Alvarez calls on House to support mining reforms

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As part of the Duterte administration’s crackdown on illegal and destructive mining operations in the country, the new leadership at the House of Representatives on Monday said it wants mining companies to secure legislative license to operate, among other sweeping reforms to the industry.

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Davao del Norte 1st District Representative Pantaleon Alvarez gave this marching order to the 292 members of the House after winning the speakership on Monday.

“That way, their activities would be subject to legislative oversight and their franchises can be revoked by the oversight body instead of a probably bribable bureaucrat in an obscure DENR office if they violate the terms and conditions thereof,” said Alvarez.

In his acceptance speech during the opening of the 17th Congress, Alvarez once again called on Congress to support the President’s priority measures—including the revival of a proposed measure to ban raw ore export and require mining companies to process materials locally to produce more revenue and stronger job generation.

Alvarez, who is a close ally of President Duterte, said that it is expected that the labor component for the metal production will increase significantly as the development of downstream value addition becomes viable from the domestic production, particularly of nickel ore.

The production of nickel metal in the form of ferronickel and nickel pig iron is a significant value addition in the utilization and optimization of the country’s mineral resources. It also reduces the country’s dependence on the shipping of low-value, high-volume nickel ore to China.

Currently, all steel and stainless steel products are imported into the Philippines despite the country being rich in the basic minerals used to manufacture this product.

Indonesia’s ore export ban follows the same principle, which has forced many Chinese smelters to plan the investment and construction of nickel pig iron plants in Indonesia to ensure that their nickel metal supply for their stainless steel manufacturing industry is not compromised.

With the Indonesian ore export ban in place, the Philippines is now the main supplier of nickel ore to China’s nickel pig iron industry. China is heavily dependent on ferronickel and nickel pig iron for its stainless steel manufacturing industry.

Over the past three years, however, the Philippines failed to capitalize on its nickel production after Indonesia imposed a raw ore export ban in January 2014.

The Mines and Geosciences Bureau attributed this to poor base metal price was brought about by the listless world economic growth and slowdown of the Chinese economy.

At present, there are only two nickel processing facilities in the Philippines, both owned by Nickel Asia Corp. Most of the country’s nickel ore is shipped to Japanese and Chinese smelters. There are also just two gold processing plants and one for copper processing.

If approved, smelting operations would directly benefit Mindanao.

In his State of the Nation Address, President Duterte has directed the DENR to review all permits granted to mining, logging and other environmentally sensitive activities. On mining, the president stressed that all companies must abide both government and international standards.

Environment Secretary Regina Paz Lopez earlier order a stricter audit of all mining operations in the country, imposing even higher standards than that of international firms. The review covers some 105 metallic and non-metallic mines—including quarrying and small-scale mining.

The DENR chief also said that they are eyeing the creation of a “commando group for the environment,” who will work with the military and the police to go after those engaged in illegal mining activities.

In response, members of the Chamber of Mines of the Philippines said they are ready for an airtight audit.

“President Duterte reminded mining firms to abide by government standards. COMP members have in the past and will continue to abide by government and international standards. Congratulations to President Duterte on this occasion,” the group said.

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