technical report on mineral accounts - psa.gov.ph

TECHNICAL REPORT ON MINERAL ACCOUNTS

MINERAL ACCOUNTS OF THE PHILIPPINES

2013-2018

Environment and Natural Resources Accounts Division

Macroeconomic Accounts Service

Sectoral Statistics Office

Philippine Statistics Authority

TERMS OF USE Mineral Accounts of the Philippines is a publication of the

Philippine Statistics Authority (PSA). The PSA reserves exclusive

right to reproduce this publication in whatever form. Should any

portion of this publication be included in a report/article, the title of

the publication and the PSA should be cited as the source of data.

The PSA will not be responsible for any information derived from the

processing of data contained in this publication.

ISSN-2672-278X


PHILIPPINE STATISTICS AUTHORITY iii

FOREWORD

The Mineral Accounts of the Philippines are environmental accounts developed and

compiled by the Philippine Statistics Authority (PSA) under the Philippine Economic-

Environmental and Natural Resources Accounting (PEENRA) Project. This

compilation is an update of the pilot accounts done through the Philippine Wealth

Accounting and the Valuation of Ecosystem Services (Phil-WAVES) project in 2016.

The PSA presents this technical report on the asset accounts for mineral resources,

particularly for nickel, gold, copper, and chromite. These accounts follow the

international standard for environmental accounting – the United Nations System of

Environmental-Economic Accounting (SEEA) 2012-Central Framework.

This compilation of mineral accounts was made possible with the help of the Mines

and Geosciences Bureau (MGB) of the Department of Environment and Natural

Resources (DENR). The PSA would like to express its sincerest gratitude to the said

bureau for their data provision and technical support in this endeavor.

DENNIS S. MAPA, Ph.D.

Undersecretary

National Statistician and Civil Registrar General

Quezon City, Philippines

December 2020


PHILIPPINE STATISTICS AUTHORITY v

LIST OF ACRONYMS AND ABBREVIATIONS

DENR Department of Environment and Natural Resources

DMPF Declaration of Mining Project Feasibility

ENRA Environment and Natural Resources Accounting

GDP Gross Domestic Product

GVA Gross Value Added

IEMSD Integrated Environmental Management for Sustainable Development

MAQ Mining and Quarrying

MGB Mines and Geosciences Bureau

MPSA Mineral Production Sharing Agreement

MRI Mineral Resource/Reserve Inventory

MT metric ton

NPV Net Present Value

NSCB National Statistical Coordination Board

PEENRA Philippine Economic-Environmental and Natural Resources Accounting

Phil-WAVES Philippine Wealth Accounting and the Valuation of Ecosystem Services

PMRC Philippine Mineral Resource/Reserve Classification

PSA Philippine Statistics Authority

SDG Sustainable Development Goals

SEEA System of Environmental-Economic Accounting

SNA System of National Accounts

UNDP United Nations Development Programme

UNFC United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources


PHILIPPINE STATISTICS AUTHORITY vii

EXECUTIVE SUMMARY

This publication presents the Mineral Accounts of the Philippines, particularly the physical

asset accounts for nickel, gold, copper, and chromite. This is an update of the pilot compilation

initially done in 2016 under the Philippine Wealth Accounting and the Valuation of Ecosystem

Services (Phil-WAVES).

Divided into five sections, this report describes the concepts, methodologies, preliminary

results and future directions of the study. The introductory part defines the objectives of this

study and provides some background on the mineral industry as well as the initiatives on

environmental accounting in the country. The second part describes the UN System of

Environmental-Economic Accounting 2012 Central Framework (SEEA CF) and its

recommended classification of mineral resources. The next section is a discussion of the

operationalization of the conceptual framework in the Philippines, including the scope and

coverage, data source, and estimation methodology. The main part of this technical report

follows, with a discussion of the preliminary results and analysis of this study. Finally, a

summary of the study and plans for future compilation is presented. The bibliography and

appendix tables of the accounts are also included in this report.

The SEEA CF serves as the framework for this study. This is a multi-purpose framework for

measuring the environment and its interaction with the economy.

This report includes physical asset accounts for nickel, gold, copper, and chromite reserves

of the Philippines from 2013 to 2018, which were compiled using data from the Mines and

Geosciences Bureau (MGB) of the Department of Environment and Natural Resources

(DENR). The accounts provide information on the available stocks of these metallic minerals

at the start and end of each year, as well as the changes that occurred in the stocks. These

mineral resources were also classified as follows: Class A, commercially recoverable

resources; Class B, potentially commercially recoverable resources; and Class C, non-

commercial and other known deposits.

The following part presents the results covering the four metallic minerals in the Philippines,

namely: nickel, gold, copper, and chromite.

Nickel

The total nickel reserves in the Philippines increased by 1.5 percent, from 2.02 billion metric

tons (MT) in 2013 to 2.05 billion MT in 2018. Among the three classes, Class A was largest in

2013, while Class C consistently has the highest share from 2014 to 2018, comprising of 49

to 54 percent of the total reserves. Class A nickel reserves decreased by more than 84 million

MT or around eight percent of the 1.03 billion MT of reserves during the period 2013 - 2018.

viii PHILIPPINE STATISTICS AUTHORITY

Although the stock of Class A nickel showed a steady decrease from 2013 to 2017, a large

increase was recorded in 2018 due to upward reappraisals amounting to more than 119 million

MT. Meanwhile, Class B nickel reserves hugely declined from 108.8 million MT in 2013 to 28.4

million MT in 2016 and down to zero in 2017 and 2018 due to reclassifications. Lastly, due to

the entrance of new players, reclassifications and reappraisals, Class C nickel reserves

increased from 880 million MT of reserves in 2013 to 1.1 billion MT in 2018.

Gold

The total gold reserves in the Philippines increased by 0.8 percent from 4.85 million kilograms

in 2013 to 4.89 million kilograms in 2018. Gold reserves were dominated by Class C reserves

or the non-commercial and other known deposits. In 2018, 60.4 percent of gold reserves

belong to Class C, 26.4 percent belong to Class B and 13.3 percent belong to Class A.

Reclassifications were recorded from 2013 to 2016, ranging from 0.35 million kilograms to

0.01 million kilograms. In 2015, around 0.33 million kilograms of gold reserves were

reclassified from Class C to either Class A or Class B. In terms of reappraisal, a large increase

was posted for Class A gold reserves in 2017 due to upward reappraisals amounting to around

0.08 million kilograms. As a result of upward reappraisal and reclassification, Class A gold

reserves increased by 19.5 percent from 0.54 million kilograms in 2013 to 0.65 million

kilograms in 2018. Meanwhile, Class B gold reserves increased by 20.9 percent from 1.07

million kilograms in 2013 to 1.29 million kilograms in 2018.

Copper

From 2013 to 2018, total copper reserves in the country remained at the same level, at around

1.14 billion MT. This is mainly attributed to the non-activity of copper reserves consisting of

the following averages: (1) Class C - 83.8 percent; (2) Class B – 12 percent; and (3) Class

A – 4.2 percent. By class however, Class A copper reserves increased from 4.25 million MT

in 2013 to 1.3 million MT in 2018, Class B copper reserves increased hugely from 4.85 million

MT in 2013 to 136.94 in 2018, and Class C copper reserves decreased from 1.13 billion MT

in 2013 to 0.86 billion MT in 2018. The changes were mainly due to reappraisals,

reclassifications and extractions. Extractions of Class A reserves also showed a steady

decrease, from 90.9 thousand MT in 2013 to 69.9 thousand in 2018.

Chromite

The total chromite reserves in the Philippines increased by 11.21 percent from 40.33 million

MT in 2013 to 44.86 million MT in 2018. Among the three classes, Class C chromite reserves

had the biggest share with an average volume of 34.93 million MT from 2013 to 2018. In said

years, several reclassifications were recorded. In 2016, a total of 5.11 million MT was


PHILIPPINE STATISTICS AUTHORITY ix

reclassified from Class A to Class B. In the following year, it was reclassified from Class B to

Class C. In terms of reappraisals, one upward reappraisal in Class C amounting to 4.68 million

MT was recorded in 2017. As a result, chromite reserves notably increased in 2017. Due to

extractions and reclassification, Class A chromite dropped by 61.31 percent from 8.58 million

MT reserves in 2013 to 3.32 million MT in 2018. Meanwhile, Class B reserves had the lowest

share among the three classes.

Taking off from these physical asset accounts, the next step is the compilation of monetary

asset accounts. These accounts will provide key inputs on the eventual estimation of

macroeconomic indicators adjusted for the depletion of natural resources as well as measures

of comprehensive wealth. Moreover, the compilation of asset accounts for non-metallic

minerals, such as limestone, marble, sand and gravel, will widen the scope of the mineral

accounts. With its increasing importance to the country’s economy, it is imperative to account

for non-metallic minerals to monitor the sustainability of its extraction.


