CARA Aggregates Industry Report －Mining

CARA Aggregates Group

Group Members:
Charmine P. Felicilda
Anna Mae S. Bagay
Ronalyn P. Gomez
Angie E. Tabinas
I. Introduction

Overview

The sector of the mining industry is considered as a major backbone of the Philippine

economy. Mining industry has contributed strongly to economic stability and growth in the

country, for one, the industry provides employment opportunities to a significant portion of the

population, directly and indirectly.

The launching of a mining project spurs local and regional economic development as

mining firms invest in road infrastructure, utilities, and other facilities within the mine site.

Mining, likewise, contributes to the country’s foreign-exchange earnings through exports.

Furthermore, the industry provides additional and needed revenues for the government through

taxes and fees paid on mining and other related activities.

Industry Environment

The Philippines has been ranked as the fifth most mineral-rich country in the world with

untapped reserves estimated at $1 trillion. That is nearly three times the country’s GDP in 2021.

In terms of global prospective, Philippine mining ranks third largest deposits of gold, fourth for

copper, fifth for nickel and sixth for chromite. The nation’s mineral resource assets are valued at

around A$1.32 trillion, but those remain largely untapped.

The country’s total land area covered by mining tenements is only 0.872 million hectares

or 2.91 per cent of the country’s 30 million total land area. In terms of non-metallic minerals, the

country has untapped coal resources estimated at about 2.4 billion tonnes. The country has 44
mining companies of which 37 are operating mines, six gold mines, three copper mines and 28

nickel mines as well as 65 non-metallic mining companies.

The top mineral exports of the country are copper, gold and nickel. Other target minerals

include quartz, mica, iron, gypsum, feldspar, chromite, calcite and sulfur. Some target non-

metallic minerals are sand and gravel, limestone, marble, clay and other quarry materials.

According to a report released by Mines and Geosciences Bureau (MGB) of the

Department of Environment and Natural Resources, the Philippine mining industry contributed

P102.3 billion to the Gross Domestic Product (GDP) in 2020 despite the challenges posed by the

Covid-19 pandemic.

Mining companies have shown themselves to be pandemic-resilient, able to operate with

minimal risk of infection and under self-contained environments, Mr. Recidoro noted, the

executive director of the Chamber of Mines of the Philippines (COMP). “Mining did not just

survive during the pandemic; it thrived,” he said.

However, the Philippines lack of domestic markets for mining products. There is no

domestic markets for the volume of gold that the country can produce. There are also no local

steel manufacturers that can take up nickel ore and convert it to metal. Except for copper smelter

in Leyte, most copper concentrates are exported overseas. For a country to expect and gained

more value from the minerals produced mining and manufacturing of mining products should be

connected.
II. Business Process Design

Mineral exploration is a complete sequence of activities. It ranges between searching for

a new mineral prospect (reconnaissance), evaluation of the property for economic mining

(feasibility study), production and the things to be considered after the mining.

Pre-Mine Mine Planning Production Post-Production Post-Mining

Planning and Development and Closure
 The business process design for mining industry shows five life cycle stages; pre-mine

planning, mine planning and development, production, post-production and closure, and post-

mining.

Pre Mine Planning

This is also called exploration & prospecting stage, the first and most essential step of the

mining process: in order to open a mine, companies must first find an economically sufficient

amount of the deposit (an amount of ore or mineral that makes exploitation worthwhile.

Geologists are enlisted by the companies to understand the characteristics of the land to

identify the presence of mineral deposits. Within this phase they must consider the land

availability, select an area then evaluate, study if they have access to capital, exploration,

environmental assessment and approval are needed for financial considerations.

Mine Planning and Development

Once the miners are sufficiently confident that there is a financially viable amount of

deposit, the project can progress to the planning stage.

Companies will create multiple plans with different variables (time-span, amount of ore

mined) to evaluate which fulfills the most criteria. Within this phase scoping study, pre-

feasibility study, feasibility study and implementation.

