Development of mineral processing plants a long-term goal

MANILA, Philippines – The development of domestic mineral processing plants should be the long-term goal of the government to generate more employment and significantly improve the mining industry’s contribution to the economy, Senator Cynthia Villar said yesterday.

“That should be the vision in the future because right now we are just exporting raw materials, but as the country develops, we should export the processed already. It’s not now because the industry is not that developed ,but it is something we can look forward to in the future,” Villar said on the sidelines of the two-day Mining Philippines Conference 2016, which kicked off yesterday.

The plan is similar to that of the Indonesian government where it is a prerequisite for companies to build domestic processing facilities and to revise regulations on mineral ore exports.

“If we are able to build stronger mining companies then their next sphere of action would be to build processing plants. They have to be stronger first, then that would follow,” Villar said.

The Chamber of Mines of the Philippines (COMP) said the establishment of processing plants could not be done in a short period of time as this would require the conduct of an economic feasibility study that would benefit both investors and the government.

“The industry would need a huge capital for that, billions of dollars, and we have to look at the best available technology. It’s a longer term plan,” COMP executive vice president Nelia Halcon said.

Although Villar doubts that the plan will materialize in the current administration, COMP is upbeat that the plan will at least be included in the six-year development program of President Duterte as he shifts gears towards industrialization.

“The President has been saying that we have to industrialize. In his term of six years, I think that would all be allotted for planning and the next administration would execute it, “ Halcon said.

Despite the costly plan of putting up processing plants, Halcon noted that investors would continue to flock as long as the government would provide incentive packages such as tax exemption on environmentally-safe equipment.

COMP emphasized that it should not be mandatory, but merely an encouragement among companies for them to increase their investments and income.

“I don’t think you should impose just like what Indonesia did because not everyone was able to follow. It’s better if we just encourage and direct them that this is what the country needs and this is where we’re heading. And that way, I think Filipinos, taipans and industrialists will invest in the country,” Halcon said.

Villar, head of the Senate committee on environment and natural resources, also asked the government to strike a balance given its ongoing crackdown on irresponsible mining, saying the industry generates employment and helps in alleviating poverty.

“The government should do a balancing act—encourage investors by putting in place the right business environment and at the same time be vigilant against abuses and excesses, especially negative impact, if any, on the environment,” Villar said.

President Duterte earlier said he would support responsible mining that upholds environmental and safety standards, strictly implements the mining law and considers limiting the issuance of government permits to mining companies.

Last month, Environment Secretary Gina Lopez has ordered the audit of all mining companies to ensure their compliance with environmental standards. This has so far resulted in the suspension of about 10 firms in the last 50 days.

Villar said mining projects that prioritize local suppliers and contractors should be the topmost priority since this could spell the difference in inducing growth both upstream and downstream industries such as agriculture and agro-forestry, which can thrive under responsible mining operations.