PHILIPPINES: No new mining permits

PRESIDENT Macapagal-Arroyo has offered to suspend the issuance of new mining permits to try to appease Roman Catholic bishops strongly opposed to the country's new Mining Act, a top Malacanang official said yesterday.

But mining industry executives warned such a move would make the Philippines a pariah to foreign investors whom Ms Arroyo had aggressively wooed to put their money in the country after the Supreme Court upheld the constitutionality of the Mining Act in 2004.

A senior Palace official, who was privy to Ms Arroyo's talks with the bishops in Malacanang Monday night, said the proposed moratorium would not cover the existing mining permits with a total of $6 billion in investments that should keep the local industry busy over the next four years.

Earlier, acting Presidential Chief of Staff Mike Defensor had indicated to reporters during Ms Arroyo's visit to Albay the other day that Malacanang was no longer keen about issuing new mining permits.

The Palace official clarified that nothing was final yet.

"Pinaplano pa lang yan ... Yan ang offer namin sa mga bishops (That is still in the planning stage. That was our offer to the bishops)," said the official, who asked not to be identified, saying he had not been officially authorized to talk about the meeting.

The official said the proposed moratorium on new permits for both large- and small-scale mining would be in place until the government and the Church had agreed on a fool-proof system to ensure the protection of local communities-specifically the indigenous people-and the environment.

The official said suspending the issuance of mining permits would immediately address the bishops' concerns on the entry of mining firms in greenfield areas.

This could mean limiting mining activity in areas that have been traditional hosts to these activity, the official said.

Country's credibility

Last Sunday, the Catholic Bishops Conference of the Philippines issued a pastoral statement calling for the repeal of the Philippine Mining Act of 1995, saying that it "destroys life."

The bishops also called for the cancellation of all approved mining concessions and the junking of pending applications.
Patrick Caoile, treasurer of the Philippine Mine Safety and Environment

Association, said the Philippines' credibility would take a hit with the plan to impose a permits' moratorium.

"The President went around the globe inviting mining companies supposedly with open arms to explore one of the richest mineral countries in the world. We'd become a pariah if we tell them that no permits will be given," Caoile said.

A source from the Bicol group of bishops said that a closer look at the data released by Malaca¤ang to hype the mining industry would show that mining was just a filler in the country's investment strategy not worth the social costs and political risks.

New jobs, more taxes

By 2010, new mining projects would have generated 43,635 jobs, P27 billion in new taxes, P684 million for social development funds and P1.7 billion in royalties for the indigenous people. The government estimated that mining projects would
bring in P240 billion in investments up to 2010.

However, the Church group said only 20 percent of this would remain in the country as the bulk would go to the payment of project loans and repatriation to parent companies.

The Church has deemed the 20-percent return as too modest for an extractive,
non-repeating resource business.

Main example

The Rapu-Rapu mining incident has become the Church's main exhibit of possible environmental disasters. The two cyanide spills on the island has caused fishkills and reportedly endangered Albay's tourism potential.

Caoile said the Rapu-Rapu controversy could have been averted had the mining firm Lafayette taken in a local contractor to help build their tailings dam.

"They used an all-Australian team, including equipment and technology. Australia does not have that much rainfall as the Philippines and that's just one of the biggest
differences that they did not take into consideration," Caoile said.

No need for rush

In his talk with reporters in Albay, Defensor said that what the Palace had told the bishops was "ayusin na lang natin yung existing (permits)"-let's make the existing permits work. "Then let's not approve anything anymore," Defensor said, adding this was basically their message to the bishops.

"Let's make do of them. Let's not anymore approve permits," Defensor said. "We have enough now for the country to move the economy. Let's not rush things. Let us perfect what we have now."

40 concessions under review

At least 40 proposed mining concessions covering 1.6 million hectares are being reviewed by the government to check if the concession areas overlapped with any protected areas and timber concessions, Environment Undersecretary for Mining Deinrado Dimalibot said yesterday.

The Department of Environment and Natural Resources has sent out intents to cancel to 40 companies applying for Financial and Technical Assistance Agreements (FTAAs) as early as September last year.

"We are also doing a reassessment of the viability of those areas for mining and the social acceptability of the projects, if the people really agreed to the projects," Dimalibot said in an interview.

He said that while the Mines and Geosciences Bureau continued to accept applications for mining concessions, the government was not inclined to approve more applications soon.

"There is that trend because the President is already satisfied with the 24 priority mining project sites," Dimalibot said.

Hopes on mining

The administration is banking on the revitalized mining industry to prop up the economy, identifying 24 mine-rich areas that the government is promoting on its mining road shows abroad.

The government had suspended the processing of the 40 FTAA applications because of the Supreme Court case that contested the provision of the Mining Act allowing full foreign ownership in mining projects.

Dimalibot said the DENR wanted to see if the firms were still interested in pursuing their mining applications and if they had complied with the documentary requirements.

Four of the 40 FTAA applications under review have foreign partners, Dimalibot said. Another 19 FTAA applications are pending with the MGB, the agency tasked to review and process all mining applications.

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