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PROMOTING A RESPONSIBLE
AND SUSTAINABLE MINERALS
INDUSTRY
HORACIO C. RAMOS
Director
Mines and Geosciences Bureau
Department of Environment and Natural Resources
Republic of the Philippines
Mining Forum
Frankfurt, Germany
June 28, 2007
Some Key Dates in Philippine Mining
1974: Parity Rights expired; “Filipinization” of Philippine mining
operations; 70’s considered as the “boom years”
1986/87: People Power; Freedom Constitution; general lack of
exploration activities.
1991: Enactment of Local Government Code providing for local
autonomy and wealth sharing from mining.
1995: Passage by Congress of the Philippine Mining Act of 1995
(RA7942); initial foreign investors interest; rise in environmental
activism.
1996/97: Marcopper incident; challenge to the Constitutionality of the
Mining Act; enactment of the Indigenous Peoples Rights Act.
2003: Start of Revitalization Program for the Philippine Minerals
Industry; renewed investor interest.
2004/05: Affirmation by the Philippine Supreme Court of the
Constitutionality of the Mining Act.
2008: Start of a new mining boom?
Mining Industry Indicators (2006)
GROSS PRODUCTION VALUE IN MINING BY TYPE
(CY 2000 to 2004)
80
Large Scale Metallic Mining PhP68.4 billion in 2006; up
Small Scale Gold Mining by 36.25% from 2005
70
Non-metallic Mining
Gross Production
60
50
In Billion Pesos
40
30
20
10
0
2000 2001 2002 2003 2004 2005 20063
Year
Mining Industry Indicators (2006)
Share of Mineral Exports to Total Philippine Exports
25 Highest in early to mid-
70’s; 24.56% in 1973
20
Percentage
15
(%)
10 Gradual growth since
2003; 4.46% for 2006
5
0
1970 1974 1978 1982 1986 1990 1994 1998 2002 2006
4
Year
Mining Industry Indicators (2006)
Taxes, Fees and Royalties from Mining
Preliminary figure for
2006 is PhP4.9 billion
6000
5000
Million Pesos
1992: The excise tax for
metallic minerals was
4000 reduced from 5% to 2%
of the gross value.
3000
2000
1000
0
1997 1999 2001 2003 2005
5
Year
Mining Industry Indicators (2006)
Employment in the Mining and Quarrying Sector
0.80
2006: 141,000 directly
0.70
Percentage (%)
employed or 0.43% of total
labor force
0.60
0.50
0.40
0.30
0.20
0.10
0.00
1970 1974 1978 1982 1986 1990 1994 1998 2002 2006
Year
Mining Industry Indicators (2006)
Mining's Contribution to GDP
2006: PhP59.7 billion at
current prices
60,000
Million Pesos
50,000
40,000
30,000
20,000
10,000
-
1970 1975 1980 1985 1990 1995 2000 2005
7
Year
OPERATING MINES
1 Polymetallic Mine – Rapu rapu mine
2 Large – scale Mines:
Lepanto’s Victoria Gold Mine
Philex’s Padcal Copper Mine
4 Medium-scale Chromite Mines
Masinloc Project of Benguet Corp.,
Omasdang Project of Crau Minerals
Homonhon Project of Heritage Res.
Redondo Project of Krominco, Inc.
6 Medium-scale Nickel Mines
Rio Tuba Nickel Mine
Taganito Nickel Mine
Cagdianao Nickel Mine
Sigbanog Project, Hinatuan Mining
Tagana-an Project, Hinatuan Mining
Berong Nickel Project of TMM
5 Medium-scale Gold Mines
Canatuan Project of TVI
Acupan Gold Operations of Benguet
Diwalwal Direct State Development Project
Banahaw Gold Project, Philsaga Mining Corp.
