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Philippines to review all mines as environmentalist takes the helm

[July 01, 2016] By Manolo Serapio Jr and Enrico Dela Cruz

MANILA (Reuters) - The Philippines will review all mines operating in the country, the new mining minister said on Friday, as the committed environmentalist vowed to determine whether the industry is hurting the Southeast Asian nation.

Regina Lopez's appointment to head the Department of Environment and Natural Resources has sent shockwaves through the mining sector, which fears a nationwide crackdown.

"I'm not against the mining industry but I'm against suffering," Lopez told reporters on her first day in office as part of the administration of Rodrigo Duterte.

"I do want to evaluate if the country is safe from mining," she told a briefing where videos were aired showing environmental harm from mining along with testimonies from farmers and fishermen opposed to the industry.

Lopez said the review would take a month.

Her stance suggests a tough regulatory road ahead for Philippine miners, whose nickel ore producers are the biggest suppliers to China.

A mining industry lawyer said he was worried a ban on new mining development permits in place since 2012 may not be lifted if the minister's review drags on.

"Our concern is that if Secretary Lopez's initiative to review all mining operations will take another four years, and no new mining permits are issued, that will effectively kill the industry," said Ronald Recidoro of the Chamber of Mines of the Philippines.

President Duterte has warned that he could cancel projects causing environmental harm, though he told business leaders last week that he was not against mining per se.

The country's mining sector, one of the world's largest in the 1970s, has since struggled partly due to environmental rules and policy flip flops, missing much of the mining boom in recent decades and now facing much lower commodity prices.

Lopez has described as "madness" even to consider open pit mining - a method used by many miners in the Philippines and elsewhere - because of the environmental impact.

The minister declined to say on Friday whether she would ban it, but said the industry "has to shift its method of operations."

The Philippines has suffered a number of environmental disasters caused by mining, including a 1996 tailings leak at Canadian-owned Marcopper Mining Corp's copper mine in Marinduque that contaminated rivers.

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Philippine President-elect Rodrigo Duterte speaks during his election victory celebration in Davao city in southern Philippines June 4, 2016. REUTERS/Lean Daval Jr/File Photo.

RISK OF POLICIES BACKFIRING?

Miners say hardline policies could backfire particularly as the Philippines has become the biggest nickel ore supplier to China after previous top exporter Indonesia banned shipments of unprocessed minerals in 2014, shipping 34.3 million tonnes last year.

Recidoro said metal output could drop if no new mines are allowed.

"If we do not get new mines online then there will be a gap as the older mines run out of ore," he said.

Mining contributes less than 1 percent to the Philippine economy. Of 9 million hectares identified by the government as having high mineral reserves, only 3 percent is being mined.

The challenge is how to lure back foreign investors.

Commodities giant Glencore Plc last year quit the $5.9 billion gold-copper Tampakan project in the southern Mindanao island, that has failed to take off after the province where Tampakan is located banned open-pit mining in 2010.

There are only a handful of foreign investors involved in mining currently, including Australia's Oceanagold Corp and Canada's B2Gold.

It's going to take some time to reassure foreign investors, which have the capital and technology, that "the risk is not too high," said business consultant Peter Wallace.

(Editing by Ed Davies)

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