Dr. Emiliano T. Hudtohan, AB-BSE, MA, EdD
Graduate School of De La Salle Araneta University, Malabon, Philippines
President, AcademiX2Business Consultancy, Inc.
Makati City, Philippines
dr.eth2008@gmail.com
www//emilianohudtohan.com
International Seminar on the Socio-Economic and Environmental Impact of Mining
Paper to be delivered at the University of Pejuang,
Makassar, Konawe, Sulawesi, Indonesia
November 24, 2015
Edition November 10, 2015

Abstract

Social impact is seen from the view point of civil society whose interest are directly affected by the mining industry.  There are internal stakeholders whose economic welfare must be addressed and at the same time as key human resource in mining production whose health and wellness must be promoted.  The external stakeholders are the community and the environment.  The heightened awareness of climate change, global warning and the occurrence of mining disasters like that of Marcopper and Philiex continue to haunt the mining in the Philippines.  The NGOs and religious groups remain extremely watchful and active in this regard. Thus, the economic impact of mining has been deterred not only by civil society but mainly disharmonious policies of the national and local government. In 2014, the mining industry employed only 235,000 workers; its gross value of P84.2 billion contributed to merely .7 percent of  GDP (Oxford Business Group reports .9 percent), a significant drop from P299.5 billion or 3.3 percent of GDP in 2013.The Executive Order issued in 2014 further restricted mining operations.  The last say on mining operations in the Philippines appears to be the clearance of the local government which the city and barangay councils’ approval have to be secured. The political impact refers to governance.  Politics in a young democracy like the Philippines has been used as a power to gain common interest of certain sectors and not necessarily common good.  Common interest can be the alignment of the business interest with the personal gain of those who hold power and authority.  The overall assessment of the mining industry in the Philippines is that it has declined because of politics and governance issues, environmental and civic issues brought about by the new mandate for triple bottom line, which highlights care for the planet. But many are hopeful that its economic potential will be achieved through tripartite effort of business, civil society and government.

Key words: sociio-economic-political impact, Maharlikhans, Spanish colonization, American governance, piloncitos

Introduction

This is my third visit to Konawe, Sulawesi, Indonesia. The first two were at Unaaha, Kendari in 2009 where I delivered a paper on creating a New Framework for Sustainable Development and in 2011 at Unaaha again I read a paper on Sustainable Mining Management and the Next Generation (Hudtohan, 2009, 2011). This kinship I feel is probably due to the close bond of the Philippines with the rest of Southeast Asia during the reign of the Sri Vidjaya Empire and the Madjapahit Empire.  In fact, the island where I come from is the Visayas whose name comes from Sri Vidjaya.  My father sported a bansil (gold-laden tooth with moon) and tattoo in his arm.

The mining industry in the Philippines is highly politicalized. When Benigno Aquino, Jr. became president of the Republic, he included mining as one of the eleven priority areas for foreign investment. Towards the end of his term in May 2016, OceanaGold Phils. Inc. chair Jose Leviste noted at the Mine Safety and Environment Symposium that low world metal prices and the administrations economic fiscal re\gime were the two primary threats to the industry; he likewise suggested flexing their political muscle to support candidates who are pro-mining (Inquirer, 2015e)  As Philippine national election will be held in May 2016..Mining as an industry is used by our Vice President Jejomar Binay, who attended the annual summit of the local mining industry, as a campaign platform to get the businessmen and investors on his side as he runs for presidency (Inquirer, 2015a). Senator Grace Poe, another presidentiable begged off because of her national address announcing her presidency.  Former interior and local government secretary Mar Roxas also begged off to speak but sent a representative in his behalf.  After missing out on the economic benefits of the last five years, the local mining industry is excited to cross to the 2016 with a positive outlook under a new administration (Inquirer, 2015b).