Production

Now the mine is finally ready to begin producing. It begins with the extraction, then

down to whole transportation like; processing, smelting, refining, product manufacture and

recycling.
Post-Production and Closure

Mine companies have to think about a mine closure plan before they start to build as

governments need assurances that operators have a plan and the required funds to close the mine

before they are willing to issue permits.

Detailed environmental studies form a big part of the mine closure plan on how the mine

site will be closed and rehabilitated. A comprehensive mine rehab programme will also include:

closure, planning risk analysis, legal compliance and financial.

Post-Mining

Mining is a temporary activity, once the deposit is gone it's time to relocate to a new site.

But before they can do this, they must first close and rehabilitate the mine.

Rehabilitation includes ensuring public health and safety, removing waste and hazardous

material, establishing new land forms and vegetation and minimizing environmental effects like

preserving water quality and stabilizing land to protect against erosion.

III. Permits and Licensing

Patents, copyrights, trademarks, licensing agreements involved

Increasingly challenging ore mineralogy, lower ore grades and metal prices, and more

demanding environmental regulations are forcing mining companies to develop innovative

metallurgical processes. Even small improvements in efficiency can yield significantly higher

returns. These processes can provide a mining company with distinct competitive advantages

that can be leveraged in acquiring royalty or working interests in mineral resources.

The competitive advantages of technological innovation can be protected against use by

competitors through strategic use of intellectual property rights. Intellectual property rights can

not only protect a mining company from being copied by competitors but also are a corporate

asset, that can be sold or licensed to competitors or used to secure loans. Many countries provide

tax incentives, such as tax concessions for patent related profits, to obtain and exploit patents.

Patents are a valuable defensive weapon that can be used to deter competitors from initiating

infringement proceedings against the patent owner and enable cross-licensing by the patent

owner to gain access to the patents of others.

From patents, trademarks and copyright to trade secrets and a wide variety of licensing

agreements, protecting intellectual assets has taken on a heightened sense of importance. Mining

companies are using Intellectual Property rights today in these tightening times to create new

local and international revenue streams, maintain a competitive edge, boost their asset holdings

and secure new finance.

Examination of permits for mining operations is a process involving a large number of

players. From an operator declaring its intention to start exploration for ore to the start-up of a
mine requires several different permits. The examination process is different from that for other

environmentally hazardous operations in that besides the Environmental Code. it also involves

examination under the Minerals Act.

The intention of the Environmental Code is to promote sustainable development, which

means that present and future generations are assured a healthy and good environment, while the

purpose of Minerals Act is to ensure that society has a supply of essential metals and minerals

through the extraction of specially identified natural resources, so-called concession minerals.

Government permits required

The DENR is the primary government agency responsible for the conservation,

management, development and proper use of the country’s environment and natural resources.

Line bureaus under the DENR, particularly the Mines and Geosciences Bureau (“MGB”) and the

Environmental Management Bureau (“EMB”), are respectively responsible for the proper

management and disposition of mineral lands and mineral resources and the implementation of

environmental laws. Further, local government units (“LGUs”) also exercise powers that affect

the mining industry pursuant to their mandate to promote the general welfare within their

territorial jurisdictions, provided they do not contravene the Philippine Constitution and the

Philippine Mining Act.

Under the Philippine Mining Act, reconnaissance is subsumed under exploration, which
requires an EP. A holder of an EP is granted the right to conduct exploration for all minerals in
specified areas. Mandatory requirements for EPs include:
1. Location map/sketch plan.
2. Two-year exploration work programme.
3. Certificate of Environmental Management and Community Relations Record or Certificate of
Exemption.
4. Environmental Work Program (“EWP”).
5. EP holders must be: Philippine citizens; Philippine organized juridical entities with technical
and financial capabilities to undertake resource development, at least 60% of the capital of which
is owned by Philippine citizens; or a legally organized foreign-owned entity.
6. Proof of technical competence or financial capacity

