Mining investment forecasts down markedly due to EO 79

MANILA, Philippines – The government has lowered significantly its forecasts for mining investments this year and the next 4 years because of project delays due to the implementation of Executive Order 79, also known as the Aquino administration’s mining policy.

Data from the Mines and Geosciences Bureau (MGB) showed that $509.24 million mining investments are seen to flow into the country in 2012, 75% lower than the previous $2 billion estimate.

Investment targets from 2013 to 2016 were also revised, in consideration of the EO.

Investment inflows for 2013 are likely to reach $718.47 million, down from the previous target of $2 billion; for 2014, $851.75 million from $2.4 billion; for 2015, $757.60 million from $2.9 billion, and for 2016, $619.50 million from $2.3 billion.

EO 79 prohibits the processing of new mining applications, pending the identification of sites where mining activities would be banned.

The government is having difficulty delineating the boundaries of prime agricultural land as well as tourism development areas.

The EO also prohibits the granting of new mining permits until a law rationalizing the revenue-sharing scheme between government and mining companies is passed.

Some projects, like the $5.9-billion Tampakan copper-gold project of Sagittarius Mines Inc., have also been delayed due to ordinances banning open-pit mining in certain provinces. Mining firms have questioned these ordinances, saying they run counter to national laws. EO 79 upholds the primacy of national laws, but no action has been taken yet on the local bans.

In the first half of 2012, mining investments amounted to $160 million, down from $309.31 million in the same period last year.

A large portion of these investments were made by Philsaga Mining Corp., the operator of a gold mine in Agusan del Sur, and Sagittarius Mines for initial expenditures of the Tampakan project. – Rappler.com