Awareness of the plight of the miners was shown in the Europa film festival at Shangri-La Hotel Complex in Makati City (Inquirer, 2015b).  Pride, the movie, is about the mining events (1984-1085) prompted the Margaret Thatcher government to shut down 20 uneconomic coal mines. On October 1, 2015, the Philippine Daily Inquirer (2015c) reported that the government failed to protect the child miners.  The New York based Human Rights Watch noted that nearly 5.5 million work children working in absolutely terrifying conditions in small-scale gold mines.  On October 25, 2015, the Philippine Daily Inquirer  (2015d) reported the four houses fell into a gaping hole that gave way in a mining town in Itogon, Benguet.  This happened after international typhoon Koppol passed the Philippines.

Objective of the Paper

The objective of this paper to share the Philippine mining experience and its socio-economic and political impact on life of the Filipinos.  The social aspect refers to the internal and external stakeholders of the industry; the economic aspect directly bears upon the profitability of the industry and its contribution to the national economy; and the political aspect refers to the layers of political governance and also the politics at the national and local level of Philippine Government.  In addition this paper gives a brief history of mining in the Philippines and it likewise presents an update of the socio-economic-political issues related to mining.

Methodology
It presents a historical review of related literature on the mining industry.  History is relevant only if it is used to find solutions to current issues and problems (Torre, 2015; Skinner, 1997; Elton, 1967; Bloch, 1949). .It made use of retrospect-prospect approach (Gonzalez, Luz, J & Tirol, 1984; Hudtohan, 2005; Lei, 2015).  The socio-economic impact of mining is viewed from Kanter’s (1999) perspective that all social problems are economic problems.  The overall solution to the mining issues can come to a resolution by applying the tripartite principle of action (Perlas, 2005; Etzkowitz, 2008; Albareda, .Lozano, Tencati, Midttun, & Perrini, 2008).

Economic Impact

Based on the study of Patrick Caolie (2015), mining is the most logical economic driver for the Philippines because agricultural production is down and rice even cost three times more compared to imports from Vietnam and Thailand.  But the Aquino government instead relied on the remittances of migrant workers and the business process outsourcing (Inquirer, 2015e).

The Economy of the Philippines is the 39th largest in the world, according to 2014 International Monetary Fund statistics, and is also one of the emerging markets. The Philippines is considered as a newly industrialized country, which has been transitioning from one based on agriculture to one based more on services and manufacturing. In 2014, the GDP by Purchasing power parity was estimated to be at $692.223 billion. [World Economic Outlook]. According to Index Mundi (2014), agriculture contributed 11.2 percent, industry 31.6 percent and services 57.2 percent.  The labor force of 41.33 million (2013 est.) is distributed – by occupation in agriculture (32%), industry (15%) and services (53%).

In 2015, there are about 12 million Filipinos around the world and they contribute US$40 billion to the Philippine economy it is about 13 percent of the national GDP (Wooton, 2015).  But in 2014, the mining industry employed only 235,000 workers; its gross value of P84.2 billion contributed to merely .7 percent of  GDP, a significant drop from P299.5 billion or 3.3 percent of GDP in 2013 (Mining Industry Statistics, Mines and Geoscience Bureau, 2015).

About 60% of total mining production is accounted for by non-metallic minerals, which contributed substantially to the industry’s steady output growth between 1993 and 1998, with the value of production growing 58%. In 1999, however, mineral production declined 16% to $793 million. Mineral exports have generally slowed since 1996. Led by copper cathodes, Philippine mineral exports amounted to $650 million in 2000, barely up from 1999 levels. Low metal prices, high production costs, lack of investment in infrastructure, and a challenge to the new mining law have contributed to the mining industry’s overall decline.

The industry rebounded starting in late 2004 when the Supreme Court upheld the constitutionality of an important law permitting foreign ownership of Philippines mining companies. However, the DENR has yet to approve the revised Department Administrative Order (DAO) that will provide the Implementing Rules and Regulations of the Financial and Technical Assistance Agreement (FTAA), the specific part of the 1994 Mining Act that allows 100% foreign ownership of Philippines mines.

