GDP contribution of mining seen rising to 1.5%

The mining industry can potentially increase its contribution to the national economy to 1.5 percent if the government will make policy changes to aid in the country’s recovery amid the pandemic.

During the virtual Arangkada Forum Wednesday, the Chamber of Mines of the Philippines said there is a need to get the economy moving again as the coronavirus pandemic took a toll on the country.

“Large scale mining can play a big role in spurring the economy,” COMP chairman Gerard Brimo said.

Three big ticket projects are on hold due to the ban on open pit mining and moratorium on new mining projects.

These gold and copper projects are the Tampakan mine in South Cotabato, KingKing in Compostela Valley and Silangan mine in Surigao del Norte.

“Three pending projects alone, which are all located in Mindanao, can bring total industry contribution to exports to nine percent and total contribution to GDP (gross domestic product) to 1.5 percent,” Brimo said.

For such a highly mineralized country, the large scale metallic mining sector does not substantially contribute to the national economy as the industry has been stymied by policy problems resulting in no new investments and no growth over the last years.

Currently, mining contributes 6.3 percent to total exports valued at $4.38 billion, while its share to total GDP is a dismal 0.6 percent or about P124.5 billion.

“We don’t need to look too far, we just have to look at these three projects. There is loss of potential export receipts, tax revenues and social programs unless the issue is resolved,” he said.

Total capital investment for the three projects is $4.7 billion, with annual total exports pegged at $1.81 billion.

The Tampakan project is expected to yield P7.1 billion in combined annual national and local government revenues. Capital investment is set at $2.5 billion.

Silangan, on the other hand, will give the government P4.5 billion in yearly revenues with an investment of $1 billion.

KingKing is also expected to turn in P1.9 billion in revenues with a capital investment of over $2 billion.

The mining industry was barely affected by the pandemic as mine sites operate in remote communities.

“We fared a lot better than most other industries. Employment in mining is largely unaffected,” Brimo said.