Foreign investors are bullish in pursuing mining ventures in the Philippines, with few signs of a slowdown in mineral demand from Asian neighbors such as China, but policy bottlenecks are hampering a faster flow of investments to the sector.
The Philippine government expects new investments in its minerals industry to reach $2.8 billion this year, double an earlier forecast and the highest annual figure since the sector was fully opened to foreign investors in 2005.
But new investments in just seven major projects expected to start from 2012 to 2016, including the giant Tampakan copper-gold project, would run up to $11 billion, Environment Secretary Ramon Paje said.
These major projects include the $1.3 billion nickel project of Sumitomo Metal Mining Co. set to operate by 2013 and the $1 billion Silangan copper-gold project of Philex Mining Corp., both in Surigao del Norte.
The $1.8 billion Kingking copper-gold project of CGA Mining Ltd and St. Augustine Gold and Copper Ltd is another venture set to raise the country's mining output.
Still, the mining industry believes more money would flow into developing the country's estimated $1 trillion mineral resources if the government fixes policy discords and reforms the mining application process to make it easier for investors to enter the sector.
We are ready to help our economy and invest in our country, but we also need the DENR (Department of Environment and Natural Resources) to act on the permits to enable the industry to move forward, Philip Romualdez, president of the Chamber of Mines of the Philippines which groups the country's large-scale miners, told a mining conference.
TEST CASE: TAMPAKAN
The industry group said a moratorium on processing mining applications was stalling growth in the sector and hurting the broader economy, but Paje said Manila plans to restart the approval process soon.
The immediate action plan now is to lift the moratorium on the acceptance and grant of mining applications, Paje said, adding his department would review appeals from 30 percent of rejected applications, and formulate guidelines for public bidding of exploration areas and joint ventures in mining deals.
The mining regulator, Mines and Geosciences Bureau, last month rejected more than two-thirds of pending mining applications after an eight-month review aimed at getting rid of mining speculators. The agency suspended the acceptance and granting of mining permits during the review.
Paje also said he was hopeful a local government ban on open-pit mining that is threatening the $5.9 billion Tampakan project, Southeast Asia's largest copper-gold prospect, would be removed this year.
Sagittarius Mines Inc, which is developing Tampakan, said its shareholders global miner Xstrata Plc and Indophil Resources NL , were committed to the project despite the ban, although it was concerned about its potential impact on the mining venture.
We're encouraged by the significant stakeholder support, Mark Williams, Sagittarius general manager, told reporters. We are hopeful of a timely resolution.
Indophil said it was exploring for more gold projects in the Philippines, particularly in the northern Benguet province and in southern Mindanao, while it awaits regulatory approvals for Tampakan, a sign that investors see big opportunities in the country.
Canadian firm TVI Pacific Inc said it expects to extend the life of its Canatuan copper mine in southern Philippines beyond 2013 and is looking at other prospects, such as gold mining, to boost output.
The Philippines is very attractive, Clifford James, TVI Pacific chairman, told reporters after a presentation at the conference. I've been here for a long time and we moved slowly in making things better. But now I'm very confident that things will improve.
We're fine, we're very happy to be here, he said.