Asteria Lending Inc. 14th Floor, World Center Building, 330 Sen Gil Puyat Ave, Makati, Philippines
We’re Open: Mondays – Fridays
Office Hours: 9:00 am – 7:00 pm
Email: [email protected]
Placer and lode gold deposits are found throughout the country, the districts of Baguio and Paracale in Luzon and Mascara, Surigao and Masbate in Mindanao are the principal producers of gold.
Benguet is the first and the oldest mining company established in 1903. Extensive mining of gold and nickel is done at the Acupan which started in 1927.
In 1982, the attention of international community was focused on the town of Hinobaan when gold nuggets were found in its river, which aroused the interest of people and hundreds of miles were dug all over by miners from the Philippines and neighbouring Indonesia and Malaysia.
Today, Philippines sits on the world’s second-largest gold deposits, and applications from foreign mining firms are piling up to tap that plus a list of other metals that just sit under the ground now. Mining made up only about 0.72 of the impoverished Southeast Asian country’s economy in 2012 as gold production fell back 50% to 15,762 tons that year. Access to this Philippine $1.4 trillion mining sector, also rich in copper and nickel, has been mired since the 1980s in klutzy laws, environmental battles and land rights issues.
Officials in Manila see mining as an untapped treasure that could help sustain recent annual economic growth of about 6% and bring in foreign investment – a national priority since 2010. Gold mining is one of the country’s next boom sectors, forecasts Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in Metro Manila.
The present administration wanted more foreign investment in mining, in turn adding to some 250,000 jobs offered by the industry. Also, officials in Manila insist on getting a huge share of revenues from the nation’s treasures before they go offshore. That is why the Executive Order 79, signed in 2012 and now waiting for Congressional approval, may lead to an excise tax of 10% on gross sales of minerals, replacing two smaller taxes today.
A fiscal mining framework under study now may give Manila more royalties, as well. Once the lawmakers pass these regulations, investment in mining should pick up, says Benedict Uy, a Philippine trade representative stationed in Taipei, relieving a pipeline of overseas mining firms awaiting permits. “There are lots of mineral deposits in the Philippines, but everyone is on hold till we come up with a clear regulation on how to handle these things, and I think it is going to be sooner than later,” Uy says.
Also, Executive Order 79 would calm all environmental interests if it goes far enough. The draft legislation clarifies every part of the Philippines that are closed to mining site and demands for more enforcement of environmental rules.
The environmental protests provoked mainly by the anger against foreign countries taking Philippine resources have sparked two deadly shootings in Bukidnon province, part of the country’s second largest island Mindanao and a significant mining source, a New York advocacy group Human Rights Watch says. South Cotabato province in Mindanao bans open-pit mining, cramping a $5.9 billion copper and gold mining project.
If Executive Order 79 creates a one-stop permitting process for miners as proposed and forces staunchly autonomous local LOCM +0% governments to be more transparent about contracts, as proposed, foreign investors would worry less about getting mired in legal messes.
Also, in the legal department, the government’s Geosciences and Mines Bureau intends to stop permit speculation, meaning more of the 700-some permits out there now would be used for extraction instead of being sold onward for a higher price and deterring foreign investors who need a geographically unified cluster of go-ahead to do work on a profitable scale.
“The mining bureau, to its credit, is trying to solve this, but it is not one or two,” says Jose Mari Lacson, head of research at Philippine stock brokerage Campos & Lanuza. “We are talking about hundreds of these fragmented mining permits.”
There are many active foreign corporations in the Philippines’s 35 commercial-scale mines such as Australian-based OceanaGold, which employees 1,800 people to extracts copper and gold from the Didipio Mine on Luzon Island north of Manila. It began commercial mining two years ago and expected production of 100,000 ounces of gold and 14,000 tons of copper over 16 years.
A UK-based Metals Exploration has been mining the Runruno Gold-Molybdenum Project on the Luzon Island since 2005 with a defined mineral resource of 1.39 million ounces of gold. Philex Mining, a local company is particularly aggressive in Mindanao, and Forbes called it one of Asia’s best firms under a billion in 2012.
Other miners are eager to follow. “Very simple, solve the environment (issues) and solve the policy and you’ll have a lot of investors,” Ravelas says.