PHILIPPINE STATISTICS AUTHORITY xi

TABLE OF CONTENTS

FOREWORD iii

LIST OF ACRONYMS AND ABBREVIATIONS v

EXECUTIVE SUMMARY vii

LIST OF TABLES AND APPENDICES xii

LIST OF FIGURES xiii

1 | INTRODUCTION 1

Background 1

Objectives of the Study 2

2 | REVIEW OF COUNTRY EXPERIENCES 3

Local 3

International 4

3 | CONCEPTUAL FRAMEWORK 7

Scope and Coverage 7

Framework for the Asset Accounts for Mineral Resources 7

3 | OPERATIONALIZING THE FRAMEWORK 11

Scope and Coverage 11

Sources of Data 11

Estimation Methodology 11

4 | RESULTS AND DISCUSSION 14

Nickel 14

Gold 18

Copper 22

Chromite 25

5 | SUMMARY AND NEXT STEPS 29

APPENDIX 31

BIBLIOGRAPHY 39

DEFINITION OF TERMS 41

xii PHILIPPINE STATISTICS AUTHORITY

LIST OF TABLES AND APPENDICES

Table 1. Categorization of mineral and energy resources ..................................................... 8

Table 2. Structure of physical asset account for mineral resources ....................................... 9

Table 3. Structure of monetary asset account for mineral resources ................................... 10

Appendix Table 1. Physical asset account: Total nickel reserves, in ore, in million metric tons

........................................................................................................................................... 31

Appendix Table 2. Physical asset account: Class A nickel reserves, in ore, in million metric

tons ..................................................................................................................................... 31

Appendix Table 3. Physical asset account: Class B nickel reserves, in ore, in million metric

tons ..................................................................................................................................... 40

Appendix Table 4. Physical asset account: Class C nickel reserves, in ore, in million metric

tons ..................................................................................................................................... 40

Appendix Table 5. Physical asset account: Total gold reserves, in metal content, in million

kilograms ............................................................................................................................ 33

Appendix Table 6. Physical asset account: Class A gold reserves, in metal content, in million

kilograms ............................................................................................................................ 33

Appendix Table 7. Physical asset account: Class B gold reserves, in metal content, in million

kilograms ............................................................................................................................ 34

Appendix Table 8. Physical asset account: Class C gold reserves, in metal content, in million

kilograms ............................................................................................................................ 34

Appendix Table 9. Physical asset account: Total copper reserves, in metal content, in million

metric tons .......................................................................................................................... 35

Appendix Table 10. Physical asset account: Class A copper reserves, in metal content, in

million metric tons ............................................................................................................... 35

Appendix Table 11. Physical asset account: Class B copper reserves, in metal content, in


Appendix Table 12. Physical asset account: Class C copper reserves, in metal content, in


Appendix Table 13. Physical asset account: Total chromite reserves, in ore, in million metric

tons ..................................................................................................................................... 37

Appendix Table 14. Physical asset account: Class A chromite reserves, in ore, in million

metric tons .......................................................................................................................... 37

Appendix Table 15. Physical asset account: Class B chromite reserves, in ore, in million

metric tons .......................................................................................................................... 38

Appendix Table 16. Physical asset account: Class C chromite reserves, in ore, in million

metric tons .......................................................................................................................... 38


PHILIPPINE STATISTICS AUTHORITY xiii

LIST OF FIGURES

Figure 1. Total Nickel Reserves by Class, 2013-2018 ......................................................... 14

Figure 2. Net Reclassifications by Class, 2013-2018........................................................... 15

Figure 3. Stock of Class A Nickel Reserves, ....................................................................... 16

Figure 4. Extractions of Class A Nickel Reserves, ............................................................... 16

Figure 5. Net Reappraisals in Class A Nickel Reserves, 2013-2018 ................................... 16

Figure 6. Net Reclassifications of Class A Nickel Reserves, 2013-2018.............................. 16

Figure 7. Stock of Class B Nickel Reserves, ....................................................................... 16

Figure 8. Net Reclassifications in Class B Nickel Reserves, 2013-2018 .............................. 16

Figure 9. Net Reappraisals in Class C Nickel Reserves, 2013-2018 ................................... 17

Figure 10. Stock of Class C Nickel Reserves, ..................................................................... 17

Figure 11. Net Reclassifications in Class C Nickel Reserves, 2013-2018............................ 17

Figure 12. Total Gold Reserves by Class, 2013-2018 ......................................................... 18

Figure 13. Net Reclassifications by Class, 2013-2018......................................................... 19

Figure 14. Stock of Class A Gold Reserves, 2013-2018 ...................................................... 20

Figure 15. Extractions of Class A Gold Reserves, ............................................................... 20

Figure 16. Net Reappraisal in Class A Gold Reserves, 2013-2018 ..................................... 20

Figure 17. Net Reclassifications in Class A Gold Reserves, 2013-2018 .............................. 20

Figure 18. Net Reappraisal of Class B Gold Reserves, 2013-2018 ..................................... 30

Figure 19. Stock of Class B Gold Reserves, ....................................................................... 30

Figure 20. Net Reclassifications in Class B Gold Reserves, 2013-2018 .............................. 30

Figure 21. Net Reappraisal in Class C Gold Reserves, 2013-2018 ..................................... 22

Figure 22. Stock of Class C Gold Reserves, ....................................................................... 22

Figure 23. Net Reclassifications in Class C Gold Reserves, 2013-2018 .............................. 22

Figure 24. Total Copper Reserves by Class, 2013-2018 ..................................................... 22


Figure 26. Stock of Class A Copper Reserves, ................................................................... 24

Figure 27. Extractions of Class A Copper Reserves, 2013-2018 ......................................... 24

Figure 28. Net Reappraisals in Class A Copper Reserves, 2013-2018 ............................... 24

Figure 29. Net Reclassifications in Class A Copper Reserves, 2013-2018 .......................... 24

Figure 30. Stock of Class B Copper Reserves, ................................................................... 24

Figure 31. Net Reclassifications in Class B Copper Reserves, 2013-2018 .......................... 24

Figure 32. Net Reappraisals in Class C Copper Reserves, 2013-2018 ............................... 25

Figure 33. Stock of Class C Copper Reserves, 2013-2018 ................................................. 25

Figure 34. Net Reclassifications in Class C Copper Reserves, 2013-2018 .......................... 25

Figure 35. Total Chromite Reserves by Class, 2013-2018 .................................................. 26


Figure 37. Extractions of Class A Chromite Reserves, 2013-2018 ...................................... 27

Figure 38. Stock of Class A Chromite Reserves, 2013-2018 ............................................... 27

Figure 39. Net Reclassifications of Class A Chromite Reserves, 2013-2018 ....................... 27

Figure 40. Stock of Class B Chromite Reserves, ................................................................. 28

Figure 41. Net Reclassifications in Class B Chromite Reserves, 2013-2018 ....................... 28

Figure 42. Net Reappraisals of Class C Chromite Reserves, 2013-2018 ............................ 28

Figure 43. Stock of Class B Chromite Reserves, 2013-2018 ............................................... 28

Figure 44. Net Reclassifications of Class C Chromite Reserves, 2013-2018 ....................... 28


PHILIPPINE STATISTICS AUTHORITY 1

1 | INTRODUCTION

Background

Mineral resources are identified as non-renewable resources, which implies that once

extracted, it is considered depleted. Mineral is defined as naturally occurring, solid, inorganic

element having an internal structure and chemical composition (NAMRIA,1991). Minerals are

important as they have numerous uses in the daily lives of people. They are essential in

producing many industrial products, such as jewelry, utensils, appliances, electrical and

electronic gadgets, and coins.

The Philippines is endowed with rich mineral resources due to its strategic location along the

Pacific Rim of Fire. According to the Mines and Geosciences Bureau (MGB), about 30 percent

(or 9 million hectares) of the Philippines’ total land area of 30 million hectares, is identified as

having high mineral potential. In January 2019, 2.34 percent or 702.7 thousand hectares of

the total land area was covered by mining tenements. Among the minerals found in the country

are nickel, copper, gold, chromite, iron, lead and manganese. In 2018, a total of forty-eight

(48) operating metallic mines were recorded. Out of these forty-eight (48), thirty (30) were

nickel operating mines.

The mining industry plays a consequential role in economic development by generating

employment opportunities, business development, increased fiscal revenues, and

infrastructure linkages (UNDP, 2018). In 2018, the mining industry contributed 0.6 percent to

the Gross Domestic Product (GDP). The Gross Value Added (GVA) of Mining and Quarrying

(MAQ) at constant prices amounted to PhP 103.5 billion. The total estimated production value

for metallic minerals was PhP 121.9 billion in 2018. The estimated value of nickel and nickel

products was PhP 55.2 billion, equivalent to 45.3 percent of the total estimated production

value for metallic minerals. The export of minerals and mineral products amounted to US$ 4.3

billion with copper, gold and nickel as the country’s top mineral exports. Moreover, the mining

industry contributed to PhP 25.7 billion paid taxes in 2017. It also employed 0.5 percent (or

207 thousand workers) of the total employment in the country.

Due to the great importance of mineral resources, it is significant to monitor its stocks and

changes in stocks for sustainable extractions. In 2013, the World Bank launched the Philippine

Wealth Accounting and the Valuation of Ecosystem Services (Phil-WAVES) to start their goal

in mainstreaming natural capital development planning and national economic accounts. In

2016, Phil-WAVES published the Mineral Accounts of the Philippines containing both the

physical and monetary asset accounts from 2002 to 2012. This report contains the update of

the physical asset accounts of nickel, gold copper, and chromite from 2013 to 2018.


