MINING IN MINDANAO: COMPETITIVE AND RESPONSIBLE

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1 MINING IN MINDANAO: COMPETITIVE AND RESPONSIBLE RAMON J. P. PAJE Secretary 22 nd Mindanao Business Conference August 8-10, 2013 SMX Davao Convention Center SM Lanang Premier, Davao City

2 MINERAL POTENTIAL More than half of the estimated mineral wealth of the Philippines is found in Mindanao, where almost 50% of gold and 65% of nickel reserves of the country are located.

3 MINING TENEMENT INFORMATION Major Approved Mining Tenement (July, 2013) Mindanao National Mineral Production Sharing Agreement Exploration Permit Financial or Technical Assistance Agreement 1 6 Total

4 MINING TENEMENT INFORMATION MINING APPLICATIONS IN MINDANAO Of the 589 mining applications filed, as of 2011, 448 were denied under the Use It or Lose It Policy of the DENR on the same year. Of the total 89 Exploration Permit (EP) applications accepted by the Mines and Geosciences Bureau after the lifting of the moratorium in March 2013, 37 are located in Mindanao.

5 MINING OPERATIONS Number of Operating Metallic Mines (July 2013) Mindanao National Nickel Mines Gold Mines 4 7 Copper Mines 2 5 Chromite Mines 1 2 Iron Mines - 3 Total 21 40

6 UPCOMING MAJOR MINING PROJECTS PROJECT MINING COMPANY LOCATION Tampakan Copper- Gold Project Boyongan-Bayugo Copper-Gold Project Sagittarius Mines, Inc./ Xstrata Copper Plc. Philex Mining Corporation South Cotabato, Sultan Kudarat and Davao del Sur Mainit and Placer, Surigao del Norte Sumitomo H-PAL Project Taganito Mining Corporation Claver, Surigao del Norte Kingking Copper- Gold Project Nationwide Development Corporation/Russel Mining-St. Augustine Gold Mining Corporation Pantukan, Compostela Valley

7 ISSUES ON MINING LACK OF BASELINE DATA ON THE MINING INDUSTRY; POLICY INCONSISTENCIES BETWEEN THE NATIONAL AND LOCAL LAWS;

8 ISSUES ON MINING GOVERNANCE AND LAW ENFORCEMENT CONCERNS;

9 ISSUES ON MINING LACK OF TOTAL ECONOMIC VALUATION FOR THE MINING INDUSTRY;

10 ISSUES ON MINING INSUFFICIENT GOVERNMENT SHARE IN MINING REVENUES; AND ADVERSE EFFECTS OF ENVIRONMENTAL DEGRADATION AND CLIMATE CHANGE.

11 INSTITUTING POLICY REFORMS Created the Mining Study Group per instruction of the President in October 2011 Tasked to finalize the mining industry policies Composed of the DENR Secretary, Presidential Assistants on Climate Change and on Environmental Protection, and Vice-Chair of the Climate Change Commission

12 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 Signed on 06 July 2012

13 HIGHLIGHTS OF THE NEW MINING POLICY Clarifying the Areas Closed to Mining Applications. Full Enforcement of Environmental Standards. Sibuyan Island

14 HIGHLIGHTS OF THE NEW MINING POLICY Review of the Performance of Existing Mining Operations and Cleansing of Non-Moving Mining Rights Holders. Freeze in Grant of Mineral Agreements Pending New Legislation on Revenue Sharing. Grant of Mining Rights thru Competitive Public Bidding.

15 HIGHLIGHTS... Declaring Abandoned Ores and Tailings as Assets of the State for Bidding. Development of Downstream Industries for the Mineral Sector. Constituting the Cabinet- Level Mining Industry Coordinating Council. Dizon Mine s Tailings Pond San Marcelino, Zambales

16 HIGHLIGHTS... Rationalizing Small- Scale Mining Activities. Addressing the Conflicts between Local Ordinances and the National Laws. Creating a One-Stop Shop for All Mining Applications. Joining the Extractive Industries Transparency Initiative.

17 HIGHLIGHTS... Creation of a Centralized Database for the Mining Industry. Creation of an Integrated Map System for Mining. Creation of an Anti-illegal Mining Task Force. Use of the Programmatic Environmental Impact Assessment in Mining

18 ACTIONS TAKEN: 1. On the Integrated Map System The No-Go Zone Map has been prepared as a major input to the Integrated Map; clearly shows the areas closed to mining. 2. On the Creation of One-Stop-Shop (OSS) Regional OSS to be created in the Regional Level

19 ACTIONS TAKEN: 3. On the Participation in the Extractive Industries Transparency Initiative (EITI) Philippine candidacy accepted MGB and other government agencies concerned to populate database systems, for full transparency and disclosure of information on mining. 4. On Measures to Improve Small-Scale Mining Nationwide consultation held on drafting of the Smallscale Mining guidelines; draft guidelines presented to MICC for approval. Expediting establishment of Minahang Bayan.

20 ACTIONS TAKEN: 5. On the Establishment of Mineral Reservations 15 Mineral Reservations are targeted to be identified and assessed for this year. 6. On the New Revenue Sharing Scheme Draft bill to be presented to MICC ; for final review and submission as draft bill to Congress

21 ACTIONS TAKEN: 7. On the Review of Performance of Existing Mining Operations Multi-sectoral team to be created in every Regions. Cleansing process for approved mining tenements have been started; show-cause letters sent. 8. On the Illegal Mining Task Force on Illegal Mining created, led by DILG; anti-illegal mining operations launched.

22 EXPECTED OUTCOME OF MINING POLICY REFORMS THE GOVERNMENT IS NOW ENSURING THAT CLEAR AND PREDICTABLE POLICIES FOR A MORE SECURED MINING INVESTMENTS WILL BE SET IN PLACE UNDER GOOD GOVERNANCE AND THE PRINCIPLE OF RESPONSIBLE MINING. MINDANAO, WITH ITS HIGH MINERAL POTENTIAL, STANDS TO GREATLY BENEFIT FROM THE PURSUIT OF RESPONSIBLE MINING.

23 THANK YOU and MABUHAY..