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Solon lauds EO allowing mining deals for economic recovery

By Filane Mikee Cervantes

April 15, 2021, 3:06 pm

<p><em>(File photo)</em></p>

(File photo)

MANILA – The chairman of the House Ways and Means Committee on Thursday said the establishment of new mining agreements will pave the way for the country’s bid for competitiveness in the electric vehicle and renewable energy battery sector, as well as the country’s long-term economic recovery.

Albay Rep. Joey Salceda made the statement after President Rodrigo Duterte issued Executive Order (EO) 130, which lifts the nine-year moratorium on mineral agreements to spur economic growth and support projects and programs of the government.

“We are currently in a mineral boom, and metallic resources that we have in abundance, like gold and silver, are at elevated prices. Because there has been much monetary expansion all over the world, investors want to hedge their bets on some store of value. Gold has been the first choice for that, historically,” Salceda said, citing the fact that the Philippines has some of the world’s largest deposits of precious metals.

He also noted that the country has large reserves of nickel and copper, which are crucial to the global push for electric vehicles, as they are critical inputs to the batteries that power these vehicles.

“So, it can only mean well for our economic recovery, especially if we can set up the ground rules and the tax regime for mining well," he said.

He said the country should now develop a plan to aggressively play a role in developing inputs to electric vehicles using its mineral resources.

“In the past, renewable energy was not always relied upon because of fluctuations in supply. When there’s no wind, there is little wind-powered energy supply. Solar energy requires consistent sunlight, and so on,” he added.

With powerful battery technology, driven by nickel and cobalt, he said renewable energy can be stored better, so that fluctuations are managed.

“In other words, we now have the power and the prospects to create millions of jobs in renewable energy, battery manufacturing, sustainable mining, and related sectors. This will be a key driver of economic recovery post-Covid, but we have to be very wise with our policies,” Salceda said.

Over the next 10 years, he said that some 1.3 million jobs await the country in nickel-related industries.

“The world appears to see that this is the future. Top nickel buyer and electric vehicle manufacturer Tesla is already larger in market cap than all other major car manufacturers combined. Chinese electric vehicle manufacturers are also rising. Nickel will be very big, and as one of the world’s largest producers of nickel, we will be very important, if we will be wise,” he said.

Salceda also added that the country can become a global power in renewable energy and in the electric vehicle supply chain with the right policy moves.

“The Philippines remains among the world’s largest producers of nickel. Despite taking a small production dip between 2017 and 2018, when nickel production fell from 366,000 metric tons (MT) to 340,000 MT, the nation increased its output to 420,000 MT in 2019. That is very strategic, when you account for the potential growth in prices of nickel," he said.

Duterte signed EO 130 on April 14, amending Section 4 of EO No. 79, s. 2012 that prohibits the grant of mineral agreements “until a new legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect”.

Under the new EO, Section 4 of EO No. 79, the government may enter into new mineral agreements, subject to compliance with Philippine Mining Act of 1995 and other applicable laws, rules, and regulations.

The new EO also directs the DENR to "formulate the terms and conditions in the new mineral agreements that will maximize government revenues and share from production, including the possibility of declaring these areas as mineral reservations to obtain appropriate royalties, in accordance with existing laws, rules, and regulations."

"The DENR shall likewise undertake a review of existing mining contacts and agreements for possible renegotiation of the terms and conditions of the same, which shall in all cases be mutually acceptable to the government and the mining contractor," the EO read.

The DENR and the Department of Finance are directed “to undertake appropriate measures to rationalize existing revenue sharing schemes and mechanisms.”

"The mining industry can support various government projects, such as the Build, Build, Build Program, by providing raw materials for the construction and development of other industries; and the Balik Probinsya, Bagong Pag-asa Program, by increasing employment opportunities in remote, rural areas where there are mining activities thereby stimulating countryside development," the EO read.

According to the new EO, the country has tapped less than 5 percent of its mineral resources endowment to date. (PNA)

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