The Philippines governments mining investments as of this month are nearly halfway to its $650-million scaled-down full-year target, the chief of the Mines bureau said yesterday.
"At this time, [mining investment] is $300 million," Horacio C. Ramos, director of the Environment department’s Mines and Geosciences Bureau, told reporters yesterday.
"This year, our projected [investment] is $650 million, but because of the delay in other investments, I do not know if we can still attain it."
For instance, the completion of the feasibility study of Japanese Sumitomo Metal Mining Co. Ltd. and holdings firm Nickel Asia Corp. for a $3-billion nickel ore processing plant in Surigao del Norte was moved to late this year or early next year.
However, the country’s mining industry group remained confident of reaching the $650-million investment target, citing the recovery in metal prices that has encouraged investors.
"With a few months towards the end of the year, I think [the government] can attain the investment target," Nelia C. Halcon, executive vice-president of the Chamber of Mines of the Philippines, said in a phone interview.
"For as long as the demand is there — and I think the demand [for metals] will be there in the next three to five years — that will be the driving force for investors to pursue their projects."
The original $800-million to $1-billion investment target set at the start of the year was pared down to $650 million after disappointing first quarter data.
In the first quarter, investments in mining reached only $11.16 million, though Mr. Ramos stressed that this was because companies did not report capital spending on time.
For investments this year, Swiss mining giant Xstrata Plc and Oslo-based miner Intex Resources ASA have contributed about $50 million and $30 million, respectively, for their feasibility studies, Mr. Ramos said.
As of this month, mining investments have totalled $2.1 billion since 2004, when the Supreme Court allowed complete foreign ownership of mining ventures, data from the Mines bureau showed.
The government targets $11 billion in mining investment by 2013.
Actual investments in the mining industry last year reached $577.25 million, lower than the $1-billion target for that year and $679.65 million in 2007.
Mr. Ramos said mining is recovering, as shown by rising nickel, gold and copper prices.
"The world economic condition is already recovering. China and the United States are recovering and the price is increasing," Mr. Ramos said.
Prices of gold, copper and nickel have so far increased to about $960 per ounce, $2 per pound, and $8 per pound, respectively, from an average of $907 per ounce, $1.70 per pound and $6 per pound in the first quarter.
"There are many inquiries for gold and copper [projects] because gold is fetching good prices in the world market and copper prices are undergoing corrections," Ms. Halcon said.
Mr. Ramos concurred, saying that "low prices are over. Our only problem is peace and order and the misconceptions on mining."
Value of mineral output this year is expected to go up to about P98.7 billion from last year’s P87 billion, driven by a new gold mine and increased production in four gold and copper mines, said Mr. Ramos.
"With the entry [sic] of five companies, our production volume will increase by 10% as compared to last year," he said.
Australian CGA Mining, Ltd. and local unit Filminera Mining Corp. began gold production in a $250-million project in the Bicol region last May which will produce 200,000 ounces of gold per year.
Australian Medusa Mining, Ltd. increased in June the annual gold production in its Agusan del Sur property to 60,000 ounces per year from 45,000 ounces.
Listed Atlas Consolidated Mining and Development Corp. will also increase the daily milling capacity of its Toledo gold and copper mine in Cebu this month to 35,000 metric tons of ore from 25,000 MT.
Sumitomo also doubled the capacity of its Palawan nickel mine to 20,000 MT per day in March, while the Rapu-Rapu Mining, Inc. is already producing 50,000 ounces of gold per year from its mine in Albay, Mr. Ramos said.
"That [mineral output value rise] is a fair estimate because prices of gold are still high and even [that of] copper," said Ms. Halcon.
The value of local mineral production dropped by 8% in the first quarter to P15.6 billion from P16.95 billion year-on-year amid dampened prices in the world market, data from the Mines bureau showed.
Source: Business World Online
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