Mining sector seen to remain under scrutiny

Published April 22, 2021, 6:00 AM

by Madelaine B. Miraflor

Despite EO 130

The mining sector will remain under scrutiny despite President Rodrigo Duterte’s recent decision to lift the moratorium on new mining operations, a top government official said. 

As a start, Environment Secretary Roy Cimatu said the government is considering imposing more requirements on new mining applications.

In a statement issued Wednesday (April 21), the Department of Environment and Natural Resources (DENR) has vowed to scrutinize pending applications for mineral agreements to ensure that they will not pose adverse effects to the environment.

Environment Secretary Roy A. Cimatu (RTVM / FILE PHOTO / MANILA BULLETIN)

“There is no automatic approval even if these mining applicants submit all the requirements,” Cimatu said.

This was after environmental concerns were raised against the recently issued Executive Order (EO) 130, which lifted the ban on new mining agreements in the country.

EO 130 amended EO 79, which banned the approval of new mining agreements until there is no new revenue sharing scheme between the government and mining companies. The order was issued by former President Benigno Aquino III in 2012.

While the mining industry, including the Chamber of Mines of the Philippines (COMP), lauded this move, groups like Bantay Kita and Alyansa Tigil Mina (ATM) were dismayed about it.

For Bantay Kita, reforms in the fiscal regime of mining such as an increase in mineral royalty payments, the imposition of windfall gain tax, and the scrapping of unnecessary incentives should be enacted first before the ban on new mining projects is lifted.

This, according to the group, will ensure a more fair economic contribution from the extractive industry.

ATM, on the other hand, said allowing more mining projects in the Philippines “will impact our water, food supply, forest, biodiversity, indigenous communities, and fragile island-ecosystems”.

For his part, Cimatu said Mines and Geosciences Bureau (MGB) will implement a thorough review and validation of mining applications, especially their Final Exploration Report and Mining Feasibility Studies. 

The Final Exploration Report, which will be validated by the MGB Central Office, should show that the delineated mineral resources and reserves are plentiful to last at least a 10-year mine life or commercial extraction life for metallic minerals and seven years for non-metallic.

Meanwhile, the Mining Feasibility Study should show that the cost to develop the mine can pay for all the costs related to the mining operation including operating cost, administration overhead, and milling cost if there is a processing plant, environmental cost, social development cost, and safety and health cost.

Aside from these, the company should also have the financial capability to pay national and local taxes, royalties, local government fees, other national government fees, and interest and charges on loans. 

Cimatu also said new requirements may come up based on EO 130’s implementing rules and regulations (IRR), which will soon be drafted.

He said the MGB-DENR-Department of Finance Working Group is set to convene to draft the IRR.

To secure a mining permit, companies must first obtain Environmental Compliance Certificate (ECC), Tree Cutting Permit, Foreshore Lease Agreement or Special Land Use Agreement, Philippine Ports Authority (PPA) permit for loading port, and the National Commission on Indigenous Peoples (NCIP) permit.

Miners must also submit for approval their respective Social Development and Management Program (SDMP), Environmental Protection and Enhancement Program (EPEP), Safety and Health Programs (SHP), final mine rehabilitation, and decommissioning plan (FMRDP), and Care and Maintenance Program (CMP).  

Moving forward, MGB Director Wilfredo Moncano told Business Bulletin that the processing of applications will generally follow the government’s existing procedure but will be expedited.
MGB had so far issued 309 mineral production sharing agreements (MPSAs) all over the country.

The other day, Moncano said that 36 metallic and non-metallic mines are poised to start operations soon based on the agency’s current list of pending applications, while 65 more are up for processing as new MPSAs.

“Lots of applications were filed before EO 79,” he further said.

Moncano also said the 36 metallic and non-metallic mines being reviewed under Priority Phase 1 are “ripe to start [operations] this year”, while those under Phase 2 of the review “can start development and construction in 2022”.