Generally, the right to conduct mining is granted under MAs or Financial or Technical
Assistance Agreements (“FTAAs”). MAs are agreements between a contractor and the
government wherein the government grants to the contractor the exclusive right to conduct
mining operations within, but not title over, the contract area. The requirements for MAs include:

1. Location map/sketch plan.

2. Three-year development/utilization work programme.
3. Mining Project Feasibility Study.
4. Complete and final exploration report.
5. Certification that mining claims are subsisting.
6. Environmental report.
7. Environmental Compliance Certificate (“ECC”).
8. Approved survey plan.
9. Environmental Protection and Enhancement Program (“EPEP”).
10. Certificate of Environmental Management and Community Relations Record or Certificate of
Exemption.
11. Certificate Precondition from the National Commission on Indigenous Peoples (“NCIP”).

FTAAs may be entered into between a contractor and the government for the large-scale
exploration, development and utilization of gold, copper, nickel, chromite, lead, zinc and other
minerals, except for cement raw materials, marble, granite, sand and gravel and construction
aggregates. Requirements for FTAAs include:
1. Location map/sketch plan.
2. Two-year exploration work programme.
3. Posting of bond.
4. Certificate of Environmental Management and Community Relations Record or Certificate of
Exemption.
5. EWP.
6. Approved survey plan.
7. ECC.
8. EPEP.
9. Social Development and Management Program.

10. Mining Project Feasibility Study.

11. Three-year development/utilization work programme.

Generally, the procedures for different minerals and different types of land are the same.

FTAAs, however, may not be entered into with respect to cement raw materials, marble, granite,

sand and gravel and construction aggregates. The Philippine Mining Act also allows qualified

persons to apply for quarry permits for building and construction materials located within a

maximum area of five hectares.There are also additional requirements for offshore exploration

permit (“OEP”) applications.

Natural and juridical persons may own exploration and mining rights. The latter may be

in the form of a corporation, partnership, association or cooperative

The mining industry is also regulated by the ordinances issued by the local legislative

bodies of the local government units. These ordinances must be confined to the imposition of

reasonable limitations on mining activities conducted within their respective territorial

jurisdictions, and must be consistent with national laws and regulations.

Environmental Restrictions (Ras, PDs, EOs, etc)

In terms of serving environmental interests, Atty. Dante R. Bravo, president of Global

Ferronickel Holdings, Inc. (FNI) and president of Philippine nickel Industry Association (PNIA)

notes that existing legislation, particularly the Mining Law, provides safeguards to protect the

environment, among them undertaking environmental protection and enhancement programs and

creating a mine rehabilitation fund. There are also best practices, accrediting measures, and

framework improvement efforts being initiated by Chamber of Mines of the Philippines (COMP).

Laws affecting the mining industry

Republic Act No. 6969 (the “Toxic Substance and Hazardous and Nuclear Wastes Control Act”)

regulates the importation, manufacture, processing, distribution, use and disposal of chemical

substances and mixtures.

Republic Act No. 8749 (the “Clean Air Act”) outlines measures to reduce air pollution.

Republic Act No. 9003 (the “Ecological Solid Waste Management Act”) provides for a

systematic ecological solid waste management programme.

Republic Act No. 8371 (the “Indigenous Peoples’ Rights Act”) recognizes and promotes the

rights of indigenous communities by requiring their free, prior and informed consent (“FPIC”) in

specified instances relating to mining activities, among others.

Republic Act No. 7076 (the “People’s Small Scale Mining Act of 1991”) promotes viable small-

scale mining activities.

Executive Order No. 79 (Institutionalizing and Implementing Reforms in the Philippine Mining

Sector, Providing Policies and Guidelines to Ensure Environmental Protection and

Responsible Mining in the Utilization of Mineral Resources) (“EO 79”) instituted reforms such

as a review of the performance of existing mining operations and cleansing of non-moving

mining rights holders, imposed a moratorium against the issuance of mineral agreements

(“MAs”) until the enactment of legislation rationalizing existing revenue-sharing schemes and

mechanisms, and constituted the Mining Industry Coordinating Council (“MICC”), among

others.

