DENR hikes mining dev't fund to 1.5 percent

Mining firms will now be required to allocate as much as 1.5 percent of their operating cost for social development programs in their host communities, after the Department of Environment and Natural Resources (DENR) increased the required financial support from 1 percent. “We have to ensure that the host communities get the most benefits due them", Environment secretary Horacio Ramos. He added: "Big mining companies will necessarily give more since they have immense budgets for operations. Small miners are also required to give 1.5 percent for social programs however small their operation is." He explained that the allocation is intended to provide sufficient funds to implement activities that will promote the general welfare of not only communities hosting mining projects but also those of their neighbors. Aside from social development programs, the funds will also be used for the development of mining and processing technologies and geosciences and the conduct of public awareness and education program for local communities. Ramos stressed, however, that if the mining project falls within the ancestral domains, the 1.5 percent allocation shall be on top of the royalty payment of the mining company to concerned indigenous peoples (IPs) in the area. Under DENR Administrative Order No. 2010-13, which revised the implementing rules and regulations of the Philippine Mining Act of 1995, operating cost is defined as “the specific costs of producing a saleable product on a commercial scale incurred in the calculation of the net income before tax as confirmed by the Mines and Geosciences Bureau (MGB). According to the DENR, operating cost includes all mining/extraction and treatment/processing costs inclusive of depreciation, depletion and amortization, exploration during operation stage, power maintenance, administration, excise tax, royalties, transport and marketing costs, and annual progressive/environmental management costs. Ramos said of the 1.5 percent, about 1.125 percent or 75 percent of the 1.5 percent shall allocated for social development projects; .15 percent for the development of mining and processing technologies and geosciences; while the remaining .225 percent will be for information and educational activities. Under the mining technology development and geosciences component, the activities that may be undertaken will include advanced studies conducted in the mining area, cost of publications, including technical journals or monographs, and expenditures for scholars, trainings on mining and processing technologies and geosciences, and expenditures for equipment and capital outlay for research to develop mining and processing technologies. - GMANews.TV