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Duterte lifts moratorium on mineral agreements

President Rodrigo Duterte has issued an executive order lifting the nine-year moratorium on mineral agreements to spur economic growth, and to support projects and programs of the government.

Duterte signed EO No. 130 on April 14, amending Section 4 of EO No. 79, series of 2012 that prohibits the grant of mineral agreements “until a new legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect”.

“The moratorium on mineral agreements under Section 4, EO No. 79 is hereby lifted,” Section 1 of the amended EO 130 read.

Under the new EO, Section 4 of EO No. 79, which was signed by former President Benigno Aquino III in 2012, shall be amended to read as follows: “Section 4. Grant of Mineral Agreements. The Government may enter into new mineral agreements, subject to compliance with Philippine Mining Act of 1995 and other applicable laws, rules, and regulation”.

“The DENR (Department of Environment and Natural Resources) may continue to grant and issue Exploration Permits under existing laws, rules, and guidelines. The grantees of such permits shall have the rights under the said laws, rules, and guidelines over the approved exploration area and shall be given the right of first option to develop and utilize the minerals in their respective exploration area upon the approval of the declaration of mining project feasibility,” it added.

The new EO also directs the DENR to “formulate the terms and conditions in the new mineral agreements that will maximize government revenues and share from production, including the possibility of declaring these areas as mineral reservations to obtain appropriate royalties, in accordance with existing laws, rules, and regulations.”

“The DENR shall likewise undertake a review of existing mining contacts and agreements for possible renegotiation of the terms and conditions of the same, which shall, in all cases, be mutually acceptable to the government and the mining contractor,” the EO read.

The DENR and the Department of Finance are directed “to undertake appropriate measures to rationalize existing revenue sharing schemes and mechanisms.”

EO 130 also directs the DENR to strictly implement mines safety and environmental policies.

“It shall ensure strict implementation of and compliance with the recommended measures of the Mining Industry Coordinating Council involving all mining operations, including other pertinent laws, rules, and regulations, and the terms and conditions of the mineral agreements,” the EO read.

Duterte issued EO 130 to usher significant economic benefits to the country.

“The mining industry can support various government projects, such as the Build, Build, Build Program, by providing raw materials for the construction and development of other industries; and the Balik Probinsya, Bagong Pag-asa Program, by increasing employment opportunities in remote, rural areas where there are mining activities thereby stimulating countryside development,” the EO read.

According to the new EO, the country has tapped less than 5 percent of its mineral resources endowment to date.

On Dec. 19, 2017, Duterte signed Republic Act 10963 or the Tax Reform for Acceleration and Inclusive (Train) Act, and Section 48 of the law doubled the rate of excise tax on minerals, mineral products, and quarry resources from 2 percent to 4 percent.

Duterte has repeatedly urged the mining industry to observe stricter environmental rules or risk getting shut down.

COMP, PNIA REACT

The Chamber of Mines in the Philippines (COMP) and the Philippine Nickel Industry Association (PNIA) lauded the decision of Duterte.

COMP said the new mining projects will generate new revenues for the government in the form of taxes and fees, and royalty fees, while increasing export revenues and job generation, especially in the rural areas.

PNIA said the lifting of the moratorium recognizes the role of the mining industry in economic recovery and development. “PNIA has always maintained the industry’s contribution to countryside development by providing employment opportunities and livelihood, and ensuring the sustainability of our host communities,” it said in a separate statement.

Both groups said they will continue to adhere to the highest environmental and social standards to mitigate the impacts of mining on the environment and the host communities.*PNA

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