Masara Mine, Apex/Crew Minerals
15 Cement Plants and Quarries
1 Nickel Processing Plant in Palawan
1 Copper Smelter (PASAR) in Leyte 8
2000+ Quarries and small scale mines
Philippine Mineral Potential
METALLIC MINERAL Zinc
RESOURCES/
Alum inum
RESERVES 2005 Molybdenum
Manganese
Iron
Chrom ite
Gold: 4.018 BMT
Nickel: 1.66 BMT @ 1.08 gpt
@1.31% Ni
MINERAL
ENDOWMENT
• 3rd for gold
• 4th for copper
• 5th for nickel
• 6th for chromite
Copper:
6.76 BMT @ 9
0.49%Cu
Philippine Mineral Potential
NON-METALLIC MINERAL Guano/RockPhosphate
RESOURCES/ RESERVES
Marbleized
2005
Limestone
12.04 B cu.m.
Magnesite
Aggregates:
3.36 B cu.m.
Perlite
Shale:
Limestone 2.54 BMT
Feldspar
40.25 BMT Silica:
Clay 2.162 BMT
Sulphur
Gypsum
Asbestos
Construction and
Bentonite
cement raw materials
predominate Zeolite
Talc
10
Diatom aceous Earth
Philippine Mineral Potential
PORPHYRY COPPER
PHILIPPINES BELTS
PORPHYRY COPPER
BELTS
11
Philippine Mineral Potential
Mineral Land Distribution
(As % of Total Philippine Land Area)
Approximately 2% currently covered
30% or 9 Million Hectares by permits
High-Potential
70%
Low-Medium Potential
Potential Areas and
1
2 Deposits
1. Luzon Central Cordillera – Au,
4
Cu, Fe, Mn
3 2. Northern Sierra Madre – Cr, Ni,
5 Cu
3. Zambales – Cr, Ni, Co, Pt, Cu, Au
4. Vizcaya-Aurora – Cu, Au
6 5. Bicol – Au, Fe, Cu
7 6. Southern Tagalog – Cu, Au, Ni,
Co
8 7. Central Visayas – Cu, Au, Mn
8. Samar-Eastern Mindanao – Au,
Cu, Fe, Cr, Ni, Co, Pt, Mn
9
12 10
9. North Central Mindanao – Cr, Cu,
Au
10. Zamboanga Peninsula – Au, Cu,
Cr, Fe
11. Southern Mindanao – Cu, Au
12. Palawan – Cr, Ni, Co, Pt, Au, Rare
11 Earth Elements
NEAR-COAST AND
Magnetite
OFFSHORE RESOURCES
Gold Philippines offshore area including
Chromite EEZ is 2.2 million Km2
Magnetite Potential offshore mineral
resources:
Manganese
Chromite
• Placer minerals including gold,
chromite, magnetite, silica
Magnetite • Offshore Palawan also holds
resources of manganese
• Aggregate resources (sand &
gravel)
Gold • Decorative stones, manganese
nodules/encrustrations with
Chromite associated copper, gold, zinc,
cobalt
Chromite
Philippine Mineral Potential
Global Exploration Expenditures (Source: MEG)
7.5 Global exploration expenditures
bottomed in 2002 at US$1.9 billion but
Exploration Expenditures (1997 - 2006):
7
Expenditures in Billion US$
6.5 with better metal prices, improving
investment conditions and “awakening’
6
5.5 ≈ US$200 million
of junior companies as risen to the
current high of US$7.5 billion
5
4.5
Recent Discoveries:
4
3.5
• Far Southeast Copper Orebody
3
2.5
• Tampakan Copper-Gold Orebody
2
1.5
1
•
0.5 Boyongan Gold Orebody
0
1993 1995 1997 1999 2001 2003 2005
Year
Philippine Mineral Potential
NICKEL
• The Philippine nickel resource is the biggest in Southeast Asia
• Improved technology makes low-grade lateritic ore viable
CHROMITE
• Improving chromite prices could revive Philippine chromite mines in
Zambales, Palawan, Samar, Dinagat and Zamboanga.
IRON
• The increasing demand for iron is reviving exploration for the commodity
in the Philippines
• The spatial relationship of carbonate rocks with younger intrusives in the
Philippines offers the possibility of finding new skarn deposits
LEAD and ZINC
• Ophiolitic and Early Tertiary arc terranes in the Philippines holds much
promise for deposits similar to those of Lafayette in Rapu-Rapu island.
