MINING’S IMPACT ON THE PHILIPPINE ECONOMY AND

ECOLOGY:GOVERNMENT PERSPECTIVE

LEO L. JASARENOLEO L. JASARENOActing Director

Mines and Geosciences BureauDepartment of Environment and Natural Resourcesp

Shall we mine or not?

“The Philippines possesses astrong mineral resourcestrong mineral resourcebase that justifies mining asa development option - foras long as it is responsibleas long as it is responsiblemining where benefits faroutweigh the costs ”outweigh the costs.”

From: Garwin

THE LEGAL BASIS OF MINING

•Section 2, Article XII of the 1987 Philippine Constitution

“The exploration, development, and utilization of natural resources shall be under thefull control and supervision of the State. The State may directly undertake suchactivities, or it may enter into co-production, joint venture, or production-sharingagreements with Filipino citizens, or corporations or associations at least 60 percentum of whose capital is owned by such citizens Such agreements may be for acentum of whose capital is owned by such citizens. Such agreements may be for aperiod not exceeding twenty-five years, renewable for not more than twenty-five years,and under such terms and conditions as may provided by law”.

“The President may enter into agreements with foreign-owned corporations involvingeither technical or financial assistance for large-scale exploration, development, andeither technical or financial assistance for large scale exploration, development, andutilization of minerals, petroleum, and other mineral oils according to the generalterms and conditions provided by law, based on real contributions to the economicgrowth and general welfare of the country. In such agreements, the State shallpromote the development and use of local scientific and technical resources.”

•Section 2 of the Philippine Mining Act of 1995

“All mineral resources in public and private lands within the territory and exclusiveeconomic zone of the Republic of the Philippines are owned by the State. It shall bethe responsibility of the State to promote their rational exploration developmentthe responsibility of the State to promote their rational exploration, development,utilization and conservation through the combined efforts of government and theprivate sector in order to enhance national growth in a way that effectively safeguardsthe environment and protect the rights of affected communities”.

Philippine Mining Act and IRRpp g

• Enshrined the principles ofresponsible mining;responsible mining;

• Placed strong focus on life-of-mineand after-mining environmental andand after-mining environmental andsocial responsibilities;

• Ensured equitable sharing of benefits;Ensured equitable sharing of benefits;and

• Protected the rights of Indigenousg gPeoples and communities.

Other Major Laws on Mining j g

• National Integrated Protected Areas System Actg y• Indigenous Peoples Rights Act • Environmental Laws

• Philippine EIS System• Clean Water Act• Clean Air Act• Clean Air Act• Ecological Solid Wastes Management Act• Hazardous and Toxic Wastes Management Actg

• Local Government Code• Forestry Code• Small-Scale Mining Laws

Mining is NOT allowed in:

• Old growth or virgin forests, proclaimed watershed forest reserves,

g s O a o ed

g g , p ,wilderness areas, mangrove forests, mossy forests, national parks,provincial/municipal forests, tree parks, greenbelts, game refuge, birdsanctuaries and areas proclaimed as marine reserves/marine parks,tourist zones and identified initial components of the NIPAS;tourist zones, and identified initial components of the NIPAS;

• Critical watersheds with appropriate barangay/municipal/ city/provincialSanggunian ordinance;

• Forest and other government reservations (unless with clearance fromagency concerned);

• Built-up areas (buildings, bridges, private plantations, etc.) unless withconsent from agency or party concerned;

• Ancestral domains/lands unless with Free and Prior Informed Consentfrom Indigenous Peoples;

• Coastal areas; and

• Other areas expressly prohibited by law.

THE LEGACY MINES

Rallying point ofy g pthose who opposenew mining projects

FINAL MINEFINAL MINE REHABILITATION/DECOMMISSIONING PLAN

Year 0: Mined-Out Area

Year 2

Year 3

Year 4Year 4

Approved Mining Tenements Approved Mining Tenements (As of January 2012)

Exploration Permit 115

Mineral Production Sharing Agreement 339g g 339

Financial or Technical Assistance Agreement 6

Mineral Processing Permit 68

Industrial Sand and Gravel Permit 214Industrial Sand and Gravel Permit 214

Mining Lease Contract 36

TOTAL EXISTING/APPROVED MINING PERMITS 778

Operating Mines

3 C i ( ith ld d• 3 Copper mines (with gold andsilver)

• 1 Copper mine (with gold,silver zinc)s e c)

• 5 Gold mines

• 3 Chromite mines

1 M tit i• 1 Magnetite mine

• 18 Nickel mines

• 1 Nickel Processing Plant

• 1 Copper Processing Plant

• 2000+ sand and gravel, andother non-metallic small-scale

tioperations

Mine Development P j tProjects Far Southeast Copper-

Gold Project

Boyungan

OceanaGold Didipio Copper-Gold Project

Siana Gold Project

Gold ProjectRunruno Gold-Molybdenum Project

j

Kingking Copper Gold Project

Sumitomo Nickel Project

Tampakan Copper Project

Industry Performancey2009 2010 2011*

GROSS PRODUCTION VALUE IN MINING (MGB)

