Royalties from mining firms drop by 18 percent


Royalties collected from mining companies operating within mineral reservation areas dropped by 18.3 percent in the first half of the year due to lower nickel prices, the Mines and Geosciences Bureau (MGB) said on Thursday.

MGB Director Leo Jasareno said that government collection of royalties reached P577.5 million in January to June 2013, from P707.4 million a year ago. The first-half collections represent 5 percent of the gross market value of minerals produced during the period.

“The drop in collections can be attributed to lower nickel prices for the period,” said Jasareno said.

In 2012, government earnings from royalties reached P1.57 billion.

This year, total royalty earnings from mineral reservation areas are expected to reach P1.17 billion.

The government-declared mineral reservation sites are located in Zambales province in Region 3, and Surigao del Norte, Surigao del Sur and Dinagat Islands in Region 13.

The Mining Act of 1995 stipulates that 10 percent of the collection shall be used by the MGB for special projects and administrative expenses related to the exploration and development of other mineral reservations.

The remaining 90 percent shall be divided between the national government and the local government units hosting the mineral reservation sites.

Nickel sulphides production and nickel direct ore shipments are traditionally the top contributors to domestic metal production value.In 2012, these contributed 46 percent, or P46.03 billion—of the total metal production value for 2012.

Several nickel-producing companies reported lower incomes in the first six months of the year on falling nickel prices.

The MGB has yet to release the metal production value data for 2013.


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