5 top Japanese firms eye RP mining industry

TOKYO, Japan – Five of Japan’s biggest mining and trading companies have expressed interest in investing in the revitalized Philippine mining industry.

At the Mining Congress organized by the state-run Japan Oil, Gas and Metals National Corp., Japanese mining companies said they are seriously looking at several potential gold, copper and nickel ore mining projects in the Philippines.

At the same time, Japan’s major financial institutions such as Mitsui Bank and Japan Bank for International Cooperation have also committed to fund mining projects of Japanese companies in the Philippines.

"Some of these companies have existing participation in mining projects in the Philippines while others are taking a second look at the Philippines, especially after the favorable ruling by the Supreme Court that allowed full foreign ownership of mining projects. They were previously skeptical about prospects in the Philippines but recent favorable developments changed their negative perceptions," said Philip Romualdez, president of the Chamber of Mines of the Philippines (CMP).

Romualdez said that among the companies coming to Manila to look further into mining sites open for exploration and development are Pan Pacific Copper Ltd. (PPC), Mitsubishi Corp., Sojitz Corp., Sumitomo Metal Mining Co. and Marubeni Corp.

PPC, whose shareholders include Nippon Mining and Metals Co. and Mitsui Mining and Smelting Co., has existing investments of about $15 million for its joint venture mining project with local mining firm Philex Mining Corp. in Benguet.

PPC president Takeshi Kurushima that the company wants to expand its presence in the local mining scene to secure a steady supply of copper concentrates.

Copper ore concentrates are shipped by PPC to Nippon and Mitsui for smelting and refining and the products are returned from the two companies and sold by PPC.

Mitsubishi Corp., one of Japan’s largest trading companies, is looking at new sources for nickel ore from the Philippines since its current supplier, the Rio Tuba nickel mining project in Palawan, is expected to be exhausted in three years, said Romuldez.

The company has been in the nickel business for more than 50 years and currently markets and trades as much as 80,000 metric tons annually of contained nickel in form of ore, ferronickel, oxide and metal.

Sojitz Corp. whose local unit, Sojitz Philippines Corp. also wants to expand its nickel projects in the Philippines. The trading company is importing about 24,000 metric tons of nickel ore from Rio Tuba, Taganito, Cagdianao and Hinatuan in the Philippines and is exporting refractory chromite to China, Japan, Taiwan and Thailand.

Sojitz currently has an 18-percent stake in Coral Bay Nickel Corp., four percent in Coral Bay Nickel Corp. (CBNC), 1.5 percent in Taganito Mining Corp.

On the other hand, Sumitomo Metal Mining Co. which has a 54-percent stake in CBNC and Marubeni Corp., is also reviewing potential mining sites in the Philippines.

"We can expect in the near-term, specific and concrete commitments by these companies," said Romualdez.

The Mines and Geosciences Bureau has identified 23 to 30 large-scale mining projects in the next six years of the Arroyo administration.

These projects are estimated to bring in fresh investments of $6 billion, $7 billion in foreign exchange, P5 billion in excise taxes alone and about 210,000 in direct and indirect employment.

Some of the scheduled large-scale mining projects are the Nonoc nickel project by Nonoc Processing Corp/Philnico in Nonoc Island, Surigao del Norte with potential investment of $1 billion projected to begin commercial operations by 2009; Pujada nickel project in Davao Oriental by Asiaticus, $1 billion, 2009; Mindoro nickel project of Aglubang Mining Corp. in Mindoro Oriental, $1 billion, 2009; Boyungan copper project by Silangan Mindanao Mining Corp. in Surigao del Norte, $500 million, 2009; Tampakan copper project by Sagittarius Mines Inc. in South Cotabato, $500 million, 2009; King King copper-gold project by Benguet Corp. and Nationwide Development Corp. in Compostela Valley, $532 million, 2007 Victoria II gold project by Lepanto Consolidated Mining Corp. in Mankayan, Benguet, $80 million, 2004 and the Didipio copper-gold project by Climax Arimco Mining Corp. in Nueva Vizcaya, $63 million, 2006.

The Philippines is considered a highly mineralized area with mineral resources estimated to cover nine million hectares or about 30 percent of the country’s total land area. Currently, however, less than half a million hectares are being explored or developed.

The minerals industry offers huge untapped potentials. For 2003 alone, the mining sector employed 104,000 workers and provided P4 billion to P5 billion in wages and benefits. For each direct job in the mining sector, four to 100 allied jobs are created.

The country’s mineral wealth is estimated at $800 billion to $1 trillion.