INSTITUTING POLICY REFORMS IN MINERAL RESOURCES

DEVELOPMENT

RAMON J.P. PAJESecretary

Mining Philippines 2011September 14, 2011, Sofitel Philippines Plaza Hotel

Manila, Philippines

• Gross Production Value: up 39% - fromPhP106.1B in 2009 to PhP144.4B in 2010.

– Metallic Sector: 77% or PhP111.1B• Gold : PhP70.51B or 63%• Nickel: PhP22.99B or 21%• Copper: PhP15.78B or 14%• Others: PhP 1.81B or 1.6%

– Non-Metallic Sector: 23% or PhP33.3B

GROWTH HIGHLIGHTS 2010

• Volume:– Gold: up 11%; from 36.814 MT to 40.847MT– Copper: up 16%; from 49,060MT to 58,412%– Nickel: up 59% for DSO and 55% for

concentrate; from 8.31M DMT to13.21M DMT

• Price:– Gold: up 25.6%; $1,222.02/oz from

$973.01/oz– Copper: up 49%; $3.40/lb from $2.28/lb– Nickel: up 49.7%; $9.82/lb from $6.56/lb

PRODUCTION HIGHLIGHTS 2010Metallic Sector

• Metallic Sector up 31%.• Gross Production Value: from PhP48.73B to

PhP63.92B; up by PhP15.19B:– Gold : PhP42.18B or 66.13%– Nickel : PhP11.00B or 17.25%– Copper: PhP 9.19B or 14.42%– Others: PhP 1.41B or 2.20%

GROWTH HIGHLIGHTS 1st Semester, 2011

• Minerals Industry conservatively projected togrow by 17%

• Metallic Sector: projected to go up by 24%– Gold : 8%– Copper : 23%– Nickel : 56% for concentrate; 77% for

direct shipping ore– Chromite : 10%– Zinc : 106%

2011 PROJECTIONS

• 3 Copper mines (withgold and silver)

• 1 Copper mine (withgold, silver zinc)

• 5 Gold mines

• 2 Chromite mines

• 1 Magnetite mine

• 18 Nickel mines

• 1 Nickel ProcessingPlant

• 1 Copper ProcessingPlant

• 2000+ sand and gravel,cement and other non-metallic operations

√From 2004 to 2010: $3.835 Billion; √May reach up to US$18 billion up to 2016.

955.86719.51

604.17708.40

190.33457.15

200.47

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

in M

$

Kingking Copper Gold Project

Sumitomo Nickel Project

Tampakan Copper ProjectBoyungan Gold Project

Far Southeast Copper-Gold Project

Runruno Gold-Molybdenum Project

Didipio Copper-Gold Project

9

• Protection of mining investments• New chapter in small-scale mining with DOJ

Opinion

10

• Completion of the First Phase ofimplementation of the “Use It or Lose It”policy

“Use It or Lose It” Policy Implementation

• Legal Basis: DENR Memo Order No. 2010-04

• Period Covered: Oct 2010 to June 30, 2011

• Target Applications: 2,196 (excluding 604 involved in cases)

• Accomplishments: 97% or 2,136 applications: – Denied : 1,606– Indorsed : 530

• MRs/Appeals- 24%

Immediate Action Plan

Review all Motions for Reconsideration

Conduct Technical Assessment of freed areas todetermine which of the areas can be viablypackaged.

Formulate Guidelines for Public Bidding and enterinto Joint Venture Agreements.

Lift the moratorium on the acceptance and grant ofmining applications.

13

Upgrade ofenvironmentalstandards in mining

Absorption ofenvironmental cost

14

• Shift to value-adding activities• Encourage downstream

processing of mine products

• Enhanced revenues from mining

16

• Strengthen public-private partnership

17

• Sustain information, educationand communication program

• Request for clarification RE: Section 2.2 (Exemptionfrom the ban on the issuance of tree cutting permits)of Executive Order No. 23 (Logging Moratorium)submitted to the Office of the President.

• Administrative Order that will clarify the jurisdictionbetween the Mines and Geosciences Bureau and theEnvironmental Management Bureau being finalized.

• “Codifying” corporate social responsibility.

• Completing the 1:10,000 scale geohazardmaps of the entire country being fasttracked.

• Providing full support to the Office of theSolicitor General in connection with theincreasing cases being filed against miningprojects (i.e., Writ of Kalikasan, TemporaryEnvironmental Protection Order, Writ ofContinuing Mandamus.

Thank You!