Large Scale Metallic Mining P 42.8 Billion P 68.2 Billion P 88.0 Billiong g

Small Scale Gold Mining 36.8 Billion 42.9 Billion 34.1 Billion

Non-metallic mining 26.5 Billion 33.3 Billion nya

TOTAL P 106.1 Billion P144 .4 Billion P122.1 Billion

GROSS VALUE ADDED IN MINING AT CURRENT PRICES P 65.8 Billion P 88.2 Billion P 56.1 Billion*(NSCB)

Mining Contribution To GDP 0.8% 1.0% 1.2%

TOTAL EXPORTS OF MINERALS & MINERAL PRODUCTS (BSP) $1,470 Million $1,870 Million $2,043 Million

Mining Contribution To Total Exports 3.9% 3.7% 5.6%

TOTAL EXPORTS OF NON-MET. MINERAL MANUFACTURES (BSP)

$156 Million $162 Million $130 Million

Mining Contribution To Total Exports 0.4% 0.3% 0.4%

EMPLOYMENT IN MINING AND QUARRYING (DOLE) 169,000 197,000 205,000

Mining Contribution To Total Employment 0 5% 0 5% 0 6%Mining Contribution To Total Employment 0.5% 0.5% 0.6%

TAXES, FEES AND ROYALTIES FROM MINING

Fees, Charges & Royalties Collected by DENR-MGB/LGUs P 396.2 Million P 800.6 Million P 558.6 Million

Excise Tax Collected by BIR 718.8 Million 1,299.7 Million nya

Taxes Collected by Nat'l Gov't Agencies 10 272 5 Million 10 612 4 Million nyaTaxes Collected by Nat l. Gov t. Agencies 10,272.5 Million 10,612.4 Million nya

Taxes and Fees Collected by LGUs 992.8 Million 1,113.0 Million 23.0 Million

TOTAL P12,380.3 Million P13,825.7 Million P581.6 Million

* - Preliminary

Industry Performancey

2011 2010 % Change

Mineral Commodity Unit Quantity Value Quantity Value Qty.

Value

PRECIOUS METALS 65,898,447,124 71,698,391,862 -8

Gold kg 31,120 63,142,761,963 40,847 70,508,198,235 -24 -10

Silver kg 45,530 2,755,685,161 41,004 1,190,193,627 11 132

BASE METALS 56,248,482,781 40,271,604,780 40

Copper Concentrate DMT 253,975 19,091,584,582 236,814 15,775,710,591 7 21

Nickel Concentrate DMT 38,798 11,197,108,000 33,539 9,795,473,000 16 14

Nickel Direct Shipping Ore DMT 20,104,142 24,463,091,114 13,763,734 14,080,650,478 46 74

Metallurgical Chromite DMT 25,483 145,178,018 14,807 117,135,758 72 24

Zinc DMT 37,354 1,036,557,037 19,819 502,634,953 88 106

Iron Ore DMT 126,177 314,964,029 0 0

TOTAL 122,146,929,905 111,969,996,642 9

PH now 2nd in global mined ti ft R iproduction after Russia

(United States Geological Survey Mineral Commodity Summaries 2012)(United States Geological Survey Mineral Commodity Summaries 2012)

CHALLENGES CHALLENGES

• Perception of mining as an environmentalPerception of mining as an environmentaldespoiler;

• Lapses and delinquencies of miners;p q ;• Lack of monitoring capability of government;• Insufficient national mineral resourcesInsufficient national mineral resources

inventory;• Insufficient Government Share from mineralsu c e t Go e e t S a e o e a

resources utilization;• Security of investments; andy ;• Opposition of LGUs to mining.

CHALLENGES

• Small-Scale mining:g• Having 2 laws on small-scale mining;• The unabated use of mercury in extracting gold;

U f i i ti• Unsafe mining practices;• Lack of environmental impact mitigation;• Rampant child labor; • Illegal use of heavy equipment and explosives; • Non-collection of excise tax;• Rapid depletion of mineral deposits due to• Rapid depletion of mineral deposits due to

selective unsystematic method of mining; and • Proliferation of illegal small-scale mining

tioperations.

CHALLENGES

• Land Use Conflicts with -• Farmlands.• Ancestral land/domain.• Key biodiversity areas.• Proposed protected areas.

E t i• Eco-tourism areas.• Agrarian reform areas.• Forestry projects• Forestry projects.• Fishing grounds.

The Road Forward

P rs ing f rther the “Use it or Lose it• Pursuing further the “Use it or Lose itPolicy”;

• Enrolling the mining industry in the National• Enrolling the mining industry in the NationalGreening Program;

• Participating in the Extractive Industry• Participating in the Extractive IndustryTransparency Initiative;

• Responding to the legislative challenges toResponding to the legislative challenges tothe Mining Act;

The Road Forward

• Pursuing the early resolution of cases filedagainst mining projects, such as the

titi f W it f K lik dpetitions for Writ of Kalikasan andTemporary Environmental Protection Order;

• Intensifying information, education andcommunication campaigncommunication campaign.

Mining Policy of the Aquino AdministrationAdministration

THANK THANK YOU !

www.MGB.gov.ph

Siltation: From the mine or not?

A mining area situated right along a road and the coast, with vulnerable features.