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Will Filipino Mining Realise Its Potential?

 4 min read / 

After a tenure that lasted only ten months, Filipino lawmakers rejected the appointment of Regina Lopez as secretary of the Department of Environment and Natural Resources (DENR) on 03 May 2017. The Philippine Stock Exchange (PSE) promptly posted its highest close since September 2016, buoyed by mining and oil stocks that surged after Lopez’s ousting.

Too Radical

The Commission on Appointments cited Lopez’s lack of technical qualifications and knowledge of mining and the uncertain legal basis of her recent rulings against mining companies as reasons for the dismissal. A staunch advocate of environmental protection, Lopez’s brief but tumultuous reign saw the closure of 22 of the country’s 44 mines, in addition to the cancellation of 75 mines yet to be developed.

A week before her dismissal, Lopez banned prospective open-pit mining applications with a total worth of $8bn. The ban garnered controversy due to its selective nature. It blocked gold, copper, silver and complex ore projects, while allowing coal, nickel and large-scale quarries, which Lopez’s family plans to operate in Batangas.

Sensing the end was near, when issuing the ban, the ad interim secretary stated:

“Politics is unpredictable. I want to put in place these policies while I am still here.”

Going Downhill

Cracks in Lopez’s crusade against mining companies began to show when Greenstone Resources opted to suspend its gold project in Surigao del Norte. Despite passing stringent audit requirements imposed by the Mines and Geosciences Bureau (MGB), Greenstone halted the project due to uncertainty over regulations and governmental mining policy.

Persistent uncertainty over the future of mining has fueled a growing backlash against the secretary and her most recent directive – that sought to bar companies from exporting unless they established a trust of 2 million pesos per hectare of mined land – was overturned.

A profanity-laced tirade against a young reporter who questioned the directive did no favours for the secretary’s waning support amongst the public and her government colleagues.

One of her biggest advocates, President Duterte, who fought twice to have her reinstated as secretary, has been uncharacteristically quiet and has not issued a statement since the dismissal. Duterte’s silence on the matter may signify his fading will to battle against the country’s miners. Perhaps he sees the economic benefits of reversing the crackdown on an industry that has untapped reserves that experts say a number in the hundreds of billions.

Reversing Legislation

Following Lopez’s dismissal, the Philippine Chamber of Mines said it would seek to immediately nullify measures imposed by the secretary, arguing that many of her decisions carried no legal grounds, which of course was part of the reason for her dismissal.

Lopez will certainly be remembered by the mining industry’s compliance officials, but their attention is quickly shifting towards the question of who will be the DENR’s next secretary. A few days before the resumption of Lopez’s confirmation hearing, associates of President Duterte, clearly confident she would not remain, threw a name into the ring to replace her.

A press statement endorsed Mark Kristopher Tolentino, a young private litigation lawyer and professor at De La Salle University for the position, who is widely known for his tolerant approach to the industry. An advocate of responsible mining, Tolentino underlines the need for a middle ground to exist between the utilisation of mineral resources for economic growth as well as the necessity of environmental protection.

Looking Ahead: An End to Uncertainty?

Tolentino’s relationship with mining companies will undoubtedly fare better than Lopez’s, especially since his particular perspective focuses on the economic realities (and benefits) of mining. However, when looking at these realities, it is hard to ignore the unequal distribution of profits – not just to local communities – but the entire economy: the industry contributing only 0.7% to the country’s GDP between 2000 and 2015.

The Philippine Stock Exchange (PSE) enjoyed a boost from the news of Lopez’s ousting with nickel prices falling by 3%, potentially enticing China to look at increasing its imports from the resource-rich archipelago – a former world-leading nickel producer. Nevertheless, grave uncertainty remains over the future of the industry.

Opportunities remain for Filipino mining. However, both the industry and government must demonstrate its feasibility as an industry that can play both a sustainable and fair role in the economy.

This requires transparent legislation to be passed that seeks to reverse its elitist and arguably gamed nature – an objective of Duterte prior his nomination – and one he would do best to reorientate himself towards if mining is to be welcomed back into the Philippines.

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America

Trump’s Presidency and Russian Relationship: The Future

 4 min read / 

Trump Russia

Much has been said about Donald J. Trump’s love affair with Russia. Questions deserve a thorough and honest investigation. As distasteful and risky it may be, the best outcome of the enquiry is accusations continue to swirl, Trump limps through three more years, and in 2020, he is crushed at the ballot box. The world moves on. If removed from office, odds are Trump whips his base into a frenzy. Only the height and duration of civil unrest is in question. A worse case is that Trump emerges emboldened, eager to settle Putin’s longstanding challenge.

Putin Mocks Trump

The competition is real. Putin’s economic and political dominance gnaws Trump. Putin knows this. So, he taunts the President and dares Trump to employ the same ruthless tactics he exploited to consolidate power and possibly become the world’s richest man. Since Trump only sees green, he took the bait. The race is on to be the world’s first trillionaire.

