Let Us Revitalize the Mining industry.(Opinion &Amp; Editorial)

Article excerpt

ECONOMISTS agree that unless the Philippines is able to attain growth rates in its Gross Domestic Product (GDP) of about seven to eight percent per annum in the next ten years, it will be difficult to combat mass poverty, especially in the rural areas. Attempts to redistribute income, without sufficient economic growth, will just be tantamount to redistributing poverty. Everyone will turn out equally poor.

A most important sector, after agriculture, that can uplift the poor in the countryside is the mining industry. The minerals industry used to contribute more than two percent of the Philippine GDP in the decade of the 1980s. This contribution to income and employment (close to 150,000 people were directly employed by the industry) was especially significant in the island of Mindanao in some of whose regions exist the highest rates of poverty. The Philippines was literally a world power in copper and gold production. In 1980, it ranked 5th in the world's gold production and 9th in copper production. Minerals contributed 21 percent of our total exports in the early 1980s. Today the Philippines is number 26 in copper production and number 25 in gold production and minerals contribute less than a measly two percent to our total exports.

What has happened to this once thriving industry? Part of the problem can be attributed to a few cases of irresponsible practices of some mining firms that damaged the physical environment and dislocated some indigenous tribes. Unfortunately, the sins of the minority hurt the entire industry. The major part of the explanation, however, is the great amount of misinformation and miscommunication among the industry leaders, the government, and nongovernmental organizations who have systematically opposed mining operations in diverse parts of the Philippines. It is important for us to remove the misconceptions and to enable responsible mining firms to make a significant and much needed contribution to poverty eradication in the Philippines.

The first fact to establish is that the minerals industry is a high risk business. Industry experts estimate that there is a one-in-one-thousand chance for exploration projects to yield a world-class producing mine. Even the one in 1,000 successful exploration may take ten years to make profitable. This long lead time requires very clear policy guidelines and a stable environment so that a country can attract investors. Since the Philippines suffers from acute capital scarcity, these investors will have to be attracted mostly from abroad.

In 1995, the Philippine Mining Act was passed as part of a set of progressive policies to stimulate economic growth and eradicate mass poverty. This new mining act addresses effectively the issue of sustainable development defined by the Bruntland Commission as "meeting the needs of the present without compromising or prejudicing the ability of future generations to meet their needs." The Act requires 10 percent of mine development costs for initial environmental programs and a range of three percent to five percent of annual mining and milling costs for environmental protection and enhancement projects. It also requires the submission of a final mine rehabilitation/decommissioning plan five years before decommissioning. There is a multi-party monitoring committee made up of the host communities, accredited NGOs, the local government unit, the Department of Environment and Natural Resources and the mining firm.

The problem of forest denudation is also addressed. Under the National Protected Areas System (NIPAS), certain areas of the country (i. …