Mining still needs incentives to fuel growth

MANILA, Philippines - Investment incentives are still necessary for the local mining sector to flourish, according to Chamber of Mines of the Philippines president Benjamin Philip Romualdez.

Speaking to reporters following a meeting by the Philippine Mining Club, Romualdez pointed out that the mining sector still needs project perks, contrary to government?€™s contention that such investment would still come in even without incentives because of the enormous returns in mining ventures.

Romualdez said mining firms have to invest a tremendous amount upfront without any assurance that their investment would yield returns.

?€œA lot of the funds that come in does not go to the project immediately,?€ he said, adding ?€œthere is a lot of non-recourse risk taken (by the investor).?€

?€œBefore the real investment in the actual project, we already spend a lot of money in exploration and we?€™re not even sure if there is a mineral resource.?€

Furthermore, Romualdez said, working in the Philippines is becoming more challenging, citing a recent survey of the World Bank on competitiveness which showed that the Philippines has slipped in ranking in terms of the ease of doing business.

The mining sector, Romualdez said, faces several challenges that include the ?€œNo to mining in Palawan?€ lobby, several alternative mining bills in Congress, the ban on open pit mining, the Writ of Kalikasan in the Zamboanga Peninsula and the bias of the NCIP (National Commission on Indigenous People) against large-scale mining.

With those challenges, Romualdez said ?€œbold steps need to be taken.?€ These should include: aligning the Mining Act with other laws such as the Local Government Code, the IPRA and Internal Revenue Code; supervision of small scale mining should be with National Government not with the LGUs; resolve the IP ownership concept vis-a-vis Regalian doctrine; educate the NCIP; and rectify the two to three-year delay in the release of LGU share in mining excise taxes.

The delay in the release of the LGU share from the mining excise tax, Romualdez said, is one of the main reasons why the mining industry does not get support from the LGUs.

?€œThe LGUs suffer from their inability to get full benefits from mining,?€ Romualdez said.

Thus, Romualdez stressed, the government needs to take decisive action on the open pit mining ban and should help the mining industry communicate with stakeholders. - By Marianne V. Go (Philstar News Service, www.philstar.com)

Authors: mining - Yahoo! News Search Results