The Philippines boasts some of the world’s vastest precious metals reserves, valued at around $840bn at 2010 prices. In 2013 the Philippines was tied with Indonesia as the largest nickel producer in the world, producing some 440,000 tonnes each. The country’s vast and largely untapped mining potential will continue to draw strong interest from foreign and domestic actors despite decreasing investment in the short term. Although overall output and revenue are being sustained by existing operations, new investment continues to lag, as mining companies wait out the finalization of new mining regulations. The question is when will the regulatory framework catch up with the demand. (Oxford Business Group, 2015).

The Oxford Business Group (2015) reported the economic following impact of the mining industry:

1.    The progress of the mining industry in the Philippines is proceeding at an extremely slow pace in 2014, posting a modest growth, contributing just 0.9% to national GDP. Contribution of mining and quarrying increasing only marginally in recent years, from P72.05bn ($1.62bn) in 2012 (equivalent to 1% of GDP) to P72.9bn ($1.64bn) in 2013 and P75.48bn ($1.7bn) in 2014, according to the Philippine Statistics Authority – National Statistical Coordination Board (PSA-NSCB). New mining investment continues to lag, as mining companies wait out the finalization of new mining regulations, which have dragged on since 2011.

2.    All metallic mining has been accounted for by large-scale mines since 2011, due to a change in tax collection practices that essentially eliminated small-scale gold mining operations from the formal sector. According to the Bangko Sentral ng Pilipinas (BSP), the Philippine central bank, the gross production value from such operations came to just P1.2bn ($27m) in 2012 and P300m ($6.75m) in 2013 – a significant decline from the P42.9bn ($965.25m) and P34.1bn ($767.25m) in 2010 and 2011, respectively.

3.    By contrast, data from the MGB saw large-scale metallic mining steadily increase its gross production value over the period, from P69.1bn ($1.55bn) in 2010 to P88bn ($1.98bn), P97.8bn ($2.2bn) and P99bn ($2.23bn) in the following years. The growth in the value of the sector in past years is thanks to higher output from existing mines, as only a handful of new mines have come on-line of late due to legislative delays that have slowed sector investment to a trickle.

4.    In early 2014, there were two new commercial-scale gold-copper projects and the resumption of another precious metals output, in addition to a slight year-on-year (y-o-y) increase in production, from P7.62bn ($171.45m) in the first quarter of 2013 to P8.63bn ($194.18m) in 2014. Substantial growth in copper and nickel production helped push base metal output in the first quarter of 2014 to P13.35bn ($300.38m), up from P11.15bn ($250.88m) one year earlier. The bulk of increasing gold production is due to two new operations – the high-grade gold-copper Didipio Mine and copper-gold Padcal mine –which ramped up operations at the end of 2013. Operated by Australia’s OceanaGold, the Didipio mine – located about 270 km north of Manila on the island of Luzon

5.    Established Producers. Well-established Toledo copper mine in Cebu helped to bolster output with 41.6m kg of copper concentrate in 2013, a 2% y-o-y increase from the 40.9m kg produced in 2012, according to company reports. As a subsidiary of the Australian Atlas Mining through its domestic operator Carmen Copper Corporation, Toledo is one of the country’s largest copper mines, with estimated mineral resources of 1.43m tonnes at 0.29% copper grade and 4.1m tonnes of copper metal at 0.15% cut-off grade.

6.    Co-O Gold Project of Mindanao Mineral Processing and Refining increased production 19% from 494 kg to 588 kg. The output from the Benguet Corporation’s Acupan Contract Mining Project also more than doubled y-o-y, from 92 kg to 188 kg. These rises combined to more than offset declines in other areas, such as from the shuttering of Greenstone Resources Corporation’s Siana gold project and the Rapu-Rapu polymetallic project, which had been producing around 182 kg and 201 kg, respectively, as recently as the first quarter of 2013.

