Please find below an article from the Philippine Star (www.philstar.com) noting that the the Philippines
will meet the World Bank's definition of a "mining country"
within the next few years based on its mineral exports.
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Getting 'Mining Country' Status
BIZLINKS By Rey Gamboa
Friday, February 29, 2008
Miners, despite the expected slowdown of the US economy, and subsequently,
the global economy, remain bullish that gold prices will continue to soar
this year.
Analysts point out that gold prices, even after
reaching such recent record highs of $950 an ounce, are driven by strong
and solid fundamentals, unlike the 1980s when prices were driven by
speculation.
This time around, gold prices are feeding on the
fact that demand continues to outweigh supply, helped by the marked
increase in institutional buying, the volatility in oil prices and a weak
US
economy.
There could be a downside when prices go on a
consolidation mode, but this should be short term as bargain hunters will
once again push prices up, and possibly to higher levels.
With the latest US data pointing to an
economic standstill, if not an alarming decline, the Federal Reserve Bank
has pledged to intervene in the likely form of more interest rate cuts. This
would further batter the weak dollar, and push financial institutions
wanting not to be trapped in dollar-based assets to go into the relative
safety of tangible assets like gold.
On the other hand, even as the US economy weakens, emerging economic
powerhouses like China,
and tailing it, India,
are going to play bigger roles in determining global demand for metals
that are shrinking in supply.
Continuing surge in prices
These should augur well for local mining
companies, especially those that are actively producing. They expect
prices of gold as well as other precious and base metal prices to enjoy a
surge this year, even up to the next two to three years at least.
This may yet prove to be auspicious for some
mining projects that will become partially operational. The Department of
Environment and Natural Resources is projecting mineral production from
seven priority projects to hit $291 million this year, and go up further
to $670 million in 2009.
Some of the mining companies that are scheduled
to move from development stage to actual production include Carmen Copper
Corp.'s Toledo copper project in Cebu, Oceana-Gold's Didipio copper-gold
project, Palawan HPAL Nickel Project Line 2, Filminera Masbate gold
project, Iligan Ferronickel Smelter Plant, Manticao Ferronickel smelter
plant, and the Philsaga gold project.
Among the bigger mining oil companies is Philex
Mining Corp. which is spending more this year to expand production and
mine life of its Padcal mines in Benguet, and is also intensifying its
gold and copper exploration projects in the Visayas and Mindanao
regions.
Mining country
Subsequently, in the next year or so, barring
any unexpected downturn in metal prices, the country's mineral exports
should be ready to hit that all-important milestone, one that will
elevate the Philippines'
ranking as a "mining country."
Based on the World Bank's definition of a mining
country, a nation's mineral and mineral product exports should account
for at least six percent of its total exports.
We are now, according to the DENR at the level
of 4.8 percent, with mineral shipments among the top five exports last
year. Getting to six percent this year doesn't seem to be far-fetched at
all.
Untapped resources
The country has an estimated $1 trillion worth
of untapped gold, copper and nickel resources, and yet less than two
percent of about nine million hectares of land, identified as having rich
mineral deposits, have been explored and covered by mining permits.
With demand still high, many are wondering why
the country has been unable to capitalize fast enough on these
opportunities.
For some the problem lies in the turtle-paced
process of getting mining permits, but that could turn out to be a blessing
in the end for the country.
Utmost regard for environment
No mining project should be taken lightly. Each
project has to pass all possible environment standards because the
overriding principle is that prudence should be exercised in minimizing
the impact of a mining operation on its immediate environment.
There will always be consequences on the
environment, but maybe it does not have to be irreversible as what had
happened before when irresponsible miners ravaged their surroundings.
The other factor is the ever present and
tumultuous issue of the displacement of indigenous people. Already, some
are complaining of various human rights violations against mining
companies. It conjures images of unexplained deaths and disappearances
and razing of facilities in mining operations.
Such brazen and primitive acts benefits no one
except emboldens anti-mining groups whose noise had been muffled in
recent years by the loud cheers of the revival of interests in the local
mining sector by foreign investors.
The government has a tough balancing act. It
should remain diligent in implementing mining laws and not an ounce of
violation should be left without a resounding reprieve.
Otherwise, anti-mining groups would pounce on an
issue again and give them a jumpstart to pursue often overzealous
protests. If the protests become disruptive, then it would definitely
have foreign investors willing to bet on the Philippines, to take flight
and look for friendlier shores.
http://www.philstar.com/archives.php?aid
08022869&type=2
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