for Copper Presented by: Mr. Angel Veloso Chairman, PASAR Dusit - - PowerPoint PPT Presentation

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

CONCENTRATE S 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

EXPORTS LOCAL PROD’N IMPORTS

200 400 600 800 1000 2009 2010 2011 Export Import

Volume of Export and Import

• f Copper Products ('000

Metric Tons)

Industry Profile/Situationer

5000 10000 15000 2012 2015 2017 C opper Mining S ector

Employment 1 2 3 S hort-term (2016) Medium- term (2022) Long-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 Corporation
• 2. Carmen Copper Corporation
• 3. TVI Resource Development (Phils.), Inc.

INDUSTRY ASSOCIATION/S

Chamber of Mines of the Philippines Philippine 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

Adminis Administr trativ tive e Bottlenec Bottlenecks ks

• 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

Ma Major R jor Ref efor

• rms

ms

• Inclusion of copper products in the 2014 IPP
• Where eligible, mining areas to be included as economic zones

but with locator incentives limited to what will be in the fiscal regime being discussed at the MICC

• Where eligible, mining areas to be included as economic zones

but with locator incentives limited to what will be in the fiscal regime being discussed at the MICC

Concrete Project Timeline

Completion of the Copper Wire Rod Feasibility Study 2013 Strengthening of tie-ups with international copper

• rganizations

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) jun.veloso@gmail.com

• Engr. Guillermo S. Laquindanum

Director, Supervision and Monitoring Department, Board of Investments 890-9544 (tel. no.); 895-3649 (fax) gslaquindanum@boi.gov.ph