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MANILA, Philippines (UPDATED) – The mining industry has spoken. They are “shocked” and they will sue.
This was the message of the president of the Philippine Chamber of Mines Philip Romualdez at the 2nd day of the 2012 Mining Conference in Pasay City.
“We are shocked with Section 9 of the implementing rules of EO 79 (Executive Order 79),” he said to a packed room of conference attendees who have investments, work, or have stakes in different mining firms in the country.
He was referring to a provision of the implementing rules and regulations (IRR) of the Aquino government’s mining policy released on September 11.
Watch his speech below.
He said that since this provision shortens the potential lifespon on a project which has a maximum lifespan of 50 years, this is “illegal.”
Section 9 of the IRR, he said, “mandates that the terms and conditions of the second 25-year term of mining contracts would be renegotiated by the government.” This provision effectively shortens mining contracts to a mere 25 years in violation of Section 32 of the Mining Act, which guarantees the mining companies of a second 25-year term under the same terms and conditions.”
“This provision is patently illegal and contrary to the assurances of government that mining contracts will be respected.”
He spoke before Vice President Jejomar Binay did, in effect setting the tone that the mining industry will not be as laid back as it generally was in recent months, when the Aquino government has been crafting its mining policies.
Legal action
Currently, the Mining Act provides for an initial 25-year contract, which is extended by another 25 years 6 months before the original contract ends. The terms of both contracts are similar, industry practitioners say, thus their contracts have effectively a 50-year term.
Because mining firms consider the IRR provision shortening this 50-year term, Romualdez said in a follow up interview at the sidelines of the conference that mining firms will take legal action.
“They will sue,” he told reporters. “Any change to that (Mining Act), they will sue. If they (government) will continue with it, [a legal action] is being prepared.”
The IRR will be implemented 15 days after it is published in major broadsheets.
“I was informed that they will review it. They should. And the Vice President (Jejomar Binay) say it should [be reviewed],” he added.
He said the mining firms have carefully reviewed every aspect of the EO 79 and its IRR and they stand by their position that the IRR’s provision is illegal.
A portion of Section 9 of the IRR reads: “ In the case of expiring 25-year mining tenements, the qualified mining tenement holder electing to exercise its right to renew the said mining tenement for another 25- year term shall file the pertinent mining applications in the MGB not later than six months prior to the expiration of the same mining tenement.”
“The mining contract/agreement that may be renewed shall be subject to new terms and conditions pursuant to the laws, and rules and regulations that are existing at the time of renewal or may be hereafter issued, such as, but not limited to, the establishment of the contract area as a mineral reservation.”
Below is a copy of the IRR.
At a crossroads
Romualdez lamented the way the Aquino government has handled the policies covering the local mining industry.
He echoed a sentiment the industry players have expressed mostly in coffee shops and within the confines of their offices.
“Our government is seeking more revenues from the industry and, while at it, has extended the moratorium on new mining projects until a new revenue measure has been agreed upon,” he said, referring to the provision of the EO 79.
The day before, House Speaker Sonny Belmonte admitted the lawmakers will find passing the mining bill “difficult” as the 2013 elections nears.
“As we’ve pointed out, the moratorium has, according to the Bangko Sentral ng Pilipinas, already caused an outflow in foreign direct investments in the mining sector in 2011 to the tune of P10 billion,” he added.
He went on to describe their industry as being “at a crossroads.”
“The Philippine mining industry is at a crossroads. After being the “raging bull” of the stock market from 2008 to early 2012, mining stocks have sputtered to become a “sitting bull” in the PSE by this month,” he said.
Romualdez said that since the moratorium on new mining contracts were implemented since 2011, the country has been losing out on foreign direct investments. Thus, the investment targets for the industry will also not be met.
“The projected $16 billion of investments that were supposed to occur during this administration will not happen. The $2 billion that we as
a country were expecting in additional foreign direct investments this year from the minerals sector will not happen. The $2 billion that we expect in additional investments next year will not happen,” he stressed. – Rappler.com
Read the Blog on the 2012 Mining Conference for a blow-by-blow account of issues being discussed.
For the existing mining contracts in the Philippines, view this #WhyMining map.
How does mining affect you? Are you pro or against mining? Engage, discuss & take a stand! Visit Rappler’s #WhyMining microsite for the latest stories on issues affecting the mining sector. Join the conversation by emailing whymining@rappler.com your views on the issue.
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- REPLAY: #WHYMINING
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