Rodriguez: $4B lost due to new mining policy-A A +A
Friday, September 21, 2012
THE Philippines may have lost as much as $4 billion in foreign direct investments since the moratorium on the new mining contract was implemented in 2011, said the president of Chamber of Mines in Leyte.
Benjamin Philip Romualdez said in a speech on the 2012 Mining Conference at the Sofitel Plaza Hotel in Pasay City that the freeze “caused an outflow” of about P10 billion in mining investments since last year, based on Bangko Sentral ng Pilipinas data.
“The projected $16 billion investment that was supposed to occur during this administration will not happen. The $2 billion that we as a country were expecting in additional foreign direct investments this year from the minerals sector will not happen. The $2 billion that we expect in additional investments next year will not happen,” he said.
Romualdez added that mining companies would file individual cases in court to question the legality of Section 9 of the implementing rules and regulations (IRR) of the new mining policy, which stipulates that the terms of mining contracts shall be renegotiated after the first 25 years, potentially shortening the lifespan of a project, which is guaranteed a maximum of 50 years under the existing law.
“This effectively shortens mining contracts to a mere 25 years in violation of section 32 of the Mining Act, which guarantees the mining companies of a second 25-year term under the same terms and conditions. This provision is patently illegal and contrary to the assurances of government that mining contracts will be respected,” Romualdez said.
Under Section 32 of Republic Act 7942, or the Mining Act of 1995, “mineral agreements shall have a term not exceeding 25 years to start from the date of execution thereof, and renewable for another term not exceeding 25 years under the same terms and conditions thereof, without prejudice to charges mutually agreed upon by the parties.”
The Department of Environment and Natural Resources recently released the Executive Order 79, which aimed at boosting revenues from the mining sector while increasing environmental safeguard.
The IRR extended the ban on new mining permits until Congress passed a law raising royalties on the sector from two percent to five percent.
Romualdez said, however, that the industry is committed to work with the government on the revenue-sharing issue. (Leyte Samar Daily Express)