Aquino Says Philippine Mining Overhaul May Enable Xstrata Plan
The Philippines is set to unveil a mining policy that boosts the government’s take from resources contracts, identifies protected areas and still lets a stalled Xstrata Plc (XTA) project to proceed, President Benigno Aquino said.
“It really is a question of balancing the benefits” against the damage mining can cause, Aquino, 52, said in an interview at Malacanang Palace in Manila on May 4. “We have 100 percent of the exposure in case of an ecological disaster. We get 2 percent of the gains.”
The administration will “soon” publish its new policy, which will increase the state’s revenue from the current 2 percent excise tax and ensure 78 areas are cordoned off for eco- tourism, Aquino said. Success in getting higher revenue would help narrow the fiscal deficit and improve odds of the Philippines winning investment-grade credit status.
Asked whether the guidelines would let the proposed $5.9 billion Xstrata copper and gold project to proceed, the president said “I think so.” Xstrata’s plans have been stymied by a local-authority ban on open-pit mining.
The Philippines, which has had annual budget deficits since a surplus in 1997, would join at least 11 countries from Australia to Ecuador that Deutsche Bank AG says announced plans to increase taxes or royalties on sales of resources such as gold and coal last year.
Fees and royalties collected by the Department of Environment and Natural Resources climbed to 1.2 billion pesos (28 million) in 2011 from 800 million pesos a year earlier, agency data show.
Gain in Exports
Mineral exports rose to $2.7 billion last year from $1.9 billion in 2010, and mining currently employs 210,000 people in an economy where the World Bank says one in four people lives on less than $1.25 a day.
Aquino, in an interview that spanned relations with China to a campaign against tax cheating, also said his nation is on the verge of receiving fresh investment from overseas manufacturers. Two shipbuilders “from a neighboring country” and a steelmaker plan to build plants, and combined have reserved more than 700 hectares of property for their operations. He declined to identify the companies by name.
An electronics company separately plans to invest 20 billion pesos more in operations that will add 5,000 jobs, Aquino said without revealing its name.
The president said his administration is open to an agreement with China that would allow companies to exploit oil and gas resources while the governments separately resolve South China Sea border disputes. “So long as our sovereignty is respected, we are open to partner with them.”
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