Mining in R.P.: Boon or bane?

Mining in R.P.: Boon or bane?

TORONTO–Former Armed Forces Chief-of-Staff and now Philippine Secretary of the Department of Environment and Natural Resources (DENR), Gen. Angelo Reyes in an exclusive interview with The Philippine Reporter said that the Mining Act of 1995 and the Philippine Supreme Court’s decision to uphold the Mining Act is a boon to the Philippine economy and will fuel economic growth since the country has “ a strategic geographical location for those looking to sell into Asian markets of Japan, China, Korea and neighbouring countries.”

“Mineral reserves are present in the country and we have gold, copper and nickel,” Secretary Reyes said.
“We have the workforce with competent skills to support the mining industries, legal backing and framework with the Supreme Court legalizing the Mining Act and the Presidential Executive Order 270 which sets a clear road map for the development of the mining industry” DENR Secretary Reyes confirmed.

This mining sales pitch is massive and it is sanctioned by the administration of President Gloria Macapagal Arroyo. In the words of the media observers and participants of the recently concluded Prospectors and Developers Association of Canada (PDAC) 2006 Mining Convention held at the Intercontinental Toronto Centre last March 5,6,and 7, 2006, “the Philippines is all out campaigning and has lately made its presence felt in the mining industry.”

Is the Philippines up for sale?

Coming to Philippine provinces, cities and towns are big foreign mining firms. In the coming months and years, these mining firms will become an ordinary sight, moving mounds of earth, opening up pit mining and are expected to operate frenzied mining activities with heavy equipment digging for copper, gold and other mineral ore deposits. Some of these firms have already begun. And if all goes according to plan, the Philippines will be the “world’s number four in gold, number six in copper and number seven in nickel production” stated Mr. Artemio F. Desini, Chairman of the Chamber of Mines of the Philippines and President of Natural Resources Mining Development Corporation.

“It will also uplift the livelihood of lowland communities and highland indigenous communities who will benefit from the one percent share of the profits from these foreign investors.”

According to the March 2006 issue of the London-based Mining Journal, the Philippines is “well endowed with mineral resources, and its long history and experience in mining has demonstrated its very rich potential for copper, gold, nickel, chromite and other metallic minerals. It has also abundant industrial minerals, such as marble, limestone, clays, feldspar, rock aggregates and dolomite.”

DENR Secretary Reyes added that the Philippine “government has targeted 24 major and medium mineral projects for development in the next five years at a total investment of over $8B US in the year 2013.”

As of December 31, 2005, the total number of mining rights issued by the national government was 762.
Among the major players in the Philippines are Crew Minerals AS operating a nickel project on Mindoro Island, Apex Mining Co (recently acquired by Crew Gold Corp and Mapula Creek Mining Corp), Benguet Corporation (which operates under Ampucao Copper Porphyry Project, Kingking Copper Gold Project, Kingking epithermal gold project, Santa Cruz nickel project, Pantingan Epithermal Gold Prospect), Climax Mining Ltd., Coral Bay Nickel Corp., Indophil Resources NL (Tampakan copper-gold project), Lafayette Mining Ltd. (Rapu-Rapu mining), Mindoro Resources Ltd. and TVI Pacific Ltd., a Canadian Mining firm operating in Canatuan and Balabag.

Mr. Gavan Collery, Manager-Corporate Affairs of the Indophil Resources NL (Sagittarius Mines, Inc.) hastens to add that his company recognizes that its Tampakan Mining Project in South Cotabato is the “largest underdeveloped copper-gold resource in Southeast Asia with 8.9 million tones copper and 11.6 million ounces of gold (0.3% copper COG) with significant higher grade zones.”

Indophil’s North American Investor Briefing cited the above key points and adds that “there is excellent potential for increased resources, new exploration initiatives are in place and pre-feasibility study is in progress.”

The Tampakan project is situated some 50 kilometers north of Gen. Santos City in South Cotabato province home to six tribal communities such as the T’boli, B’laan, Kalagan, Ubo, Manobo and Tasaday with the mining sites situated in tribal ancestral territory of the B’laans.

“At least five B’laan tribal chieftains have agreed to allow mining in their ancestral abode namely Datus in Pula Bato, S’bangken, Tablue, Datal Biao and Danlag,” Mr. Collery stated. Indophil project locations are in Tampakan, Cu-Au Deposit, Columbio FTAA, Hillcrest FTAA Aplication and Southcot EPA
Columbio FTAA is a partnership agreement between Sagittarius Mines Inc. and the GRP. Sagittarius equity includes 60 percent of Tampakan Group of Companies and 40 percent of Indophil and Alsons Corporation.

Indophil has conducted 200 exploration holes from the surface and projects a development cost of US$1B. The project, according to Collery will last 40-50 years and will have a payback after seven years. “And with the market value of gold at $450/ounce and copper at $2.5/pound, the Tampakan Project is a promising investment.” Last Oct 2005, the company had five drill rigs on site and will start production in 2010.

What are the hazards of mining and environmental risks?

“Minimal,” says Mr. Disini, when asked about the dangers of toxic spills and pollutions caused by open pit mining and toxic wastes from mineral refineries. Disini handles all government contracts with mining and his responsibility includes bidding out the mining sites and calls this “a joint venture between the government and the private sector – for profit.” His other responsibility, he said, is checking the records of companies for adherence to sound environmental practices, safeguards and commitment.
When asked about the toxic spill at the Rapu-Rapu mining site of La Fayette Mines, Ltd. and other mining disasters, Mr. Disini offers his ‘direct’ knowledge of the events.

“There were only 10 kilos of fish that were affected in Rapu-Rapu and it was not a big health issue.”
“Marcopper (Placerdome) paid $70M to clean up the toxic spills in Calancan Bay and nature has a way of cleaning up the environment. When the rains came all the toxins and pollutants were washed away downstream and into the sea,” said Mr. Disini. “The Department of Health came out with something but it really was not a big issue. Today, marine life has returned to Calancan Bay. Nature has a way of cleaning the environment.”

Will mining ease the RP government budget woes?

Last September, President Gloria Macapagal-Arroyo, signed National Policy Agenda to Revitalize Mining in RP as detailed in the Mineral Action Plan (MAP) signaling what Kalikasan – People’s Network for the Environment (K-PNE) called a “frenzied rush to mine all Philippine mineral resources.”

“Under MAP, government agencies are mandated to resolve issues between communities and mining corporations in order to attract foreign capital into the mining industry.

“K-PNE national coordinator Clemente Bautista scored government claims that MAP’s implementation would lead to a more prosperous minerals industry that could help ease the government’s budgetary and fiscal woes.

In fact, Bautista says, “the liberalization of the mining industry, which MAP is all about, will worsen the fiscal crisis.”

“The MAP allows 100 percent repatriation of capital and profits, a 10-year tax holiday, capital tax exemptions, duty-free importation of equipment and machinery and other rights and privileges that tend to trample upon rights of host communities and the wanton disregard of the environment. It also shortened the processing time for mining applications by downgrading the participation of local government units in approving mining projects in their respective areas and harmonizing conflicting laws such as the Indigenous People’s Rights Act (IPRA) with the Mining Act.”

“Bautista said that these erroneous economic policies are one of the major reasons in the government’s low revenue collection and a ballooning budget deficit.”

The Bureau of Treasury records as of September last year revealed that the Philippines has a budget deficit totalling P4.02 trillion.