One of the major drivers of colonization has been the search for gold and other mineral resources. The Western powers explored and invaded lands in Africa, the Americas and Asia in search of precious metals and stones that they could use to feed their industries and develop their own countries.
The search for such wealth may partly be the reasons why Spain and the United States invaded and colonized the Philippines. After all, we are in the top 10 in the world when it comes to mineral deposits in gold, copper, nickel, magnessium and bauxite. We have one of the world’s longest running gold mines at Mankayao, Benguet. Gold mining in that area stretches as far back as the pre Hispanic period.
According to recent surveys, the country’s extractable mineral wealth remains substantial. Metallic mineral reserves are estimated at 7.1 billion metric tons while non metalic minerals are at 51 billion metric tons, valued to be anywhere from $800 billion to $1 trillion. This is 10 times our gross domestic product and 14 to 17 times our total external debt; truly mind boggling amounts in these cash strapped times.
Unlike other natural resources, however, a country’s mineral wealth can only be extracted once and never replenished. Worse, its exploitation comes at great cost to the environment, as one has to literally destroy the land to get at the wealth beneath it.
Thus a country’s mineral policy should not only ensure that the mining industry earns as much money and creates as much jobs as possible. More than this, it should ensure the proper and judicious use of these resources in order to build one’s own industries and the economy at large.
Unfortunately, in our craze to earn as much foreign exchange as possible and create jobw, we ignored this very important aspect and liberalized the industry in 1995 through the enactment of Republic Act No. 7942 or the Mining Act of 1995. The law was designed to make our mining industry more attuned to the insatiable demand of the global markets; in other words export oriented and heavily dependent on foreign capital.
The Mining Act is a classic sweetheart deal typical of the heady liberalization frenzy of the 90s. Under the act, foreign corporations are allowed to operate 100% without any local capital requirement. They are given 25 year concessions extendable to 50 years. Mining companies enjoy a slew of fiscal incentives and are granted easment rights, timber rights and water rights, allowing them to exploit everything on and under the soil.
In exchange, all they have to do is pay taxes, fees and charges. Royalties and government’s share of the income are negotiable and can be collected only upon recovery of thencompany’s pre-operating, exploration and development expenses.
The offer was simply too sweet to resist. Overnight, practically the whole country was covered by mining applications. If not for the economic downturns that followed in the late 90s and again in 2008, and the spirited resistance of our indigenous peoples and other communities threatened or affected by large scale mining, many of these applications would have matured by now into actual large-scale mining operations.
Our Mining Act is a formula for the plunder of our mineral resources, the likes of which we have seen in mineral rich Africa. In fact, our minerals are now being exported to China, Taiwan and Japan with minimal processing. In magnetite-rich shores of Cagayan, Zambales and Negros, unprocessed sand is being shipped out by the thousands of tons, resulting in the destruction of our shorelands.
Rather than being integrated with and contributing to the establishment of our own medium and heavy industries – notably steel, construction, transportation, glass, energy – our mining industry is being used to feed the industrial demands of other countries.
Here lies the tragedy – we are so rich in minerals and yet are not able to make full use of its potential, prefering simply to sell it to other countries rather than actually use it for our own industrial development. Nagkakasya tayo sa kakarampot na barya habang nakaupo sa higanteng bundok ng ginto.
Its time to reorient our mining policy. Its time we replace the Mining Act of 1995 with a more progressive, nationalist and pro-people mining law.#