Interest in Philippine Mining?
Richard Mills, Chairman
quarter of the year recorded only $67M of investments in the Philippine
mining sector. Given that the
government plans to attract $837M for the entire year, the slow start is
cause for some concern.
Horacio Ramos, director of the Mines and Geosciences Bureau (MGB) which
issues mining permits, is holding to his goal to attract $10B by 2011.
However, total investments in the mining sector since 2004 have only
been $1B to date. There would
need to be a significant increase in interest in order to meet the lofty
To this point,
gargantuan mineral deposits seem not to have been enough to overcome a range
of hindrances to mineral development in the country.
The deterrents often cited vary from contract disagreements with
joint-venture partners to attacks by communist rebels, opposition from local
communities and regulatory requirements that are perceived as
As an example,
there was great hope the Didipio gold-copper project of Australiaís
OceanaGold would be in production by now.
Unfortunately, that company is involved in an unpleasant disagreement
with a local government unit over payments for some permits that the company
doesnít feel are justified.
is another high profile company that appears to be going through a rough
stretch in Philippines. It is
engaged in a very public dispute with its local partner because of alleged
project delays. In the meantime,
progress seems to have been stymied.
say, such setbacks donít help to improve the perception of Philippines as
an easy place to do business. For
its part, the Mines and Geosciences Bureau cites 2 large-scale investments
that will be moving ahead. One
is by a large gold producer called Zijin, owned by the ever-enthusiastic
Chinese. The other is fronted by
a prominent local individual named Ramon Ang who is also president of San
Miguel Corporation, a large local conglomerate.
actions by these 2 important players would indeed be exciting, there has
been a noticeable decline in interest from other groups, especially as the
Australians and Canadians, who were formerly showing a lot of fervour.
observers speculate that the government thinks companies from so-called
advanced countries are too demanding and inflexible to work with compared to
the more accommodating and diplomatic Asians.
Nevertheless, it is worth the trouble if only because they can be
counted upon to carry on with projects even in the face of global recessions
and declining commodity prices.
governmentís success in attracting qualified Asian investors is
praiseworthy, letís also hope it continues work to attract a full range of
investors to the country.
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