RESOURCES COMMENTARY
PHILIPPINE RESOURCES THE MAGAZINE FOR MINING AND CONSTRUCTION Philippine Resources is published independently for executives in Philippine mining, construction, resources and associated business sectors. Publisher Elizabeth Galura Consulting Publisher Greg Brimble Editor Jimbo Owen Gulle Sales and Marketing Manager Matt Brimble +63 927 721 6622 Matthew@philippine-resources.com Account Manager Merian Jay Fallan +63 955 738 0266 merian@philippine-resources.com Administration Cecilia Pamular +63 917 308 1971 cecille@philippine-resources.com Design/Production Elizabeth Galura Journalists Marcelle P. Villegas Abe Almirol Contributors Patricia A.O. Bunye Fernando Penarroyo Manila Publishing Office Suite 6, 2nd Floor Corinthian Plaza Building 121 Paseo de Roxas Legaspi Village Makati City, Philippines 1226 Phone +632 8251 5599 Digital Online Edition www.Philippine-Resources.com ON THE COVER: Photo courtesy Richie Bros. Premier Global Auction in Orlando See related story, “Ritchie Bros.: Providing the Philippines a World of Choice” on page 57
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Mining Trends 2022: Will the outlook remain positive?
ast year saw miners experiencing record profitability and revenue. While the industry continues to benefit from relative high metal prices and opportunities from the clean energy transition and digital transformation, there are identified risks arising from COVID-19’s resurgence and disruptions, poten-tial for weaker-thanexpected global economic growth, government intervention, and community op-position. Meanwhile compliance with environment, social and governance (“ESG”) standards will ob-ligate mining companies to protect the environment, contribute to community development, and be-have ethically. On the local front, Department of Environment and Natural Resources (“DENR”) Secretary Roy Ci-matu lifted the four-year-old ban on the open-pit method of mining for copper, gold, silver, and com-plex ores. Enforced in 2017, the ban was one of the high-impact measures taken by the late DENR Secretary Regina Lopez. The former DENR secretary also ordered the closure of 26 mines. Howev-er, with the completion of the Mining Industry Coordinating Council audit which started in 2019, only 3 out of the 26 mines were deemed unsafe and the other closures were reversed. The Chamber of Mines of the Philippines deplored the lost opportunities in the mining sector in the last decade. The chamber believed that the industry has been unjustly scrutinized and subjected to unfair publicity, which cost billions in lost revenue. Foreign direct investment (“FDI”) will remain stag-nant for the industry unless regulations are eased, and barriers are lowered. The ban also delayed FDIs in open pit mining projects like Sagittarius Mines Inc.’s $5.9-billion Tampakan copper project in South Cotabato and St. Augustine Gold and Copper Ltd.’s $2-billion King-king coppergold project in Compostela Valley. The lifting of the ban according to the DENR order, is meant to “revitalize the mining industry and usher in significant economic benefits to the country by providing raw materials for the construction and development of other industries and by increasing employment opportunities in rural areas.” With the
lifting of the ban, the Department of Finance said the mining industry can become a key contributor to the nation’s economic recovery per DENR’s projection that openpit mining will lead to the immedi- By Fernando Penarroyo ate development of 11 pending projects. These projects are expected to generate about PHP11 billion combined in yearly government revenue, increase annual exports by PHP36 billion, and provide employment to 22,880 people living in remote municipalities. Economists see the Philippine economy’s continuing rebound this year after registering a 5.6 percent GDP growth in 2021. However, the outlook is threatened by the emergence of new COVID-19 vari-ants and how the government handles them. Based on the World Bank’s Global Economic Pro-spects, despite the spike in infections from the omicron variant, the Philippines is poised to register the fastest growth in ASEAN this year and the second highest growth in 2023. According to the World Bank, the projected economic growth rate of 5.9 percent for 2022 will be the fastest growth expected in ASEAN, while the 5.7 percent expected next year will be second only to Vietnam’s 6.5 percent. ESG will dictate investments in mining Miners are under increasing pressure to integrate ESG into corporate strategies, investment decisions, and stakeholder reporting. Demands from shareholders, financial institutions, local communi-ties, national governments, customers, and the sector’s own workforce are requiring miners to ad-here to ESG standards. Sustainability in mining means minimizing the consumption
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ISSUE 1 2022 • WWW.PHILIPPINE-RESOURCES.COM