November 10, 2011 / 9:36 AM / 6 years ago

Philippines readying policy to head off mining bans

MANILA, Nov 10 (Reuters) - The Philippines could unveil a comprehensive mining policy by the end of 2011 that addresses thorny issues hampering the industry, including when the national government can overrule provincial bans, a government official said on Thursday.

A government panel created last month to craft a new mining policy is expected to submit its proposals on November 15 for approval by President Benigno Aquino before the year ends, Mines and Geosciences Bureau (MGB) director Leo Jasareno said.

Governments of two southern provinces, Zamboanga del Norte and South Cotabato, have banned open-pit mining, affecting existing and planned projects and worrying investors.

TVI Resource Development (Phils) Inc, the local unit of Canada's TVI Pacific Inc , has sought a court order to stop the ban in Zamboanga del Norte, which took effect this week and would force the firm to close its polymetallic mine within one year. {ID:nL4E7M91O4]

A similar ban last year in South Cotabato has put at risk the $5.9 billion Tampakan copper-gold project of global miner Xstrata Plc and Indophil Resources NL .

"While serious efforts have been extended to address the issues on mining through the years, it has been shown that many measures still need to be put in place to ensure the survival of the industry," Jasareno said in a speech at a mining conference.

He said the new policy would likely be enacted through an executive order (EO) by the president rather than a vote in Congress, and should correct inconsistencies between national and local laws that have seen some provinces ban government-approved projects.

The provincial governments have cited environmental reasons in banning certain mining methods, although the national mining law does not prohibit open-pit mining.

The Southeast Asian country, which has an estimated $1 trillion worth of metallic mineral reserves, considers mining as a growth sector that will attract investments and create jobs but the uncertainty has been a deterrent to investors.

Last month Jasareno told Reuters mining investment this year might not even reach $1 billion, or about one-third of a government forecast of $2.8 billion.

Jasareno said the new policy would also address the issue of revenue-sharing between the government and the industry, which opposes a proposal for additional royalties.

"We hope that the new mining policies can finally lead the industry to a middle ground where the concerns of every stakeholder will be reasonably addressed," he said.

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