Dim prospects for mining in the Philippines

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Despite having some of the world's largest mineral reserves, the Philippines will remain virtually off-limits to new mining investment for the foreseeable future. Hopes that a new mining policy would be enacted after current president Rodrigo Duterte was elected in May 2016 have faded as the government has indicated it considers the issue a low priority.

World's 5th-largest reserves

Philippine business leaders have expressed frustration over the government's lack of interest in mining development. The Philippines' mineral reserves in 2010 – the last year in which a comprehensive survey was done by the Mines and Geosciences Bureau (MGB) – were estimated at $1.39 trillion, the fifth-largest in the world. Estimated gold reserves exceed 3.8 billion tons, and the country has an estimated 5.05 billion tons of copper. There are also significant reserves of nickel, iron, aluminum, and molybdenum, as well as smaller reserves of chromite, zinc, and manganese.

According to data from the MGB, there are currently 41 operating mines in the country, 28 of which are nickel mines, and just four smelters, two each for gold and nickel; the Philippines' sole copper smelter shut down in 2015. Mineral exports, which contribute just 0.6 percent of the country's GDP, peaked in 2013 at about $3.41 billion, but declined to $2.3 billion in 2016.

Of the estimated nine million hectares of land covering mineral reserves, less than two percent is covered by current exploration or mining permits.

Problematic regulatory environment

Mining in the Philippines was regulated under the Mining Act of 1995, but only briefly. Legal challenges to the law kept it from being implemented until 2004, when it was finally cleared by the nation's Supreme Court.

In 2010, then-president Benigno Aquino III unilaterally rescinded the Mining Act with Executive Order 79, which froze all new mining investment and development and set forth terms for what was intended to be an updated mining law to be enacted by Congress. The measure, however, was not taken up by the Philippine legislature during Aquino's term, which ended in May 2016, nor has it been addressed since the election of his successor Rodrigo Duterte.

Duterte himself has largely been antagonistic toward the mining industry, in spite of acknowledging its role in industrial development. In July 2016, he appointed a militant environmentalist, Regina Paz Lopez, to head the country's Department of Environment and Natural Resources. Lopez promptly imposed a ban on open-pit mining, ordered 25 operating mines closed for a variety of environmental infractions (some have since reopened), and canceled 75 outstanding Mineral Production Sharing Agreements (MPSAs). Under pressure from business leaders, the Philippines' powerful Commission on Appointments refused to confirm Lopez's appointment, and she was replaced in April by Roy Cimatu, a former national security adviser.

So far, Cimatu has not acted to roll back any of Lopez's controversial measures, and he has hinted that he will probably allow the open-pit ban – which Duterte has publicly endorsed – to stand; a September deadline for a review of the order was allowed to pass without comment. The ban effectively eliminates some of the largest foreign investments in Philippine history, a total of $11.5 billion in planned gold and copper projects in the country's economically-depressed south.

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