Gov’t out to fast-track draft mining bill

Business World Online 

Posted on September 17, 2012 10:40:57 PM

A GOVERNMENT review of mining revenue-sharing reforms could soon be completed, a Cabinet official said, after which a draft bill will be submitted to Malacañang for approval.

"The Mining Industry Coordinating Council (MICC) has been meeting every week and we hope to finish ... in the next few weeks," said Finance Secretary Cesar V. Purisima, who sits in the panel, at the sidelines of yesterday’s Philippine Economic Briefing.

"After the study, we will craft a draft mining bill and present it to [President Benigno S. C. Aquino III]. Once he approves the measure, it will be filed in Congress."

The government aims to have the mining bill passed as soon as possible and Mr. Purisima said ideally it should be signed into law within the current Congress’ term, which ends in June 2013.

"Legislators have said that if we can provide a draft quickly, then maybe they can expedite the process for us. But, we have to be practical. We will see what we can do on our part first," he said.

"Definitely, the bill will be passed before 2016," he added.

The draft mining bill will result from Executive Order (EO) 79, issued in July, that outlined the government’s new industry policy.

The Palace directive extended a moratorium on all new mining permits "until a legislation rationalizing existing revenue-sharing schemes and mechanisms shall have taken effect."

The government aims to increase its share of mining revenues and the MICC was tasked to create a technical working group to study possible reforms.

Among the proposals under review, Mr. Purisima said, are the carbon tax and mineral resource rent tax imposed in Australia.

"I also held discussions with Chile in a bilateral meeting in the APEC (Asia-Pacific Economic Cooperation) summit last week. I asked for a copy of their revenue-sharing formula… where the revenues increase when mineral prices increase and vice versa," he said.

The Finance chief has also endorsed recommendations made in an International Monetary Fund (IMF) study, among them the creation of a single royalty rate of 7%, the unification of mining regimes and the removal of income tax holidays for miners.

The MICC is also looking to resolve other issues that have stalled the development of the sector in recent years.

"We’re looking at the need for legislation to align national and local policies, especially with the case of South Cotabato’s open-pit mining ban. After all, all business is local," Mr. Purisima said.

Sagittarius Mines, Inc.’s $5.9-billion Tampakan copper and gold project could be called off due to the ban.

"We also want to ensure that the creation of the mining bill will not delay the government’s right to privatize its mining assets. That’s our stance," Mr. Purisima said.

The Privatization and Management Office aims to bid out stakes in four nickel, copper and gold mines, as well as the government’s shares in Semirara Mining Corp.

Lastly, Mr. Purisima said the MICC wanted to increase downstream activities so that mineral processing could be done locally.

"It should no longer be the traditional practice of simply extracting the minerals here and then exporting them for processing. That way, mining can be the sixth gear for economic development in the country," he said.    source