Mining row hurting supply chain

By: Roy Stephen C. Canivel - 03:06 AM February 21, 2017

http://business.inquirer.net/224938/mining-row-hurting-supply-chain

The Philippine Exporters Confederation Inc. (Philexport) said the controversy in the mining industry has hurt the supply chain, leaving the foreign market worried that local exporters might not be able to fill their orders.

The crackdown on mining firms accused of committing environmental violations has now also affected other related industries in the export market, putting at risk “thousands others that depend on mining.”

This is on top of the scores of workers directly employed under the mining industry and who may face displacement following the recent orders of the Department of Environment and Natural Resources (DENR).

 “It’s not as simple as mining itself. The supply chain is disrupted,” Philexport president Sergio Ortiz-Luis Jr. told the Inquirer in a phone interview Monday.

“The price, for instance, of nickel has doubled. Therefore, those who order here are afraid because our exporters might not be able to supply. Unfortunately, even down the chain, allied industries have a problem, too,” he said, citing consolidators and brokers in their member-companies as among those affected.

Early this month, Environment and Natural Resources Secretary Regina L. Lopez received flak from the business community following her orders to cancel 75 mining contracts in pre-development, close down 23 mining firms and suspend five others.

Most of the mines that were targeted for closure produce nickel, which account for half of the Philippines’ exports of the raw material used to make steel.

Ortiz-Luis said that the mining industry was previously expected to be the “sunrise export” sector during the start of the Duterte administration, but the crackdown of Lopez has created doubts instead, leaving a “big impact” on mining firms and related industries.

Meanwhile, the Surigao Chamber of Commerce and Industry Inc. (SCCI) issued a resolution last week asking the national government to consider how orders to close and suspend mining firms have impacted the region.

The document, which was dated Feb. 17 but was released to media Monday, recommended a set of measures for sustainable mining development in light of controversies that have recently put the sector in a crisis.

In essence, the list asked the national government to help mitigate the repercussions of the DENR orders on the part of affected workers while encouraging the practice of responsible mining and the gradual shift toward the export of processed minerals.

This comes as the province is considered instrumental in making the Caraga region (made up of the provinces of Agusan del Norte, Agusan del Sur, Dinagat Island, Surigao del Norte and Surigao del Sur) the “center” of the Philippine mining industry.

According to SCCI, there are 25 operating large-scale mining firms in the Caraga region that contribute 28.5 to 32.5 percent of the gross regional domestic product, along with nearly all of the region’s exports and employ around 28,000 workers.