Asean Sets 5-year Action Plan To Boost Mineral Output

Asean sets 5-year action plan to boost mineral output

By Rocel C. Felix, The Philippine Star

12 October 2005

The Association of Southeast Asian Nations Federation of Mining Associations (AFMA) will implement a five-year ASEAN Minerals Cooperation Action Plan (AMCAP 2005-2010) that will bolster economic gains from mineral production and exports.

Keng Yong Ong, secretary general of the ongoing 6th Asia-Pacific mining conference in Makati, said ASEAN economies are working together to make the region more attractive to foreign investors as well as investors within the region.

"Most ASEAN countries are looking to make the minerals sector an engine for greater economic growth or catalyst. To do this, we have to look at existing problems and work on eliminating these obstacles to enhance trade and investment in the minerals sector," said Ong.

At the outset, the AMCAP will create harmonized investment rules for its member countries.

"There has to be a sound and stable investment policy in the region that would make it easier for investors to have a basis for deciding where they should invest. The other concept is that the more or less similar investment rules will level the playing field for countries in the region" said Ong.

Ong noted that for most ASEAN economies the potential of the minerals sector has yet to be fully realized.

"Despite its rich mineral endowment, non-energy minerals and base metals productions account for less than one percent of total ASEAN GDP growth in 2003. Together, exports of these minerals account for a mere 0.7 percent of total ASEAN GDP in 2003. With AMCAP, we hope to increase the mineral sector’s GDP contribution to at least two percent in 2010 and further increase this in succeeding years," said Ong.

He said that most ASEAN economies lack the required capital to undertake such capital-intensive mining exploration and production activities.

"The mining sector in the region is not regarded as a plum sector because of various limitations. It is important for countries to be able to attract the investors with the financial capability to extract our resources, but at the same time, we have to ensure that we get our due," said Ong.

The broad strokes of the AMCAP include establishing information sharing mechanism with the view to harmonize mineral policies of ASEAN member countries; identifying impediments with a view to review tariffs and non-tariff barriers to ASEAN mineral trade and investment; undertaking a study on mineral trade flow of ASEAN countries and analyzing the demand and supply of mineral and mineral-based products of ASEAN members.

Ong said that for the next five years, the AMCAP will also address issues such as creating regulations and incentives to promote and facilitate mineral trade and investment and establishing a one-stop mineral trade and investment promotion center in each ASEAN member country.

The AMCAP will also include promotion and facilitation of joint venture cooperations between ASEAN private sector companies, undertaking investment missions to related ASEAN member countries, and developing a regional framework to facilitate cross-border movement of skilled and professional workforce as well as technology.

Ong noted that ASEAN member countries also have to work on pursuing a better communication, education and public awareness to lessen and mitigate the resistance often put up by prospective host mining communities.

"The resistance is often due to ignorance, there is still the perception that mining areas will lead to irreparable damage to the environment. But we have to communicate that there are new technologies that could minimize the impact on their environment. It is critical to point out as well the economic gains and the multiplier effects of developing mineral resources, and for mining companies to implement practices that won’t cause too much upheaval in host communities," stressed Ong.

Ong said that with sound policies for the ASEAN region, its mining sector could really catapult struggling economies.

The challenge is coming up with a concrete framework that will stimulate growth of the minerals sector and promote the wiser use of the finite mineral resources, said Ong.

AFMA is projecting its mineral exports to triple to as much as $15 billion in the medium term as global demand for minerals continue to surge amid declining production.