is proposing the nation introduce competitive bidding for mining rights, widen a ban on the activity to more areas, and boost state revenue from the industry, according to a draft executive order obtained by Bloomberg News. The eight-page document, which was sent by Aquino’s office to various departments for feedback, was confirmed by Finance Secretary Cesar Purisima.
In similar rhetoric to Michael Sata, the recently elected president of Zambia, Aquino is quoted saying “Mining should be done in a manner that doesn’t destroy the environment, in a way that benefits are properly shared between the companies and the country,” Purisima said in an interview in Manila Feb. 10. “The revenue that the government shares from mining must be increased.”
Companies that could be hurt by the new rules include Xstrata, whose $5.9 billion Tampakan copper-gold project would be the largest in Southeast Asia; and OceanGold Corp., an Australian gold producer developing the $185 million Didipio mine in northern Philippines.
A 2004 court ruling supported foreign investment in mining by allowing "overseas investors to skirt a constitutional ban on owning the country’s mining companies, easing foreign access to untapped mineral wealth estimated to be worth $1 trillion," Bloomberg reported.
The Joint Foreign Chambers condemned the proposed changes in a strongly-worded statement:
“Institutionalizing and implementing reforms in the Philippine mining sector, providing policies and guidelines therefore, and for other purposes,” would significantly alter and damage the mining investment climate in the Philippines, reported BusinessMirror, the Philippines business daily:
The JFC said the draft EO has the potential of becoming the death knell for the Philippine mining industry.