2 PHILIPPINE STATISTICS AUTHORITY

Objectives of the Study

The Philippine Statistics Authority, by virtue of the Republic Act 10625, otherwise known as

the Philippine Statistical Act of 2013, is mandated to plan, develop, prescribe, disseminate

and enforce policies, rules and regulations and coordinate government-wide programs

governing the production of official statistics, general-purpose statistics, and civil registration

services.

The PSA is also tasked to support the institutionalization of the System of Environmental-

Economic Accounting 2012 - Central Framework (SEEA 2012-CF), by developing

environmental accounts, such as the physical and monetary asset accounts for mineral

resources.

Since mineral resources are unique types of environmental assets that cannot be renewed on

any human timescale, there is a particular interest in understanding the rate at which these

assets are extracted and depleted. The information from asset accounts can be used to

facilitate the management of environmental assets, taking into consideration the sustainable

use of mineral resources and the capacity of the environment in providing natural inputs to the

economy and society. In addition, the compilation of the mineral accounts will allow for the

development of macroeconomic indicators that will support the planning and policymaking of

relevant agencies and organizations.



2 | REVIEW OF COUNTRY EXPERIENCES

Local

In 1991, the compilation of the first natural resources accounts was conducted by the former

National Statistical Coordination Board (NSCB), funded by the US Agency for International

Development (USAID) as a project under the Department of Environment and Natural

Resources (DENR). This first set of accounts adopted the Peskin framework1 for the

development of the database for environmental accounting and generation of a number of

parameters/assumptions.

Relatedly, in 1995, a project under the United Nations Development Programme’s (UNDP)

Country Program on Integrated Environment Management for Sustainable Development

(IEMSD) was implemented by the NSCB, as a component of SEEA and adopted the UN SEEA

1993 framework, a satellite account of the System of National Accounts. The national accounts

developed for minerals covered six commodities: gold, copper, chromite, nickel, iron, and

manganese. Only gold, copper, and chromite were valued using the Net Present Method

(NPM) and the unit User Cost Method (UCM) or EI Serafy Method (ESM). Following the

specific feature of the accounts structure of the 1993 SEEA framework relative to the flow of

assets, three major categories emerged, namely: a) extraction; b) other accumulation -

changes due to economic decisions; and c) other volume changes - other changes due to

decisions, other than economic.

In 1998, the ENRA II project was launched, focusing on the development and enhancement

capacities for environmental and natural resource accounting. The fundamental objective was

to institutionalize the generation and utilization of the Philippine Economic-Environmental and

Natural Resources Accounting (PEENRA). Mineral accounts developed at the national level

were pilot-tested at the sub-national level in Cordillera Administrative Region under the former

1 The Peskin model “explicitly accounts for economically valuable services of natural resources and the

environment as a medium for the disposal of wastes, a supplier of recreational services, aesthetics, and life support of species” (ENRAP,1991).



NSCB Regional Unit and in Palawan through the Palawan Council for Sustainable

Development Staff (PCSDS).

In 2014, the Philippine Statistics Authority developed and compiled the Mineral accounts of

the Philippines under the Wealth Accounting and the Valuation of Ecosystem Services

(WAVES) project under the World Bank. It aimed to help countries build accounts for natural

capital and ensure that their significance and benefits are incorporated in development

programs and policies and support of sustainable development. The Phil-WAVES supported

the institutionalization of selected modules of the SEEA 2012, a multipurpose conceptual

framework developed by the United Nations to facilitate understanding of the interactions

between the environment and the economy. Since the Philippines has one of the world’s

richest deposits of mineral resources, the compilation covered minerals such as gold, copper,

nickel, and chromite. The accounts compiled by the Phil-WAVES project provided an

assessment of the available stocks, in physical and monetary terms, of the four resources at

the beginning and the end of the year, covering the changes that affect the stocks. The mineral

resources/reserves were classified according to the United Nations Framework Classification

to Fossil and Mineral Reserves and Resources 2009, an internationally applicable and

acceptable classification system used to build resource inventory. In monetary terms, the Net

Present Value (NPV) was applied to the valuation of mineral resources, which focused only

on Class A reserves. The generated accounts covered 11 years, from 2002 -2012.

International

1. Australia

The Australian Bureau of Statistics (ABS) published the first edition of the Mineral Account,

Australia, in 1998. It followed the Integrated Environmental and Economic Accounting – SEEA

(UN, 1993a) and the complementary framework System of National Accounts 1993 (UN,

1993b). A physical account was developed to quantify Australia's "naturally occurring mineral

and petroleum resources" (ABS, 1998).



The mineral account focused on an environmental account's two core components: the stock

table and flow table. The stock table showed the level or amount of mineral resource from

1985 to 1996. The Bureau of Resource Sciences (BRS) was the primary data source of the

stock table. To classify the mineral resources, ABS adapted the McKelvey Box, which BRS

used in its data compilation. According to two characteristics, the McKelvey Box cross-

classified subsoil assets: 1) the degree of geological assurance and 2) the degree of economic

feasibility of reserves. The resource categories2 of Australia's mineral account are: 1)

economic demonstrated resources (EDR) – resources with a very high degree of geological

assurance and for which extraction is expected to be profitable at the price and technology

prevailing at the time the assessment was undertaken; 2) sub-economic demonstrated

resources (SDR) – resources with a very high degree of geological assurance but for which

extraction is not expected to be profitable over the life of the mine due to high production costs

relative to the prevailing commodity price; and 3) inferred resources (IFR).

The changes through time in the mineral account were also recorded as other volume

changes. These include production, discoveries, reclassification for technical and economic

reasons, industry revision, and other changes not elsewhere classified.

The flow table was compiled for the years 1992-1993 and 1993-1994. The flow table aimed to

show the movement of mineral resources from extraction to productive use. It was compiled

based on the classification and concepts of the Input-Output. In addition, several assumptions

were made in the compilation of the flow table, including the same commodity prices across

all industries and end-users.

The flow table's supply estimates are the sum of production and imports of the commodity,

while the use data were derived from the Input-Output Supply and Use Tables in monetary

terms that were then applied to the total supply estimates in physical terms.

At present, the Australian Bureau of Statistics compiles mineral and petroleum exploration on

a quarterly basis.

2 Definition of resource categories are from Australian Bureau Statistics. 19 March 1998. Mineral Account,

Australia, 1996.



2. Botswana

In 2004, Lange and Wright's study included manufactured capital, natural capital, and net

foreign financial assets to expand the measurement of Botswana’s wealth.3 The said study

attempted to investigate natural capital transformation to other forms of wealth in resource-

rich countries like Botswana. The Department of Environmental Affairs and the Centre for

Applied Research also prepared a set of mineral accounts in 2007 and a preliminary report for

WAVES project in 2014. In May 2016, the Economic Accounting of Mineral Resources'

technical report in Botswana was released under the WAVES project, a partnership project

between the Government of Botswana (GoB) and the World Bank.

Botswana’s mineral account under the WAVES project aimed to reflect the importance and

role of mining sector in the country’s economic growth. The study followed the 2012 SEEA

Central Framework and 2008 SNA. It accounted for the following mineral resources:

diamonds, copper-nickel and cobalt, coal, soda ash and salt, and gold. In addition, the mineral

account was in physical and monetary accounts.

3 LANGE, G., & WRIGHT, M. (2004). Sustainable development in mineral economies: The example of

Botswana. Environment and Development Economics, 9(4), 485-505. doi:10.1017/S1355770X04001469



3 | CONCEPTUAL FRAMEWORK

Scope and Coverage

The System of Environmental-Economic Accounting 2012 Central Framework (SEEA 2012 –

CF) serves as the framework for this study. It is a multi-purpose conceptual framework that

aims to measure the interactions between the economy and the environment. It is also a

statistical framework that consists of a comprehensive set of tables and accounts which guides

the compilation of consistent and comparable statistics and indicators for policymaking,

analysis, and research.

The SEEA CF covers measurement in three main areas: (1) the flows of water, energy and

materials within the economy and between the economy and the environment; (2) the

economic activity and transactions related to the environment; and (3) the stocks of and the

changes in these stocks of environmental assets, such as mineral and energy resources,

which is the main focus of this study.

Framework for the Asset Accounts for Mineral Resources

Mineral resources include deposits of non-metallic and metallic minerals which are generally

found underground. Hence, the quantity of resources that one might reasonably expect to be

extracted is not known with any large degree of precision. A key factor in the measurement of

mineral resources is the concentration and quality of mineral in ore deposits, which influence

the likelihood and cost of extraction and the degree of confidence in quantity that can be

sustainably extracted in the future.

The SEEA Central Framework recommends the use of the United Nations Framework

Classification for Fossil Energy and Mineral Resources (UNFC-2009) in classifying mineral

resources. UNFC-2009 is a generic and flexible scheme for classifying and evaluating

quantities of mineral and energy resources based on three fundamental criteria as follows:

a. Economic and social viability (E): the degree of favorability of economic and social

conditions in establishing the commercial viability of the project;

b. Field project status and feasibility (F): the maturity of studies and commitments

necessary to implement mining plans or development projects; and

c. Geological knowledge (G): the level of certainty of geologic knowledge and of potential

recoverability of quantities of the resource concerned.



Through the combination of these criteria, known deposits of the mineral and energy resources

are categorized into three classes:

a. Class A: Commercially recoverable resources

b. Class B: Potentially commercially recoverable resources

c. Class C: Non-commercial and other known deposits

An overview of how these classes are defined is found below on Table 1.