Challenges in Mining Industry in the Philippines

• Responsible Mining under Philippine Mining Act

• Circumvention of Permits

• Interfacing with LGUs

• Delays in the declaration of Indigenous Peoples (institutional issues with National

Center for IPs)

• Impact of COVID-19 pandemic

IV. Trends, Opportunities, Threats, Challenges, and Critical Issues

Trends

The mining industry is a growing contributor to the Philippine economy. Based on the
mining industry statistics released by the Philippine Mines and Geosciences Bureau, the gross
production value of the first quarter of 2018 – Php109.5bn – surpassed the gross production
value of the entire previous year – Php108.6bn. In addition to its significant contribution to the
economy, the mining industry also opens up a host of employment opportunities to its
stakeholder-communities. As of 2016, at least 236,000 workers (excluding indirect jobs
generated by upstream and downstream sectors) were employed in the mining industry.
Indirectly, mining companies have also positively impacted the development of their
stakeholder-communities. As of August 2016, approximately Php13.153bn has been allocated by
mining companies for the development of their host and neighbouring communities through
approved social development and management programme.

The apparent lack of responsible mining practices and its negative environmental effects

led then-president Benigno Aquino, Jr. to issue Executive Order No. 79 which, among other

things, effectively increased the areas which are not open to mining and imposed a moratorium

on the granting of new mining agreements. In 2016, the Philippine Department of Environment

and Natural Resources (DENR) declared another moratorium, suspending the processing and

approval of all pending exploration permits. President Rodrigo Duterte has, on several occasions,

including his recent state of the nation address, expressed the view that the environment must be

prioritized as far as the utilization of mineral resources is concerned.

The negative perception of the effects of mining on the environment also resulted in the

former DENR secretary, Regina Lopez, issuing Department Administrative Order No. 2017-10,

which imposed a ban on open-pit mining. This issuance has been met with much criticism as it is

arguably unconstitutional, since the administrative order is banning a method of extraction that is
allowed by law. Further, the DENR secretary is only allowed to issue rules and orders for the

regulation of the conservation, management, development and proper use of mineral resources,

and does not have the power to prohibit what is allowed by law. In effect, the former secretary

unduly amended the law through the administrative order, an act not within the power of a

DENR secretary. In fact, the Philippine Mining Industry Coordinating Council (MICC), an inter-

agency forum mandated to review all mining-related issuances, has recommended the lifting of

the ban on open-pit mining, which was however denied by the president, who is now considering

retaining the open-pit ban until 2019.

Recent developments have shown that the Philippine mining industry may have a greater

opportunity to contribute to the country’s economic progress. Recently, the DENR lifted the

aforementioned 2016 moratorium on the processing and approval of pending exploration permits.

According to the current secretary of the DENR, Roy Cimatu, this was in line with the

administration’s objectives of increasing market competitiveness, increasing the ease of doing

business in the Philippines and attracting local and foreign direct investment.

The government has also begun to crack down on illegal small-scale mining by creating

the National Task Force on Mining Challenge (NTFMC), which is tasked with the enforcement

of mining and other environmental laws, rules and regulations. Since its formation, the NTFMC

has closed a number of illegal small-scale mining operations and gold processing plants in

surprise raids.

Further, in an effort to align with the government’s continued focus on ensuring the

environmental sustainability of all mining activities in the country, the Chamber of Mines of the

Philippines, the country’s association of large-scale miners, recently adopted the Towards
Sustainable Mining (TSM) initiative, spearheaded by the Mining Association of Canada, one of

the global benchmarks in the extractive mineral industry. The TSM will provide the mining

industry “tools and indicators to drive performance and ensure that key mining risks are managed

responsibly [in order] to meet society’s needs for minerals, metals and energy products in the

most socially, economically and environmentally responsible way”.

