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Presentation on theme: "PROMOTING A RESPONSIBLE AND SUSTAINABLE MINERALS INDUSTRY"— Presentation transcript:

HORACIO C. RAMOS Director Mines and Geosciences Bureau Department of Environment and Natural Resources Republic of the Philippines Mining Forum Frankfurt, Germany June 28, 2007

2 Some Key Dates in Philippine Mining
1974: Parity Rights expired; “Filipinization” of Philippine mining operations; 70’s considered as the “boom years” 1986/87: People Power; Freedom Constitution; general lack of exploration activities. 1991: Enactment of Local Government Code providing for local autonomy and wealth sharing from mining. 1995: Passage by Congress of the Philippine Mining Act of 1995 (RA7942); initial foreign investors interest; rise in environmental activism. 1996/97: Marcopper incident; challenge to the Constitutionality of the Mining Act; enactment of the Indigenous Peoples Rights Act. 2003: Start of Revitalization Program for the Philippine Minerals Industry; renewed investor interest. 2004/05: Affirmation by the Philippine Supreme Court of the Constitutionality of the Mining Act. 2008: Start of a new mining boom?

3 Mining Industry Indicators (2006)
3 PhP68.4 billion in 2006; up by 36.25% from 2005

4 Mining Industry Indicators (2006)
4 Highest in early to mid-70’s; 24.56% in 1973 Gradual growth since 2003; 4.46% for 2006

5 Mining Industry Indicators (2006)
5 Preliminary figure for 2006 is PhP4.9 billion 1992: The excise tax for metallic minerals was reduced from 5% to 2% of the gross value.

6 Mining Industry Indicators (2006)
2006: 141,000 directly employed or 0.43% of total labor force

7 Mining Industry Indicators (2006)
7 2006: PhP59.7 billion at current prices

8 OPERATING MINES 1 Polymetallic Mine – Rapu rapu mine
2 Large – scale Mines: Lepanto’s Victoria Gold Mine Philex’s Padcal Copper Mine 4 Medium-scale Chromite Mines Masinloc Project of Benguet Corp., Omasdang Project of Crau Minerals Homonhon Project of Heritage Res. Redondo Project of Krominco, Inc. 6 Medium-scale Nickel Mines Rio Tuba Nickel Mine Taganito Nickel Mine Cagdianao Nickel Mine Sigbanog Project, Hinatuan Mining Tagana-an Project, Hinatuan Mining Berong Nickel Project of TMM 5 Medium-scale Gold Mines Canatuan Project of TVI Acupan Gold Operations of Benguet Diwalwal Direct State Development Project Banahaw Gold Project, Philsaga Mining Corp. Masara Mine, Apex/Crew Minerals 15 Cement Plants and Quarries 1 Nickel Processing Plant in Palawan 1 Copper Smelter (PASAR) in Leyte 8 2000+ Quarries and small scale mines

9 Philippine Mineral Potential METALLIC MINERAL RESOURCES/ RESERVES 2005
MINERAL ENDOWMENT 3rd for gold 4th for copper 5th for nickel 6th for chromite 9

10 Philippine Mineral Potential
Construction and cement raw materials predominate NON-METALLIC MINERAL RESOURCES/ RESERVES 2005 10

11 Philippine Mineral Potential

12 Philippine Mineral Potential
Mineral Land Distribution (As % of Total Philippine Land Area) 30% or 9 Million Hectares Approximately 2% currently covered by permits High-Potential Low-Medium Potential 70%

13 Potential Areas and Deposits
1 2 4 3 6 7 8 9 10 12 5 11 Luzon Central Cordillera – Au, Cu, Fe, Mn Northern Sierra Madre – Cr, Ni, Cu Zambales – Cr, Ni, Co, Pt, Cu, Au Vizcaya-Aurora – Cu, Au Bicol – Au, Fe, Cu Southern Tagalog – Cu, Au, Ni, Co Central Visayas – Cu, Au, Mn Samar-Eastern Mindanao – Au, Cu, Fe, Cr, Ni, Co, Pt, Mn North Central Mindanao – Cr, Cu, Au Zamboanga Peninsula – Au, Cu, Cr, Fe Southern Mindanao – Cu, Au Palawan – Cr, Ni, Co, Pt, Au, Rare Earth Elements

Magnetite Philippines offshore area including EEZ is 2.2 million Km2 Gold Chromite Potential offshore mineral resources: Manganese Placer minerals including gold, chromite, magnetite, silica Offshore Palawan also holds resources of manganese Aggregate resources (sand & gravel) Decorative stones, manganese nodules/encrustrations with associated copper, gold, zinc, cobalt

