Mining to the Philippines

Trends and opportunities

The market

The Philippines is the fifth most mineralised country in the world, with the third largest deposits of gold, fourth for copper, fifth for nickel and sixth for chromite. The nation’s mineral resource assets are valued at around A$1.32 trillion, but those remain largely untapped. The country’s total land area covered by mining tenements is only 0.872 million hectares or 2.91 per cent of the country’s 30 million total land area. In terms of non-metallic minerals, the country has untapped coal resources estimated at about 2.4 billion tonnes.

The country has 44 mining companies of which 37 are operating mines - six gold mines, three copper mines and 28 nickel mines – as well as 65 non-metallic mining companies. The Department of Environment and Natural Resources has been undertaking an audit to ensure these companies are ISO14001 compliant. Australian and Canadian standards have been named by Philippine President Rodrigo Duterte as the reference point.

Metallic mineral production value increased by 5.1 per cent in the first quarter of 2017. This was due to good metallic prices. More importantly, gold with the highest price contributed to the highest percentage to total mineral production. The combined gold output of the Didipio Gold Project of OceanaGold Philippines, Inc. and Masbate Gold Production of Filminera Mining Corporation/Philippine Gold Processing and Refining Corporation in Masbate accounted for more than 58 per cent of the country’s total gold production. In terms of mining method, five are underground and one open-pit mine.

In terms of nickel production, Direct Shipping Ore (DSO) and mixed nickel-cobalt sulphide accounted for 28 per cent of total mineral production coming. Out of the 28 nickel mines, only seven reported production for the first quarter of 2017. Zero production was due to unfavourable weather conditions, some mines are on care and maintenance status, and suspended operations due to environmental related issues. Coral Bay Nickel Corporation and Taganito Mining are at the forefront, combined nickel production increased by 27 per cent in the first quarter of 2017. Both companies/plants make use of hydrometallurgical nickel processing method.

In terms of copper production, Carmen Copper Corporation reported the largest output equivalent to 46 per cent of total copper production, followed by Padcal Copper-Gold Project of Philex Mining which is an underground mine, Toledo Copper open pit mine and Didipio Copper-Gold Project of OceanaGold Philippines also an open pit mine.

For non-metallic mine operations, Semirara Mining is the major coal producer of the country, accounting for almost 97 per cent of total coal production. In the first half of 2017, Semirara Mining increased coal production by 25 per cent to 7.35 million metric tons (MMT) from 5.88MMT (Source: Semirara Mining and Power Corporation report, 1H2017).

Government and policies

The Department of Environment and Natural Resources (DENR) is the primary agency responsible for the conservation, management, development, and proper use of the country’s environment and natural resources. Its mandate among others is to assure availability and sustainability of the country’s natural resources through judicious use and systematic restoration or replacement, whenever possible (Source: Department of Environment and Natural Resources ).

The Mines and Geosciences Bureau (MGB) is mandated to take charge in the administration and disposition of mineral lands and mineral resources; promulgate rules and regulations, policies and programs relating to mineral resources management and geoscience developments (Source: Mines and Geoscience Bureau (MGB ).

The Department of Energy (DOE) is mandated to prepare, integrate, coordinate, supervise and control all plans, programs, projects and activities of the government relative to energy exploration, development, utilisation, distribution and conservation.

Philippine Mining Act of 1995

The Philippine Mining Act of 1995 (Republic Act No. 7942) is the governing law for mining. Under this Act, mineral resources are owned by the state and their exploration, development, utilisation, processing and conservation are under its full control and supervision. The state may grant mining rights in three ways:

  1. Exploration Permit (EP) or Mineral Processing Permit (MPP) – grants the right to explore specified areas for two years, renewable for a maximum of eight years for metallic mines and six years for non-metallic mines.
  2. Mineral Production Sharing Agreement (MPSA) – grants the contractor the right to conduct mining operations within a contract area and share the gross output. The MPSA is for 25 years, renewable for another 25 years.
  3. Financial or Technical Assistance Agreement (FTAA) – a contract involving financial and technical assistance for large scale exploration, development and utilisation of mineral resources. This type of contract is open to Filipinos and foreign corporations with up to 100 per cent foreign equity and has a term of 25 years and renewable for another 25 years.

As of September 2016, the Philippines has 29 existing EPs; 303 MPSAs; and five FTAAs. (Source: Mines and Geoscience Bureau (MGB) ).