Opportunities

Many companies are looking to make improvements in surrounding sustainability and

safety in particular.

1. Licence to operate

Mining companies having a licence to operate allows them to contribute to economies and

communities as well as protection of heritage sites. LTO creates value for the future of investors,

and secures the operation.

2. Safety innovations

Safety innovations are becoming increasingly important not only due to the risks in the mining

industry but also because of the pandemic. Mine workers are at an increased risk of lung

conditions, and miners with these conditions are more likely to suffer the symptoms of covid,

which makes precautions more important.

3. Decarbonization

Decarbonization is not only important for a sustainable future, but also important for the

investors in the mining industry. Most investors and companies are moving away from thermal
coal. Mining companies moving towards decarbonization and net zero are currently reviewing

their technology, assets, and funding.

4. Workforce

Mining companies are creating a better future for their workforce with better career pathways

and safe culture. Mining jobs are becoming increasingly competitive which means jobs are

becoming more beneficial for workers, with mental health programs and quality training. For

investors diversity in the workforce is an important factor.

5. ESG

ESG and sustainability is becoming increasingly important in every industry, and is now a

priority to investors and stakeholders. Mining companies are doing more to make their projects

and operations more sustainable. Some of the most important factors to investors are water

management, operation closures, and biodiversity. Mines and Money in support of ESG in the

mining sector, had an ESG award at their event last year.

Threats

KPMG’s Global Mining Risk Survey Report 2021 lists commodity price risk as the top

concern for global mining leaders with a new addition – pandemic risk – coming in second.

Economic downturn and uncertainty rounded out the top three, reflecting the significant

volatility the sector faced in 2020. Interestingly, companies now rank access to key talent as the

number nine risk their own organizations face, perhaps reflecting restrictions in travel across the

globe. Like other industries, mining operations were forced to scramble to respond to the
pandemic to ensure the safety of employees, the communities in which they operate, and the

security of supply chains.

The pandemic may have increased the risk associated with political instability and

economic downturns, but at the same time it has prompted enormous stimulus spending in most

major jurisdictions, driving demand for commodities. We’ve seen not just a spike in prices for

iron ore, but more broadly government stimulus and supply interruptions caused by COVID-19

have been driving up commodity prices. Volatility in global markets has also seen investors

flock to safe havens, driving strong precious metal prices, such as gold.

In line with investor expectations environment, social and governance (ESG) has jumped

two places in the 2021 survey to fifth place. COVID-19 also seems to have accelerated the focus

on climate change and efforts to decarbonize. It is no longer just about operating responsibly; the

adoption of carbon neutral goals will see business models change and portfolios readjust. Since

2020, the race to decarbonize mining has only intensified and technology and innovation are

helping speed the change. Overwhelmingly, the surveyed mining companies agreed they now

need to have a clear, measurable ESG strategy. Yet around a third of respondents noted investor

expectations are still not well understood or consistent across the market. The days of

considering ESG factors as ‘soft’ secondary risks are long gone; recent years have taught the

mining sector that mistakes can carry very hard consequences.

On that theme, an overwhelming majority (82 per cent) of survey respondents identified

technological disruption as an opportunity rather than a threat. But just how this disruption will

affect players within the sector is still being worked through. Respondents were split on whether
disruption would weaken or eliminate traditional leaders, with 25 per cent agreeing it would,

while 33 per cent disagreed.

Concerns about access to capital, political instability, ability to access and replace

reserves, and permitting risks all remain prominent on the risk landscape, although each has been

marginally downgraded from the previous year. Meanwhile, the emergence of regulatory and

compliance changes/burden enters the list in tenth position.

When it comes to capital, nearly half of respondents (45 per cent) agreed the ability for

the industry to access the traditional sources of capital has deteriorated in the last three years,

while 39 per cent said access to capital is a significant constraint and required them to change

gears when it came to strategy. However, new ways to raise and access capital are emerging.