PHILIPPINE NATIONAL
MINING POLICY
FOUNDATIONS
A. Philippine Mining Act and RIRR
– Enshrined the principles of
sustainable mining and concept of
planning for mine
closure/integrated mine closure
planning;
– Strong focus on life of mine
environmental and social
responsibilities
Major Types of Mining Tenements
– Exploration Permit (EP)
– Mineral Agreement (MA)
Mineral Production Sharing
Agreement (MPSA)
Joint Venture Agreement
Co-Production Agreement
– Financial or Technical Assistance
Agreement (FTAA)
– Mineral Processing Permit (MPP)
• PRE-EXPLORATION Prepare Social Implement Annual SDMP
Certificate of Satisfactory Development and
Environmental Management Management
and Community Relations Program (SDMP) Implement Final
Record (CEMCRR) Mine Rehabilitation
Prepare Safety Implement Annual SHP
and Health & Decommissioning
Program (SHP) Plan (FMR/DP)
• Environmental Work Program
•Decommissioning
(EnWP)
•Rehabilitation
• Safety and Health Program
(integrated with the EnWP) •Social
Environmental Implement Annual EPEP
• Host Community Devt. Protection and •Maintenance and
(voluntary) Establish the Contingent Monitoring
Enhancement
Liability and
Program (EPEP)
• Preparation of Environmental Rehabilitation Fund POST CLOSURE
with Final Mine
Impact Statement (EIS) as (CLRF) - Implement Site
Rehabilitation and
basis for an Environmental Decommissioning Management
Compliance Certificate (ECC) Plan (FMR/DP) Plan (SMP)
SHES Monitoring and Audit
S
T
A Exploration/Feasibility Development
Operating Period
Mine
G Period
and Construction
Closure
Period
E
Other Relevant Laws Affecting Mining
– Indigenous Peoples Rights Act of 1997
– Local Government Code of 1991
– National Integrated Protected Areas
System
– Environmental Laws, Rules and
Regulations
– Small Scale Mining Laws
B. Executive Order No. 270
The National Policy Agenda on
Revitalizing Mining in the Philippines
– Based on the policy declaration
of H.E. President Arroyo in
2003;
– Product of a 10-month
consultation process among
the 3 key stakeholders;
– Called for the development of
the Mineral Action Plan, the
current industry roadmap; and
– Led to the Creation of the
Mineral Development Council .
Objectives of EO No. 270
Fair and equitable
sharing of benefits
among the
company, Recognition of the
government and the rights and
SOCIAL
mining communities participation of the
communities and
ECONOMIC indigenous peoples
in mining
operations
Adequate
ENVIRONMENT
protection of the GOVERNANCE
environment, not
only before and
during mining
operations but Competitive
even long after investment climate
mining has ceased and adequate
protection of the
rights and privileges
of mining investors
23 Mining Development Projects
(Original – 2004)
11 Copper Projects
Tampakan Copper Project Amacan Copper Project
Far Southeast Copper Project Rapu-Rapu Polymetallic
Boyongan Copper Project Didipio Cu-Au Project
Carmen Copper Project Kingking Cu-Au Project
Batong Buhay Copper Project Padcal Expansion Project
San Antonio Copper Project
6 Gold Projects
Itogon Gold Project Diwalwal Gold Project
Masbate Gold Project Siana Gold Project
Teresa Gold Project Canatuan Au-Cu Project
5 Nickel Projects
Mindoro Nickel Project ACT Nickel Project
Palawan HPAL Project Pujada Nickel Project
Nonoc Nickel Project
1 Cement Project
Akle Cement, Project
41 Exploration Projects
(Original-2004)
12 Copper/Copper-Gold Projects
Ampucao Proj.(Benguet) Sogod Proj. (S. Leyte) Colet Proj.(Negros Occ.
