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Philippines's rich deposits ticket to economic growth: Reyes

Singapore (Platts)--21May2007

The Philippines is a logical choice for many prospective mining investors because of the country's potentially high mineral wealth, and the country should take advantage of this interest to generate funds needed for economic development, said Environment and Natural Resources Secretary Angelo T. Reyes in a speech before members of the Philippine business community during the JP Morgan Philippines Corporate Access Days forum held on May 18, 2007 in Makati City, Philippines.

"The Philippines, being situated along that well-defined belt of volcanoes called the 'circum-pacific rim of fire' that extends from the tip of South America to North America, East Asia and Oceania, is rich in these mineral deposits," Reyes said, naming gold, copper, iron, chromite, nickel, cobalt and platinum.

Reyes said that the belt is an extended zone where tectonic plates collide. The collision of the plates and volcanic activities has resulted in the formation of the metallic minerals.

"It is not surprising, therefore, that our country may rank as one of the most mineral-endowed in the world," he said.

Among the areas identified by the DENR chief as having high mineral potential include Baguio and Mankayan districts area, for copper and gold; Surigao-Davao districts area, for gold, chromite and nickel; and Palawan, also for nickel.

Among the mining companies operating in these areas are Lepanto Consolidated Mining and Philex Mining, for gold in the Baguio-Mankayan area; Berong Nickel Mining and Celestial Nickel Mining, for nickel in Palawan; and JLB Enterprise in Surigao del Norte, Ventura Timber in Surigao del Sur, Caracan Development in Surigao del Sur and Nationwide Development in Davao del Norte.

PAST TWO AND A HALF YEARS SEE MINING INVESTMENT AT $694 MILLION

Reyes disclosed that a total of $694 million in investments have been placed in the country's mining industry during the past two and a half years of the government's mining revitalization program. He said the investments are still expected to rise in the coming years with significant inflow next year up.

For this year, Reyes said local mining investment is expected to reach $348 million. This will result from the expansion of the High Pressure Acid Leach facility of Coral in Palawan expected to bring in about $154 million; $23 million from the construction of the base metal plant of TVI in Zamboanga del Norte, $21 million from the development of the Didipio copper-gold project in Nueva Vizcaya; $36 million from the Masbate gold project in Masbate island; and $97 million from the continuing rehabilitation of the Carmen copper project in Cebu.

Reyes also said that since the start of the government's mining revitalization program in 2004, some 6,500 new jobs have been created by the industry and that an additional 30,000 jobs are still projected to be generated between 2008 and 2010.

Reyes also said that aside from gold, copper, and nickel, magnetite- and chromite-bearing sands also abound in the country's offshore area.

He said that the Philippines has around 2.2 square kilometers of offshore and exclusive economic zone area that can be explored for such resources.

"The country's rich mineral wealth cannot just be left untapped on the ground but has to be developed and exploited in order to generate the capital wealth needed for the development of our communities and country," Reyes said.

DENR 2006 mining industry statistics showed that mining gross production value reached Peso 68.4 billion ($1.5 billion.); mining's contribution to gross domestic product (for 2005) also reached P14.8 billion; and taxes, fees and royalties from mining amounted to P3.1 billion.

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