Australia backs Manila land reform to aid mining

Australia pledged A$34 million ($25.5 million) on Friday to help the Philippines improve its unwieldy land administration system and provide greater incentive for potential investors in key areas like mining.
The money, to be paid over five years, was offered at the inaugural meeting of trade and foreign ministers from the two countries, who share annual two-way trade of about A$1.9 billion, roughly equally.
"A significant part of the discussions today focused on the desire by the Philippine government for Australian mining interests to take a greater role in the development of the mining and resources sector in the Philippines," Australian Trade Minister Mark Vaile told reporters after the meeting.
Vaile said Australia's miners could help redress an investment imbalance which currently sits heavily in favour of the Philippines, which he said had about A$4 billion in Australian investments while only about A$400 million in investments flows from Australia to the Philippines. The Manila government expects local and foreign mining firms to pump about $6 billion into 23 priority projects over the next six years.
Those projects include the Rapu-Rapu polymetallic project in the central Philipines, in which Australia's Lafayette Mining Ltd has a 74 percent stake and which began production this year.
Vaile said the government of Philippine President Gloria Macapagal Arroyo had been trying to make investment in mining more attractive and an obvious target had been the expertise of the Australian mining sector.
"One of the issues to be addressed is the land tenure system," Vaile said.
"Our industry has deployed capital and resources into other parts of Southeast Asia and we would like to work with them ... to create an environment that is more attractive to that investment," he said.
Potential investment is made difficult by unclear land title and ownership rights. In addition, some of the richest deposits of gold, copper and other minerals are in areas of insurgency by Muslim and communist guerrillas.
Land reform efforts over the years have run up against resistance from powerful families who own large plantations and been complicated by government efforts to resurrect the mining sector after years of neglect.
Rapu-Rapu, the first new foreign-funded mine in the Philippines since 1968, is expected to produce 3,900 tonnes of zinc this year and 14,500 tonnes in 2006, as well as 10,500 tonnes of copper in 2006, up from 4,000 tonnes this year.
It is also expected to yield an average of 50,000 ounces of gold per year.