Striking a Balance: The Philippines’ Path to Sustainable Critical Minerals Development

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ASEAN Beat | Environment | Southeast Asia

Striking a Balance: The Philippines’ Path to Sustainable Critical Minerals Development

Manila is under pressure to begin exploiting its rich mineral deposits, but it needs to carefully consider the likely social and environmental costs.

Striking a Balance: The Philippines’ Path to Sustainable Critical Minerals Development
Credit: Photo 320886146 © Petr Kahanek |

The demand for critical minerals, such as nickel, cobalt, and rare earth elements, has surged in recent years due to their role as essential components for modern technologies and green energy solutions. Under the Paris Agreement, meeting the world’s climate stabilization goal requires quadrupling mineral requirements for renewable energy technologies by 2040.

The Philippines, with largely untapped reserves of copper, gold, nickel, zinc, and silver, stands to economically benefit from this global surge in demand, necessitating greater investment in its mining sector. Currently, only 5 percent of these reserves have been explored, and just 3 percent are covered by mining contracts. President Ferdinand Marcos Jr.’s administration has sought and achieved greater investment from countries like the United States and Japan to diversify the critical minerals supply chain away from China. The Philippines was China’s largest supplier of nickel ore in the first quarter of 2023 alone, exporting 3.48 million tons. However, geopolitical shifts and contestations regarding territorial claims over the South China Sea has led the current Philippine government to seek greater alignment with the United States, with the goal of expanding further into the critical minerals market under the Biden administration’s Inflation Reduction Act.

Initiatives between the U.S. and the Philippines covering critical minerals sectoral development are already underway. On November 16, 2023, the University of the Philippines Public Administration Foundation and five Philippine government agencies, in partnership with the U.S. Agency for International Development and the U.S. Commercial Service, signed an MoU on the launch of a $5 million technical assistance program. This program aims to develop the Philippines’ critical minerals sector to support the country’s goal of becoming a significant player in the global clean energy value chain.

During the event, Environment Secretary Maria Antonia Yulo-Loyzaga emphasized the importance of sustainable resource management, while Ernesto Perez, director of the Anti-Red Tape Authority, highlighted streamlined regulations and environmental preservation.

Environmental conservation is particularly concerning not only to Philippine government agencies but also to the country’s indigenous populations. The indigenous population of the Philippines is estimated to make up roughly 15 percent of the total population, but nearly 60 percent of all mining operations occur on their ancestral lands.

Open-Pit Mining (OPM) is the most common and destructive mining method used in the Philippines. Large-scale removal of vegetation and topsoil destroys habitats and fragile ecosystems throughout the island archipelago, which is one of 17 megadiverse countries in the world, with more than 52,177 described species. OPM has also been known to cause widespread contamination of water bodies and to degrade air quality due to the use of heavy machinery and associated particulate matter dispersion.

While the Department of Environment and Natural Resources issued an order banning OPM in 2017, this was reversed in late 2021 by Environment Secretary Roy Cimatu, citing the importance of economic growth amid the COVID-19 pandemic. The lifting of the OPM ban poses severe threats to the environment and local populations’ livelihoods, especially on ancestral lands. These practices often occur without the knowledge or consent of Indigenous peoples, purportedly protected under the Indigenous People’s Rights Act of 1997 (IPRA).

However, the preceding 1995 Philippine Mining Act appears to supersede such regulation under the IPRA, stating, “Mineral resources are owned by the State and the exploration, development, utilization, and processing thereof shall be under its full control and supervision.” No doubt both laws are in conflict with one another. The state’s claim to own minerals and have “full control and supervision of their development” exists in tension with the IPRA’s stipulation that Indigenous peoples hold “the right to negotiate the terms and conditions for the exploration of natural resources” in ancestral domains, and the requirement for Indigenous Free Prior and Informed Consent (FPIC) in relations to grants of any “concession, license or lease, or entering into any production-sharing agreement” in those domains. FPIC is primarily conducted by means of village leaders or a council of elders that, in theory, with consultation from representative institutions, ultimately decide whether or not to grant concessions for external operations on their land, including mining.

Further analysis reveals that the FPIC stipulation is an insufficient means of guaranteeing that the interests of Indigenous communities are properly represented. Local governments have been found to circumvent the FPIC clause by assigning an “alternative” council of Indigenous community elders that, unlike their representative counterparts, decide in favor of mining practices, granting concessions for use of “their” ancestral domains. A publication by the German Society for International Cooperation found that 38.2 percent of studied cases wherein FPIC was “granted” had exhibited multiple instances of FPIC violations, primarily due to the failure properly to inform Indigenous communities.

