The Philippines has announced it will end a nine-year ban on new mining projects in a bid to expand the role of mining in the national economy and raise state revenues.
Editorial
On April 14, President Rodrigo Duterte signed an order lifting a moratorium on new mining permits in place since 2012. The order references the need for new growth to support an equitable economy and help the “underprivileged”, as well as to supply raw materials for the government’s Build, Build, Build infrastructure plan.
The Philippines is a major exporter of copper and gold and in 2020 became the number one exporter of nickel ore to China, after Indonesia imposed a ban on raw mineral exports last January.
The Chamber of Mines of the Philippines said that removing the ban “will help bring the Philippines back on the investment map,” though the mining industry currently represents an extremely small portion of the country’s economy.
Environmental and sustainable development advocates have condemned Duterte’s decision and called for the president to rescind the order and to enforce existing suspension and closure orders for mining operations. Critics say the decision represents an about-face for the president and that it endangers communities affected by mining projects, including indigenous groups, as well as the country’s ecosystems and other natural resources.
Leon Dulce of the Kalikasan People’s Network for the Environment told Mongabay that the decision to reopen permitting exposes mining-affected communities to major threats under the country’s existing Mining Act.
“The Mining Act provides auxiliary rights to mines that allow them to cut timber, deplete water, and ‘ease out’ communities away from their lands. As part of its investment guarantees, the Mining Act commits government to ensuring the removal of obstacles to mining, and that includes conflicting land uses such as agricultural lands and communities,” Dulce said.
In addition to the risks of environmental and rights abuses, the Duterte administration’s plan to boost growth through the mining sector places significant faith in an industry that has so far brought few benefits to the country.
Government touts prospects for growth in mining
The Philippine government and mining firms have focused on the potential for growth as the mineral resources are opened up again.
There are now over 290 existing applications for mining permits and the Duterte administration has set its sights on these investors as a major source of revenue. Duterte’s order specifically mentioned that the tax mineral producers in the country has doubled since 2018 to 4%. The executive order also calls for the Department of Environment and Natural Resources to set terms for new mining agreements that will maximize state revenue.
Though mining operations in the country have largely continued through the pandemic, the mining industry contributed less than 1% of the Philippines’ GDP in 2020. According to government figures, less than .5% of the country’s employed labor force works in the industry. As anti-mining coalition Alyansa Tigil Mina (ATM) put it in a statement following Duterte’s announcement, “mining has never been a significant contributor to GDP, taxes or employment.”
The Philippine government says it has tapped less than 5% of its mineral resources and the country’s Mines and Geosciences Bureau has labeled over a third of the Philippines’ land area as having “high mineral potential.”
The Australian firm RTG Mining issued a statement welcoming Duterte’s order, saying that it will create job opportunities in remote areas such as Labo in Camarines Norte, where the company has been working to advance the Mabilo copper and gold project.
Dante Bravo, head of Global Ferronickel, the second-biggest nickel mining firm in the country, pointed to the mining industry as a key opportunity for the Philippines as the world copes with the economic effects of the pandemic. “There will be a need for a lot of raw materials like nickel, copper, gold, manganese, chromite, etcetera when the world returns to normal,” he said.
The decision appears to show the Duterte administration pegging part of its economic recovery from COVID-19 to an industry that has brought local communities little, without addressing the significant risks of environmental and rights abuses.
Mining could help domestic building push
The government also hopes the order will support its Build, Build, Build program, an initiative to drive economic growth by building massive public works and bringing the Philippines into a “golden age of infrastructure”. At first, the program saw large pledges of financing from Chinese investors, at one point totalling US$24 billion or more.
But little of this money has come through. As Asia-Pacific author and academic Richard Heydarian wrote in March for Nikkei Asia, “After five years of strategic servility, Duterte has little to show for his pivot to Beijing, not even the large volume of free COVID vaccines China promised to deliver by the end of 2020.” Some analysts argue that the Philippine president is now using his earlier full-on embrace of China as a bargaining tool with the US, including around the Visiting Forces Agreement with Washington.
The Duterte administration appears to view the opening up of the mining industry as a way to bring much-needed momentum to the Build, Build, Build scheme. The president said that together, these steps will increase “employment opportunities in remote rural areas where there are mining activities and thereby stimulating countryside development”.
Regardless of the possible benefits, environmental advocates have been calling for reforms to the Philippines’ mining industry for years. But the Philippines is currently one of the world’s most dangerous places for those who speak up about mining issues. Global Witness found that in 2019, more environmental advocates and defenders were killed for mining-related work in the Philippines than anywhere in the world.
Despite this, ATM and others are still pushing for Duterte to reverse his decision. ATM told Mongabay that the order shows the government will allow mining projects that threaten permanent damage to the country’s natural resources and could have major negative impacts for the public.
“President Duterte has completed his turnaround, from claiming to protect and stop the destruction of forests by destructive mining, to a pro-mining president,” the group said. “Lifting the moratorium exposes this administration’s support for mining projects that will impact our water, food supply, forest, biodiversity, Indigenous communities and fragile island ecosystems.”
“As we confront the impacts of climate change and this pandemic, more environmental destruction from mining is the last thing that our rural poor and forest-dependent communities need,” ATM said in a statement, adding that “corporate interests and profit have won again over the welfare and benefits of the many.”
