Philippine Industry Roadmap for · PDF filePhilippine Industry Roadmap for Copper ......
Transcript of Philippine Industry Roadmap for · PDF filePhilippine Industry Roadmap for Copper ......
Philippine Industry Roadmap
for Copper
Presented by:
Mr. Angel Veloso
Chairman, PASAR
Dusit Hotel
13 August 2013
MINING
ORE
MINERAL PROCESSING
•Crushing & Grinding
•Classification/sizing
•Flotation
CONCENTRATE
ELECTROLYTIC REFINING
SMELTING
COPPER CATHODE
•Heat Treatment
•Hot/Cold Rolling
•Wire Drawing
•Heat Treatment
•Rolling
•Forging
•Extrusion
•Heat Treatment
•Alloying
•Forging
•Casting
COPPER IMPORTS: CATHODES, WIRES, INGOTS AND OTHER SEMI-FINISHED FORMS
EXPORT
PRODUCTS
WIRE
•Electrical/Electronics Industry (wires, cables, accessories, etc.)
BARS, SHEETS, STRIPS
•Household and Construction Materials (pipes, tubings, roofing, nails, rivets, etc.)
•Aviation and Marine Industry
•Automobile Industry
BRASS, BRONZE AND OTHER ALLOYS OF COPPER
•Automobile Industry (wheels, radiators, engine blocks, linings, etc.)
•Aviation and Marine Industry (vessels, tanks, pipings, etc.)
•Household and Construction Materials
DOWNSTREAM INDUSTRY APPLICATIONS OF COPPER
PREVAILING CONDITIONS
CONCENTRATES 100%
IMPORTED
CATHODES 90%++
IMPORTS
RODS 95-100% IMPORTS
COPPER RAW MATERIALS
100% IMPORTS
COPPER
MINING (CONCENTRATE
S)
COPPER SMELTING
(CATHODES)
CASTING (RODS), WIRES
& CABLES
AUTO WIRE HARNESSES;
FOILS
100% EXPORTED
95-100% EXPORTED
95-100% EXPORTED
A DISJOINTED INDUSTRY
EX
PO
RTS
LOC
AL
PROD’N
IMP
OR
TS
0200400600800
1000
2009 2010 2011
Export
Import
Volume of Export and Importof Copper Products ('000
Metric Tons)
Industry Profile/Situationer
0
5000
10000
15000
2012 2015 2017
C opperMiningS ector
Employment
0
1
2
3
S hort-term
(2016)
Medium-
term (2022)
L ong-term
(2030)
Increased contribution to the
economy (% of GDP)
Industry Profile/Situationer
PRODUCT/ SERVICE COVERAGE
Major products:•Concentrate•Cathode and blister• Rolled products, tubes, rods and other semi-finished
