The proposed ban on exports of raw ores under Senate Bill (SB) 2826 will discourage additional mining investments in the country, the Chamber of Mines of the Philippines and the Philippine Nickel Industry Association warned.
In a joint statement on Wednesday, the mines chamber and the nickel association said such provision “is the last thing our country needs.” SB 2826 passed on second reading late Tuesday.
“Its intended purpose of compelling mining companies to build processing plants within five years before the enforcement of the export ban will not happen. It will even most likely lead to considerable unintended consequences,” the mining groups said.
They added that challenges such as high power rates and overall lack of necessary infrastructure such as power plants, transport networks and facilities to support large-scale domestic mineral processing, as well as conflicting local ordinances with national mining laws will make the construction of mineral processing plants “undoable.”
“Unless those issues are fully addressed, mineral processing will remain but a dream. Simply, there are no shortcuts. A raw ore export ban will lead to mine closures and consequently, to unemployment for hundreds of thousands of Filipino workers who rely on mining, directly or indirectly, for their livelihood,” the group statement said.
They also pointed out that possible mine closures would reduce government revenues and economic activities in mining communities that could also have a negative impact on public funds for infrastructure, social services and community development programs.
Latest data from the Mines and Geosciences Bureau (MGB) showed metallic mineral production value increased by 3.17 percent to P195.92 billion in the first nine months of 2024 from P189.9 billion in the corresponding year-earlier period.
According to the Mines bureau, improvements in the value of chromite, copper, silver and gold helped raise the value of production despite lower output volumes from the local mines.
The miners also urge the government to conduct an extensive study to assess the economic and social implications of the proposed law since it will also have implications on global trade in metallic minerals.
“The Philippines is the second largest exporter of raw nickel ore worldwide. The proposal will cause massive disruptions to existing supply chains; many mining companies have long-term contracts and established supply chains with international buyers. This policy change could disrupt these agreements, leading to contractual disputes, penalties and loss of trust in the Philippines as a reliable trading partner,” the miners said.
The mines Chamber and the NIckel association said they recognize the proposal is anchored on what Indonesia has implemented, but emphasized that Indonesia has higher grade nickel ores and an abundant coal reserve which pulls down the cost of power in processing raw nickel ore.
The miners said they support fiscal provisions uncder SB 2826 which proposes a margins- and windfall-profits based tax scheme similar to House Bill 8937.
“We believe this system will put the Philippines at par with other mining jurisdictions and help ensure a sustainable and vibrant industry,” the mining groups said.
President Ferdinand Marcos Jr. has certified as urgent a mining fiscal regime that designated mining as an essential industry, the Mines chamber and the Nickel association said.
The mining groups also said they also welcomes the ongoing efforts of the Department of Environment and Natural Resources to reduce the mining and exploration permitting process
As of end-Sept 2024 there were 21 operating mines in the country, including 20 nickel mining projects and one chromite mining project, MGB data also showed.