MGB pushes for gradual stop of exportation of raw minerals

The Mines and Geosciences Bureau (MGB) is pushing for policies that would gradually restrict the exportation of raw minerals to pave the way for more mineral processing and value-adding in the country's mining sector.

During the MGB Stakeholders Forum on Thursday, Juancho Pablo Galvez, chief of MGB Metallurgical Technology Division, said the Philippine government is still determined to develop the downstream industry in the mining sector, which should lead in the production of higher processed mineral products and other value-added products out of the country’s mineral resources.

Right now, most of the metal products that the Philippines, one of the highly mineralized countries in the world, currently being sold overseas are raw and unprocessed. This, while the mining sector’s contribution to the Philippines’ total gross domestic product (GDP) stood at less than 1 percent.

The top major export destinations for the country’s mineral output are China, Australia, Japan, and Canada.

Galvez said that MGB’s current approach to push for metallurgical development in the Philippines include policy-making, research and development, and provision of technical services.

As such, he said that “value adding activities and the development of downstream industries for the mineral sector” needs to be prioritized.

“On the policy making, we want to assist in the crafting of senate and house bills in promoting value-adding of the mineral sector. gradual and partial restriction of exporting direct shipping ore. Rather than exporting unprocessed minerals, we need to process [in order to sell at higher prices," Galvez said.

"We have proposed the bill and it was filed just a few months ago. The bill will not be passed during this Congress, maybe next," he added.

Direct shipping ore refers to unprocessed or raw minerals that were directly sold from the mine site and the preferred market of the mining companies.

Right now, only two mining companies in the Philippines are engaged in the processing of nickel, which are the Coral Bay Nickel Corp. and Taganito HPAL Nickel Corporation.

Galvez said that since the number of processing plants in the Philippines are still limited, the partial restriction on the exportation of raw minerals would mean half of the mining companies' raw output can be exported while half should be locally processed.

"If they don't have their own processing plants, they could have contracts with legitimate mineral processing plants," Galvez said, adding that the government will allot a transition period of at least five years to give mining companies some time to put up their own plants.

These things, which Galvez has mentioned, are contained in the proposed House bill that the MGB helped crafted. Filed in July this year, House Bill (HB) 9775 is now pending in Congress. It seeks to gradually and partially restrict the direct shipping of nickel ore and other raw metallic ores.

"This bill proposes gradual/partial restriction of export of these direct shipping ore as its mechanism to start and drive the mining industry to compel into mineral processing, value-adding and establishing of downstream industries, which are sure means to let the mining industry to be a significant economic contributor, while ensuring the preparedness of mining companies to respond to such call," said South Cotabato and General Santos City First District Representative Shirlyn Banas-Nograles in her explanatory note for HB 9775.

"In essence, the bill seeks not only to increase the mining industry's GDP contribution but also to increase employment and other benefits, both directly and indirectly, that accrue from processing and manufacturing with minerals and metals," she added.

In 2018, Philippine Nickel Industry Association (PNIA) President Dante Bravo said the Philippines is not a strategic location to develop new mineral processing plants in.

One of the obvious reasons for this, he said, is the high cost of running a plant in the Philippines due to high fuel prices.