Philippine President Rodrigo Duterte had strong words for the mining industry during his two-hour State of the Nation address on Monday (July 24).
He said he would “tax miners to death” if damage to the local environment continues, adding that he could also halt mineral resource exports and possibly close the country’s mining sector completely. “Declare your correct income, pay your correct taxes. Your failure to do so will be your undoing,” he said.
Earlier this month, the president talked about the damage mining companies cause to local communities and the environment, and asked “rich” mining firms to pay the people who have been impacted. Last Friday (July 21), he announced plans to draft a new law for the country’s mining industry.
In response, Ronald Recidoro, legal and policy vice president of the Chamber of Mines of the Philippines, told The Philippine Star, “we do not condone wrongdoing within the industry. Erring mines must be prosecuted and made accountable to the fullest extent of the law.”
Recidoro added, “we have a clear responsibility to manage the impact on the environment, guarantee the full and complete rehabilitation of mined-out areas, and ensure that communities get their fair share in the benefits from mining.”
President Duterte also said on Monday that he wants mineral resources processed domestically before they are exported, though Recidoro commented that incentives will have to be implemented to offset the cost of doing that. Mining executives have said the government needs to subsidize high power costs and provide investor incentives.
The country currently has two nickel and two gold processing plants, but the president said most ore is shipped out of the country to be processed and imported in as consumer goods, “at prices twice or thrice the value of the raw materials.”
The Philippines is the world’s top exporter of nickel and a major producer of gold and copper, but data from the country’s Mines and Geosciences Bureau reveals that mining contributes less than 1 percent to the country’s economy. Analysts say the president’s remarks continue to break the confidence of mining companies looking to explore and develop projects in the island nation. The Philippines is estimated to hold untapped deposits worth AU$840 billion.
Mining concerns in the Philippines appear to have had a positive impact on nickel prices, which were up over half a percent on the London Metal Exchange on Monday morning. ANZ said in a report that supply-side concerns plus a weaker dollar have also driven base metals prices higher.
Nickel miners that had their contracts revoked earlier this year under Regina Lopez, the country’s previous Department of Environment and Natural Resources secretary, are still waiting to find out their fate under Roy Cimatu, the new secretary.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.