Table 1. Categorization of mineral and energy resources

Known deposits

SEEA classes

Corresponding UNFC-2009 project categories

E

Economic and social viability

F

Field project status and feasibility

G

Geologic knowledge

A: Commercially recoverable resources

E1. Extraction and sale have been confirmed to be economically viable

F1. Feasibility of extraction by a defined development project or mining operation has been confirmed

Quantities associated with a known deposit that can be estimated with a high (G1), moderate (G2) or

low (G3) level of confidence.

B: Potentially commercially recoverable resources

E2. Extraction and sale are expected to become economically viable in the foreseeable future

F2.1 Project activities are on-going to justify development in the foreseeable future

Or F2.2 Project activities are on hold and/or where justification as a commercial development may be subject to significant delay

C: Non-commercial and other known deposits

E3. Extraction and sale are not expected to become economically viable in the foreseeable future or evaluation is at too early a stage to determine economic viability

F2.2 Project activities are on hold and/or where justification as a commercial development may be subject to significant delay

Or F2.3 There are no current plans to develop or acquire additional data at the time due to limited potential

Or F4. No development project or mining operation has been identified

Potential deposits (not included in SEEA)

Exploration projects Additional quantities in place

E3. Extraction and sale are not expected to become economically viable in the foreseeable future or evaluation is at too early a stage to determine economic viability

F3. Feasibility of extraction by a defines development project or mining operation cannot be evaluated due to limited technical data

Estimated quantities associated with potential deposit, based primarily on indirect evidence (G4)

Or F4. No development project or mining operation has been identified



Asset accounts for mineral resources organize relevant information covering the quantities

and values of stocks of these resources and changes in stocks over accounting periods. The

asset accounts can be presented in physical and monetary terms.

Accounting for the flows of extraction, losses, discoveries as well as other changes such as

reappraisals and reclassifications in physical terms is central to the mineral asset accounts.

These changes are defined as follows:

a. Discoveries – these include the quantity of new “known” deposits found during an

accounting period.

b. Reappraisals – these relate to the changes that arise due to reassessment of quality

and quantity of stock, and economic viability of extraction (including development of

extraction technology). Reappraisals may be upward or downward.

c. Extraction – these are the quantity of mineral and energy resources that are physically

removed from the deposit. Estimates of extraction should exclude the mining overburden

and include illegal extraction, either by residents or non-residents.

d. Catastrophic losses – these rarely occur with energy resources. Catastrophes such as

collapsing of mines may occur but this does not reduce the stocks of the resources.

However, catastrophes such as instability of oil wells may result to losses in the

resources itself and these should be recorded as catastrophic losses.

e. Reclassifications – these occur when there is a change in the classification of the

deposits due to factors such as government-ordered or voluntary suspension of

operations.

A basic physical asset account for mineral and energy resources is shown below in Table 2.

This is compiled by type of resources, each with the same unit of measurement, and by class

of resource.

Table 2. Structure of physical asset account for mineral resources

Type of mineral resource (Class A: Commercially recoverable resources)

Non-metallic minerals (tonnes)

Metallic minerals (thousands of tonnes)

Opening stock

Additions to stock

Discoveries

Upward reappraisals

Reclassifications

Total additions to stock

Reductions in stock

Extractions

Catastrophic losses



Downward reappraisals

Reclassifications

Total reductions in stock

Closing stock

The monetary account valuates the physical stocks and changes in stocks of mineral

resources. The structure of these accounts is similar with that of the physical, but with an

additional entry: revaluations. Revaluations occur due to changes either in resource prices

over the accounting period or in assumptions underlying the Net Present Value (NPV)

approaches that are typically used to value mineral resources.

The basic structure of monetary asset accounts is shown below in Table 3.

Table 3. Structure of monetary asset account for mineral resources

Type of mineral resource (Class A: Commercially recoverable resources)

Non-metallic minerals (tonnes)

Metallic minerals (thousands of tonnes)

Opening stock

Additions to stock

Discoveries

Upward reappraisals

Reclassifications

Total additions to stock

Reductions in stock

Extractions

Catastrophic losses

Downward reappraisals

Reclassifications

Total reductions in stock

Revaluations Closing stock

Due to the uncertainty in the expected extraction profile and incomes of types of reserves, it

is recommended that only Class A deposits be valued. Moreover, if valuation for Class B and

Class C deposits are estimated, values for each type should be clearly distinguished.



3 | OPERATIONALIZING THE FRAMEWORK

Scope and Coverage

Mineral resources are non-renewable natural resources categorized into metallic and non-

metallic. Most of the country’s metallic minerals are gold, copper, chromite, nickel, iron, cobalt,

platinum, silver, mercury, manganese, molybdenum, and zinc. These metallic minerals are

extracted from major deposits located in Luzon and Mindanao.

In line with the System of Environmental Economic Accounting – Central Framework (SEEA

– CF 2012), the PSA has been engaged in the development of environmental accounts in

support to the institutionalization of the framework in the Philippines. The PSA has updated

the physical asset accounts for mineral resources, the main area of this report.

The current compilation of mineral asset accounts focused only on the metallic minerals,

specifically: nickel; gold; copper; and chromite.

Sources of Data

The data for estimating the physical asset accounts were sourced from the Mines and

Geosciences Bureau (MGB) of the Department of Environment and Natural Resources

(DENR). The PSA likewise compiled data from the Mineral Resource/Reserve Inventory of the

Philippines (MRI), as well as the production data for nickel, copper, gold and chromite from

2000 to 2018. The List of Existing Mineral Production Sharing Agreement (MPSA) was also

used as a reference in the estimation.

Estimation Methodology

A. Classification

Pursuant to Department Administrative Order (DAO) 2010-09 issued by the Department of

Environment and Natural Resources, the classification system adopted in the Philippines for

mineral resources and reserves follows the Philippine Mineral Resource/Reserve

Classification (PMRC). Using the PMRC, mineral resources are classified as inferred,

indicated, and measured, while mineral reserves are classified as probable and proved. To

align the PMRC and UNFC-2009 as recommended by the SEEA 2012, a localized evidence-

based classification system was adopted by the Phil-WAVES team in compiling the pilot

mineral asset accounts. This localized classification system is adopted in this compilation, with

some modifications due to limitations on the available data and administrative forms.

When a mining company has records on production for the reference year or it has a

Declaration of Mining Project Feasibility (DMPF) approved by the Mines and Geosciences

Bureau, it is classified as Class A. The DMPF manifests that feasibility studies were



conducted, and economic and social viability as well as field project feasibility have been

established.

Class B, on the other hand, indicates a need for justification of the reserves’ economic viability

in the foreseeable future. A mining company which is not yet producing during the reference

year but has production in succeeding years is categorized as Class B. Also, a mining

company with a DMPF awaiting the approval of MGB is considered Class B. Temporary

suspension or halted production of one year also places a mining company under this class.

Mining companies with no recorded production at all, did not apply for DMPF or has an expired

contract with no application for renewal are classified as Class C. Companies which have

permanently stopped operation or suspended for two or more years are also under Class C.

B. Opening and Closing Stocks

The data on tonnage of mineral resources and reserves from the MRI were recorded as

closing stocks. From 2000 to 2015, tonnage of mineral resources and reserves were lumped.

However, from 2016 onwards, the MRI, following the PMRC, presents the data into mineral

resources and reserves, with subcategories as mentioned above.

For reference periods 2013 to 2015, tonnage is recorded as closing stocks. On the other hand,

closing stocks from 2016 to 2018 were calculated as the sum of mineral resources and

reserves, excluding inferred mineral resources. This was done to preserve the consistency

and comparability of the dataset.

The physical accounts for nickel and chromite present data in ore form while physical accounts

for gold and copper are expressed in metal contents. Metal content is computed by multiplying

the tonnage by the grade of the mineral reserve.

C. Changes in Stocks

C.1. Discoveries

As they are not explicitly defined from the MRI, discoveries were derived from the closing

stocks. The reserves were recorded as discoveries on the year of approval of the contractor’s

MPSA – an agreement the government grants a contractor the right to mine within a contract

area. If year of MPSA approval is unknown, discovery is recorded as the year of first record in

the MRI or one year before the first record of production, whichever is earlier.



C.2. Reclassifications

A reclassification is recorded on the current year when the reserves of a mining company are

reclassified on the following year.

C.3. Upward and downward reappraisals

Similar to discoveries, reappraisals are not recorded in the MRI but were derived using the

closing and opening stocks. According to the SEEA-CF and as a general rule in accounting,

the closing stock of the current period should be equal to the opening stock of the following

period. Hence, reappraisals are calculated as balancing items. These amounts can be

attributed to re - assessment of previously known reserves, discoveries of new reserves by

existing contractors, or extractions not previously accounted in the reserves’ inventory, among

others.

C.4 Extractions

Data on the annual production of each mining company is available from the Mines and

Geosciences Bureau. These were recorded as extractions.



