* This is my article in BusinessWorld on April 21, 2017.
The above numbers show the following:
Biodiversity of living things is more common in the
tropics compared to those in the northern and southern hemisphere. Geological
diversity of nonliving things is more common in the Pacific countries as there
are more volcanic and earthquake movements in the “Pacific Rim of Fire” than
the rest of the planet.
That is why for almost all commodities -- copper, gold,
molybdenum, silver, nickel, bauxite, zinc, lead, etc. -- countries in the
Asia-Pacific Economic Cooperation (APEC) are the dominant suppliers and
exporters. Volcanic gases and molten rocks are the main producers of mineral
products below the ground.
There is a good study on the mineral potentials of APEC
economies published more than two years ago. Some definitions of the terms used
in the table below:
1. Mineral rent is the difference between the value of
production for a stock of minerals at world prices and their total costs of
production.
2. Mining Contribution Index (MCI) is calculated based on aspects of mining and metals contribution to national economies, composite for three variables: (a) Mineral export contribution in 2010 as percent of total merchandise exports, (b) Increase/decrease in mineral export contribution 2005 to 2010, and; (c) Mineral production value as a percentage of GDP in 2010.
2. Mining Contribution Index (MCI) is calculated based on aspects of mining and metals contribution to national economies, composite for three variables: (a) Mineral export contribution in 2010 as percent of total merchandise exports, (b) Increase/decrease in mineral export contribution 2005 to 2010, and; (c) Mineral production value as a percentage of GDP in 2010.
The above numbers show the following:
1. Countries on the “ring side” of the Pacific Rim
generally have higher MCI -- Australia, Chile, Papua New Guinea, Peru -- than
those a bit far from the Rim. Thus, while China has the biggest mining rent in
2013, it has low MCI.
2. The Philippines’ low mining rent and output is mainly
a result of the policy and taxation environment that is generally not
attractive to more big corporate mining but the country has high MCI. It is the
world’s 2nd biggest producer of nickel, next only to Indonesia.
3. Employment in mining is generally low relative to
total population because the industry is very capital intensive. Workers hardly
use spades and other manual tools; they use huge trucks, loaders, bulldozers,
and other machines. Thus, the Philippines’ 0.22% that is being looked down by
many anti-mining groups as being “not job-creating enough” is actually higher
than those in Indonesia, Canada, Mexico and USA.
The Philippines is one of the most mineral-rich countries
in the planet, the archipelago being largely a product of volcanic movement
rising from below the sea millions or billions of years ago. Thus, mining
potential is very high even utilizing only a small portion -- less than 1% --
of the country’s total land area.
Recently, DENR Secretary Gina Lopez has launched a series
of lectures and public fora advocating “more investments in biodiversity than
in mining.” This is after she ordered the closure of 22 mines and suspended
five others, and ordered a P2-million bond by mining companies per hectare of
“disturbed” agricultural lands before they can haul their mineral stockpiles.
The Secretary has not produced any realistic numbers of
biodiversity investments while the Chamber of Mines of the Philippines (CoMP)
has projected at least $30 billion of big mining investments in the next 10
years if the policy environment has improved and stabilized.
In my agro-forestry farming experience in a farm in
Bugallon, Pangasinan since two and a half decades ago, I saw how mahogany trees
we planted would grow well in a relatively rich soil but would have stunted
growth, many even die, just about 50-100 meters away in land with high silica
deposit and potentials. This further shows that mineral-rich lands and
mountains are generally less conducive for agriculture and even for forestry
because the soil has very low nitrogen and phosphorous levels.
The government should optimize the high mining potential
of the Philippines -- to create more jobs, generate more exports and economic
output, give more community projects that mining companies are mandated to
provide.
Big government presence in mining is justified only in
laying down rules that apply to all, big and small-scale miners. Big mining
companies in particular are expected to strictly follow existing rules
especially those provided by the Mining Act of 1995.
Beyond that, there should be less government
interventions and taxation, there should be less political harassment and
business uncertainty, especially with many mining closures and suspensions.
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See also:
BWorld 122, Six more myths in the mining debate, April 13, 2017
BWorld 123, Drug-related murders and criminal justice in Asia, April 23, 2017
BWorld 124, On Grab, Uber, traffic and LTFRB, May 05, 2017
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