Social Impact

The Oxford Business Group (2015) social impact of mining:

1.     The closure of the Padcal mine by Philex Mining, from April 2012 to March 2013 limited production at the site in Benguet to 99,802 oz. of gold in 2013, up from 71,297 oz. in 2012, but 29% less than the 140,113 oz. recorded in 2011. Increased throughput of higher-ore grades boosted copper output by 46% from 10.14m kg in 2012 to 14.77m kg in 2013, but was down 14% from the 17.25m kg seen in 2011. According to data from the MGB, the mine produced 28,995 oz. of gold in the first quarter 2014, a 247% rise over the 8360 oz. mined the previous year. Copper production likewise improved, increasing by more than three-fold from 4393 tonnes to 18,052 tonnes of concentrate.

2.    The 2012 closure came as a result of typhoon rains that caused one of the tailing storage pits to overflow, discharging some 20m tonnes of silt into the Balog Creek and Agno River and resulting in fines of P188.6m ($4.24m). According to company estimates, the total reserves of the Padcal mine covered by mineral agreements are spread out over an area of 13,492 ha and amount to around 65.8m tonnes of copper and gold grades of 0.20% and 0.40 grams per tonnes, resulting in recoverable resources of 108.7m kg of copper and 627,000 oz. of gold.

3.    The closure of Siana and Rapu-Rapu also significantly affected the country’s overall silver production, as the two projects had been contributing some 460 kg and 2709 kg, respectively, to the segment’s total output of 9629 kg as of the first quarter of 2013. The only significant silver mines to boost output over the period were Padcal, where production rose by a factor of more than three, to 753 kg, and the Carmen mining area of Toledo, which doubled output to 441 kg.

4.    The nickel industry: The country’s existing nickel mines continue to ship out vast quantities of raw ore, primarily to China, where it is processed into nickel pig iron used in Chinese stainless steel plants. In 2013 the Philippines was tied with Indonesia as the largest nickel producer in the world, though the latter banned exports of the metal in 2014 in an effort to promote local industry. This was a boon for other nickel producers like the Philippines, as nickel commodity prices rose dramatically from less than $14,000 per tonne on the London Metals Exchange at end-2013 to peak at over $21,000 per tonne in May 2014 before receding. The Philippines and Indonesia each produced approximately 440,000 tonnes of nickel in 2013, according to data from the US Geological Survey. The Philippines had increased production from 424,000 tonnes in 2012, with reserves estimated at 1.1m tonnes.

5.    Holding pattern: Despite the Philippines’ veritable stockpile of mineral wealth, the country has yet to take full advantage of its natural resources as a result of uncertainty over mining regulations. At the heart of the matter is Executive Order 79 (EO 79), which was first issued in 2011 with the intention of clarifying inconsistencies in existing mining regulations – primarily governed by the Philippine Mining Act of 1995.

6.    However, four years on, EO 79 has yet to make a substantial impact on the sector, as its accompanying implementation legislation has remained incomplete. This is largely due to different interests struggling to reach an agreement on a host of issues, including environmental regulations, transparency, the role of local government units (LGUs), the structure of exploratory and production leases, and taxation .

7.    Exploration: Despite the challenges of obtaining exploration permits (EPs), mining firms continue to show considerable interest in the sector. After the moratorium on EPs was lifted in 2013, the MGB had received some 130 applications for exploration as of October 2014, sought after as a placeholder to secure land in the hopes that the legislative morass will be resolved prior to the permits’ expiration. Depending on how accommodating the government is in approving EP applications, exploration activity could begin to pick up again after the number of active EPs fell from 53 in early 2013 to 36 by July 2014, according the MGB.

Political Impact

According to the Oxford Business Group (2015), the political impact of mining is

1.    One point of contention is the need for stronger political will by the national government over the involvement of LGUs in large-scale mining projects. While LGUs have the authority to issue small-scale mining permits, they can also block federally approved, large-scale mining projects by enacting their own conflicting legislation, such as a ban on open-pit mining. While the EO 79 was designed in part to address the inconsistency between the national mining law and LGU ordinances, in practice this has not happened.

