Philippines should consider Chile's successful mining legal structure, says expert

MANILA, Philippines ?€" The Philippine government should look into the mining legal structure in Chile that enabled the country to achieve around $40 billion yearly and an anticipated investments of $66 billion in the next six years.

Mining represented a sizable 25 percent of total government revenue of Chile and around 50 percent of total national investment.

This significant share of mining in the economy of Chile is attributed to the legal structure, said Roberto Mayorga, Chile representative to the Philippines, at the recently-concluded 2011 Mining Philippines Conference.

One of the policy basis that encourages investment in Chile is the principle that a mining concession is an ?€œin rem?€ right which means that an owner will always be the owner of this property.

?€œYou are going to be the owner for always like you're the owner of your house or car. The concession grants a property right and is protected in Chile. The title holder cannot be expropriated without compensatiion at market prices,?€ he said.

In Chile, he said, a foreign investment law exists which protects investors through a contract that is binding beyond changes in government.

Ownership of a mining property also allows one to use such right to obtain financing for capital-intensive mining development even as financing poses as one major hurdle in a mine's economic feasibility.

?€œThe concession is freely transferable, transmissible and susceptible to mortage and other encumbrances,?€ he said.

Chamber of Mines of the Philippines President Benjamin Philip G. Romualdez said the Department of Environment and Natural Resources should look into adopting model policies of Chile that will boost foreign investments.

?€œI hope the DENR secretary was listening to the Chilean model. I'm almost tempted to move to Chile. We're seeing $66 billion of investment going to flow to Chile in the next five to six years. That will have a tremendous impact on the economy,?€ said Romualdez.

The Philippines has to improve investment policies because it is competing with the rest of the world for capital, he added

?€œChile, China, Australia, Canada have fixed their mining climate, it's no wonder most of the mining investments have been going there. Even if we're the top five mineralized country in the world, we're just getting the ?€˜barya?€™ (loose change),?€ said Romualdez.

?€œWe're only dreaming of $13 billion investment. Their export is $60 billion, we're about $3 billion. If we're just about one-fourth of theirs, that's $15 billion in export that will come out of the Philippines.?€

The Chile?€™s model also allows a foreign investor's profit may be repatriated to its country of origin after payment of tax.

The Chilean consitution provides that the State of Chile has the absolute and exclusive domion over the mines. With this, the state allows any person or company to apply for a mining concession.

Applying for a concession gives people or organizations equal opportunity through a grant by an ordinary court, eliminating chances of political intervention.

For an exploration concession, the term is four years after which the holder may apply for another concession.

Authors: mining - Yahoo! News Search Results