Paco Proj.(Surigao Norte) Tagpura Proj. (Compostela) Claveria Proj.(Cagayan)
Tabuk Proj. (Kalinga) Hixbar Proj. (Rapu-Rapu Is) Papaya Proj.(N. Vizcaya
Gambang Proj.(Benguet) Manat Proj. (Compostela) Conner Proj. (Apayao)
24 Gold Projects
Kingking Proj. (Davao Or.) Pantuyan Proj. (Leyte)
Panag Proj. (Compostela) Batoto Proj.(Compostela)
Del Gallego Proj. (Quezon) Mabuhay Proj. (Surigao Norte)
Negros Proj. (Negros Or.) Kematu Proj. (South Cotabato)
Alicia Proj. (Zamboanga Sur) Archangel Proj. (Batangas)
Kalaya-an Proj. (Surigao N.) Hinonangan Proj. (S. Leyte)
Pana-on Proj. (Leyte) Labo Proj. (Camarines Norte)
Tongonan Proj. (Leyte) Nalesbitan Proj.(Camarines Norte
Surigao Proj. (Surigao N.) Cordon Proj. (Isabela)
Pao Proj. (Nueva Vizcaya) Pantingan Proj. (Bataan)
Road 5 M Proj. (Davao Or.) Agata Proj. (Agusan del Norte)
Camp 3 Proj. (Benguet) TMC Proj. (Antique-Iloilo)
3 Nickel (-PGE) Projects
Acoje Proj. (Zambales)
Sta. Cruz Proj. (Zambales)
Berong Proj. (Palawan)
1 Bauxite Project
Samar Bauxite Project, (Samar)
1 Sulfur Project
Pamplona, Negros Oriental
Economic Potential
• US $ 6.5 B - Foreign direct investments
• US $ 3.4 B - Annual sales/foreign exchange
• US $ 61.4 M - Annual excise tax on minerals
• US $ 432 M - Annual corporate income tax
• 200,000 - Additional direct and indirect
employment
UPDATES ON THE
PRIORITY MINING
PROJECTS
Mining Projects For Development
9 Copper Projects
Tampakan Copper Project Amacan Copper Project
Far Southeast Copper Project Didipio Cu-Au Project
Boyongan Copper Project Kingking Cu-Au Project
Carmen Copper Project Colet Copper Project
Batong Buhay Copper Project
6 Gold Projects
Itogon Gold Project Diwalwal Gold Project
Masbate Gold Project Siana Gold Project
Masara Gold Project Canatuan Expansion Proj
5 Nickel Projects
Mindoro Nickel Project ACT Nickel Project
Palawan HPP Expansion Hallmark Nickel Project
Nonoc Nickel Project
1 Cement Project
Akle Cement, Project
STATUS PROJECT 2006 2007 2008 2009 2010 2011 REMARKS
OPERATING / Palawan HPP Operating/Expansion
EXPANSION Rapu-Rapu Cu-Au-Zn Operating
Canatuan Ag-Au Operating/Expansion
Teresa Gold Operating
Sto. Tomas II Cu Operating
Berong Nickel Operating
CONSTRUCTION & ACT Nickel Q4- 2007 For test shipment
DEVELOPMENT Didipio Cu-Au Q2 -. 2008 Pre-development
FEASIBILITY / Masbate Gold Q2 -. 2008 Final feasibility
FINANCING Carmen Copper Q4 - 2008 Rehabilitation
King King Cu-Au By 2009 Financing
Far Southeast Cu By 2009 TechReview/financing
Itogon Gold By 2009 Mine rehab/financing
Tampakan Copper By 2009 Final Feasibility
Colet Copper By 2009 Final Feasibility
Siana Gold By 2009 Pre-Feasibility
Nonoc Nickel By 2010 Under negotiation
Akle Cement By 2010 Plant site preparation
EXPLORATION Boyongan Copper By 2009 Drilling
Mindoro Nickel By 2010 Social Prep’n/Drilling
Hallmark Nickel By 2011 Drilling
FOR BIDDING Diwalwal Gold By 2009 Tech review/Bidding
Amacan Copper By 2010 Tech review/Bidding
BatongBuhay Cu-Au By 2010 Tech review/Bidding
THE MINING INDUSTRY
TO 2011
REPORTED AND PROJECTED INVESTMENTS
(2004-2010)
3,000
2,762
2,500
(US$ Million)
Investments
2,000
1,559 1,602
1,500
Reported
1,000
447 348
500
139 108
-