2.    It is likely that a move by the national government to limit the involvement of LGUs in large-scale mining will meet with strong resistance from LGUs that hold sway over operations planned in their territories and are often backed by influential interests, including the Catholic Church and environmental groups. Several projects remain on hold as a result of local ordinances – notably, the Tampakan Copper-Gold project. Developed by Glencore Xtrata and Indofil, the mine is valued at around $5.9bn, making it the single largest foreign direct investment in the country to date. However, Tampakan remains in limbo due to an open-pit mine ban enacted by an LGU in South Cotabato back in 2010.

3.    Mapping exercise: Heavy geographical restrictions are also being codified into federal regulation in the form of a “no-go” zone map, delineating areas where mining operations are forbidden owing to social or environmental restrictions. Released in mid-2013 by the Mining Industry Coordinating Council’s technical working group, the zone map reduced the total land area previously open to extractive activities by some 50%. As a result, around 4.5m ha of land with high mineral content was ruled off limits due to criteria like the presence of tourism sites, agricultural land (including non-producing land), marine sanctuaries and island ecosystems. However, after mining advocates protested that the new map effectively nullified the majority of previously approved permits for exploration, the government agreed to revisit it and was still in the process of redrawing the boundaries as of early 2015.

4.    After years of debate, compromise and hand wringing over the implementation of EO79, the order could still be rescinded. Unlike laws passed by Congress, executive orders can be easily revoked. With a presidential election on the horizon, there is a distinct possibility that EO79 could be modified or scrapped altogether.

5.    Transparency: One of the subjects covered by EO79 that has been gaining traction in recent years is the domestic implementation of standards from the Extractive Industries Transparency Initiative (EITI), designed to open up the books of both mining companies and the government to public scrutiny. As of February 2015, some 32 countries had been deemed compliant with EITI standards, while another 48 countries were in the process of implementing its framework.

6.    EITI certification is intended to alleviate public distrust of the government and mining companies, which often struggle with negative perceptions arising from past incidences of pollution from mines and oil fields. It will also open up the government’s books to allow the collection and distribution of revenues derived from extractive industries to be traced. The transparency afforded by the process will facilitate more consistent benchmarking, fostering a more accurate and objective picture of the sector’s actual operations, in addition to taxes paid and government revenue streams.

7.    The Philippines officially became an EITI candidate country in May 2013, and has since been working with stakeholders to compile its official validation report, which will be submitted to the EITI for review. The local response to this voluntary initiative has been largely positive, with 40 mining companies having signed a disclosure waiver as of late 2014.

History of Mining

The mining history of the Philippines is presented in retrospect from the 21st century going back to the 12th century of the Maharlikhan period.  As early as the 10th century, the Laguna copper plate dated 900 A.D. attest to the fact that the Maharlikhans prior to the Muslim (1478)  conquest in Southeast Asia ,  Spanish (1521) colonization, and American (1898) governance, the Filipino were already trading using gold as a means of business and trading transactions.  Part of the Spanish and American colonization was motivated by economic pursuit and exploring the minerals in the Philippines was a major activity.

21st Century. In 2012, President Aquino signs EO79 institutionalizing reforms in the mining industry. Section 2 states that “The Government in general, and the Department of Environmental and Natural Resources (DENR) in particular, in coordination with concerned LGUs, shall ensure that environmental standards in mining, as prescribed by the various mining and environmental laws, rules, and regulations, shall be fully and strictly enforced, and appropriate sanctions meted out against violators thereof. In line with the above, only those who are able to strictly comply with all the pertinent requirements shall be eligible for the grant of mining rights, pursuant to the applicable provisions of RA No. 7942

Salient features: – The mining policy’s areas of coverage include (i) mining in general; (ii) effect on existing mineral agreements; (iii) economic provisions (revenue generation); (iv) environmental protection; (v) small scale mining; and (vi) administrative provisions. In the same year, Philiex Mining was responsible for tailings disaster, which many observers assessed as surpassing the Marcopper disaster of 1995.

