Philippine Miners Worried by Provincial Bans

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"The threat of hefty compensation claims prompts government deliberation. 'Not one mineralized country has ever put a stop on its mining industry,' asserts mining CEO."

The Philippines' mining industry is concerned about an increasing number of provincial bans on that are stopping approved projects, and said the government could be left to foot a hefty compensation bill.

South Cotabato's ban on open-pit mining has put at risk the country's largest mining project, the $5.9 billion Tampakan copper-gold project, run by global miner Xstrata Plc, even though the ban conflicts with the national mining law.

Resolutions declaring a moratorium on mining have been issued by local governments in seven other provinces. The provinces cite environmental factors as behind their decisions.

"There is not one country that is mineralized that has ever put a stop on its mining industry. We are coming dangerously close to being the first," President Gerard Brimo said at an industry briefing on Thursday.

The Philippines, with mineral deposits estimated to be worth $1 trillion, hopes to attract foreign investment into mining to create jobs and boost growth. Manila is hoping about $1 billion of investments will enter the sector this year.

But instead of attracting funds, Benjamin Philip Romualdez, president of the Chamber of Mines of the Philippines, said the government could instead find itself facing compensation claims.

"At a certain point, there will have to be a resolution. It's a question of the national government exercising its political will," Romualdez said.

South Cotabato Governor Arthur Pingoy told Reuters on Monday he was still pushing for a review of the code banning open-pit mining that was put in place by his predecessor, even after he signed formal rules for its implementation.

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