4 | RESULTS AND DISCUSSION

Nickel

Total Nickel Reserves

The total nickel reserves in the Philippines increased by 1.5 percent, from 2.02 billion metric

tons (MT) in 2013 to 2.05 billion MT in 2018. As shown in Figure 1, the stock of nickel showed

a decrease in levels from 2013 to 2017 due to stable nickel production and reclassifications;

while an increase was posted in 2018 due to upward reappraisals amounting to more than

119 million MT. Among the three classes, Class A was largest in 2013, while Class C

consistently had the highest share from 2014 to 2018, comprising 49 to 54 percent of the total

reserves.

Figure 1. Total Nickel Reserves by Class, 2013-2018 Source of basic data: Mines and Geosciences Bureau

Figure 2 shows the reclassifications of nickel reserves. In 2014, more than 104 million MT of

nickel reserves were reclassified from Class B to C. These reserves are under mining

contractors which stopped operation for more than one year. A similar scenario was observed

in 2016, with reserves amounting to more than 72 million MT reclassified to Class C. In 2017,

more than 24 million MT of reserves were reclassified to Class C as some mining contractors

were ordered by the Department of Environment and Natural Resources (DENR) to stop their

operations due to violations of environmental regulations.

-

0.50

1.00

1.50

2.00

2.50

2013 2014 2015 2016 2017 2018

To

tal N

ickel R

eserv

es (

in b

illio

n M

T)

Class A Reserves Class B Reserves Class C Reserves



Figure 2. Net Reclassifications by Class, 2013-2018 Source of basic data: Mines and Geosciences Bureau

Class A Nickel Reserves

Class A nickel reserves decreased by more than 84 million MT or eight percent of the 1.03

billion MT of reserves during the period 2013 to 2018. As reflected in Figure 3, the stock of

Class A nickel showed a steady decrease from 2013 to 2017. This can be attributed to stable

production and reclassifications recorded during the period. From 2013 to 2018, nickel

production ranged from 25 to 35 million MT, with the highest recorded in 2014 due to the

entrance of new players, increased mine output and growing demand abroad – as reported

by the MGB (Figure 4). A large increase in Class A nickel reserves was posted in 2018 due to

upward reappraisals amounting to more than 119 million MT (Figures 3 and 5).

Figure 6 shows the net reclassification of Class A nickel reserves. From 2013 to 2016,

reclassifications from Class A to B were recorded due to temporary halt in production of some

mining contractors. In 2017, around 3.5 million MT Class B reserves were reclassified to

Class A as some mining contractors commenced or resumed nickel extraction.

(100.00)

(50.00)

-

50.00

100.00

150.00

2013 2014 2015 2016 2017 2018

Net R

ecla

ssific

atio

ns (in

mill

ion M

T)

Class A Class B Class C



Figure 3. Stock of Class A Nickel Reserves,

2013-2018 Figure 4. Extractions of Class A Nickel Reserves,

2013-2018

Figure 5. Net Reappraisals in Class A Nickel Reserves,

2013-2018 Figure 6. Net Reclassifications of Class A Nickel

Reserves, 2013-2018 Source of basic data: Mines and Geosciences Bureau

Class B Nickel Reserves

Class B nickel reserves declined hugely from 108.8 million MT in 2013 to 28.4 million MT in

2016 and down to zero in 2017 and 2018. The changes in stocks of Class B reserves were

due to reclassifications. When a mining company shifts from the exploration stage to

commercial production, reserves are reclassified from Class B to Class A. Meanwhile, when

a mining company suspends its operation for more than one year, reserves are reclassified

from Class B to Class C.

Figure 7. Stock of Class B Nickel Reserves,

2013-2018 Figure 8. Net Reclassifications in Class B Nickel

Reserves, 2013-2018

Source of basic data: Mines and Geosciences Bureau

-

0.20

0.40

0.60

0.80

1.00

1.20

2013 2014 2015 2016 2017 2018

Cla

ss A

Nic

kel R

eserv

es

(in

bill

ion M

T)

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2013 2014 2015 2016 2017 2018

Extr

actio

n (

in m

illio

n M

T)

(20.00)

-

20.00

40.00

60.00

80.00

100.00

120.00

2013 2014 2015 2016 2017 2018

Net R

eappra

isals

(in

mill

ion M

T)

(50.00)

(40.00)

(30.00)

(20.00)

(10.00)

-

10.00

2013 2014 2015 2016 2017 2018

Net R

ecla

ssific

atio

n

(in m

illio

n M

T)

-

0.02

0.04

0.06

0.08

0.10

0.12

2013 2014 2015 2016 2017 2018

Cla

ss B

Nic

kel R

eserv

es

(in

bill

ion M

T)

(100.00)

(80.00)

(60.00)

(40.00)

(20.00)

-

20.00

40.00

60.00

2013 2014 2015 2016 2017 2018

Net R

ecla

ssific

atio

n

(in

mill

ion M

T)



Class C Nickel Reserves

Class C nickel reserves increased by more than 224 million MT, from 880 million MT of

reserves in 2013 to 1.1 billion MT in 2018. As seen in Figure 10, the stock of Class C nickel

showed a steady increase from 2013 to 2017. Circumstances contributing to these increases

were as follows: the reclassification of 104 million MT of reserves in 2014 (Figure 11);

discoveries amounting to 23 million MT in 2015 with the entry of a new player; and

reclassifications of more than 72 million MT and 24 million MT in 2016 and 2017, respectively

(Figure 11). Likewise, a downward reappraisal of around 225 thousand MT was recorded in

2017 (Figure 9).

Figure 9. Net Reappraisals in Class C Nickel Reserves,

2013-2018

Figure 10. Stock of Class C Nickel Reserves,

2013-2018 Figure 11. Net Reclassifications in Class C Nickel


-

0.20

0.40

0.60

0.80

1.00

1.20

2013 2014 2015 2016 2017 2018

Cla

ss C

Nic

kel R

eserv

es (

in b

illio

n M

T)

(0.25)

(0.20)

(0.15)

(0.10)

(0.05)

-

2013 2014 2015 2016 2017 2018

Net R

eappra

isals

(in

mill

ion M

T)

-

20.00

40.00

60.00

80.00

100.00

120.00

2013 2014 2015 2016 2017 2018

Net R

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ns

(in

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ion M

T)



Gold

Total Gold Reserves

The total gold reserves in the Philippines increased by 0.8 percent from 4.85 million kilograms

of reserves in 2013 to 4.89 million kilograms in 2018. As seen in Figure 12, gold reserves were

dominated by Class C reserves or the non-commercial and other known deposits. In 2018,

13.3 percent of the total gold reserves were classified as Class A while 60.4 percent were

classified as Class C.

Figure 12. Total Gold Reserves by Class, 2013-2018 Source of basic data: Mines and Geosciences Bureau

Figure 13 shows the reclassification of gold reserves. In years 2013 and 2014, more than

0.02 million kilograms of gold reserves were reclassified from Class A to B and from Class B

to C, respectively. In 2015, around 0.33 million kilograms of gold reserves were reclassified

from Class C to either Class A or Class B. In 2016, around 0.02 million kilograms Class B

reserves were reclassified to Class A.

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2013 2014 2015 2016 2017 2018

To

tal G

old

Reserv

es (

in m

illio

n k

ilogra

ms)





Class A Gold Reserves

Class A reserves increased by 19.5 percent from 0.54 million kilograms in 2013 to 0.65 million

kilograms in 2018. This increase was due to a combined effect of upward reappraisal and

reclassification constituting 0.13 million kilograms and 0.06 million kilograms, respectively

(Figures 16 and 17). From 2013 to 2018, gold production ranged from 0.01 to 0.02 million

kilograms, with the highest production recorded in 2017 (Figure 15). A large increase was

posted in 2017 due to upward reappraisals amounting to around 0.08 million kilograms

(Figures 14 and 16). Conversely, reclassifications occurred from 2013 to 2016, ranging from

0.35 million kilograms to 0.01 million kilograms (Figure 17).

-0.40

-0.30

-0.20

-0.10

0.00

0.10

0.20

0.30

0.40

2013 2014 2015 2016 2017 2018

Net R

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ms)




Figure 14. Stock of Class A Gold Reserves, 2013-2018 Figure 15. Extractions of Class A Gold Reserves,

2013-2018

Figure 16. Net Reappraisal in Class A Gold Reserves,

2013-2018 Figure 17. Net Reclassifications in Class A Gold


Class B Gold Reserves

Class B gold reserves increased by 20.9 percent from 1.07 million kilograms in 2013 to

1.29 million kilograms in 2018. As shown in Figure 20, the fall in Class B reserves in 2014 was

due to reclassification of around 0.20 million kilograms. Moreover, the uptick in 2015 was

attributed to reclassification of around 0.27 million kilograms (Figure 20). This was followed by

a decline in 2016 to 2017 due to reclassification and downward reappraisal, respectively

(Figures 18 and 20).

0.48

0.50

0.52

0.54

0.56

0.58

0.60

0.62

0.64

0.66

2013 2014 2015 2016 2017 2018

Cla

ss A

Gold

Reserv

es

(in

mill

ion k

g)

0.00

0.01

0.01

0.02

0.02

0.03

2013 2014 2015 2016 2017 2018

Extr

actio

ns (

in m

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n k

g)

-0.01

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

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0.09

2013 2014 2015 2016 2017 2018

Net R

eappra

isals

(in

mill

ion k

g)

-0.03

-0.02

-0.01

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

2013 2014 2015 2016 2017 2018Net R

ecla

ssific

atio

ns

(in

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ion k

g)



Figure 18. Net Reappraisal of Class B Gold Reserves,

2013-2018

Figure 19. Stock of Class B Gold Reserves,

2013-2018 Figure 20. Net Reclassifications in Class B Gold


Class C Gold Reserves

Class C gold reserves decreased by 8.9 percent from 3.24 million kilograms in 2013 to 2.95

million kilograms in 2018. The drop of gold reserves in 2015 was due to reclassification by

around 0.33 million kilograms (Figures 22 and 23). On the other hand, the minimal increase

in 2016 was caused by upward reappraisal (Figure 21). Thereafter, steady reserves were

observed in the last two years (Figure 22).