2004 2005 2006 2007 2008 2009 2010
31
Year
REPORTED AND PROJECTED NEW JOBS
(2004-2010)
16,000
14,047
14,000
11,854
12,000
New Jobs
10,000
8,000
Reported
6,000 4,800
4,000 3,041 3,250
2,000 1,540
2,000
-
2004 2005 2006 2007 2008 2009 2010
32
Year
ACTUAL AND PROJECTED COPPER, GOLD AND SILVER SALES
VOLUME FROM EXISTING AND NEW PROJECTS (2007-2011)
ACTUAL AND PROJECTED VOLUME OF SALES OF ACTUAL AND PROJECTED VOLUME OF SALES OF GOLD
COPPER (2004-2011) AND SILVER (2004-2011)
3,500,000
900,000
VOLUME OF SALES (TROY OUNCES)
800,000 3,000,000
VOLUME OF SALES (DMT)
700,000
Gold
2,500,000
Silver
600,000
2,000,000
500,000 Actual
400,000 1,500,000
300,000 1,000,000
200,000
Actual 500,000
100,000
-
-
2004 2005 2006 2007 2008 2009 2010 2011 2004 2005 2006 2007 2008 2009 2010 2011
YEAR YEAR
33
ACTUAL AND PROJECTED CHROMITE, ZINC AND NICKEL SALES
VOLUME FROM EXISTING AND NEW PROJECTS (2007-2011)
ACTUAL AND PROJECTED VOLUME OF SALES ACTUAL AND PROJECTED VOLUME OF SALES
OF CHROMITE, ZINC AND NICKEL (2004-2011)
OF NICKEL ORE (2004-2011)
160,000 4,000,000
140,000 3,500,000
VOLUME OF SALES (DMT)
VOLUME OF SALES (DMT)
120,000 3,000,000
100,000 Chromite 2,500,000
Zinc
Nickel 2,000,000
80,000
1,500,000
60,000
1,000,000
40,000
500,000
20,000
-
- 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
YEAR
YEAR 34
Actual and Projected Mineral Sales Value From
Existing and New Projects (2007 - 2011)
6,000
Gross Sales (in US$ Million)
New Developm ent Projects
5,000
Existing Operating Mines
4,000
3,000
Actual
2,000
1,000
-
2004 2005 2006 2007 2008 2009 2010 2011
Year
Policy Reforms
– Revisiting of the 24 Priority Mining Projects to
include new projects that have potentials of
contributing to the goals of the program.
– Review of the Mineral Action Plan to track down
accomplishments and to review and identify
gaps/concerns that need attention.
– Preparation of an Industrialization Plan for the
development of upstream and downstream
industries.
Policy Reforms
– Full activation of the Minerals Development Council
(MDC); establishment of regional MDCs;
– Conduct of legal study by MDC on the mining
moratoriums;
– Touching base with civil society groups (e.g. Bishops-
Businessmen’s Conference) for stakeholder dialogues.
– Further amendments to DAO 96-40 (e.g. Increase in
SDMP Allocation and Simplification of Procedures) and
FTAA Fiscal Regime.
– Addressing investor’s concern on exploration/mining
area availability and non-performing mining tenements.
Concluding Statement
Combined with positive developments in the local
scene and the so-called period of prosperity for
the global minerals industry that resulted in
increased exploration spending and higher
demands and prices for metals, the Philippines is
both bullish and cautious.
Bullish about prospects for an industry take off
next year and cautious of the challenges that
comes with increasing mining activities.
But in the bottom-line, the Philippines believes
that, for as long as done responsibly, mining can
be pro-people and pro-environment in creating
wealth and improving the quality of life of the
Filipinos consistent with the principles of...
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