Anti-mining

Editorial

The government clearly has changed the rules of doing business in the Philippines midstream. It does not honor past contracts and completely ignores the economic benefits of major projects to the general population. By discarding current laws and policies, the government has alienated many foreign investors.

President Benigno Aquino III the other day reiterated his brand of governance and did not hide his dislike of the mining sector. Mr. Aquino told a forum that major mining companies like Xstrata Plc must wait for a new revenue law before developing their projects. The government, he says, will craft a bill that seeks to give the state a bigger share of the wealth from mineral resources.

Mr. Aquino said he was not confident that the existing laws were adequately protecting the environment and fairly sharing the mining resources with the people. He would rather wait for the new revenue law than risk the environment “for some temporary gain.”

Mr. Aquino, however, should be reminded that what his government intends to do is increase its mining revenues. The new law will not address safety and environment concerns, which can best be handled by responsible mining companies and the Environment Department.

Mr. Aquino’s pronouncement virtually shut the door on Xstrata’s request for an environmental clearance on its $5.9-billion copper-gold project in South Cotabato. He did so without reviewing the voluminous and scientific documents prepared by the mining proponent. Mr. Aquino also ignored the financial benefits from the huge South Cotabato mine—the total tax and royalty revenues over its 20-year life are estimated at around $7.2 billion.

The government, in sum, is discouraging foreign investments in the Philippines, especially in the mining sector. Global mining companies like Xstrata of Switzerland and Australia’s OceanaGold Corp. were lured to the Philippines because of a promise of fair returns and stable rules. That, of course, is farther from the truth.

President Aquino would rather listen to the mining critics who have not offered an alternative solution to the country’s unemployment problem.