Investments by streaming and royalty companies are becoming increasingly common, funding

exploration and development with cash up front.

The following are threats to the industry:

* Commodity price risk (No 1, 2020)concerns * Political instability/nationalization

reflect ongoing volatility
* Regulatory compliance changes
* Global pandemic risk (unplaced 2020)
* Ability to access and replace reserves
* Economic downturn/uncertainty (No 6,
2020) *Regulatory and compliance changes/burden

* Community relations and social licence to

operate – (No 4, 2020) strengthening in
ESG agendas
* Environmental risks, including new
regulations (No 7, 2020)
* Permitting risk
* Access to capital including liquidity
Challenges

The mining industry comes with its fair share of challenges; from scarce resources to
uncertainty around commodity prices, miners are always looking at ways to overcome barriers to
stay competitive.

1. Access to Energy

As resources in some areas become scarce or depleted, companies are forced to push new
frontiers of exploration. Depending on what is being mined, this has the potential to be more
expensive than traditional mining and could leave companies more reliant on rental power
solutions.

To reach those resources which remain, mines are increasingly being established in off-grid

locations and their lifecycle is decreasing, meaning it is no longer financially viable to build

permanent power infrastructure to service the mine. Instead, remote mines are now utilizing

scalable microgrids that can evolve with the lifecycle, improving flexibility and efficiency.

2. Health and Safety

Mining is a dangerous profession. The traditional occupational hazards such as coal dust
inhalation, damage to hearing due to the noise in a mine and chemical hazards still stand but the
changing nature of mining has led to a raft of new issues.

As mines are getting deeper, the risk of collapse has greatly increased. With a rise in surface

temperatures and an increasingly unpredictable climate, the temperature of a mine is more likely

to fluctuate and as a result, consistent temperature control is even more important than it had

previously been.

Additionally, a change in mining practices has led to a renewed emphasis on the importance of

consistent ventilation systems – to ensure that workers are kept safe from dangerous fumes.
3. Access to Capital

Access and allocation of capital is often cited as one of the biggest issues facing the mining
industry, especially for its juniors. Rocketing exploration and production costs have impacted
profit margins and left investors reticent to engage with new projects, especially with smaller
companies. Juniors, who lack the war chests of the major companies, face the challenge of
raising the necessary capital to invest in increasingly expensive mining practices or in large-scale
equipment.

Flexible finance has become an increasingly popular solution and it enables mining juniors to

continue to push the barriers of exploration. Nervous investors and a lack of access to capital has

meant numerous high-profile projects being scrapped, shelved or sent back to the drawing board.

4. Volatility of commodity prices

Volatile commodity prices make it extremely difficult for companies to plan income and
therefore expenditure. Recent disruption in commodity prices has led to many companies having
to close down operations or make serious cuts in the size of their workforce. As a result, mining
companies are focused on improving efficiency and reducing cost more than ever.

5. Environmental footprint

Traditionally a carbon intensive industry, miners are now looking at ways to reduce their
environmental impact more than ever.

One of the major ways it can do so, is by evaluating their energy usage. Remote locations and
limited access to local grid infrastructure means that the mining industry places significant
demand on diesel generation for electricity. However, with recent enhancements in renewable
energy, the industry is now seeing the rise of hybrid power solutions for mine site operations. By
combining renewables with thermal generation and battery storage, mine sites can now increase
efficiency while reducing their carbon footprint and overall costs.
Critical Issues

Challenge #1: Increased electrification of vehicles

We don’t have to look very far to see that climate change targets are driving demand for

alternative energy sources and technologies like electric vehicles. This in turn is increasing

demand for certain raw materials: lithium and carbon for batteries, copper for motors and cables,

and rare earth minerals for the rotors and stators of electric motors. Ironically, the processing

needed to prepare many of these metals and minerals is hydrometallurgically intensive. So

processing them for commercial use can have significant environmental impacts because of the

chemicals used and the water required.

