Public and private sector stakeholders of the Copper sector convened recently as a Technical Working Group (TWG) to provide updates and to sharpen its Industry Roadmap.
Members of the TWG for the copper sector representing government are the Board of Investments (BOI), the Commission on Higher Education (CHED), the Senate, the Technical Education Skills Development Authority (TESDA), the Department of Trade and Industry, Department of Environment and Natural Resources (DENR), Department of Science and Technology (DOST), Department of Labor and Employment (DOLE), and Department of Finance (DOF). The Philippine Associated Smelting and Refining Corporation, Philippine Electric Wire Manufacturers Association, Wallace Business Forum and major mining firms compose most of the private sector stakeholders.
DTI Undersecretary for Industry Development and Trade Policy Adrian S. Cristobal Jr. has said in previous reports that Technical Working Groups (TWG) will be convened for every sectoral roadmap. The TWG aims to conduct a joint review of the roadmap strategies and action plans while industry stakeholders present provide updates to the inter-agency representatives. Cristobal added that the TWG meetings will also determine how the government can assist in the efficient and effective implementation of the roadmaps. Current initiatives, major policy reforms, administrative chokepoints and concrete projects will be discussed in the TWGs, as well.
“We are confident that the roadmaps are moving forward and on the track in its implementation. Several sectors have been progressing with their respective roadmaps and are in various stages of execution. The joint review of the roadmap strategies and action plans will be conducted as the industry stakeholders present updates to the inter-agency representatives. Constant collaboration between the public and private sector ensures that the succeeding phases of the roadmaps will be implemented as planned,” Cristobal stated.
The TWGs aim to identify interventions needed from both the government and the private sector, and to determine the services and assistance required from the government in partnership with the private sector who will, in turn, provide the expertise.
The Copper Roadmap envisions a fully integrated copper industry from mining to manufacturing by 2030.
The industry stakeholders expressed optimism that the full integration will not be about having a single entity performing most or all stages of processing, but more of an industry where one entity performs the crucial stage of processing and provides for the needs of others in the various stages of processing. They added that integration will be upstream with the development of major copper mines, midstream with the establishment of a copper rod casting facility and downstream with the development of new copper products, such as those that link with the automotive wiring harness industry.
The industry’s short-term (2016) plan includes the operationalization of one or two world-class copper mines. At midstream is the initiative on reviving investor interest in the production of copper wire rods. Meanwhile, identified downstream activities include information gathering, research, fora and studies, to explore the possibility of venturing into new copper applications. During this period, stakeholders would have established an institutional mechanism for collaboration to improve the climate of investment for the industry.
Within the medium-term (2022), the operating world-class copper mines shall have attained full production capacity while more new mines are being developed. Copper wire rod casting plants should have been established and fully operational as well.
Over the long-term (2030), the following targets include establishment of linkages between local mining and smelting, near self-sufficiency in copper rods and the development of higher value copper products for both local and the global markets.
Other measurable targets to achieve the vision for the industry would be the production of copper concentrates by 2016 (700,000 metric tons per year), 2022 (1,100,000 MTPY) and 2030 (1,500,000 MTPY).
The actual production of copper, its transformation and further processing of semi-finished products into components for end-user goods comprise the product segment of the industry. Copper’s final products are essentially inputs in the manufacture of end-user goods like cars, mobile phones, computers, valves, and electrical materials, among others. Currently, there are four (4) operating copper mines that are producing concentrates of about 250,000 MPTY.
The combined contribution to the economy of the three (3) major product groups defining the copper sector is minimal at the moment, accounting for hardly 0.2% of GDP output. But given the recent surge in the prices of copper, it has great potential, as current values would boost the percentage share for copper. As experienced, copper concentrate has recovered from hard times in mid-2000, when output was down to as low as 72,000 MT in 2006, reaching 254,000 MT in 2011. As it stands now, copper cathodes are the largest contributor in the industry, accounting for at least 40% of the industry pie. Around $1.1 billion worth of copper cathodes were exported in 2011 along with $360 million worth of copper concentrates.
By 2030, the stakeholders project that the share of the copper industry (including copper concentrates) will rise to 2% of the GDP. The increase in output will mostly come from the operation of new large mines, the expansion of PASAR capacity and local production of copper wire rods. Faster GDP growth driven by industrial surge will provide added momentum.
Exports of copper products (excluding concentrates and cathode) are targeted to grow 15% annually and should be able to reach $2.45 billion by 2030 from $172 million in 2011.
The latest survey from the Annual Survey of Philippine Business and Industry (ASPBI) reports around 3,700 employed in insulated wires and cables sector, with total compensation accounting for 4% of production cost. PASAR employs about 1,000 workers alone.
Industry costs and technical requirements are the major issues facing the industry. Production of copper wire rods, and semi-finished copper products for that matter, is power intensive. It accounts for up to 10% of the cost of production including raw materials. Technical requirements concerns with the reliability of power. Casting involves continuous use of electricity. If by any chance power is interrupted by just a few minutes, the whole batch of copper raw materials simply go to waste and the entire process has to be repeated.
Information-sharing, consultation and coordination among key industry players through the establishment of an appropriate institutional mechanism are needed to realize its vision. The promotion of investment in sustainable copper wire rod making facilities is an initial step towards industry integration. A more active advocacy role on national policy issues among industry players is also needed to reaffirm the strategic role of mining in nation-building and economic development. And along with the development of new, high-value products, the industry value-chain will not only be strengthened but also be diversified in the long run.
The Cooper Roadmap, along with the Manufacturing Industry Roadmap and other strategic sectoral roadmaps will be integrated in the Comprehensive National Industrial Strategy (CNIS) document. The CNIS is a building block of the Philippine Development Plan (PDP) to achieve the inclusive growth goal of the country.
The Industry Roadmaps is an initiative of the Department of Trade and Industry and the Board of Investments. The roadmaps will serve as inputs to the development of a more strategic Investment Promotions Plan, ensure rational and focused promotional activities, provide policy coherence among trade, industry and other policies that affect industry development, build capacity of government and industry associations to execute the roadmaps, and support long-term sustainable inclusive growth with quality jobs.
Source: DTI Public Relations Office