In 2004, President Arroyo signs EO 270 and Section 1. Declaration of Policy states that, “It shall be the policy of the Government to promote responsible mineral resources operation, development and utilization, in order to enhance economic growth, in a manner that adheres to the principles of sustainable development and with due regard for justice and equity, sensitivity to the culture of the Filipino people and respect for the Philippine sovereignty.” In the same year, the Supreme Court declares the Mining Act constitutional

20th Century Period. In 1997, under President Ramos the Indigenous Peoples’ Right Act was promulgated to protect the rights of Indigenous Cultural Communities/ Indigenous Peoples (ICCs/IPs).  Section 2b states that “The State shall protect the rights of ICCs/IPs to their ancestral domains to ensure their economic, social and cultural wellbeing and shall recognize the applicability of customary laws governing property rights or relations in determining the ownership and extent of ancestral domain.” The aggressive development of the mining industry became a threat to those who lived in their ancestral domains.

1995 President Ramos RA 7942 Philippine Mining Act. Section 2 Declaration of Policy states that “All mineral resources in public and private lands within the territory and exclusive economic zone of the Republic of the Philippines are owned by the State. It shall be the responsibility of the State to promote their rational exploration, development, utilization and conservation through the combined efforts of government and the private sector in order to enhance national growth in a way that effectively safeguards the environment and protect the rights of affected communities.”  This was the year Marcopper caused a disastrous environmental damage and health problems to the mining communities.

In 1991 President Aquino RA 7076 People’s Small Scale Mining Act intended “to promote, develop, protect and rationalize viable small-scale mining activities in order to generate more employment opportunities and provide an equitable sharing of the nation’s wealth and natural resources.” It also stipulated the conditions for operationalizing the people’s right to small-scale mining specifying which public and private lands can be used.

In 1984, Presidential Decree 899 established the small-scale mining as a new dimension in mineral development and defined it as a specific activity subject to rules and regulations regarding government permits and mandatory sale of recovered gold to the Central Bank of the Philippines and its authorized representatives (Israel & Astrot, 2005).

In 1974, under Martial Law, Presidential Decree 463 became the 4th mining law.  From 1980 –1990, the mining industry started to decline and this was a period of the Dark Period of mining because of the control of Marcos cronies. Likewise, it did not have any provision on small-scale mining.

American Period. In the post-war era, Philippines became independent and the Parity Rights Amendment and Laurel Langley Agreement resulted to: Filipinization of mining industry, rehabilitation of gold mines in the 1940s, copper was started to be explored in the 1950s, large scale open pit mining and low-grade copper were introduced, and the period 1960-1980 was the Golden Age of Philippine Mining.

America in the 20th century has an expanding monopolistic capitalism and the dominance of the corporations.  Their industrial system needed raw materials and base metals.  The US Government adopted the policy of Monometallism and the Philippine Bill of 1902 became the second Philippine Mining Law. After the President Emilio Aquinaldo surrendered to the Americans, the US Military 49ers remained in the Philippines and became the vanguards of the mines in Cordillera.  In 1907, Benguet Mines was established and subsequently 17 other gold mines were opened in Baguio District. In 1936 the Commonwealth Act of 136 became the 3rd Philippine Mining Law. This legislative act did not have any provision on small-scale mining since it was not yet practiced extensively.

Mahalikhan Period. Before 1478 Muslim dominance in Southeast Asia (Majul, 1999), the Philippine islands part of the Royal Kingdom of Maharlikha (www.rumormillnews.com/pdfs/The-Untold-Story-Kingdom-of-Maharlik hans.pdf) under the Srivijaya empire that ruled from 683-1286 (Munoz, 2006) and the Majapahit Empire that ruled from 1293-1500 (www.rumormillnew.com/pdf/The-untold-story-of-Maharlikans.pdf). According to the Nagarakretagama (Desawarñana, 1365), the Majapahit empire stretched from Sumatra to New Guinea and it included present day Indonesia, Singapore, Malaysia, Brunei, southern Thailand, Sulu Archipelago, Manila, and East Timor (http://dbpedia.org/resource/ Majapahit).

