If there’s a possible downfall in the future, the mining industry would be at the losing end because metal prices are so volatile. A competitive tax regime would be a factor to help attract possible investors.

Stakeholders have expressed support for the tax increase but asserted that the hikes should be equitable as their industry is highly dependent on metal prices.

BAGUIO CITY — Mining executives recently expressed apprehension over the adverse effects that may be prompted by the current tide of uncertainties over how the mining industry will be managed and regulated.

Philex Mining Corp. president and CEO Eulalio Austin thus urged lawmakers to immediately resolve the unstable fiscal regime and regulatory climate as these policy shifts may impede mining companies’ growth.

“We support the increase in taxes but it should be some sort of equitable because the mining industry is so dependent on metal prices that’s why we are proposing tax measures that are linked also to metal prices and margins,” Austin told reporters in a spot interview.

He explained that the mining tax regime should take into account the volatile metal prices to at least help companies easily recover should there be a future downfall in the industry.

“If there’s a possible downfall in the future, the mining industry would be at the losing end because metal prices are so volatile. A competitive tax regime would be a factor to help attract possible investors,” Austin said.

Despite gaining the full trust of people in the area where they operate, Austin said the ambiguous regulatory climate currently scares off future investors.

“We are currently having a hard time raising the initial money for our Silangan Mine project because some issues are being raised because of the regulatory environment but we are trying to convince them that Silangan is a different story,” Austin said.

In a separate interview, C.T.P. Construction and Mining Corporation president Clarence J. Pimentel Jr. also admitted that the vague regulatory mining climate is among the “biggest risks” his company has to hurdle.

Pimentel, who is also the chairman emeritus of the Philippine Nickel Industry Association (PNIA), said he remained optimistic that the lawmakers will soon figure out how they want to manage the mining industry.

“Hopefully once it gets settled, it will help the industry a lot more to move forward. At this point, we’re just waiting for it to move to the Senate and once it goes there at least we can finally settle a lot of things in the industry,” Pimentel said.

Recently, the House of Representatives’ Committee on Ways and Means approved on third and final reading a new fiscal regime that will impose a 3 percent tax royalty on top of a 4 percent excise tax regardless if a mining company operates inside or outside a mineral reservation area.

The new fiscal regime fines lower royalty tax for companies operating within a mineral reservation area while those operating outside declared mineral reservation zones will now be fined with royalty tax.

Mining companies currently operate under a fiscal regime that imposes a 4 percent excise tax and a 5 percent royalty on mining companies that operated within the declared mineral reservation areas.

The development in the new tax regime was announced by Mines and Geosciences Bureau director Wilfredo Moncano during the kick-off ceremony of the 66th Annual National Mine Safety and Environment Conference.