The controversy about the distribution of mining revenues between the government and mining firms is only a small part of how the country can harness its mineral resources for economic development. The much larger part comes from using this mineral wealth to produce Filipino-made industrial goods, research group IBON said.
The real value of the country’s mineral wealth is much more than the estimated US$840 billion from their mere extraction and export.
According to IBON, if there are Filipino industries to process these minerals and manufacture intermediate and final goods these could be used to create at least US$7.3 trillion or more worth of products. The case of cellphones illustrates this, the group said. The typical cellphone is estimated to contain 16 grams of copper, 350 milligrams of silver and 34 milligrams of gold. At current prices of copper (US$3.86/lb as of March 9, 2012), silver (US$34.21/troy oz) and gold (US$1,711.50/troy oz) and at current exchange rates this translates into some Php102.11 worth of metals in a typical cellphone.
The lowest priced cellphone on the market costs Php888 which is 8.7 times the value of the metals contained – correspondingly, the country’s estimated US$840 billion in minerals could conceivably be used to manufacture US$7.3 trillion worth of cellphones or other similar technology goods. The higher the technology then the greater the ultimate value to the economy that produces these goods.
According to IBON, the true potential of the country’s mineral wealth is not just the worth of raw materials but rather the total value of the final industrial products which could not have been made without these minerals. There are also the manufacturing jobs generated while making these. The country will not be reaping the full benefits from the irreversible extraction of its mineral resources if there is no Filipino industry that processes these minerals and that also manufactures final goods.
Increased mining will not accelerate economic growth and development if there is no domestic industrial base. The government should not just seek an increased share of mining firms’ revenues from extracting raw materials but more importantly should actively create the conditions for the Philippines to get the larger benefits from manufacturing intermediate and final industrial goods. These benefits include much more jobs than mining will ever create, domestic incomes and profits, and Filipino science and technology, said IBON. (end)