Executive Order 79

Reforms in the Philippine mining industry was institutionalised in July 2012 through the Executive Order 79. Two important issues have been raised under the EO 79, which will greatly affect the mining industry:

  1. The proposed mining revenue sharing scheme
  2. The proposed no-go zone maps

House Bill (HB) 5367 proposes a government share equivalent to 10 per cent of the gross revenue, or 55 per cent of the ‘adjusted mining revenue’, whichever is higher. The no-go zone maps developed by the Mining Industry Coordinating Council (MICC) identified areas reserved for agriculture, eco-tourism, protected landscapes and seascapes.

The no-go zone maps developed by the Mineral Industry Coordinating Council (MICC) closes approximately 84 per cent of the country’s 30 million hectare total land area as off limits to mining activities. These areas are reserved for agriculture, eco-tourism, protected landscapes and seascapes. Effectively, about 4.5 million hectares of the 9 million hectares generally considered to be of high mineral potential are now closed off to mining. The ‘no-go’ zone maps remain pending approval with the Office of the President, but it is now being used by the MGB in its review of exploration permit applications.

Legislation on Open Pit Mining

The EO 79 does not have specific laws on mining techniques. The Department Secretary (Minister) for Environment and Natural Resources will recommend a legislation providing clear-cut rules and regulations on open-pit mining. Discussions are ongoing with the Mining Industry Coordinating Council (MICC).

The MICC is tasked to formulate the implementation rules and regulations for EO 79. It is composed of the Economic Development Cabinet Cluster and the Climate Change Adaptation and Mitigation Cluster. The Philippine mining stakeholders which include the MICC, the Chamber of Mines of the Philippines, and the mining non-governmental organisations are currently having a series of discussions to ensure that it is equitably beneficial to the state and to the private sector with emphasis on environment sustainability and safety standards.

Extractive industries transparency initiative

The Philippine Government has joined the Extractive Industries Transparency Initiative. This is a commitment to fiscal transparency and accountability for effective governance. The Philippines-EITI Multi-Stakeholder Group (MSG) appointed an independent administrator that reconciled the accounts submitted by the relevant government agencies and the 33 participating mining and oil and gas companies.

Through the EITI process, local governments and mining communities now have access to data regarding their shares from national wealth and payments collected from companies in their area. The data is collected from an electronic reporting system where EITI data and the Local Government Units and Department of Finance are integrated.

The Philippine-Extractive Industries Transparency Initiative (PH-EITI) report for 2014 covered a total of 36 companies - 31 large-scale metallic mining companies and 5 oil and gas companies for collections in year 2014. The report revealed that there was a variance of over Php 76 million from what was paid by mining and oil and gas companies in the form of taxes to what was received by the Philippine government. The causes of variances were a result of difference in accounting frameworks, no centralized database, disaggregated data, delayed submissions of required schedules and documents to support disclosures.

The recommendations of the report include: uniform accounting framework preferably through the accrual method, formalise alternative procedures, close coordination by agencies’ central offices and provincial branches, and regular conduct of audit.

Mining Projects (Source: Mines and Geosciences Bureau)

Some of the current Major Mining Projects in the Philippines are:

  • Didipio Copper Gold (OceanaGold Philippines): copper, gold, silver (FTAA)
  • Carmen and Lutopan (Carmen Copper Corporation): copper, gold, silver (MPSA
  • Coral Bay HPAL (Coral Bay Nickel): mixed nickel-cobalt sulphide (MPP)
  • Padcal Copper-Gold (Philex Mining): copper, gold, silver (MPSA)
  • Masbate Gold (Filminera Mining): gold, silver MPP
  • Taganito HPAL (Taganito HPAL Nickel Corporation): mixed nickel-cobalt sulphide (MPP)
  • Mindanao Mineral Processing and Refining (Philsaga Mining Corporation/Mindanao Mineral Processing): gold, silver (MPP)
  • Cagdianao Nickel (Platinum Group Metals): nickel (MPSA)
  • Rio Tuba Nickel (Rio Tuba Nickel): nickel (MPSA)
New mining projects

Two mining projects are close to getting a final investment decision (FID). These are the KingKing Mining Project and the Silangan Mining Project.

Kingking Mining Project is a A$ 2 billion project in Pantukan, Compostela Valley. The project is under the Mineral Production Sharing Agreement between the National Development Corporation (NADECOR) and St. Augustine Gold and Copper Ltd (Sagcl), a company listed in Toronto Stock Exchange. It is expected to produce up to 3.2 billion pounds of copper, 5.4 million ounces of gold and 11.7 million ounces of silver. The company targets to produce cathode copper by 2018 to 2019.

