Philippines Ore Ban Unlikely During Duterte’s Term, Says Senator

(Bloomberg) -- A lawmaker with oversight of the Philippines’ embattled mining industry said the nation is at least six years away from enacting legislation that would ban mineral-ore exports and force companies to process metals locally.

Senator Cynthia Villar, who heads the Senate’s environment and natural resources committee, said she doubts any ban will happen during new President Rodrigo Duterte’s six-year term. “The industry is not that developed,” she told reporters Tuesday on the sidelines of a mining conference in Manila. Domestic processing “is something we should look forward to in the future,” she said.

The House of Representatives will tackle a bill seeking to ban ore exports as part of a broader plan to revamp the mining sector and retain more of the country’s mineral wealth domestically, Congressman Carlos Isagani Zarate said last week. The country is the world’s biggest supplier of nickel ore used in stainless steel and the top supplier to China. Global nickel prices rallied to the highest in a year this month after some mines were suspended amid an environmental audit and reports of the potential export ban.

The law’s sponsors aim to develop a domestic processing industry, creating jobs and boosting tax revenue. A similar bill foundered in 2014 through lack of support.

Many Models

Villar, who spoke at an event organized by the Chamber of Mines of the Philippines, said she wants to see the “creation or development of more domestic processing facilities to generate more local employment,” similar to Indonesia, which halted ore shipments more than two years ago. “There are many models of mining policies that we can examine to see how it can apply to our country and benefit our people,” she said, citing Canada and Australia for their high safety standards.

Villar’s son is the chief executive officer of St. Augustine Gold and Copper Ltd., the Toronto-listed operator of the planned King-king gold and copper mine in the southern Philippine province of Compostela Valley.

The senator said mining shouldn’t come at the expense of the environment and she blamed small, illegal miners for bad practices. She said that with only 0.3 percent of the nation’s area devoted to mining, she’s surprised that chamber members “are being blamed for environmental degradation.”

Mining Crackdown

President Duterte and Environment Secretary Gina Lopez are spearheading the mining crackdown, ordering operators to comply with environmental rules or face closure. Lopez’s audit of miners is due to end this month. So far, 3 percent of the nation’s first-half output this year has been shuttered, according to Citigroup Inc. The bank said the impact on world supply has been limited and forecast that producers will respond to higher prices by increasing shipments.

The nation’s miners aren’t against local processing of ores but instead of an export ban, the government should encourage investors to set up local plants by offering tax incentives, Nelia Halcon, executive vice president of the chamber, said Monday. The government should also conduct a feasibility study on banning exports, she said.

Philippines’ growth would be as much as 10 percent had mining projects worth $34 billion been allowed to proceed in a timely fashion, Halcon said. The nation’s economy expanded at 7 percent in the second quarter.