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m234MANILA: Philippines has said it will not grant new mining contracts until Congress approves a proposal to impose royalties on industry operators, as the Southeast Asian nation seeks to increase its share of mining revenues.

President Benigno Aquino has signed a long-awaited executive order (EO) that is also aimed at addressing concern over environmental damage and harmonising provincial ordinances and national mining laws.

For a full report on the executive order, click on.

Following are key provisions of the new policy:

A multi-stakeholder team led by the Department of Environment and Natural Resources (DENR) will conduct a review of existing mining operations based on guidelines and parameters set out in specific mining contracts or agreements.

No new mineral agreements will be entered into until legislation rationalising revenue-sharing schemes and mechanisms have taken effect.

Prime agricultural lands, areas covered by the Comprehensive Agrarian Reform Law, and at least 78 eco-tourism sites are declared no-mining zones.

The DENR will review existing mining contracts for possible renegotiation of terms and conditions, with the review to be mutually acceptable to the state and contractors.

Potential and future mining areas with known strategic mineral reserves and resources will be declared "mineral reservations" for the development of strategic industries identified in the Philippine Development Plan and a National Industrialisation Plan.

The granting of mining rights and mining tenements over areas with known and verified mineral resources and reserves, including those owned by the government and all expired tenements, will be undertaken through competitive public bidding.

The Mines and Geosciences Bureau will prepare competitive bid packages and formulate guidelines and procedures for the tender.

All other mining rights and tenement applications will be processed and approved through existing procedures.

All valuable metals in abandoned ores and mine wastes and/or mill tailings generated by previous and now-defunct mining operations belong to the state and will be developed and utilised through competitive public bidding.

The government, in consultation with the mining industry, will within a six-month period come up with a national programme and roadmap for the development of value-added activities and downstream industries for strategic metallic ores.

A Mining Industry Coordinating Council will be created to submit a work plan within 60 days from the effectivity of the executive order for implementation of the order and other reforms related to the mining industry.

Small-scale mining will be strictly monitored and allowed only within certain areas, and will not be applicable for metallic minerals except gold, silver and chromite.

The use of mercury in small-scale mining will be strictly prohibited.

The Department of Interior and Local Government will ensure that all local ordinances covering mining are consistent with the National Mining Act. New mining contracts, it can now grant exploration permits and allow feasibility studies while Congress deliberates on the new proposal, Paje said.

Although the new policy says provincial rules governing mining must be consistent with national laws, it fails to address existing disputes over mining bans imposed by some provinces. Paje said the government could only provide guidance to local authorities in imposing mining regulations.

At least 14 provinces have issued ordinances and resolutions against mining, including the southern province of South Cotabato, which is host to the $5.9 billion Tampakan copper-gold mine of global miner Xstrata Plc and Australia's Indophil Resources NL.

Tampakan, Southeast Asia's biggest undeveloped copper-gold reserve, is under threat from a two-year-old local ordinance banning open-pit mining, and the government's refusal to grant environmental clearance for construction of the mine.

"We believe this executive order is a positive step towards promoting a responsible mining industry in the Philippines, and in particular we welcome the recognition of the need for consistency between national laws and local ordinances," said John Arnaldo, spokesman for Sagittarius Mines Inc, the local unit of Xstrata.

"If approved, we believe the Tampakan Project will establish a blueprint for modern, large-scale mineral development in the Philippines."

The Philippines has extracted only a small portion of an estimated $1 trillion in metals resources, mostly gold, nickel and copper. Metallic and non-metallic mining made up 1 percent of the Philippines' gross domestic product in the last two years, up from 0.8 percent in 2009.

Copyright Reuters, 2012


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