The output of copper mines is starting to falter, and there have been no new large discoveries in

the past two decades. When we consider that a fully electric vehicle needs four times the amount

of copper that a normal internal combustion vehicle does, the gravity of the supply-and-demand

gap is sobering.

Challenge #2: Increased energy consumption costs

Rising energy costs is one of the biggest financial threats to mining operations today. In 2017 in

Australia, electricity accounted for 6 percent of the total cost of mining. As an example,

Newcrest Cadia Valley Operations saw a 90 percent increase in energy costs after its energy

contract expired in June 2017. In 2012, Mining World indicated that comminution—one of the

most fundamental processes in mining—accounts for a staggering 4 percent of the total global

energy demand.

Challenge #3: Global scarcity of fresh water

Activist investors, communities, and environmental groups are turning the spotlight on water-

intensive industries like mining. In 2017, Anglo American CEO Mark Cutifani said, “Water is

one of the greatest constraints to the new supply of mined products across the industry.”

Mining requires significant amounts of fresh water, and many mining operations are already in

water-stressed regions. The Financial Times reported that mining companies spent about $12

billion last year on water infrastructure, compared with about $3.4 billion in 2009.

Challenge #4: Capital intensity in mining

Developing new mines is expensive, and fewer and fewer corporations can afford the full life-

cycle costs of current mining operations. Rio Tinto alone has at least $12 billion in mine closures

on its books. With current operations, mines will need to be monitored for hundreds of years

after they close.

Challenge #5: Dealing with data and the rise of digital

One of the newest challenges for mining operations is managing the massive amounts of data

produced across the value chain. Mining operations are spread out globally and decision-making

is often soiled. Because the value chain isn’t connected through data, only about 10 percent of

the data we have is being leveraged to reduce process variability and optimize operations.
V. Summary and Conclusion

The mining industry plays a very important role in the country’s economic development.

For one, the industry provides many opportunities to a significant portion of the population,

directly and indirectly. The launching of a mining project spurs local and regional economic

development as mining firms invest in road infrastructure, utilities, and other facilities within the

mine site.

Mining, likewise, contributes to the country's foreign-exchange earnings through exports.

Furthermore, the industry provides additional revenues for the government through taxes and

fees paid on mining and other related activities. The mining activities involve operations that

have significant impact on the environment. In most facets of the mining activities, there is

always the potential for environmental and ecological problems -- from the construction of

mining facilities, the extraction of ore, to the processing of minerals.

Philippines mining industry have the estimates from Mines and Geosciences Bureau

which states that the country’s mineral endowment for copper, gold, nickel, chromite is at around

US$ 1.4 trillion or over P60 trillion; while over US$ 5 billion were gained in exports in 2020,

equivalent to over 6% of the country’s total exports. Miners also paid over P25 billion in taxes,

fees, and royalties.

Philippines socio-economic development largely depends on the extent and composition

of its natural resources. The mining sector is likely to contribute to the development of the

economy of any country through taxes from large-scale mining companies and contribute to

social–economic infrastructural development within the area where the mine is located. The

mining sector can; create employment opportunities both directly in the mines and indirectly on
services to the mines, provide education and health services, increase foreign exchange reserves,

(reducing a country’s foreign exchange deficit), improve infrastructure like roads and water

supply, and create other economic activities to support the mines instead of importing all

supplies from abroad.

The mining industry holds a lot of potential and performs a complementary role in

industrial development. It will be necessary to use this potential if the country wants to attain its

economic development goals within the next decade, but at the same time remain prudent in the

use of these natural mineral resources, so that succeeding generations may still benefit from it.

Responsible mining should protect the environment and restore mine to their original conditions

through restorations efforts, alongside sustainable livelihood activities for communities that will

be left behind.

A good compromise between sound environmental protection and effective regulation of

mining activities should reduce the hostility coming from anti-mining advocates and promote

effort to tap country’s unused mineral potential. Such efforts should continue encouraging

investment into mining along a job creation and the development of both upstream and

downstream mineral processing activities.