The Philippine government intends to impose far heavier taxes and tougher environmental restrictions on the mining industry, President Benigno Aquino said Tuesday
Aquino told AFP in an interview a review of the country's mining policies was close to being finished, and the government would likely require all mining companies to start paying the government a hefty percentage of revenues.
Aquino said the government currently only received a two-percent excise tax.
We are now reviewing what is fair... we get two percent of the profit and 100 percent of the risks. That doesn't seem fair, he said.
Aquino said the government was looking at efforts by the Australian government to generate more money from the mining sector, where a 30-percent tax on extraordinary profits of coal and ore producers will start in July.
He said a 50-50 revenue sharing agreement was even being considered, although he emphasized the policy had not been finalized and refused to signal what percentage the government was hoping for other than a fair share.
The Philippines is believed to have some of the biggest mineral reserves in the world - the government estimates the country has at least $840 billion in gold, copper, nickel, chromite, manganese, silver and iron.
However, the minerals have been largely untapped, partly because of a strong anti-mining movement led by the influential Catholic Church, while poor infrastructure and security concerns have also kept investors away.
Aquino said the new mining policy would aim to regulate the industry much more closely and give certainty to investors.
But he signalled the government was not desperate to cash in on the global commodities boom, pointing out the mining sector played only a small role in the nation's economy and created many environmental risks.
They (miners) claim they contribute quite a big amount to the national economy but at the end of the day it's really just two percent, he said.
Aquino also indicated tourism was a much higher economic priority for the government than mining, which he said generally created only short-term economic benefits.
He said the government was aiming to attract 10 million tourists annually by 2016, up from four million currently, and that each visitor generated one job domestically.
If we get 10 million tourists, we get 10 million new jobs... this is sustainable. We can count on that year in, year out, he said.
(But) once all of those minerals are extracted, that's it. So if we go into gaining these resources on a temporary basis, we might be sacrificing the long-term opportunities for our future.
Aquino said, under the new policy, mining would be banned completely from 78 sites deemed important to tourism, while other environmental restrictions would be imposed.
Myanmar is a country rich in natural resources and in the early stages of opening to foreign direct investment.
Shayne Heffernan is one of the leading legal advisors on Mining Law in Asia, Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
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In Australia last night the Senate passed the new mining tax last night, bringing to an end a saga of almost two years for the government. The minerals resources rent tax will begin on July 1 and is budgeted to raise $10.6 billion in its first three years.
In Indonesia 2 new mining laws have been implemented in the last month, The government plans to establish a holding company that would oversee the operation of state-controlled miners such as Aneka Tambang, Timah and Bukit Asam, similar to the type of holding company the government plans to establish for the plantation sector next month.
The idea to create an umbrella company called Integrated Resources Companies tasked mainly with supervising and synchronizing the operations of state-owned miners was floated in 2006 but never carried out.
The Government also confirmed when we contacted them that all companies without exception, must implement a new policy under which foreigners cannot own more than 49 per cent of a mining project in the country. The divestment must start taking place after a mine has been in production for five years, and be complete after 10 years.
The Indonesian regulation extends a 2009 law mandating local ownership of at least 20 percent in joint ventures by the sixth year of production.
The new law applies to companies with mining business licenses.
There is a further government regulation that will ban the export of raw materials and unprocessed commodities, including coal.
Under the regulation, after May 7 no new contracts for exporting raw materials can be signed. The export ban will go into effect in 2014 for all companies, no matter what their existing contract of work stipulates.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
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