Wednesday, February 15, 2017

China benefits from mines closure in Philippines

Is DENR secretary Gina Lopez being played by Chinese miners? Some friends say Lopez is trying to kill the mining industry in the Philippines by ordering the closure of 75 mine contracts in the country. Lopez described it as a gift of love to the peoples of Mindanao.

Who benefits from the death of mining in the Philippines? Surely, it's China.

China has vast stocked piles of mineral ores and mineral products. The world's biggest economy has had this problem since 2012. And demands for Chinese ore have cooled for the past few years. Analysts say this is a pesky problem which reflects the very economic state of China. Some say this stockpiling of mined products highlights China's weakening economy.

The solution for China's problem is simple---close their mines. That would be catastrophic for China. Had the Chinese government did exactly that--that would mean tremendous loss of jobs, as well as stoppage of industrial activity which impacts on several other industries linked with mining. A slowdown will cause China's economy to fall a few points.

With the closure of mines in the Philippines, China is now in the position of being the world's top source of nickel, copper, chromite even gold. Without mined ore from the Philippines, China can now dispose of millions of tons of steel products which they have stockpiles.

Of course, Lopez wants lost revenues from mining recovered from tourism. The main problem is, how do you attract tourists to these areas already "destroyed" by mining activities?

You need billions of pesos worth of investments. Where do you now get those billions, when everyone knows that it is too risky to invest in tourism in the Philippines?

You don't have a fully integrated and world-class airport system. You don't have a good road system. You still have a still-born private enterprise led tourism infrastructure. And there are just a handful of serious resort operators there willing to risk their monies for a venture which, in all seriousness, is still quite nebulous.

So, who, again gains from the closure of mines in the Philippines? Lopez will say the people. The question is--who then will the people go to when hunger now sets in these communities with the loss of economic activity?

We might have saved millions of Chinese' workers lives when we closed our own mines. How about the lives of Filipinos who depend on this economic activity for their daily sustenance? Does Lopez have a plan for them? I sincerely hope so.