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2013 2014 2015 2016 2017 2018

Cla

ss B

Gold

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es (

in m

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n k

g)

-0.01

0.00

0.00

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2013 2014 2015 2016 2017 2018

Net R

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(in

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-0.05

0.00

0.05

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0.15

0.20

0.25

0.30

2013 2014 2015 2016 2017 2018

Net R

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(in

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Figure 21. Net Reappraisal in Class C Gold Reserves,

2013-2018

Figure 22. Stock of Class C Gold Reserves,

2013-2018 Figure 23. Net Reclassifications in Class C Gold


Copper

Total Copper Reserves

From 2013 to 2018, total copper reserves in the country remained on the same level at around

1.14 billion metric tons (Figure 24). This is mainly attributed to the non-activity of copper

reserves, with the following averages: Class C - 83.8 percent; Class B - 12 percent; and Class

A - 4.2 percent.

Figure 24. Total Copper Reserves by Class, 2013-2018 Source of basic data: Mines and Geosciences Bureau

2.70

2.80

2.90

3.00

3.10

3.20

3.30

2013 2014 2015 2016 2017 2018

Cla

ss C

Gold

Reserv

es (

in m

illio

n k

g)

-0.001

0.000

0.001

0.002

0.003

0.004

0.005

0.006

0.007

0.008

2013 2014 2015 2016 2017 2018

Net R

eappra

isals

(in

mill

ion k

g)

-0.40

-0.35

-0.30

-0.25

-0.20

-0.15

-0.10

-0.05

0.00

0.05

2013 2014 2015 2016 2017 2018

Net R

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ssfications

(in

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g)

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

2013 2014 2015 2016 2017 2018

To

tal C

opper

Reserv

es (

in m

illio

n M

T)




Figure 25 shows the net reclassifications of copper reserves by class. As observed, largest

net reclassification occurred in 2015 when 268.8 million metric tons of copper reserves were

reclassified from Class C to Class B. On the other hand, least net reclassification was recorded

both in 2013 and in 2014. In 2013, 4.85 million MT were reclassified from Class A to Class B.

In 2014, 41 thousand MT were reclassified from Class A to Class B and 4.81 million MT from

Class B to Class C.


Class A Copper Reserves

From 4.25 million MT in 2013, Class A copper reserves increased by almost 3.1 thousand

percent, ending with 135.8 million MT of copper reserves in 2018 (Figure 26). A large increase

in 2017 was mostly due to the reclassification of 131.9 million MT of copper reserves

(Figure 29). Also, an upward reappraisal of five thousand MT were observed in 2018

(Figure 28).

As shown in Figure 27, extraction of Class A copper reserves declined throughout the six-year

period. While the largest production was recorded in 2014 at 91.8 thousand MT; the least

production was recorded in 2017 with about 68.2 thousand MT of copper reserves.

(300.00)

(200.00)

(100.00)

-

100.00

200.00

300.00

2013 2014 2015 2016 2017 2018

Net R

ecla

ssific

atio

ns (in

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T)




Figure 26. Stock of Class A Copper Reserves,

2013-2018 Figure 27. Extractions of Class A Copper Reserves,

2013-2018

Figure 28. Net Reappraisals in Class A Copper

Reserves, 2013-2018 Figure 29. Net Reclassifications in Class A Copper


Class B Copper Reserves

Class B copper reserves increased from 4.85 million MT in 2013 to 136.94 million MT in 2018

(Figure 30). Changes in stock were due to reclassifications of reserves. As shown in

Figure 31, a large reclassification, amounting to 268.79 million MT, increased the stock in

2015. However in 2017, almost 131.9 million MT of copper reserves were reclassified to Class

A, which attributed to the decrease in stock in said year.

Meanwhile, no reappraisals were recorded for Class B reserves.

Figure 30. Stock of Class B Copper Reserves,

2013-2018 Figure 31. Net Reclassifications in Class B Copper

Reserves, 2013-2018


-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

2013 2014 2015 2016 2017 2018

Cla

ss A

Copper

Reserv

es

(in

mill

ion M

T)

-

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

2013 2014 2015 2016 2017 2018

Extr

actio

ns (

in m

illio

n M

T)

(0.01)

-

0.01

0.02

0.03

0.04

0.05

0.06

2013 2014 2015 2016 2017 2018

Net R

eappra

isals

(in

mill

ion M

T)

(20.00)

-

20.00

40.00

60.00

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100.00

120.00

140.00

2013 2014 2015 2016 2017 2018

Net R

ecla

ssific

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ns

(in

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T)

-

50.00

100.00

150.00

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300.00

2013 2014 2015 2016 2017 2018

Cla

ss B

Copper

Reserv

es

(in

mill

ion M

T)

(200.00)

(150.00)

(100.00)

(50.00)

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50.00

100.00

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200.00

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300.00

2013 2014 2015 2016 2017 2018

Net R

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atio

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(in

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T)



Class C Copper Reserves

Class C comprised an average of 83.8 percent of the total copper reserves in the country from

2013 to 2018. Figure 33 shows a minimal increase of 4.85 million MT due to a reclassification

in 2014 (Figure 34). Moreover, a large decrease of 268.7 million MT in stocks was observed

in 2015, which is the net result of an upward reappraisal of reserves (Figure 32) and a

reclassification from Class C to Class B (Figure 34).

Figure 32. Net Reappraisals in Class C Copper

Reserves, 2013-2018

Figure 33. Stock of Class C Copper Reserves, 2013-2018

Figure 34. Net Reclassifications in Class C Copper Reserves, 2013-2018


Chromite

Total Chromite Reserves

The total chromite reserves in the Philippines increased by 11.21 percent from 40.33 million

MT in 2013 to 44.86 million MT in 2018 due to an upward reappraisal. Among the three

classes, Class C of chromite reserves had the biggest share with an average volume of

34.93 million MT from 2013 to 2018. It rose by 30.82 percent from 31.75 million MT in 2016 to

41.54 million MT in 2017. Meanwhile, Class A chromite reserves recorded its biggest decline

by 60.26 percent from 8.52 million MT in 2015 to 3.39 million MT in 2016. In addition, Class B

had the smallest share among the three classes as shown in Figure 35.

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200.00

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600.00

800.00

1,000.00

1,200.00

2013 2014 2015 2016 2017 2018

Cla

ss C

Copper

Reserv

es (

in m

illio

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T)

-

0.01

0.02

0.03

0.04

0.05

2013 2014 2015 2016 2017 2018

Net R

eappra

isals

(in

mill

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T)

(300.00)

(250.00)

(200.00)

(150.00)

(100.00)

(50.00)

-

50.00

2013 2014 2015 2016 2017 2018

Net R

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ns

(in

mill

ion M

T)



Figure 35. Total Chromite Reserves by Class, 2013-2018 Source of basic data: Mines and Geosciences Bureau

As seen in Figure 36, there were small reclassifications of 0.5 million MT registered from 2013

to 2014. In 2016, a total of 5.11 million MT was reclassified from Class A to Class B due to the

suspension of some mining operators, which led to an increase in Class B reserves. In the

following year, the 5.11 million MT was reclassified from Class B to Class C, which resulted to

the increase in Class C reserves.


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5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

2013 2014 2015 2016 2017 2018

To

tal C

hro

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es (

in m

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n M

T)


(6.00)

(4.00)

(2.00)

-

2.00

4.00

6.00

2013 2014 2015 2016 2017 2018

Net R

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Class A Chromite Reserves

Class A chromite reserves decreased by 61.31 percent from 8.58 million MT in 2013 to

3.32 million MT in 2018, due to extraction and reclassifications. The highest extraction was

registered in 2014 at 47 thousand MT. On the other hand, the lowest extraction was posted in

2015 at 15.5 thousand MT due to the downward trend in world metal prices according to MGB.

Overall, chromite extraction had an erratic trend as reflected in Figure 37.

As shown in Figure 38, Class A chromite reserves notably dropped in 2016 due to

reclassification. In Figure 39, a total of 5.11 million MT was reclassified from Class A to Class

B due to mining suspensions. This has caused a significant decrease in the Class A reserves.

Figure 37. Extractions of Class A Chromite Reserves,

2013-2018

Figure 38. Stock of Class A Chromite Reserves,

2013-2018 Figure 39. Net Reclassifications of Class A Chromite


Class B Chromite Reserves

Figure 40 shows that in 2013, Class B chromite reserves had only 0.50 million MT. However,

in 2016, it climbed to 5.11 million MT due to a reclassification. From 2017 to 2018, no Class B

chromite reserves were registered due to the reclassification of the 5.11 million MT to Class

C (Figure 41). Moreover, no reappraisals were recorded for Class B chromite reserves.

