Philippines for first time to try to close illegal mines

MANILA Fri Feb 17, 2012 5:56am EST

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MANILA Feb 17 (Reuters) - The Philippines for the first time plans to close down dozens of illegal small-scale gold and copper mines, often the cause of deadly accidents, an official said on Friday, but it remains to be seen how strictly the new regulations will be enforced.

The new policy will be spelt out in an "executive order" by President Benigno Aquino, said Leo Jasareno, director of the state agency, Mines and Geosciences Bureau.

Aquino, who has vowed to crack down on perennial corruption which blights the country, will sign the order after consulting with the mining industry. A National Anti-Illegal Mining Task Force will be created and given police powers to oversee small mines.

"There are between 200 and 300 small-scale mining operations in the country, and about 80 percent of them are considered illegal," Jasareno said at a media forum.

Most mining accidents in the Southeast Asian country, which has mineral reserves estimated at $1 trillion, have been caused by rampant and unregulated small-scale mining.

There has been no attempt so far to close the mines because they enjoy the support of local governments. Jasareno did not say how the executive order would be enforced at the local level.

The new policy "will lay out measures and directives that will address all issues the industry is facing, including the conflict between national and local laws", he said.

The Chamber of Mines of the Philippines which represents large-scale miners on Tuesday criticised a government plan to impose new taxes on mining and review incentives provided under their contracts.

It said the government's inconsistent mining policy would scare off investors.

Jasareno declined to comment on the issue. But Finance Secretary Cesar Purisima told reporters on Wednesday the government wants a bigger share of mining revenue and the removal of incentives for mining investors.

"The order will provide clarity to our rules and that will help improve the business environment," Jasareno said, adding the order would pave the way for the lifting of a one-year-old moratorium on the issuance of new mining permits.

He said the new mining policy should also help resolve the issue involving the $5.9-billion Tampakan project in South Cotabato, believed to be Southeast Asia's biggest undeveloped copper-gold reserves.

The project led by global miner Xstrata Plc is under threat from a local ban on open-pit mining and the government's refusal to grant it an environment clearance needed for mine construction.

"We want to make it clear that Tampakan remains a priority project for us," Jasareno said.

(Reporting by Erik dela Cruz; Editing by Nick Macfie)

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