Mining poised for takeoff, but old woes persist
SPECIAL REPORT
By Daxim Lucas
Inquirer
Last updated 11:30pm (Mla time) 06/10/2007
(First of two parts)MANILA, Philippines -- THESE ARE HEADY DAYS FOR THE LOCAL mining industry.
Given up for dead by foreign investors in the 1990s, Philippine mining firms are now riding the crest of an investment wave that could see equity inflows of as much as $6.5 billion over the next few years.
Driving this expected surge in investments is the combination of strong commodities prices on the world market, and a large deposit of metals and minerals that, in the region, is second only to that of Indonesia.
International experts at the just concluded 7th Asia-Pacific Mining Conference and Exhibition described the prospects of the industry in glowing terms, pointing to the strong demand from China, and the growing demand from India, as the factors that will sustain the ongoing boom for the next two decades.
"In these two countries, strong economic growth will fuel demand for metals until 2030," said Citigroup's Asia-Pacific head of metals and mining Alexander Molyneux. "This is the megacycle that we've been talking about."
Already, metals prices worldwide have skyrocketed on the back of China's frenetic economic growth, which has fueled demand for almost everything, from high- to low-grade ore from mining firms to scrap metal from junk shops.
As it stands, China's voracious appetite for base metals like copper and nickel-for which it consumes about 15 percent of global production-is already enough to send prices to present record levels.
According to Molyneuz, this trend would continue and even accelerate in coming years, as he pointed to statistics showing that China and India would need as much as 150 percent of present-day global production levels of copper and nickel.
"By 2050, both countries would need as much as 200 percent of today's [total] copper supply and 300 percent of today's [total] nickel supply," he said.
For Asean countries rich in these base metals and bulk commodities, the opportunities for profit are as clear as daylight.
These opportunities are especially clear for the Chamber of Mines of the Philippines, whose members have languished for a decade due to a dearth of interest and capital from foreign investors.
"The demand is there, and is set to increase further," said Benjamin Philip G. Romualdez who head's the industry's lobby group. "It really depends on us if we can capitalize on these opportunities over the next few years."
Romualdez, who also heads a firm that specializes in gold mining, pointed out that the country's recently revamped regulatory and legal environment puts it ahead of mining powerhouse Indonesia, which is just beginning to struggle with issues that the Philippines had already hurdled.
This, he said, puts the local mining industry in a unique position to meet international demand for metals while Indonesia is still trying to get its act together.
"In many ways, we've already gone through what they're going through now," he said, pointing to the Indonesian government's ongoing debate over issues like the environment, foreign investor protection and regulation, among others.
On the ground, however, old problems persist.
In an interview arranged by anti-mining advocates, Timuay tribal chief Jose Anoy claimed that he and other members of his tribe were evicted from their ancestral domain after Canadian firm TVI Resource Development Phils. Inc. opened its gold mining operation in Siocon, Zamboanga del Norte.
Anoy said he holds a valid title to a parcel of land that was awarded to him by no less than President Macapagal-Arroyo a few years ago. Since the entry of TVI, however, he lost access to his property and was forced to relocate after it was fenced off by TVI as part of its mining claim.
"Our rights, according to our indigenous laws and according to Philippine national laws, have been repeatedly violated and no one in authority has protected us," he said.
His complaints, and others like his, are casting a
pall on the mining industry's celebratory mood, and posing tough
questions to policymakers who must balance the competing interests of
powerful lobby groups.
