RP mulls five-year ban on iron ore exports

With the recent spikes in iron ore prices, the Philippine government is mulling on a five-year moratorium on exports of the commodity, until the country is able to build two integrated steel processing plants. “We’re studying the option of imposing government control on the export of iron ore within the next five years, Environment Secretary Horacio Ramos told reporters in a briefing Thursday. The proposed ban comes from "the need to conserve the resource for the possible establishment of iron or steel plants as well as the rights of the companies producing iron," Ramos said. The 2008 Foreign Trade Statistics, recently released by the National Statistics Office, showed that the Philippines shipped 76,500 gross tons of iron ores and concentrates including roasted iron pyrites amounting to P84.4 million. The shipments were for China, Taiwan, Hong Kong and Japan. With iron ore prices rising fast in the world market, the Department of Environment and Natural Resources (DENR) is also mulling on an ambitious plan to build two integrated steel processing plants at a combined cost of $3.2 billion in capital expenditure. "If we have our own processing facility we can now dictate terms, same thing as what VALE of Brazil, BHP and Rio Tinto of Australia are doing to the market," Environment Secretary Horacio Ramos told reporters in a briefing Wednesday. The price of iron ore shot up to $120 to $130 per metric ton (MT) in the last two weeks, from $70 per MT in 2009, helped by rising demand of car manufacturers and makers of heavy machineries. The commodity was trading at $140-$145 per MT on Wednesday. Ramos said he met with outgoing President Gloria Macapagal-Arroyo in Malacañang last week and recommended the creation of an integrated steel plant that will use indigenous iron ore as feedstock. The plant would have a rated capacity of 2.4 million MT a year, using iron ore deposits called magnetite which is being mined in small quantities in various parts of the country. Still, the government would need to secure the money to build the processing plants. “We hope to initialize the construction by 2011, if there are willing investors from the private sector. The government will only come in as far as regulating the resource is concerned," said Edwin Domingo, director of the Mines and Geosciences Bureau. According to the DENR, the processing plants should be built either in Northern Luzon or Mindanao. The country’s iron ore deposits are in Sta. Ines, Antipolo, Rizal; Abra de Ilog, Occidental Mindoro; and Midsalip, Zamboanga del Norte. —VS, GMANews.TV