The Laguna Copper Plate dated 900 AD (Postma, 1992) had an inscription that condoned the debt of the descendants of Namwaran (926.4 grams of gold) which was granted by the chief of Tondo in Manila and the authorities of Paila, Binwangan and Pulilan in Luzon. The words were a mixture of Sanskrit (Francisco, 1964), Old Malay, Old Javanese and Old Tagalog.  This establishes the Maharlikan connection with the Srivijaya Empire and Majapahit Empire. (Hudtohan, 2015).

For three centuries of colonial rule, the Spaniards failed to penetrate the rich gold deposits due to the Gran Cordillera Central resistance of the Igorots of the Mountain Province. Gold diggings and gold treasures were in the hands of the natives until the coming of the Americans.

Traditional placer and lode mining and metallurgy were subsistent activities of the barangays before Spanish colonization which began in 1521.  These were evidence of piloncitos. Piloncitos are tiny engraved gold coins found in the Philippines from the pre-Hispanic era. Trade among the Maharlikans [early Filipinos] and with traders from the neighboring islands was conducted through barter. The inconvenience of barter later led to the use of some objects as a medium of exchange. Gold, which was plentiful in many parts of the islands, invariably found its way into these objects that included the piloncitos, small bead-like gold bits considered by the local numismatists as the earliest coin of the ancient Filipinos, and gold barter ring

Mining Prospect

The Oxford Business Group (2015) the following points are areas of future development in the mining industry:

1.    With the Didipio mine up and running and operations resumed at Padcal, only a limited number of mines now remain in stages of development that would allow them to commence operations in the coming years. At least three new mining projects with combined investments of P1.46bn ($32.85m) are expected to be up and running in early 2015 with several others also awaiting final authorization of pending permits to begin mining as well.

2.    Among these is the Vitali iron ore mining project, located in Zamboanga City in Mindanao, which will produce iron along with smaller amounts of gold, silver and other associated mineral deposits over a projected mine life of 10 years. Hard Rock Mineral Trading secured a declaration of mining project feasibility (DMPF) in March 2014 to begin commercial operations through its mineral production sharing agreement (MPSA), which covers an area of 2077 ha.

3.    The other projects on the horizon are two new nickel operations: Libjo nickel laterite project, developed by the East Coast Mineral Resources Company on Dinagat Island, and the Agata nickel laterite project, from the Minimax Mineral Exploration Corporation, located in Agusan del Norte. The Agata North nickel mine is estimated to have proven and probable ore (limonite and saprolite) reserves of 6.79m tonnes, with measured and indicated resources of 33.94m at a grade of 1.1% nickel, and inferred resources of around 2m tonnes with a nickel grade of 1.04%. A partial DMPF for nickel production on 600 ha was approved in April 2014 by the government, with exploration also approved in the remaining portion of the 7679-ha MPSA contract area. Commercial operations to mine chromite and nickel have also been approved for the 697-ha MPSA covering Dinagat Island which expires in November 2022.

4.    In addition to these, the Runruno mine is also under development and could begin commercial operations as early as 2015 provided it is able to clear up a few outstanding social and environmental permits. The gold-molybdenum project boasts a defined resource of 1.42m oz. of gold and 11.6m kg of molybdenum according to operator FCF Minerals Corporation, with 780,000 oz. of proven and probable gold reserves.

5.    The long awaited King-king Copper-Gold Project, being developed by the Philippines-based Nationwide Development Corporation (Nadecor) and Toronto-listed St Augustine Gold and Copper, was also on the verge of opening as of early 2015, pending the approval of its Environmental Compliance Certificate. If given the go-ahead, the mine would likely become the most productive in the country, producing around 110,000-130,000 tonnes of copper as well as 529,000 oz. of gold per year, according to company estimates.

6.    Located near Davao City in Mindanao, the project boasts measured and indicated mineral resources of  962.3m tonnes at 0.25% total copper, 0.06% soluble copper and 0.33 grams per tonne of gold, resulting in 2.45bn kg of contained copper and 10.3m oz. of contained gold, according to data from St  Augustine.

