Yes? or No to Mining?

Mining investments seen reaching $1-B in 2011

By Marianne V. Go, The Philippine Star

Posted at 04/01/2011 4:56 AM | Updated as of 04/01/2011 4:56 AM

MANILA, Philippines - The Chamber of Mines of the Philippines expects mining investments this year to reach $1 billion, chamber president Benjamin Philip Romualdez said.

Last year, mining investments in the country reached $955.85 million and could have easily gone over the $1-billion mark had some projects not been delayed.

In a briefing to members of the Economic Journalists Association of the Philippines, Romualdez said mining investments could be much higher if controversial issues and concerns are resolved by the government.

The economic issues include government plans to increase to 5% the royalty on mineral reservations and unregulated imposition of mining taxes by local government units (LGUs).

According to Romualdez, the government has to be careful in changing the rules of the game midstream as it is turning off investors.

Likewise, Romualdez expressed strong criticism about the corruption in the local government level, even more than at the National Government level which continues to remain supportive of the mining industry.

One particular environmental issue that is closely being watched by potential investors, Romualdez said, is the open pit mining ban to be imposed in Mindanao and proclamation of protected areas covering mineral reservations and mining tenements.

The open pit mining ban in Mindanao could threaten the $5.9-billion investment of the Swiss-based Xstrata Group in the Sagitarrious Mines, Inc. (SMI) Tampakan copper-gold project in South Cotabato.

A separate move to ban mining in Palawan could also affect the mining project of Nickel Asia Corp. - specifically the Coral Bay Nickel Corp.’s Rio Tuba mine project and nickel processing plant.

Gerard H. Brimo, president and chief executive officer of NAC, warned that those issues could lead to the demise of the mining industry in the Philippines.

The mining sector continues to await a stronger policy statement from the Aquino administration regarding the SMI issue.

Romualdez pointed out that should the Philippine government cancel the SMI Tampakan project, the government would have a contractual obligation to reimburse SMI for expenses incurred.

Source: http://www.abs-cbnnews.com/business/03/31/11/mining-investments-seen-reaching-1-b-2011

REACTION

Mining business seems to be boosting and is currently conquering the islands of the Philippines. A possibility of reaching a billion dollars investment is envisioned for the year 2011. This possibility may give good effects to the economy. But since this is still an anticipation there is a big chance that this may not be attained. According to the Economic Journalists Association of the Philippines, mining investment may have higher investments if the government is able to resolve the controversial issues rising. One wrong move from the government and investors may drop off from the deal, thus a keen and thorough thinking is needed. Environmental issues regarding the mining activities are also coping up which causes great pressure to the businessmen in line with this field. The huge investments that the Philippines is envisioned to have this year is linked with different issues which may lead either to the betterment or downfall of the economy.

As a student who is currently taking Economics classes I must admit that this investment for mining is really a big deal that can lift up, even in the most minor sense, the economy of our country. A billion dollars of investment? Who can let that pass? And on the plus side, it will also offer job opportunities to the citizens of our country. Thus, a part of me believes that this would be good for the economy.

 

Now I think i'll let my thoughts as a Biology student to surface up. As a student who studies natural science which also concerns life and living organisms, I believe that mining should be banned. And this belief was strengthened after watching Krusada
which showcased the Minings in Palawan. Palawan is known to have astounding biodiversities but because of mining the said biodiversity is slowly taken away from us. It was also exposed in the show that mining, despite giving job opportunities to some, causes harm to the livelihood and general well-being of the people living there. 

I realized that the third of the 10 principles of Economics according to McGregory Mankiw which is Rational people think at the margin is definitely useful in this particular issue. No matter how high the investment may be, people should always think of the costs and benefits first before having a final decision. Would it be better to continue the mining business, and destroy the life and nature that was given to us rather than stopping mining, and preserve and make of better use the gift  of life and nature given to us?