Foreign businessmen oppose ban on mineral ore exports

MANILA, Philippines — Foreign businessmen have raised concerns on the possible negative economic implications of the proposed ban on the export of mineral ores.

The Joint Foreign Chambers (JFC) in the Philippines said it opposes House Bills 2165, 2915 and 3229 which promote the development of mineral processing and in the process will ban the export of iron, nickel, chromite, manganese and other strategic metallic ores.

 “The bills aim to promote the development of minerals processing but also propose to do so through a ban on the export of unprocessed mineral ores. We agree with the goal of the bills, but not the policy means to achieve it,” the JFC said in a letter to Rep. Arnel Ty, chairman of the House Committee on Natural Resources.

The JFC said a policy to require mineral ores exported in the Philippines to be refined into metal in the country would certainly add value for the development of Philippine mineral production, if economically feasible.

But if the investment prerequisites are absent or insufficient, the group said a ban on ore exports would not lead to the construction of minerals processing plants and even result in mine closures, job losses and economic dislocation in communities hosting mining projects.

“The decision to process minerals where they are mined should be a purely commercial one based on relative advantage and commercial considerations. It will not occur unless there is a commercial advantage in doing so,” the JFC said.

“Market forces must determine whether or not an economic activity like minerals processing can be established,” it added.

The JFC said economies of scale and the cost of power are important factors in the production of refined minerals and these should be thoroughly studied before the bill’s policy is legislated.

According to the group, policies adopted in other countries have led to a serious decline in actual mining because many mining companies are simply not in the business of processing.

“And if forced to process, they will move to other mineral-rich countries where the environment allows market forces to operate,” the JFC said.

The foreign businessmen, however, see the clear need to integrate mining more effectively in the country’s industrialization strategy as going beyond mineral extraction and into processing will link mining more strongly to downstream industries, thereby creating high-quality jobs, contributing to higher GDP, enhanced fiscal revenue, and job creation for more Filipinos.

“The Philippines should target producing manufactured and industrial products based on an interlinked and sustainable industrialization framework. The extraction and production of base metals (copper, nickel, iron, and chromite) should be linked, not just with smelting and refining operations, but even further down to the manufacture of cable wires, steel, and other high-value finished products,” the JFC said.

“Therefore the JFC recommend that these bills not be enacted due to the negative impact they would have on the Philippine economy,” it added.

The JFC is a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, Korean chambers and PAMURI, representing over 3,000 member companies engaged in over $100 billion worth of trade and some $30 billion worth of investments in the Philippines.