Silangan Mining Project is a copper-gold mine in Surigao del Norte. It involves the development of Boyongan and Bayugo mineral deposits with an estimated reserve of five billion pounds of copper and nine million ounces of gold in its 25-year mine life. The estimated project cost is A$ 1.2 billion. This project is expected to replace Philex Padcal project, whose mine life is expected to end by 2020. Silangan Mining and Philex Mining are subsidiaries of Hong Kong’s First Pacific Co. Ltd.

Tampakan Mining Project of the Sagittarius Mines, Inc. located 50 kilometers north of General Santos City with a potential investment of A$ 5.9 billion. Tampakan project contains 15 million tons of copper and nearly 18 million ounces of gold. This will be an open pit mine. The current investors are the Alcantara family and SM Investments Corporation.


Australian firms remain well placed to capitalise on future developments in the Philippines’ mining and resources sector. Key opportunities for Australian companies include specialist consultancy and engineering services and mining equipment supply.

Other areas of opportunity include:

  • mineral exploration – geophysics, mapping, diamond drilling and tunnelling
  • mining software – resource estimation, modelling, mine design and planning, maintenance and optimisation
  • mining infrastructure
  • contract mining and engineering services
  • industry education and training
  • environmental related products and services – water and sewage treatment plans, effluents analysers and software
  • mine safety training and equipment
  • land rehabilitation and mine closure
Competitive environment

The market is aware of Australia’s mining capabilities in heavy mining equipment, mining technology and consultancy. However, there is strong competition in consumable items such as core trays, personal protective equipment (PPEs) which usually come from China, and heavy mining machinery from Europe and US.

Tariffs, regulations and customs

Tariff rates
  • Executive Order 57 (EO 57), which aims to provide fiscal incentives to businesses for start-up and expansion, provides zero tariff on importation of capital equipment. Here is the link to a complete list of capital equipment covered by EO 57.
  • If the importer (the Philippine company) is registered with the Board of Investment (BOI) and the capital equipment is listed in EO 57 then the tariff rate is zero.
  • If the importer is NOT registered with the BOI, then the tariff rate will be 3% - the tariff schedule for Most Favoured Nation and not EO57.
  • Australian consultants in the Philippines and independent personal services not rendered more than 183 days, or equivalent to a non-resident with income sourced from the Philippines are exempt from Philippines income tax. The Philippines and Australia has a tax treaty agreement. The Australian consultant must apply for a Tax Treaty Relief Application (TTRA) and submit and have it received by the International Tax Affairs Division (ITAD) (Source: Taxation of Non-Residents, Bureau of Internal Revenue).

Value Added Tax

The Bureau of Customs confirmed that VAT is 12% based on the value of the equipment.

ASEAN Australia New Zealand Free Trade Agreement (AANZFTA):

The signing of the ASEAN Australia New Zealand Free Trade Agreement (AANZFTA) has had a positive impact on the ability of Australian companies to supply the Philippines with mining operations and products. Many products including grinding balls, iron steel wire, conveyor belts and centrifugal pumps now have zero tariffs 

  • The exporter (the Australian company) may avail of the zero tariff rate under the ASEAN-Australian New Zealand Free Trade Agreement (AANZFTA). The HS Code for mining equipment, specifically mining slurry suction and discharge hoses, is 4009.12.10.
  • The Certificate of Origin (COO), original and two copies, must be presented for every shipment. The Australian Chamber of Commerce and Industry (ACCI) and the Australian Industry Group (AIG) are agencies that issue COO.
  • Visit the Australian Government’s Free Trade Portal to find out more.

Marketing your products and services

Market Entry

Australian companies should develop relationships with mining contractors and consultancy companies that provide services in the Philippines.

Several Australian mining equipment and technology services (METS) companies have also established a presence in the Philippines and supply directly to mining companies. Other METS companies have appointed a reputable agent or distributor to market their products and services. These companies provide after sales support as a part of their service to clients.


Mining Philippines - annual event organised by the Philippines Chamber of Mines and held in September.
Philippine Mine Safety and Environment Association Exhibition and Conference - annual assembly for the Philippine Mining Engineers and Geologists held in November.

Links and industry contacts

Chamber of Mines of the Philippines
Geological Society of the Philippines 
Mines and Geosciences Bureau
Philippine Society of Mining Engineers 

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

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