Russia’s population is 142 million. Its $3.86trn translates into a measly $26,900 per capita GDP. In contrast, the 326 million people of the United States generate $18.62trn in GDP, nearly five times Russia’s total. The US per capita GDP of $57,600 more than doubles Russia’s. Despite Russia’s meek economy and reports  that Putin has embezzled up to $200bn in assets, Putin remains incredibly popular in Russia.

The apathy regarding this unparalleled heist makes Trump and Putin salivate over what they could jointly pilfer from the world economy. To advance their contest, the pair will identify a common threat. US-Russia relations will warm. Under the guise of “Peace through strength,” Russian sanctions will be lifted, and the Magnitsky Act repealed.

The administrative state in retreat, animal spirits will run wild. Trump’s name will be emblazoned across the globe. Countries desperate for jobs will be compelled to forge deals sponsored by Putin and Trump. Ethics be damned, the race to the bottom of the $120trn global economy will prompt a wave of corruption never seen before. Every facet of human decency will be compromised: environmental regulations, free and fair-trade by-laws, intellectual property, and human rights protections. The collusion is real.

In time, complicity will turn to double-crossing. It’s the Trump-Putin way. Makeshift “me-first” trade deals will collapse. Boycotts, divestitures and sanctions will be commonplace. Cooperation will evaporate. New political boundaries will be drawn with little world condemnation.

It doesn’t have to happen this way. Patience is a virtue. The checks and balances of the three branches of government are powerful mechanisms to thwart overt corruption.

Yet, for the impatient who seek Trump’s impeachment or removal via the 25th Amendment, be careful what you wish for. Only Trump can tame his army. To assume Trump will plead mercy at the feet of the administrative state contradicts Trump’s lifelong persona. He will relentlessly counterpunch and encourage his followers to do likewise. The short and long-term political and social risks are astronomical.

If Trump stems the tide, consolidates power and aggressively partakes in Putin’s race for two terms, the risks outstrip his forced removal. The consequences will be multi-generational.

Rope-a-Dope Is the Key to Containing Trump

The only path that possibly prevents extensive collateral damage is to check Trump into policy oblivion. Legislators must play rope-a-dope for as long as it takes, even three years if necessary. If Democrats take back both houses in 2018, the tactic will not set up Trump and his base for a final knock-out punch in 2020. For that to occur, numerous members of the GOP must join the effort. They too must throw periodic jabs at Trump then absorb a barrage Trump’s counterpunches.

With foes in every corner, even Trump – the self-proclaimed greatest counterpuncher in history—and his base will wear themselves out well before 2020. Then the decisive knockout punch can be delivered at the ballot box—without collateral damage.

Trump is severely wounded. If he gracefully and peacefully surrenders the Presidency, great. But don’t expect it. Rope-a-dope deployed by both parties is the countries best hope for a peaceful end to the Trump Presidency. Any other scenario risks the once unthinkable; an ‘American Spring’.

Keep reading |  4 min read

Asia

2018 Winter Olympics: North and South Korea will March under a Unified Flag

 1 min read / 

2018 winter olympics

North and South Korean athletes are set to march together in the opening ceremony for the 2018 Winter Olympics, to be held in Pyeongchang.

On Wednesday, South Korea’s Unification Ministry announced that following talks which began earlier this month, both teams have agreed to participate together under the Unified Korea flag – the first time since 1992.

The two nations, who are still officially at war with one another, have also agreed to field a joint women’s ice hockey team and organise a joint cultural performance. Skiiers from both Koreas will train together at a resort in the North and Pyongyang has reportedly said it will allow a small delegation of supporters to attend.

This represents the first major breakthrough in years. Although some cynics are worried North Korea will use it to buy time for the development of its weapons programme, there are promising signs that the Winter Olympics could help to cool rising tensions in the area.

As a sign of good faith, combined drills held by the South Korean and US army have been suspended for the duration of the Olympics.

Keep reading |  1 min read

Asia

Hacks on Cryptocurrency Exchanges Linked to North Korea

 1 min read / 

hacks

A report has linked a hacker group, responsible for targeting crypto-investors and exchanges, to the North Korean state.

The attacks took place against South-Korean crypto-exchanges and included attempts to harvest users’ passwords. The report does not say if the attacks were successful.

The report, by internet technology company, Recorded Future, has identified the attackers as the group Lazarus, known to be associated with the hermit kingdom. The malware was similar to that used against Sony Pictures in 2015, the WannaCry ransomware attack in 2017 as well as the Bangladeshi bank heist in 2016.

Attacks began when cryptocurrencies started to rapidly increase in value. It is believed North Korea favours attacks on cryptocurrency because they are not linked to any bank or government, making attempted heists less politically incendiary.

North Korea has shown a great interest in crypto-currency, potentially as a means for funding itself. In 2017, the elite Pyongyang university started to run courses on the virtual tender.

Keep reading |  1 min read

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