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1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

2013 2014 2015 2016 2017 2018

Cla

ss A

Chro

mite R

eserv

es (

in m

illio

n M

T)

-

10.00

20.00

30.00

40.00

50.00

2013 2014 2015 2016 2017 2018

Extr

actio

n (

in t

housand M

T)

(6.00)

(5.00)

(4.00)

(3.00)

(2.00)

(1.00)

-

2013 2014 2015 2016 2017 2018

Net R

ecla

ssific

atio

ns

(in

mill

ion M

T)



Figure 40. Stock of Class B Chromite Reserves,

2013-2018 Figure 41. Net Reclassifications in Class B Chromite

Reserves, 2013-2018


Class C Chromite Reserves

Class C chromite reserves increased by 24.76 percent from 31.25 million MT in 2013 to

41.54 million MT in 2018 as shown in Figure 42. The increase was attributed to an upward

reappraisal of 4.67 million MT and a reclassification of 5.11 million MT in 2017 as seen in

Figures 42 and 44.

Figure 42. Net Reappraisals of Class C Chromite

Reserves, 2013-2018

Figure 43. Stock of Class B Chromite Reserves,

2013-2018 Figure 44. Net Reclassifications of Class C Chromite


-

1.00

2.00

3.00

4.00

5.00

6.00

2013 2014 2015 2016 2017 2018

Cla

ss B

Chro

mite r

eserv

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(in

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T)

(6.00)

(4.00)

(2.00)

-

2.00

4.00

6.00

2013 2014 2015 2016 2017 2018

Net R

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(in

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-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

2013 2014 2015 2016 2017 2018

Cla

ss C

Chro

mite R

eserv

es (

in m

illio

n M

T)

-

1.00

2.00

3.00

4.00

5.00

2013 2014 2015 2016 2017 2018

Net R

eappra

isal

(in

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-

1.00

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5.00

6.00

2013 2014 2015 2016 2017 2018

Net R

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ations

(in

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ion M

T)



5 | SUMMARY AND NEXT STEPS

The total nickel reserves in the Philippines increased during the period 2013 - 2018. On the

contrary, Class A nickel reserves declined, with a steady decrease from 2013 to 2017 due to

extractions and reclassifications, followed by an increase in 2018 due to a large upward

reappraisal. From 2013 to 2018, nickel production is relatively stable, with peak production

recorded in 2014. Among the three classes, Class A was the largest in 2013 while Class C

consistently had the highest share from 2014 to 2018, comprising 49 to 54 percent of the total

reserves.

Meanwhile, the total gold reserves increased from 2013 to 2018. Class A gold reserves also

saw an increase in stocks, net of extractions, for the same period due to upward reappraisals

and reclassification. Gold production steadily increased from 2013 to 2017, followed by a dip

in 2018. Among the three, most of the gold reserves is under Class C.

From 2013 to 2018, total copper reserves in the country remained on the same level – with an

average of almost 84 percent of total copper reserves non-commercially recoverable. On the

other hand, Class A copper reserves increased largely during the same period. This is mainly

due to a large reclassification recorded in 2017. On the average, copper production decreased

during the six-year period.

Lastly, the total chromite reserves increased from 2013 to 2018. Stocks of Class A chromite

declined on the same period due to extractions and reclassifications. Extraction of chromite

showed an erratic pattern, with the highest production recorded in 2014 and the lowest in

2015. Throughout the period, most chromite reserves were under Class C.

On next steps being planned, this will involve the compilation of monetary asset accounts,

taking off from the physical asset accounts and applying the appropriate methods of valuation.

The monetary asset accounts, to be aligned to the System of National Accounts, will provide

key inputs on the eventual estimation of macroeconomic indicators adjusted for the depletion

of natural resources as well as measures of comprehensive wealth.

The compilation of asset accounts for non-metallic minerals is also proposed to widen the

scope of the mineral accounts. Similar to metallic minerals, non-metallic minerals such as

limestone, marble, sand and gravel also have important industrial uses especially for the

manufacturing and construction sectors. In addition, the contribution of non-metallic mining to

the gross value added in Mining and Quarrying sector largely increased from 13 percent in

2000 to 30 percent in 2019. With its increasing importance to the country’s economy, it is

imperative to account for non-metallic minerals to monitor the sustainability of its extraction.



APPENDIX

Appendix Table 1. Physical asset account: Total nickel reserves, in ore, in million metric tons

Total 2013 2014 2015 2016 2017 2018

Opening stock 2,048.77 2,019.68 1,985.35 1,991.26 1,961.94 1,957.42

Additions to stock - - - - - -

Discoveries - - 23.00 - - -

Upward reappraisals - - 16.36 - 25.68 143.38

Reclassifications 164.01 134.30 91.12 100.59 28.43 -

Total additions to stock 164.01 134.30 130.49 100.59 54.11 143.38

Reductions to stock - - - - - -

Extractions 29.09 34.33 33.45 29.28 27.09 25.91

Catastrophic losses - - - - - -

Downward reappraisals - - - 0.04 3.11 24.09


Total reductions to stock 193.10 168.63 124.57 129.91 58.63 50.00

Closing stock 2,019.68 1,985.35 1,991.26 1,961.94 1,957.42 2,050.80

Notes: Details may not add up to total due to rounding up.

“-“ means zero.


Appendix Table 2. Physical asset account: Class A nickel reserves, in ore, in million metric tons

Class A 2013 2014 2015 2016 2017 2018

Opening stock 1,105.68 1,030.89 974.93 917.78 853.46 852.74


Discoveries - - - - - -

Upward reappraisals - - 16.36 - 25.68 143.38

Reclassifications 59.15 3.91 25.53 - 3.58 -

Total additions to stock 59.15 3.91 41.89 - 29.25 143.38


Extractions 29.09 34.33 33.45 29.28 27.09 25.91


Downward reappraisals - - - 0.04 2.89 24.09

Reclassifications 104.86 25.53 65.59 35.00 - -


Closing stock 1,030.89 974.93 917.78 853.46 852.74 946.12


“-“ means zero.




Appendix Table 3. Physical asset account: Class B nickel reserves, in ore, in million metric tons

Class B 2013 2014 2015 2016 2017 2018

Opening stock 63.06 108.76 25.53 65.59 28.43 -



Upward reappraisals - - - - - -


Total additions to stock 104.86 25.53 65.59 28.43 - -


Extractions - - - - - -


Downward reappraisals - - - - - -


Total reductions to stock 59.15 108.76 25.53 65.59 28.43 -

Closing stock 108.76 25.53 65.59 28.43 - -


“-“ means zero.


Appendix Table 4. Physical asset account: Class C nickel reserves, in ore, in million metric tons

Class C 2013 2014 2015 2016 2017 2018

Opening stock 880.03 880.03 984.88 1,007.88 1,080.04 1,104.67


Discoveries - - 23.00 - - -


Reclassifications - 104.86 - 72.16 24.85 -

Total additions to stock - 104.86 23.00 72.16 24.85 -




Downward reappraisals - - - - 0.23 -

Reclassifications - - - - - -

Total reductions to stock - - - - 0.23 -

Closing stock 880.03 984.88 1,007.88 1,080.04 1,104.67 1,104.67


“-“ means zero.




Appendix Table 5. Physical asset account: Total gold reserves, in metal content, in million kilograms

Total 2013 2014 2015 2016 2017 2018

Opening stock 4.65 4.85 4.86 4.84 4.83 4.89

Additions to stock

Discoveries 0.22 - - 0.01 0.00 -

Upward reappraisals - 0.02 0.01 0.01 0.08 0.03



Reductions to stock

Extractions 0.02 0.02 0.02 0.02 0.02 0.02


Downward reappraisals - 0.00 0.01 - 0.00 0.00



Closing stock 4.85 4.86 4.84 4.83 4.89 4.89


“-“ means zero.


Appendix Table 6. Physical asset account: Class A gold reserves, in metal content, in million kilograms

Class A 2013 2014 2015 2016 2017 2018

Opening stock 0.58 0.54 0.55 0.58 0.58 0.64

Additions to stock


Upward reappraisals - 0.02 0.00 0.00 0.08 0.03

Reclassifications - - 0.06 0.02 - -

Total additions to stock - 0.02 0.07 0.02 0.08 0.03

Reductions to stock

Extractions 0.02 0.02 0.02 0.02 0.02 0.02


Downward reappraisals - 0.00 0.01 - - -

Reclassifications 0.02 0.00 - 0.00 - -


Closing stock 0.54 0.55 0.58 0.58 0.64 0.65


“-“ means zero.




Appendix Table 7. Physical asset account: Class B gold reserves, in metal content, in million kilograms

Class B 2013 2014 2015 2016 2017 2018

Opening stock 1.04 1.07 1.04 1.32 1.30 1.29

Additions to stock




Total additions to stock 0.02 0.00 0.33 0.00 - -

Reductions to stock



Downward reappraisals - - 0.00 - 0.00 -

Reclassifications - 0.02 0.06 0.02 0.00 -

Total reductions to stock - 0.02 0.06 0.02 0.00 -

Closing stock 1.07 1.04 1.32 1.30 1.29 1.29


“-“ means zero.


