Ban on mineral ore export may backfire, mining stakeholders warn

MANILA, Philippines — A planned ban on the export of mineral ores may hit the country's economy and will likely risk its reputation in global markets, mining stakeholders warned.

 

While the Chamber of Mines of the Philippines (COMP) is all for the domestic processing of minerals, it maintained that a total ban on exports will not work for the country.

 

Citing Indonesia, which instituted an export ban in 2014, as an example, COMP executive director Ronald Recidoro said the move may not be applicable to the Philippines and may even backfire.

 

"Indonesia saw that the experiment did not work and it is now creating havoc within their economy. And we do not want to go through that," Recidoro said during the opening day of the Mining Conference Philippines 2017 on Tuesday.

 

"We want to see the country get more benefits from its minerals. If it means mineral processing domestically, then we are all for it. But it cannot stop at just banning raw ore exports. It simply won’t work," he added.

 

For instance, Indonesia has now partially rolled back its export ban as there were not enough nickel processing plants there, resulting in an oversupply of nickel that are currently stockpiled.

 

Recidoro added the Philippines cannot really ban the export of raw nickel without running afoul of the country’s obligations under the General Agreement on Tariff and Trade and the World Trade Organization.

 

"The real danger is that we could be sued by China and Japan by cutting supply. Our reputation as global trading partner is at risk that’s why we really have to look into it," he added.

Meanwhile, the government's call to put up more mineral processing plants in the country should be backed by incentives and assistance to achieve sustainability in the mining sector, a member of the House of Representatives said.

 

"There should be proper assistance and incentives to make investments in mineral processing attractive and competitive with other countries in the region," LPG Marketers' Association party-list Rep. Arnel Ty said.

 

He added that there should also be a balance in determining a new revenue-sharing scheme between the mining sector and the government.

 

Recidoro, likewise, said there is a need to study factors needed to make processing competitive in the country.

 

"Apart from income tax holiday, there should be assistance in terms of power cost and transporting ore because right now, inter-island shipping rate is very high, as well as cutting the red tape," he added.

 

"We cannot run a manufacturing plant if we lack the supply. The processing industry needs a big and reliable supply of minerals. So, you have to issue permits. If we really want processing, add more mines," Recidoro said.