Government eyes more mineral reservation areas

MANILA, Philippines — The government plans to declare more mineral reservation areas in the country to help provide equitable access to mineral resources and generate additional non-tax revenues for the government.

The Department of Environment and Natural Resources (DENR) and the Mines and Geosciences Bureau (MGB) is now in the process of identifying “mineralized areas and high mineral potential areas, including all existing operating mines,” for declaration as mineral reservations.

“The law provides that when the national interest so requires, such as when there is a need to preserve strategic raw materials for industries critical to national development, or certain minerals for scientific, cultural or ecological value, the President may establish mineral reservations,” Environment Undersecretary Analiza Rebuelta-Teh said.

This after the Commission on Audit (COA) alleged that DENR failed to collect almost P2.6 billion in royalty fees from five mining companies in the Caraga.

Teh clarified that the present mining law requires payment of royalty fees only in areas declared as mineral reservations.

“The mining companies are operating outside the Surigao Mineral Reservation Area.  Thus, the permits granted to them do not contain any provision for them to pay royalty,” Teh said.

Teh said that all actions of the DENR and MGB on the matter were “in accordance and consistent with existing laws and regulations.”

To address the concerns of the COA and the government in general to generate more revenues from the mining industry, Teh said the DENR plans to declare more mineral reservations to include sites where the five mining companies operate, as a solution.

The DENR has also proposed to the Department of Finance to include the imposition of royalty fees on mining firms operating outside mineral reservations in the second package of the tax reform law.

“Should an amendatory law be passed, the imposition of royalties on mining operations outside mineral reservations will be applied prospectively,” Teh said.

Mining royalty tax represents five percent of the market value of the gross output of the minerals produced by mining companies within a declared mineral reservation area.

At present, only five percent royalty is slapped on mining firms operating in the nine mineral reservation areas in the Philippines.

To date, there are only nine mineral reservation areas in the Philippines namely, Ilocos Norte feldspar, Zambales chromite, Biak-na-Bato, Siruma white clay, Samar bauxite, Zamboanga, Mt. Diwalwal Gold, Surigao, as well as all offshore areas within the country’s territorial limits. – With Rhodina Villanueva