Attracting large scale mining enterprises

Part 2

As we have seen, minerals such as iron ore, copper and nickel are essential for infrastructure development, transportation systems, electrical grids and a host of consumer and industrial goods in a highly developed or developing economy.  By its sheer size in terms of investments in exploration, feasibility studies, construction, and development all the way to operations and final closure as deposits are depleted, mining can significantly  contribute to the national economy.  

Through industry linkages, it can stimulate many vital sectors of the economy such as construction, logistics, public utilities, manufacturing and manpower services, thus creating job opportunities much beyond its sector.  It provides livelihood opportunities to local communities  and  micro-small scale and medium enterprises.  It generates fiscal revenues for both national and local governments.  Mining attracts massive amounts of capital, especially foreign capital, to fund pre-exploration, exploration, and development activities, to jump start mining operations, and to generate sustained export revenues for mineral-ore-rich countries like the Philippines.

  This contribution to our export revenues is especially significant in the coming years when there is little  hope that we can compete with our ASEAN neighbors like Singapore, Malaysia and Vietnam in the export of manufactured goods, except probably in electronics and semi-conductor components.  We missed the boat in developing export-oriented manufacturing when in the last century, in contrast with our East Asian neighbors who became tiger economies through an export-oriented, labor-intensive industrialization strategy, we insisted on an inward-looking, import-substitution and capital-intensive strategy model—a major reason for our having been left behind one by one by our neighbors in North and South East Asia. 

It is extremely important that we make use of our God-given natural resources in mining to generate the foreign exchange we need to foot the bill of our ever increasing imports, now including basic food products that the present Administration wants to import to bring down food prices, the main reason for high inflation.  It will take time before we can begin to export high-value food products like Thailand and Vietnam.  It is for the national common good that we overcome unreasonable opposition to mining.


This opposition was dramatically manifested when the participants of the Palawan Stakeholders’ Congress on Mining and the Environment (PSC-ME) almost unanimously called for a moratorium on the issuance of new permits for new mining operations in their province.  As reported by Geraldford Ticke in one of the national dailies, the close to 200 PSCME participants declared that the moratorium on the approval of applications for new mining exploration,  new mineral production sharing (MPSA), and financial or technical assistance should be imposed while Republic Act No. 7942, or the Philippine Mining Act of 1995, is being reviewed for certain proposed amendments.  This result of the PSC-ME is an outstanding manifestation of democratic government at the local level and the decentralization of decision making that is in consonance with the provisions of the Philippine Constitution which strongly mandates more power to the LGUs.

Despite all the arguments in favor of large-scale metallic mining, however, we cannot ignore that mining as an extractive industry has a direct impact on the natural environment and the well-being of the communities around them.  It can reshape the natural landscape, destroying especially virgin forests.  It can also displace communities especially from their ancestral domains.  This is especially true for the province of Palawan that has numerous indigenous tribes populating some of its more than 2,000 islands.  It can emit industry-specific effluents and pollution wreaking havoc on sources of drinking water for the local communities.  With the growing militancy of responsible investors, downstream industries, civil society and governments, the policy standards and requirements for mining tend to be stricter, unique, and demanding.  

Environmental, social, and governance principles must be adhered to and effectively implemented for mining companies to gain societal, legal, and environmental acceptance.  Unfortunately, one speaker after another from the academe, NGO sector, church  officials and IP communities presented evidences  during the Palawan Stakeholders Congress that the rules and regulations on sustainable mining are honored more in the breach than in the compliance, to the great embarrassment of the officials from DENR and MGB who attended the Congress.

It is true, as mentioned above, that mining is essential not only to promote the global common good but also the common good of  the entire Philippine economic society.  Here, we define the common good as it is understood in the Philippine Constitution of 1987:  a social or legal order which allows every member of society to attain his or her fullest human fulfilment politically, economically, culturally, socially, morally and spiritually.

 It was argued by the large majority of the stakeholders of the province of Palawan that  what may be for the common good of the whole Philippine economy may not promote the integral human development of the Palawenos.  

They were able to demonstrate that while mining may promote the common good of other highly mineralized territories of the Philippines, it can do more harm than good in the specific circumstances prevailing in the province of Palawan which has been declared as the Best Island Resort in the world and has a very bright future in the hospitality sector.  It is also referred to as the last ecological frontier of the Philippines.

Another major reason why the stakeholders of Palawan consider that they do not need mining to attain economic growth, full employment and low poverty incidence is the rich resources they have for agribusiness, especially large commercial plantations. The southern part of the main island of Palawan, that is rich in mineral resources, is also the venue of large coconut plantations like Lionheart Farms and Cardinal Agriculture that are producing high-value products from coconuts.    

I myself brought up the idea that while it is difficult to attain win-win solutions when it comes to balancing mining and the environment, a classical example of “killing two birds with one stone” is agri-tourism.  Palawan can emulate many regions in Mindanao in which agribusiness investments can also lead to attractive sites for tourism, as one can also find in countries like Spain, New Zealand,  and Israel.  The stakeholders of Palawan are happy they can contribute to food security, the highest priority of the BBM Administration, through investments in agribusiness and earn substantial amounts of foreign exchange through foreign tourism. In fact, instead of attracting large amounts of foreign equity in mining, they would rather see substantial flows of FDIs in at least three international airports, i.e. the ones in Coron, Puerto Princesa and San Vicente.  

Endowing these attractive tourism destinations with world class airports, like the Mactan International Airport, will go a long way to attract  millions of foreign tourists (not to mention domestic) tourists. The Philippines has a long way to go to reach the level of foreign tourism its ASEAN neighbors like Thailand, Malaysia and Vietnam.  Palawan will surely play a major role in attracting foreign .tourists in the very near future.  From every foreign tourist, two jobs are generated.

Fortunately for those mining enterprises that are already operating in Palawan, Governor Socrates was explicit in stating that they are not covered by the moratorium which will only apply to new and pending applicants and not to the nine existing mining operators in the province, among which are Nickel Asia Corp., Coral Bay Nickel Corp., Ipilan Nickel Corp., Citinickel Mines and Development Corp., Celestial Mining and Exploration Corp., Macroasia Mining Corp., Central Palawan Mining and Industrial Corp., Pyramid  Hill Mining and Industrial Corp., and Palawan Star Mining Ventures Inc.  Given this reasonable compromise, it is hoped that these already existing mining operations will try their best to fulfil to the utmost the terms and conditions in the environmental compliance certificate and Social Development and Management Program.  

It would also help to prove to the stakeholders that sustainable mining is not an oxymoron if they increase the royalty shares of indigenous communities and secure business permits from host municipalities.  Exemplary behavior on the part of the existing mines could change the negative perception about mining of the stakeholders who may still one day decide to lift the moratorium.  (To be continued.)