Philippines likely to miss mining investment target

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PH miningThe Philippines will likely miss its mining investment target of $16 billion by 2016 (cumulative from 2004) due to the changing regulatory environment and the push for higher taxes, Chamber of Mines of the Philippines (COMP) president Benjamin Philip Romualdez said at the Mining Philippines 2013 Conference and Exhibit in Pasay City on September 10.

He said that some $12 billion in additional mining investments might be put on hold and that companies would likely continue disbursements only for committed projects. Such challenges, combined with softening metal prices on the international market, were seen to drive mining investments down “dramatically” over the next three years.

Industry group COMP had said that the targets would not be met due to various other challenges, including changing mining policies, the recent moratorium on new contracts pending proposed changes in mining tax laws, local government ordinances that ban mining or methods like open-pit mining and high investment requirement amid high political risks. These were hampering investments at a time when the government was seeking more revenue from the industry, according to COMP.

One solution would be that mining areas must be “clearly defined” so that mining firms would not be “misled” into investing in areas that were not designated for mining.  The Mines and Geosciences Bureau is proposing a revenue-sharing scheme where all tax incentives are to be removed, existing taxes to be retained and the 5-per cent royalty for mineral reservations to be applied to all. Previously the inter-agency Mining Industry Coordinating Council proposed a government share of 10 per cent of gross mining revenue or 50 per cent of net revenue.

Industry players have argued that both proposals would make the Philippine mining industry uncompetitive and that tax-paying mining firms were already giving a “fair share” to government.

The Philippine government aims to attract $2.27 billion in mining investments for 2012 but has not released the official figure for actual investments for the year. In 2011, the Philippines missed its mining investment target of $1.44 billion due to deferred development of major projects.

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Reading Time: 2 minutes

The Philippines will likely miss its mining investment target of $16 billion by 2016 (cumulative from 2004) due to the changing regulatory environment and the push for higher taxes, Chamber of Mines of the Philippines (COMP) president Benjamin Philip Romualdez said at the Mining Philippines 2013 Conference and Exhibit in Pasay City on September 10.

Reading Time: 2 minutes

PH miningThe Philippines will likely miss its mining investment target of $16 billion by 2016 (cumulative from 2004) due to the changing regulatory environment and the push for higher taxes, Chamber of Mines of the Philippines (COMP) president Benjamin Philip Romualdez said at the Mining Philippines 2013 Conference and Exhibit in Pasay City on September 10.

He said that some $12 billion in additional mining investments might be put on hold and that companies would likely continue disbursements only for committed projects. Such challenges, combined with softening metal prices on the international market, were seen to drive mining investments down “dramatically” over the next three years.

Industry group COMP had said that the targets would not be met due to various other challenges, including changing mining policies, the recent moratorium on new contracts pending proposed changes in mining tax laws, local government ordinances that ban mining or methods like open-pit mining and high investment requirement amid high political risks. These were hampering investments at a time when the government was seeking more revenue from the industry, according to COMP.

One solution would be that mining areas must be “clearly defined” so that mining firms would not be “misled” into investing in areas that were not designated for mining.  The Mines and Geosciences Bureau is proposing a revenue-sharing scheme where all tax incentives are to be removed, existing taxes to be retained and the 5-per cent royalty for mineral reservations to be applied to all. Previously the inter-agency Mining Industry Coordinating Council proposed a government share of 10 per cent of gross mining revenue or 50 per cent of net revenue.

Industry players have argued that both proposals would make the Philippine mining industry uncompetitive and that tax-paying mining firms were already giving a “fair share” to government.

The Philippine government aims to attract $2.27 billion in mining investments for 2012 but has not released the official figure for actual investments for the year. In 2011, the Philippines missed its mining investment target of $1.44 billion due to deferred development of major projects.

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