Unjust, unsustainable mining industry

Unjust, unsustainable mining industry

Kalikasan-PNE Press Statement

January 10, 2005

Contrary to the claims of the Mines and Geosciences Bureau Director Horacio Ramos, in his recent press statment, the Mining Act of 1995 which embodies the mining program of the Arroyo government remains defective, unsustainable and environmentally devastating.

Ten years after its enactment, the Philippines was neither brought to economic development nor alleviation from poverty. It has caused more hardship and environmental catastrophes. The mining liberalization program of the government resulted not to a prosperous and vigorous local mining industry instead it has perpetuated the country's backwardness.

Since the early 1980's world prices for metal products started to fall dramatically which triggered widespread bankruptcy in the local mining industry. It intensified the crisis of the pre-industrial, export-oriented and import dependent production of the local mining. From a total mineral export value of $1.24 billion in 1979, it was reduced to $893 million in 1995. Mining corporations either closed down or reduced their production. During its production peak, there were 45 metal mining corporations in 1980 but this was drastically reduced to 17 in 1995.

Instead of nationalizing the industry and making it serve for our own country's industrialization, the government passed the Mining Act in March 3, 1995 which laid-out a pro-foreign investment climate in the hope of reviving the century-old mineral production for export. The Mining Act provides several and important economic incentives and political rights to foreign transnational mining corporations (mining TNCs) such as 100% ownership and control of over 81,000 hectares of land for 50 years.

In 1994 the mining industry employed a meager 0.44% of the total employment but this was further reduced to 0.39% in 2002. Metal productions continued to decline and mining corporations closed down. In 2002 there were only 11 metal mining corporations in the country. Among these are the Atlas mine, once the biggest copper mining in Asia, Dizon mine in 1998 due to a mining disaster and the Maricalum mine in 2001 because of financial difficulty. What little downstream mineral industries we had, such as the National Steel Corporation (NSC) and Philippine Associated Smelting and Refining Corporation (PASAR) which partly processed the minerals extracted also closed down.

This is largely due to the continued depressed prices in the international market. Mining investors pulled-out of the country in spite of favorable mining investment because it has not been profitable then to extract minerals in the Philippines and export these abroad. Up to now almost all the metal minerals extracted in our mountains and forest are exported abroad as raw materials.

Ironically while we are so rich with mineral resources, we remain heavily dependent on imported metal manufactures. In 2002, we imported iron, steel and copper manufactures totaling $786.8 million while we exported the same products worth $38.11 million with a balance of $-748.69 million.

Even the promised hundreds of thousands of jobs to be generated under the mining liberalization program failed to materialize. In 2003-04 the Arroyo administration approved 3 large-scale mining projects with a total potential investment of $202 million (Php 17 billion) but it will only generate less than 1,000 jobs during the actual commercial production. As of now the mining industry employs around 114,000 people, most of who are employed in the quarrying and small-scale metal mining production.

These facts attest that the Mining Act and the mining liberalization program of the government has failed to solve the bankruptcy upsetting the mining industry. Yet, the government, the international financial institutions and the mining TNCs are still harping that the crucial and key factor in the development of the local mining industry is the entry of foreign investment in the country.

As affirmed by the recent reversal of the Supreme Court (SC), they want foreign mining TNCs to 100% own and control our mineral resources and lands. This is an affront to our national sovereignty and transgresses over the exclusive right of the Filipino people to exploit, utilize and develop our national patrimony such as our mineral resources.

The Arroyo administration is pushing hard to promote its mining liberalization scheme, as though it is a tried and tested formula for economic development. We have been in this situation before. From the start of the direct colonial rule of the United States in 1900 until 1974, when the Parity Amendment expired, foreign individuals and corporations were 100% allowed to participate not only in mining but to all economic sectors and activity in the country. In 1971, of the top 17 mining corporations, 5 were American-owned. These five mining firms accounted for 75% of the total sales, income and equity of the top mining companies.

Yet, these have not freed the Filipinos from poverty. Neither have this brought industrialization to the country. Did these ensure the protection of our environment and prevention of man-made calamities such as landslides and flashfloods?

History and the present situation of the mining industry tell us they did not. The abject condition of the Filipino people and the degraded state of our environment attest to the ultimate objective of an export-oriented and foreign investment-driven mineral industry -- sheer plunder and profit for foreign mining corporations and their local cohorts.

Up to now the government continue to brush aside and resist the call of the people to nationalize and develop our mining industry within the framework of genuine national industrialization and development. A truly just, sustainable and prosperous mining industry serves the needs and demands of the people and of the development of the environment and not the vagaries and interests of foreign capitalists.

Now that prices of metal in the international market is back on the up trend, mining TNCs and their local cohorts are drooling as this is an opportune time again to rake in billions of profit. On the other hand, this will fire up the people's ire against the Arroyo administration and further strengthen and widen their struggle to defend their rights, land and environment against foreign transgression and plunder.