Albay Representative Jose Maria Clemente S. Salceda has raised concerns about the impact of high power costs on the mining and mineral processing industries, warning that it could hinder efforts to attract investment and develop value-added activities within the sector.
In a report by Business World, Salceda pointed out that electricity expenses are a major component of mining, smelting, and refining operating costs, accounting for 15% to 40% of the operating costs. He emphasized that without affordable power for refining companies, the country cannot develop a strong mining value chain.
He also highlighted the potential negative consequences of an export ban on unprocessed ores if the country fails to establish sufficient domestic processing capacity.
The government could consider granting direct power access to mines and refineries to prevent the diversion of power supply from consumers, he added.
The country is seen to have around $1 trillion worth of untapped mineral reserves.
However, Palawan Representative Jose C. Alvarez, Vice-Chair of the Natural Resources Committee, mentioned that the estimate of $1 trillion for mineral reserves is low and that the actual valuation could be “several trillion.”
According to Terry L. Ridon, of the InfraWatch PH think tank, providing mines and refineries direct access to power will require the construction of dedicated power plants.
He added that while this initiative wouldn’t compete with other grid users, mining firms need to carefully assess its commercial feasibility.
However, John Paolo R. Rivera, the President and Chief Economist at Oikonomia Advisory & Research, Inc., said that microgrids, though they will have huge setup costs and would take time to commence operations, are a good alternative. This is a feasible solution for a stable and uninterrupted power supply for certain industries.
Meanwhile, Ridon emphasized that mining and mineral refinement facilities can access affordable and reliable power only if there is sufficient energy supply to meet the needs of all consumers.
To address power demand and ensure stability, he urged the government to facilitate the entry of power generation projects. Increasing the number of generation facilities, regardless of technology, would effectively lower energy costs, he emphasized.
Moreover, he said that the approval and development of the Leyte Ecological Industrial Zone could provide mining and mineral refiners with access to cheaper power, boosting the minerals industry’s growth.