In May 2022, South Cotabato province in Mindanao lifted its 12-year ban on OPM, enabling the development of the $5.9 billion Tampakan copper-gold project, the largest of its kind in Southeast Asia. This decision followed shortly after the national government’s aforementioned reversal of the nationwide OPM ban. The provincial board’s unanimous vote sparked backlash from local activists, Indigenous communities, and the Catholic Church, which cited environmental and human rights concerns. Bishop Cerilo Casicas condemned the decision, while activists urged South Cotabato Governor Reynaldo Tamayo Jr. to veto it. Despite some local support due to promised benefits, resistance remains strong, with fears of significant long-term environmental impacts.

Considering the weak enforcement of the IPRA and FPIC, along with the current critical mineral supply chain aspirations following the OPM ban reversal, it is clear that environmental protection and human rights may not be in the current administration’s interests. Drawing investment from the West when the demand for supply chain diversification is so great, any country in a similar position can be expected to do the same. The Tampakan project is expected to begin in 2026, much to the dismay of the local population.

If the United States is to continue investing in this sector, better governance structures and alternative mining methods, dependent on the nature of the ore deposits, should be explored to mitigate damage to the surrounding environment as much as is possible. Currently four major mining methods are used worldwide: underground mining, surface mining (which includes OPM), placer mining (sifting from sediments or sands), and in-situ mining (through dissolution).

Underground and placer mining are used to extract valuable minerals like gold, silver, platinum, and diamonds from deep ore bodies and alluvial deposits, while in-situ mining is primarily employed for extracting uranium and certain soluble minerals directly from underground deposits, ultimately limiting its range of applications in the Philippines. OPM, used to extract copper, gold, nickel, and other minerals, is the cheapest and most common form of surface mining due to its use of powerful production equipment that allows large amounts of minerals to be excavated during a shift. Working conditions in OPMs are generally less hazardous to workers’ health and require fewer personnel compared to underground mining. Still, it remains the most environmentally damaging mining method.

However, the topography and geological nature of the ore deposits in the Philippines, like the Tampakan mine, limits the kinds of mining methods that can be used for extraction. The Tampakan deposit features a large, low-grade ore body with significant amounts of copper and gold, but at low concentrations, requiring the movement of large volumes of rock. The minerals are dispersed over a wide area and are relatively close to the surface, extending horizontally and vertically, making OPM the most feasible method for efficient extraction at this point.

In this way, while the U.S. is limited in what kind of alternative mining operations it can promote, its planned technical assistance, as per the MoU, should be used to both promote and support greater governance practices at the municipal-level for oversight of these operations. Historically, corruption and lack of transparency in issuing mining permits and enforcing regulations have been persistent problems in the Philippine mining industry. Local officials often prioritize economic gains over environmental and social considerations, leading to inadequate oversight and enforcement, affecting the lives of generations.

The Marcopper mining disaster, which occurred on March 24, 1996, in the island province of Marinduque, stands as one of the nation’s worst environmental catastrophes, whose effects are still being felt to this day. Triggered by a fracture in a drainage tunnel, over 1.6 million cubic meters of toxic mine waste were unleashed into the Makulapnit-Boac river system, causing flash floods and widespread devastation. The disaster displaced hundreds of families, contaminated drinking water, killed livestock, and rendered the Boac River unusable.

At the time of the accident, Marcopper’s official stance was that a minor earthquake caused the initial rupture of the drainage tunnel connected to the river. However, Antonio La Viña, the former environment undersecretary, stated that the rupture of the Marcopper mining disaster was also caused by a fundamental design flaw due to insufficient spending, leading to mine waste seepage that the company was already aware of prior to its rupturing. Additionally, the tunnels were intended to bring water into the mining pit, but they were misused to pump waste into the water instead.

The disaster catalyzed significant policy reforms in the Philippines’ mining sector, leading to stricter regulations focused on environmental protection and community consultation. The aftermath saw legal battles for compensation and environmental cleanup, culminating in a landmark ruling by the Marinduque Regional Trial Court in 2022, which ordered Marcopper Mining Corporation to pay damages to over 30 plaintiffs affected by the disaster. This decision also underscored the imperative for accountability and restitution in addressing the far-reaching impacts of industrial negligence on communities and ecosystems.

This happened nearly 30 years ago. Yet despite the importance of then-implemented policy reforms, recent policy reversals like lifting the OPM ban in tandem with a renewed push for critical minerals development threaten a regression away from sustainable development.

Therefore, the United States, as part of its technical assistance to the Philippines, has an obligation to promote sustainable development and greater governance practices at all levels. Doing so would highlight the country’s commitment to the region and establish higher standards for environmental governance in the region. While the USAID program acknowledges the need to improve permitting processes and minimum governance standards, the specific actions being undertaken remain unclear, meriting further explanation. The risks faced by the island archipelago, which is already experiencing the impact of climate change, are too great to ignore.