15 Philippine Mineral Potential
Global exploration expenditures bottomed in 2002 at US$1.9 billion but with better metal prices, improving investment conditions and “awakening’ of junior companies as risen to the current high of US$7.5 billion Exploration Expenditures ( ): ≈ US$200 million Recent Discoveries: Far Southeast Copper Orebody Tampakan Copper-Gold Orebody Boyongan Gold Orebody

16 Philippine Mineral Potential
NICKEL The Philippine nickel resource is the biggest in Southeast Asia Improved technology makes low-grade lateritic ore viable Improving chromite prices could revive Philippine chromite mines in Zambales, Palawan, Samar, Dinagat and Zamboanga. CHROMITE IRON The increasing demand for iron is reviving exploration for the commodity in the Philippines The spatial relationship of carbonate rocks with younger intrusives in the Philippines offers the possibility of finding new skarn deposits LEAD and ZINC Ophiolitic and Early Tertiary arc terranes in the Philippines holds much promise for deposits similar to those of Lafayette in Rapu-Rapu island.


18 A. Philippine Mining Act and RIRR
Enshrined the principles of sustainable mining and concept of planning for mine closure/integrated mine closure planning; Strong focus on life of mine environmental and social responsibilities

19 Major Types of Mining Tenements
Exploration Permit (EP) Mineral Agreement (MA) Mineral Production Sharing Agreement (MPSA) Joint Venture Agreement Co-Production Agreement Financial or Technical Assistance Agreement (FTAA) Mineral Processing Permit (MPP)

20 SHES Monitoring and Audit
SAFETY AND HEALTH, ENVIRONMENTAL AND SOCIAL REQUIREMENTS PRE-EXPLORATION Certificate of Satisfactory Environmental Management and Community Relations Record (CEMCRR) Prepare Social Development and Management Program (SDMP) Implement Annual SDMP Implement Final Mine Rehabilitation & Decommissioning Plan (FMR/DP) Decommissioning Rehabilitation Social Maintenance and Monitoring Prepare Safety and Health Program (SHP) Implement Annual SHP Environmental Work Program (EnWP) Safety and Health Program (integrated with the EnWP) Host Community Devt. (voluntary) Environmental Protection and Enhancement Program (EPEP) with Final Mine Rehabilitation and Decommissioning Plan (FMR/DP) Implement Annual EPEP Establish the Contingent Liability and Rehabilitation Fund (CLRF) Preparation of Environmental Impact Statement (EIS) as basis for an Environmental Compliance Certificate (ECC) POST CLOSURE - Implement Site Management Plan (SMP) SHES Monitoring and Audit Exploration/Feasibility Period STAGE Development and Construction Operating Period Mine Closure

21 Other Relevant Laws Affecting Mining
Indigenous Peoples Rights Act of 1997 Local Government Code of 1991 National Integrated Protected Areas System Environmental Laws, Rules and Regulations Small Scale Mining Laws

22 The National Policy Agenda on Revitalizing Mining in the Philippines
B. Executive Order No. 270 The National Policy Agenda on Revitalizing Mining in the Philippines Based on the policy declaration of H.E. President Arroyo in 2003; Product of a 10-month consultation process among the 3 key stakeholders; Called for the development of the Mineral Action Plan, the current industry roadmap; and Led to the Creation of the Mineral Development Council .

23 Objectives of EO No. 270 ECONOMIC
Fair and equitable sharing of benefits among the company, government and the mining communities SOCIAL Recognition of the rights and participation of the communities and indigenous peoples in mining operations ECONOMIC ENVIRONMENT GOVERNANCE Adequate protection of the environment, not only before and during mining operations but even long after mining has ceased Competitive investment climate and adequate protection of the rights and privileges of mining investors

24 23 Mining Development Projects
(Original – 2004) 11 Copper Projects Tampakan Copper Project Far Southeast Copper Project Boyongan Copper Project Carmen Copper Project Batong Buhay Copper Project San Antonio Copper Project Amacan Copper Project Rapu-Rapu Polymetallic Didipio Cu-Au Project Kingking Cu-Au Project Padcal Expansion Project 6 Gold Projects Itogon Gold Project Masbate Gold Project Teresa Gold Project Diwalwal Gold Project Siana Gold Project Canatuan Au-Cu Project 5 Nickel Projects Mindoro Nickel Project Palawan HPAL Project Nonoc Nickel Project ACT Nickel Project Pujada Nickel Project 1 Cement Project Akle Cement, Project

