Friedland joins the chorus of mining hype in the PhilippinesPublished by MAC on 2004-12-27
Friedland joins the chorus of mining hype in the Philippines
After the Supreme Court decision in the Philippines has supposedly opened the country back up to international investment in the mining industry, who should be sniffing at the door but our old friend 'Toxic Bob' Friedland. The government and press seem ecstatic that this famous 'deal-maker' should be adding to the recent hype, but they ignore two key things. The first is that Friedland is equally famous for the destruction that he has left in his wake (see the excerpt below and previous articles on this site). One key question is what potentially hazardous technologies may be utilised, given the parlous environmental record of some other mines he has operated.
The second is that Friedland is the master, and manipulator, of hype; the government may feel he is helping them, but it is far more likely that they will be helping him. After all he said similar things about Burma's potential back in the nineties and indeed he's got his claws on one of the largest copper mines in the region to "prove" it. Except this doesn't prove anything more than that he'd located one of the largest untapped copper lodes in the region (just as he did with Voisey's Bay earlier in the decade). Burma's overall mineral potential, combined with its lack of infrastructure - leaving aside its repressive government - doesn't make it even second rate for most multinational mining companies, and it is equally likely that we are in for some key 'cherry-picking' in the Philippines, rather than the beneficial boom prophesised by the Philippine government.
Canadian tycoon plans mining venture in RP
Monday, December 27, 2004
By Lawnrence Agcaoili, Today Reporter
Canadian billionaire Robert Friedland, one of the biggest mining entrepreneurs in the world, is interested in a possible joint-venture project in the Philippines after the Supreme Court allowed foreign investors to engage in service contracts for large-scale exploration, development and utilization of minerals, petroleum and minerals oils.
Trade Secretary Cesar Purisima told reporters that Friedland would be flying into the country early next months to meet with major players in the local mining industry for possible joint venture for his Ivanhoe Mines Ltd.
He will come back next year as he believes that the potential here is tremendous, Purisima stressed.
He said Friedland is one of the proven homerun hitters in the mining industry and came to Manila after the Supreme Court overturned an earlier decision that declared Republic Act No. 7942 otherwise known as the Mining Act of 1995 allowing 100 percent foreign ownership in mining explorations as unconstitutional.
The new SC ruling issued late last month states that the Constitution expressly allows service contracts in the large-scale exploration, development and utilization of minerals, petroleum and minerals oils.
It also states that the government may undertake these activities via agreements with foreign-owned corporations involving either technical or financial assistance as provided by law.
This was a reversal of the SC ruling issued January 27 that declared as unconstitutional portions of the mining law that allowed 100-percent foreign ownership in mining exploration.
The earlier ruling also stated that the Financial and Technical Assistance Agreement (FTAA) contracts between the government and foreign corporations were unconstitutional.
Purisima described Friedland as one of the most successful mining entrepreneurs in the world having discovered the largest copper mine in the world in Mongolia, as well as the largest nickel find in Canada several years ago.
Friedland, according to Purisima, said the decision of the High Tribunal is a very good development as only 1 percent of the potential of the Philippines in mining has been tapped and there is 99-percent mining potential that has not yet been explored.
There are still a lot of mineral resources waiting to be tapped. Friedlands interest in the Philippine mining sector is a testament to the wisdom of the SCs decision. It also heralds the renewed interest of foreign investors to grab a chunk of the countrys mining industry, he added.Friedlands Ivanhoe Mines is currently developing a major new discovery of gold and copper at the Turquoise Hill (Oyu Tolgoi) Project in southern Mongolia.
Ivanhoe Mines has a $1-billion gold and copper resources exploration program in Mongolia and China. It also has exploration programs in Australia, Kazakhstan, Myanmar, Vietnam and South Korea.
Purisima said there are already several big-ticket mining projects requiring huge capital infusion that would be registered with the Board of Investments (BOI). Major mining projects include Coral Bay Nickel Corp. (P8.13 billion); Lafayette Phils. Inc. (P2.75 billion); Filminera Resources Corp. ($100 million); Climax-Arimco Mining Corp. ($133 million); Sagittarius Mines Inc. ($1 billion), Philnico Nickel Smelting Project ($1 billion); and the King King Copper-Gold Project ($532 million).
Mining is considered as an important component of the Philippine economy.
In the 1980s, the Philippines was ranked as 5th biggest producer of gold and 9th biggest producer of copper in the world, contributing more than two percent to the countrys gross domestic product (GDP) and 21.3 percent to the countrys total exports.
In 2003, the mining industry contributed P42 billion in production value, P18 billion in value-added contribution or 1.52 of the GDP, $638 in exports or 1.8 percent of total Philippine exports, P2.1 billion in taxes and fees, P5 billion in wages and benefits, and provided more than 104,00 direct employment.
With the SC affirming the constitutionality of the mining law, I expect the mining industry to overtake some sectors in the countrys top 10 exports and take the number three slot, Purisima said.
The DTI believes that the decision of the high tribunal upholding the constitutionality of the mining law would pave the way for the infusion of $6 billion worth of capital over the next three years.