7.    Other significant projects in varying stages of development include the Far Southeast copper-gold project from Lepanto Consolidated Mining Company and Gold Fields, which is expecting approval for its Financial or Technical Assistance Agreement in 2015, and Philex’s Silangan gold and copper project, forecast to begin production in 2018.

8.    Outlook: The Philippine’s vast and largely untapped mining potential will continue to draw strong interest from both foreign and domestic actors despite decreasing investment in the short term. Although a few projects are moving forward, the vast majority of large-scale developments will remain on hold until the government issues the relevant sector regulations, which could feasibly drag on through the 2016 elections.

Artemio Disini, (OBG Report, 2015) chairman of the Chamber of Mines of the Philippines, “Once these issues are resolved, there are many large, high-grade reserves in the country. There are large deposits of gold, copper and nickel in Eastern Mindanao. If internationals decide the risk is too great in the Philippines, large local conglomerates are already showing interest in filling the void.” The question is when the regulatory framework will catch up with demand. Timing, as they say, is everything.

The Philippine Star reported on September 15, 2013 that coal mining in Seminrara may resume this year according to the Department of Energy.  Earlier the Department of Environment and Natural Resource-Environment Management Bureau suspended Semirara’ environmental compliance but restored it later after investigation showed the landslide had no adverse effect or damage to the environment in Antique.

The Philippine Daily Inquirer on September 14, 2015 reported that a mining town seeks watershed exclusion at Itogon, Benquet. The purpose of this is to urge the Department of Natural Resources to facilitate the exclusion of Braranga Tiriongdan, Loaca, Gumatdang, Ampucao and Dulupirip from the Lower Agno Watershed Forest Reserve.  Itogon Councilor Arnel Bahingawan said the Republic Act No. 9003 (Ecological Solid West Management Act of 2000) requires local government to build waste disposal facilities but the National Integrated Protected Areas System (Nipas) does not allow the town to use land near a watershed for this purpose. The question is why was the big mining company allowed to build its tailings pond in the same area?”  This refers to Benguet Corp. and Philex Mining Corp.

Conclusion

It appears that the economic impact of the Philippine mining industry, which was included in the 2011 mandatory list of annual Investment Priorities Plan which the Trade Department endorsed to Malacanang to further drive national economic growth, is being stunted by the resistance of civil society composed of NGOs, the private sectors and the Catholic Church in the Philippines. He was criticized by environmental activist  Gina Lopez (2011)  who questioned his national policy on natural resources. She eventually led a protest against mining in Palawan by securing a million signatures to stop mining. The Marcopper and Philex Mining disasters continue to spotlight the negative impact of mining.

Politically, the mining industry in the Philippines is being stunted by the non-alignment of the local government with the mining policy of the national government. Thus, the economic impact of the mining industry in the Philippines , which included mining as one of the eleven investment targets when President Benigno Aquino, Jr. started his term, is not a significant driver for progress.

The power of the local government appears to be stronger than that of the national government.  It appears that the local officials, like the city or town mayor can invoke their power under the Department of Internal and Local Government. In support with the anti-mining sentiment of some local government officials are the civic environmental activists and the Catholic Church which continue to influence business leaders and civil servants. The American-style of democratic freedom is exercised by Philippine media and it is one of the strongest critics of mining, especially when it comes to reporting mining disasters and anti-mining rallies.

Historically, mining in the Philippines is traced from the Maharlikan time to Spanish colonial period and the American regime that started the corporate exploration of mining in Benguet, Mountain Province. The minerals which the pre-Hispanic Filipinos enjoy has been overtaken by the Spanish friars and conquistadores (1521-1896), then by the Americans (1898 -1935). The Philippine Commonwealth (1935-1946) allowed Filipinos to govern themselves, a transitional period prior to Philippine Independence from the United States of America.  The Japanese government during World War II ruled from 1942-1845, Today, the struggle between the Philippine Government and the indigenous people (IPs) continue as lands expropriated to the mining industry continues to encroach into the domains of the IPs.

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