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HORACIO C. RAMOS Director Mines and Geosciences Bureau Department of Environment and Natural Resources Republic of the Philippines PROMOTING A RESPONSIBLE.

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Presentation on theme: "HORACIO C. RAMOS Director Mines and Geosciences Bureau Department of Environment and Natural Resources Republic of the Philippines PROMOTING A RESPONSIBLE."— Presentation transcript:

1 HORACIO C. RAMOS Director Mines and Geosciences Bureau Department of Environment and Natural Resources Republic of the Philippines PROMOTING A RESPONSIBLE AND SUSTAINABLE MINERALS INDUSTRY Mining Forum Frankfurt, Germany June 28, 2007

2 Some Key Dates in Philippine Mining 1974: Parity Rights expired; Filipinization of Philippine mining operations; 70s 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- 70s; 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) : PhP59.7 billion at current prices

8 8 OPERATING MINES 2 Large – scale Mines: Lepantos Victoria Gold Mine Philexs Padcal Copper Mine 6 Medium-scale Nickel Mines Rio Tuba Nickel Mine Cagdianao Nickel Mine Sigbanog Project, Hinatuan Mining Taganito Nickel Mine 4 Medium-scale Chromite Mines Masinloc Project of Benguet Corp., Omasdang Project of Crau Minerals Homonhon Project of Heritage Res. 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. 15 Cement Plants and Quarries 1 Polymetallic Mine – Rapu rapu mine Quarries and small scale mines 1 Nickel Processing Plant in Palawan 1 Nickel Processing Plant in Palawan 1 Copper Smelter (PASAR) in Leyte 1 Copper Smelter (PASAR) in Leyte Redondo Project of Krominco, Inc. Berong Nickel Project of TMM Berong Nickel Project of TMM Masara Mine, Apex/Crew Minerals Tagana-an Project, Hinatuan Mining

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

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

11 11 Philippine Mineral Potential PHILIPPINES PORPHYRY COPPER BELTS BELTS

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

14 NEAR-COAST AND OFFSHORE RESOURCES Manganese Magnetite Chromite Gold Philippines offshore area including EEZ is 2.2 million Km 2 Placer minerals including gold, chromite, magnetite, silica Potential offshore mineral resources: Aggregate resources (sand & gravel) Decorative stones, manganese nodules/encrustrations with associated copper, gold, zinc, cobalt Offshore Palawan also holds resources of manganese

15 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 Philippine Mineral Potential Exploration Expenditures ( ): US$200 million Recent Discoveries: Far Southeast Copper Orebody Tampakan Copper-Gold Orebody Boyongan Gold Orebody

16 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. Philippine Mineral Potential

17 PHILIPPINE NATIONAL MINING POLICY FOUNDATIONS

18 –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 A. Philippine Mining Act and RIRR

19 –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) Major Types of Mining Tenements

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

21 –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 Other Relevant Laws Affecting Mining

22 –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. The National Policy Agenda on Revitalizing Mining in the Philippines B. Executive Order No. 270

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

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 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 41 Exploration Projects (Original-2004)

26 US $ 6.5 B -Foreign direct investments US $ 3.4 B -Annual sales/foreign exchange US $ 61.4 M-Annual excise tax on minerals US $ 432 M -Annual corporate income tax 200,000 - Additional direct and indirect employment Economic Potential

27 UPDATES ON THE PRIORITY MINING PROJECTS

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 STATUSPROJECT REMARKS OPERATING / EXPANSION Palawan HPP Rapu-Rapu Cu-Au-Zn Canatuan Ag-Au Teresa Gold Sto. Tomas II Cu Berong Nickel Operating/Expansion Operating 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 EXPLORATIONBoyongan Copper Mindoro Nickel Hallmark Nickel Drilling Social Prepn/Drilling Drilling FOR BIDDINGDiwalwal Gold Amacan Copper BatongBuhay Cu-Au Tech review/Bidding Q By 2009 By 2010 By 2011 Q By 2010 Q Q By 2009 By 2010 By 2009 By 2010

30 THE MINING INDUSTRY TO 2011

31 31 Reported

32 32 Reported

33 33 ACTUAL AND PROJECTED COPPER, GOLD AND SILVER SALES VOLUME FROM EXISTING AND NEW PROJECTS ( ) Actual

34 34 ACTUAL AND PROJECTED CHROMITE, ZINC AND NICKEL SALES VOLUME FROM EXISTING AND NEW PROJECTS ( )

35 Actual

36 –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. Policy Reforms

37 –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- Businessmens Conference) for stakeholder dialogues. –Further amendments to DAO (e.g. Increase in SDMP Allocation and Simplification of Procedures) and FTAA Fiscal Regime. –Addressing investors concern on exploration/mining area availability and non-performing mining tenements. Policy Reforms

38 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... Concluding Statement

39 Mines and Geosciences Bureau


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