Appendix Table 8. Physical asset account: Class C gold reserves, in metal content, in million kilograms

Class C 2013 2014 2015 2016 2017 2018

Opening stock 3.03 3.24 3.27 2.94 2.95 2.95

Additions to stock

Discoveries 0.22 - - 0.01 0.00 -

Upward reappraisals - - 0.00 0.01 0.00 0.00

Reclassifications - 0.02 0.00 - 0.00 -


Reductions to stock



Downward reappraisals - 0.00 - - - 0.00

Reclassifications - - 0.33 - - -

Total reductions to stock - 0.00 0.33 - - 0.00

Closing stock 3.24 3.27 2.94 2.95 2.95 2.95


“-“ means zero.




Appendix Table 9. Physical asset account: Total copper reserves, in metal content, in million metric tons

Total 2013 2014 2015 2016 2017 2018

Opening stock 1,135.38 1,135.41 1,135.32 1,135.28 1,135.19 1,135.12

Additions to stock

Discoveries 0.12 - - - - -

Upward reappraisals - - 0.05 - - 0.06


Total additions to stock 4.98 4.90 268.91 - 132.17 0.06

Reductions to stock

Extractions 0.09 0.09 0.08 0.08 0.07 0.07


Downward reappraisals - - 0.01 - - -



Closing stock 1,135.41 1,135.32 1,135.28 1,135.19 1,135.12 1,135.11


“-“ means zero.


Appendix Table 10. Physical asset account: Class A copper reserves, in metal content, in million metric tons

Class A 2013 2014 2015 2016 2017 2018

Opening stock 9.20 4.25 4.12 4.03 3.94 135.77

Additions to stock


Upward reappraisals - - - - - 0.05

Reclassifications - - - - 132.03 -

Total additions to stock - - - - 132.03 0.05

Reductions to stock

Extractions 0.09 0.09 0.08 0.08 0.07 0.07


Downward reappraisals - - 0.01 - - -

Reclassifications 4.85 0.04 - - 0.14 -


Closing stock 4.25 4.12 4.03 3.94 135.77 135.75


“-“ means zero.




Appendix Table 11. Physical asset account: Class B copper reserves, in metal content, in million metric tons

Class B 2013 2014 2015 2016 2017 2018

Opening stock - 4.85 0.04 268.83 268.83 136.94

Additions to stock




Total additions to stock 4.85 0.04 268.83 - 0.14 -

Reductions to stock




Reclassifications - 4.85 0.04 - 132.03 -

Total reductions to stock - 4.85 0.04 - 132.03 -

Closing stock 4.85 0.04 268.83 268.83 136.94 136.94


“-“ means zero.


Appendix Table 12. Physical asset account: Class C copper reserves, in metal content, in million metric tons

Class C 2013 2014 2015 2016 2017 2018

Opening stock 1,126.18 1,126.31 1,131.16 862.42 862.42 862.42

Additions to stock

Discoveries 0.12 - - - - -

Upward reappraisals - - 0.05 - - 0.00

Reclassifications - 4.85 0.04 - - -

Total additions to stock 0.12 4.85 0.09 - - 0.00

Reductions to stock




Reclassifications - - 268.83 - - -

Total reductions to stock - - 268.83 - - -

Closing stock 1,126.31 1,131.16 862.42 862.42 862.42 862.42


“-“ means zero.




Appendix Table 13. Physical asset account: Total chromite reserves, in ore, in million metric tons

Total 2013 2014 2015 2016 2017 2018

Opening stock 40.36 40.34 40.29 40.27 40.25 44.90

Additions to stock


Upward reappraisals - - - - 4.68 -

Reclassifications 0.50 0.50 - 5.11 5.11 -

Total additions to stock 0.50 0.50 - 5.11 9.79 -

Reductions to stock

Extractions 0.03 0.05 0.02 0.03 0.02 0.05



Reclassifications 0.50 0.50 - 5.11 5.11 -


Closing stock 40.34 40.29 40.27 40.25 44.90 44.86


“-“ means zero.


Appendix Table 14. Physical asset account: Class A chromite reserves, in ore, in million metric tons

Class A 2013 2014 2015 2016 2017 2018

Opening stock 9.11 8.58 8.54 8.52 3.39 3.36

Additions to stock



Reclassifications - - - - - -

Total additions to stock - - - - - -

Reductions to stock

Extractions 0.03 0.05 0.02 0.03 0.02 0.05



Reclassifications 0.50 - - 5.11 - -


Closing stock 8.58 8.54 8.52 3.39 3.36 3.32


“-“ means zero.




Appendix Table 15. Physical asset account: Class B chromite reserves, in ore, in million metric tons

Class B 2013 2014 2015 2016 2017 2018

Opening stock - 0.50 - - 5.11 -

Additions to stock



Reclassifications 0.50 - 5.11 - -

Total additions to stock 0.50 - - 5.11 - -

Reductions to stock




Reclassifications - 0.50 - 5.11 -

Total reductions to stock - 0.50 - - 5.11 -

Closing stock 0.50 - - 5.11 - -


“-“ means zero.


Appendix Table 16. Physical asset account: Class C chromite reserves, in ore, in million metric tons

Class C 2013 2014 2015 2016 2017 2018

Opening stock 31.25 31.25 31.75 31.75 31.75 41.54

Additions to stock


Upward reappraisals - - - - 4.68 -

Reclassifications - 0.50 - - 5.11 -

Total additions to stock - 0.50 - - 9.79 -

Reductions to stock




Reclassifications - - - - -

Total reductions to stock - - - - - -

Closing stock 31.25 31.75 31.75 31.75 41.54 41.54


“-“ means zero.




BIBLIOGRAPHY

Department of Environment and Natural Resources Administrative Order No. 2010-09.

Providing for the Classification and Reporting Standards of Exploration Results,

Mineral Resources and Ore Reserves.

National Statistical Coordination Board. May 1998. Philippine Asset Accounts: Forest,

Land/Soil, Fishery, Mineral, and Water Resources. Makati, Philippines.

United Nations. 2014. System of Environmental-Economic Accounting 2012 Central

Framework. New York.

United Nations, European Commission, International Monetary Fund, Organisation for

Economic Co-operation and Development, and World Bank. 2009. System of National

Accounts 2008. New York: United Nations.



DEFINITION OF TERMS

Asset A store of value representing a benefit or series of benefits accruing

to an economic owner by holding or using the entity over a period of

time. It is a means of carrying forward value from one accounting

period to another.

Catastrophic Losses Reductions in assets due to catastrophic and exceptional events.

Discoveries Additions representing the arrival of new resources to a stock and

commonly arise through exploration and evaluation.

Environmental Asset The naturally occurring living and non-living components of the earth,

together constituting the biophysical environment, which may provide

benefits to humanity.

Extractions Reductions in stock due to the physical removal or harvest of an

environmental asset through a process of production.

Gross Domestic Product (GDP)

The total output produced within the geographical boundaries of the

country regardless of the nationality of the entities producing the

output.

Gross Value Added (GVA)

The total payment to factors of production, namely: wages, interest,

profits and rents. It also includes capital consumption allowance and

indirect taxes. It is also estimated by deducting from gross value of

output the sum of non-factor cost such as raw materials and supplies,

containers and packing materials, fuel, advertising and other non-

industrial overhead cost.

Industry Consists of a group of establishments engaged in the same, or

similar, kinds of activity.

Inferred Mineral Resource

Estimated quantity of mineral with low level of confidence on its

tonnage, grade, and mineral content.

Mineral All naturally occurring inorganic substance in solid, gas, liquid, or any

intermediate state excluding energy materials such as coal,

petroleum, natural gas, radioactive materials, and geothermal energy.

Mineral Resources Any concentration of minerals/rocks with potential economic value.

Net present value The value of the asset based on the summed value of discounted

future earnings from the asset.

Ore Naturally occurring substance or material from which a mineral or

element can be mined and/or processed for profit.

Production An activity, carried out under the responsibility, control and

management of an institutional unit, that uses labor, capital, goods

and services.

Reappraisals Changes in the measured stock of assets due to the use of updated

information that permits reassessment of the size of the stock.



Reclassifications Changes in assets that result from situation in which an asset is used

for a different purpose. A reclassification of an asset in one category

should be offset by an equivalent reclassification in another category.

Revaluations Changes in the value of assets due to price changes and reflect

nominal holding gains and losses on environmental assets. The

nominal holding gain for environmental assets is calculated in the

same way as for non-financial assets— as the increase in value

accruing to the owner of the asset as a result of a change in its price

over a period of time



PHILIPPINE STATISTICS AUTHORITY

DENNIS S. MAPA, Ph.D.

Undersecretary National Statistician and Civil Registrar General

MACROECONOMIC ACCOUNTS SERVICE

VIVIAN R. ILARINA Assistant National Statistician

ENVIRONMENT AND NATURAL RESOURCES ACCOUNTS DIVISION

Virginia M. Bathan (Supervising Statistical Specialist)

Officer-in-Charge

Polaris C. Bautista

Senior Statistical Specialist

Faith Lea B. Cabrera Statistical Specialist II

Maria Loraine C. Satairapan PEENRA Project Technical Staff

Nymphmary Daphne J. Santiago PEENRA Project Technical Staff

Fatima C. Catchero PEENRA Project Technical Staff

Liza F. Cayanga Administrative Staff

Nichole P. Gabriel Administrative Staff

technical report on mineral accounts - psa.gov.ph

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