Open For Business, Or So They Say
Richard Mills, Chairman
a year ago, no one would have imagined Philippines as the site for this
year’s Asia Pacific Mining Conference. But last week it happened, many of
the most senior mining leaders of Asia were brought together in Manila.
The country used to be one of
the largest mineral producers in the world but years of abuse has left the
industry in tatters. There have been no new mines for the past 30 years –
that is, until just the past few months
A new mining law has made the
industry in Philippines viable once again. According to the government,
Philippines is open for business. Politicians, judges and government
officials were present in large numbers to provide smiles and rosy
assurances to the hundreds of foreign delegates attending the annual
Mining executives were not quite
as optimistic as the politicians but the overall tone was certainly positive
and a big change from just one year ago. Understandably, the companies with
the most positive messages about Philippines were those experiencing the
Andrew McIlawain, Chief
Executive of Lafayette Mining, declared his company’s project as the
“first Greenfield development in 30 years.” Pouring of gold had already
begun and full production was said to be only another month or so away. John
Ridsdel, Country Manager of TVI Pacific, says his company is planning an
expansion to increase its production.
Jim Askew, Chairman of Climax
Mining, proudly announced that his company had been awarded its permit to
operate the day before and it would proceed with its large development plans
for its gold deposits. In addition, work would continue with its large
Tony Robbins, Managing Director
of Indphil Resources, was similarly positive. He described his company’s
copper /gold deposits in Philippines as probably the 7 or 8 largest in the
Nick Sheard, VP of Exploration
of Inco, also provided a riveting speech about his company’s projects.
Most of his presentation was focused on
the Asia Pacific region but he expressed pointed optimism about Philippines.
While there was much to be
upbeat about, some people expressed cautious words about operating in a
country with a long history of antagonism toward mining.
Patrick Waters, the President of
Anglo American Exploration Philippines, cited problems in many areas. He
says that while there is strong support at the
national level of government, this rhetoric is often not transferred to the
local level. Local communities are often easily influenced by anti-mining
NGO’s and militant church leaders. Corruption and red tape is another
hindrance, as is gaining access to adjacent sites because of uncertain and
sometimes arbitrary regulatory and legal structures.
Well respected business
consultant, Peter Wallace of the Wallace Business Forum, was similarly
guarded. The “new” mining law, he said, was originally passed in 1995.
The supreme court held it up for 9 years to determine whether it was
constitutional or not. In addition to an arbitrary judiciary, some of the
other concerns he expressed included: vested interests, poor security and
He told the story of Placer
Dome’s experience in Philippines some years ago as a message of the risks
avoided. The company held a minority stake in a project called Marcopper
that had a nasty spill. The company has since spent more than $70M for clean
up work that has been described by independent analysts as more than
adequate. Today, Placer Dome is still reviled. The local company that had
majority control of the project has paid nothing.
Despite the concerns,
Philippines is said to be “not much different” and “probably even
better” than many countries in Asia and Africa that already have more
established mining sectors. Indonesia, for instance, currently has foreign
mining executives languishing in jail with no end in sight.
Given the alternatives and the
current sense of commitment by the government, it seems that the Philippine
mining industry will gradually continue to improve its position. That is, as
long as there are no changes.
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