25 41 Exploration Projects 12 Copper/Copper-Gold Projects
(Original-2004) 12 Copper/Copper-Gold Projects Ampucao Proj.(Benguet) Paco Proj.(Surigao Norte) Tabuk Proj. (Kalinga) Gambang Proj.(Benguet) Sogod Proj. (S. Leyte) Tagpura Proj. (Compostela) Hixbar Proj. (Rapu-Rapu Is) Manat Proj. (Compostela) Colet Proj.(Negros Occ.) Claveria Proj.(Cagayan) Papaya Proj.(N. Vizcaya) Conner Proj. (Apayao) 24 Gold Projects Kingking Proj. (Davao Or.) Panag Proj. (Compostela) Del Gallego Proj. (Quezon) Negros Proj. (Negros Or.) Alicia Proj. (Zamboanga Sur) Kalaya-an Proj. (Surigao N.) Pana-on Proj. (Leyte) Tongonan Proj. (Leyte) Surigao Proj. (Surigao N.) Pao Proj. (Nueva Vizcaya) Road 5 M Proj. (Davao Or.) Camp 3 Proj. (Benguet) Pantuyan Proj. (Leyte) Batoto Proj.(Compostela) Mabuhay Proj. (Surigao Norte) Kematu Proj. (South Cotabato) Archangel Proj. (Batangas) Hinonangan Proj. (S. Leyte) Labo Proj. (Camarines Norte) Nalesbitan Proj.(Camarines Norte) Cordon Proj. (Isabela) Pantingan Proj. (Bataan) Agata Proj. (Agusan del Norte) TMC Proj. (Antique-Iloilo) 3 Nickel (-PGE) Projects Acoje Proj. (Zambales) Sta. Cruz Proj. (Zambales) Berong Proj. (Palawan) 1 Bauxite Project Samar Bauxite Project, (Samar) 1 Sulfur Project Pamplona, Negros Oriental

26 Economic Potential US $ 6.5 B - Foreign direct investments
US $ B - Annual sales/foreign exchange US $ 61.4 M - Annual excise tax on minerals US $ 432 M - Annual corporate income tax 200, Additional direct and indirect employment


28 Mining Projects For Development
9 Copper Projects Tampakan Copper Project Far Southeast Copper Project Boyongan Copper Project Carmen Copper Project Batong Buhay Copper Project Amacan Copper Project Didipio Cu-Au Project Kingking Cu-Au Project Colet Copper Project 6 Gold Projects Itogon Gold Project Masbate Gold Project Masara Gold Project Diwalwal Gold Project Siana Gold Project Canatuan Expansion Proj 5 Nickel Projects Mindoro Nickel Project Palawan HPP Expansion Nonoc Nickel Project ACT Nickel Project Hallmark Nickel Project 1 Cement Project Akle Cement, Project

29 STATUS PROJECT 2006 2007 2008 2009 2010 2011 REMARKS
OPERATING / EXPANSION Palawan HPP Rapu-Rapu Cu-Au-Zn Canatuan Ag-Au Teresa Gold Sto. Tomas II Cu Berong Nickel Operating/Expansion Operating CONSTRUCTION & DEVELOPMENT ACT Nickel Didipio Cu-Au For test shipment Pre-development FEASIBILITY / FINANCING Masbate Gold Carmen Copper King King Cu-Au Far Southeast Cu Itogon Gold Tampakan Copper Colet Copper Siana Gold Nonoc Nickel Akle Cement Final feasibility Rehabilitation Financing TechReview/financing Mine rehab/financing Final Feasibility Pre-Feasibility Under negotiation Plant site preparation EXPLORATION Boyongan Copper Mindoro Nickel Hallmark Nickel Drilling Social Prep’n/Drilling FOR BIDDING Diwalwal Gold Amacan Copper BatongBuhay Cu-Au Tech review/Bidding Q By 2009 By 2010 By 2011 Q Q


31 Reported 31

32 Reported 32



35 Actual

36 Policy Reforms Revisiting of the 24 Priority Mining Projects to include new projects that have potentials of contributing to the goals of the program. Review of the Mineral Action Plan to track down accomplishments and to review and identify gaps/concerns that need attention. Preparation of an Industrialization Plan for the development of upstream and downstream industries.

37 Policy Reforms Full activation of the Minerals Development Council (MDC); establishment of regional MDCs; Conduct of legal study by MDC on the mining moratoriums; Touching base with civil society groups (e.g. Bishops-Businessmen’s Conference) for stakeholder dialogues. Further amendments to DAO (e.g. Increase in SDMP Allocation and Simplification of Procedures) and FTAA Fiscal Regime. Addressing investor’s concern on exploration/mining area availability and non-performing mining tenements.

38 Concluding Statement Combined with positive developments in the local scene and the so-called period of prosperity for the global minerals industry that resulted in increased exploration spending and higher demands and prices for metals, the Philippines is both bullish and cautious. Bullish about prospects for an industry take off next year and cautious of the challenges that comes with increasing mining activities. But in the bottom-line, the Philippines believes that, for as long as done responsibly, mining can be pro-people and pro-environment in creating wealth and improving the quality of life of the Filipinos consistent with the principles of...

39 Mines and Geosciences Bureau
Maraming salamat po! Mines and Geosciences Bureau


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