products•Wires and cables, harnesses, plating and foils
MAJOR PLAYERS
1. Philex Mining Corporation2. Carmen Copper Corporation3. TVI Resource Development (Phils.), Inc.
INDUSTRY ASSOCIATION/S
Chamber of Mines of the PhilippinesPhilippine Electric Wire Manufacturers Association (PEWMA)
LINKAGES
local mining operations, copper smelters, copper wire and cable operations
Geographical Location of Companies
Oceanagold (Philippines), Inc. Dipidio, Nueva Ecija
PASAR Complex, Leyte Industrial Development Estate, Isabel, Leyte
TVI Resource Development (Phils.), Inc., Cabanatuan,
Zamboanga del Norte
Silangan Mindanao Mining Co., Inc., Brgy. Luna, Surigao City
Proposed copper wire rod facility
Tampakan copper project, South Cotabato
Copper Wire & Cable Manufacturers
Carmen Copper Corporation, Toledo Cebu
Philex Mining Corporation, Padcal, Tuba, Benguet
SWOT ANALYSIS MATRIX
STRENGTHS
• Significant reserves (8 billion tons of ore)• Presence of major copper mining development projects (Tampakan, Silangan, etc.)• Presence of a world class smelting facility
• A well-established, thriving local wire and cable industry• Facilities for rod casting already exist (but mostly idle)• Existence of an institutional mechanism for safeguarding
copper product standards
• Incentives schemes are institutionalized under BOI and PEZA• Funds are available for investing in technology that can be
developed locally • Relatively low land/plant development cost • Potential for tapping cheaper sources of energy, i.e., natural
gas
WEAKNESSES• Strong anti-mining sentiment by some groups • LGUs that issue that issue anti-mining rules that are against
national mining• Incentives scheme generally not applicable to local producers
selling to the domestic market
• Reliability of electric power (threats of power interruptions) • High cost of power (3x higher than Indonesia)• Existing rod manufacturing facilities not energy-efficient,
produces output with physical characteristics posing challenge to new wire manufacturing equipment
• Minimum delivery, quality and payment system issues in local cathode supply raises just-in-time issues
• High domestic freight costs• Tariff distortions
OPPORTUNITIES• Faster PH economic growth through a possible re-focusing on
industrial development • Strong global demand for mineral products from rapidly-
industrializing economies especially Brazil, Russia, India and China
• Undisputed advantage of copper over other materials in the electrical industry
THREATS• Global demand could make it more attractive to sell
concentrates and cathodes abroad than to supply local manufacturers
• Heavy dependence of local copper industry on the construction market, which is cyclical
• Aluminum wire now being used for internal application
• PHL to have a fully integrated copper industry from mining to manufacturing at the end of 2030
• Full integration of the copper industry
• Development of the downstream industries
• Enhancement of the copper industry value chain
• Increased contribution to the GDP from .2% at present to 2% in 2030
• Increase in export of copper products by 15% during the roadmap period from 2015-2030
Vision, Goals & Targets
Goals
Goals
Vision
Targets
Goals
Goals
Vision
Targets
STRATEGIES
INFORMATION-SHARING, CONSULTATION AND COORDINATION
AMONG KEY INDUSTRY PLAYERS THROUGH THE ESTABLISHMENT OF AN APPROPRIATE INSTITUTIONAL MECHANISM
PROMOTE INVESTMENT IN SUSTAINABLE COPPER WIRE ROD
FACILITIES
AS AN INITIAL STEP TOWARDS INDUSTRY INTEGRATION
MORE ACTIVE ADVOCACY ROLE FOR INDUSTRY STAKEHOLDERS ON
NATIONAL POLICY ISSUES AFFECTING THE VIABILITY OF THE
INDUSTRY, INCLUDING SUPPORT FOR THE DEVELOPMENT OF WORLD CLASS MINES
DEVELOPMENT OF NEW, HIGH VALUE PRODUCTS TO INCREASE THE
VALUE CHAIN, DIVERSIFY AND DEEPEN THE INDUSTRY
Administrative Bottlenecks
• Cyclical market
• Smuggling and fake goods
• Lack of integration between copper mining and copper smelting
• Tariff distortion
• High level issues regarding development of large mines
• Give a clear direction on open pit mining in the guidelines of E.O.79 and uphold the primacy of national mining laws over local laws
Major Reforms
• Inclusion of copper products in the 2014 IPP
• Where eligible, mining areas to be included as economic zonesbut with locator incentives limited to what will be in the fiscalregime being discussed at the MICC
• Where eligible, mining areas to be included as economic zonesbut with locator incentives limited to what will be in the fiscalregime being discussed at the MICC
Concrete Project Timeline
Completion of the Copper Wire Rod Feasibility Study 2013
Strengthening of tie-ups with international copper organizations
2014
Next Steps
• Creation of an organization of key industry players that would cover smelting, casting and other electrical-based manufacturing of copper products
• Generation of data among members to gauge collective performance of various segments of the industry
• Monitoring of policy, market, technological and other developments and creation of opportunities for the industry
• Advocacy work taking into consideration national issues with impact on the industry
• Building relationships among other segments of the industry with similar interests
Contact Details
Mr. Angel N. Veloso
Chairman, Philippine Association Smelting & Refining Corporation (PASAR)
845-6014 (tel. no.); 889-6332 (fax)
Engr. Guillermo S. Laquindanum
Director, Supervision and Monitoring Department, Board of Investments
890-9544 (tel. no.); 895-3649 (fax)