Selling But Few Are Sold
Richard Mills, Chairman
in Philippines are feeling rather good about themselves these days. The
country seems on its way to re-establishing itself as a major force in the
booming mining sector in Asia. Considered a “no-go zone” just a few
years ago, the country has accomplished plenty.
The Supreme Court got things
moving when it decided to uphold a law that allowed 100% foreign ownership
of large-scale mining projects. Since then the government has done its part
by gradually improving the regulatory framework that mining companies
operate by. Dealing with the large number of anti-mining groups proved to be
a more challenging task.
The country had bad experiences
in the past with environmental damage caused by miners and had developed
one of the most powerful anti-mining lobbies in Asia. In dealing with these
well meaning people, the government was presented with its most difficult
challenge when a tailings dam of Lafayette’s Rapu-Rapu mine over-flowed.
The resulting explosion of negative publicity was heard around the world and
was a nightmare to deal with. The company, a former darling of the
government, was eventually allowed to continue operations after a period of
well deserved penance in which it nearly went broke.
Over time, other critical
concerns of the anti-mining groups were responded to in a seemingly
competent and caring manner by government officials. Protest rallies have
gradually become smaller and less spirited – and more recently, they just
get cancelled. With the exception of a few extremists, average Filipinos
seem to be becoming assured that mining isn’t so bad after all when it is
While the government was busy,
the Chamber of Mines of the Philippines was relentless at promoting
Philippines to the world’s miners. Under the leadership of one of Asia’s
greatest salesmen of mining, Philip Romualdez, the country was championed in
conferences and board rooms around the world. Mr. Romualdez even got himself
elected as head of the Asean Federation of Mining Associations (AFMA) and
hosts large conferences in Manila.
As a result of all of this
effort, premier mining organizations such as Anglo-American, BHP Billiton,
Sumitomo and Xstrata are all now digging for treasure in the country’s
massive and mainly untapped mineral reserves. The Philippine industry has
vastly increased its estimates of new mining investments to $10B over the
next 5 years, up from almost zero just a few years ago. The
self-congratulatory environment within
Philippines is intoxicating.
The only problem with all of
this is that no one outside Philippines is convinced. This year’s mining
attractiveness poll carried out by the revered Fraser Institute in Vancouver
indicates that mining executives don’t think very highly of Philippines.
The 300 senior people surveyed slashed the ranking of Philippines below even
last year’s dismal placing. It now sits just a few notches above Zimbabwe,
the current bottom dweller of the list.
It is clear that there is a very
big difference of opinion between miners inside Philippines and miners
outside. Perhaps the world’s mining executives know something that
Filipinos do not. Or, maybe they just haven’t yet heard the good news of
the Philippine mining gospel lately. Let’s hope it is the latter and some
more evangelizing by the Philippine Chamber of Mines will create a few more
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