Semirara Mining and Power Corporation

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It is possible to produce around three million tons of steel a year, creating enormous added value to domestic iron ores, concludes a technical study conducted by the Metals Industry Research and Development Center, Department of Science and Technology.

In turn, putting up an iron-making facility with higher capacities of over a million tons per year will boost domestic demand for steel.

The essential ingredients are here: coal and natural gas to power the plants that process iron ore into steel.

Currently, half of the demand for steel is manufactured locally. And demand is rising: a big jump from 4.1 million tons in 2010 to 6 million tons in 2012, according to the Philippine Iron and Steel Institute and the Philippine Steelmakers Association, reporting on the country’s Apparent Steel Consumption.

The recent commercial extraction of natural as deposits and its continued exploration mean a cheap and readily available fuel for processing iron ore into steel.

The Philippines is rich in mineral resources, the fifth mineralized country in the world, third in gold reserves and fourth in copper, according to the Department of Environment and Natural Resources. The country ranks among the world’s top producers of precious and base metals, ranking third (after New Caledonia and Indonesia) in deposits of nickeliferous laterite. The more common minerals are ores that contain copper, gold, chromium, nickel, and iron.

With all the mineral resources, the country could earn a lot more – but it doesn’t. What happens is that most of the minerals extracted are shipped directly to other countries with little or no value-added. At the very least, they undergo processing into intermediate products. Still, quite a large portion of the value-adding process takes place outside the Philippines.

In the Philippines, adding value to mineral resources may involve increasing the grade of the metal compound. Or the mineral may be transformed into the desired metal or processing the metal into usable items. The benefits are not limited to getting more dollars from the increased value of the mined ore (the transformation of iron ore to pig iron, for example, means a value adding of around US $280 a ton); it also means more jobs for Filipinos.

The value adding of iron resources also promises to integrate the iron and steel industry, including the iron casting industry.

In the case if iron resources, the Mines and Geosciences Bureau (MGB) reported that 1,255,356 metric tons of iron ore concentrated was shipped abroad in 2012 by Leyte Ironsand Corp., Ore Asia Mining and Development Corp., and small-scale iron sand mining companies.

The Philippine Development Plan 2011-2016 of the National Economic Development Authority recognizes the mining industry’s potential as a driver of economic growth; it promotes the development of downstream industries to maximize the benefits of value-added mining. Bills filed in Congress, when passed into law, prohibit the direct shipping of ore for export in order to promote domestic value-adding.

President Aquino signed Executive Order No. 79 (“Institutionalizing the Implementing Reforms in the Philippine Mining Sector, Providing Policies and Guidelines to Ensure Environmental Protection and Responsible Mining in the Utilization of Mineral Resources”) which promotes the development of value-adding and downstream industries for strategic metallic ores.

The key is the extent of iron deposits, coal, and natural gas resources.

According to the MGB, the important iron districts of the Philippines are in Ilocos Norte, Ilocos Sur, Camarines Norte, Cotabato, Nueva Viscaya, Surigao, Cagayan Valley, Marinduque, Zamboanga del Sur, Samar, Rizal, and Davao.

As to coal deposits, both lignite and anthracite have been mined in Cebu since the mid-1800s. Cebu is one of the country’s principal coal fields along with Batan Island in Albay and Malangas in Zamboanga Sibugay. The high grade, semi-anthracite to subbituminous coal deposits in Malangas and Kabasalan town, Zamboanga Sibugay, are good sources of coking coal with estimated deposits of 10 million tons. (Coking coal, also known as metallurgical coal, is used to create coke, one of the key irreplaceable inputs for making steel.)

The Semirara Mining Corporation is the largest coal producer in the Philippines engaged in surface open cutmining on Semirara Island, Antique. Coal Asia Holdings, which plans to operate the second largest coal facility in the country, has a potential coal resource of 120 million metric tons.

As for natural gas, the country’s reserves are estimated to range from 5.8 trillion cubic feet (TCF) to 20.7 TCF. Some 90 percent of the proven reserves are in the Malampaya natural gas field in the West Philippine Sea. Since 2001, natural gas has been drawn off Palawan and pumped to Batangas where it is used by a natural gas processing plant and three power generation plants.

The Sampaguita gas field in the Recto Bank, 80 nautical miles northwest of Palawan, has estimated reserves of 16.6 TCF and 416 million barrels of oil.


Written by: 
Agustin M. Fudolig
Department of Science and Technology-Metals Industry Research and Development Center (DOST-MIRDC)

Pubished by:
Department of Science and Technology-Science and Technology Information Institute (DOST-STII)