Mining Week, June 3-9, 2013 issue.

THE Philippine mining industry's weekly newspaper

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VOLUME 1 NO. 1

Corporation: Mining for the future

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Mining

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JUNE 3-9, 2013

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Senate winners: How they are likely to vote on mining issues CRUCIAL MINING LAW OVERHAUL LOOMS IN NEXT CONGRESS

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resident Aquino cited two major justifications when his administration issued EO 79 last July: to improve environmental standards in mining and optimize government revenues.

The latter, which is concerned about increasing government share in mining revenues, requires legislative action. With the

elections over and Team PNoy’s impressive finish in the senatorial race, the President is in the best position to advance key legislations to fulfill his vision for the country’s minerals sector.

But how will the new set of senators-elect vote on mining-related legislations? Will they toe the party line? FULL STORY INSIDE

grace poe

Higher mining taxes to finance basic services

OPERATIONS SUSPENDED

Greenstone Siana Mines permit questioned

x GOVERNANCE

No-go-zone map on mining ready by June 1, says Dir. Jasareno x COMMUNITIES

Barricade forces Surigao nickel miner to shut down mining operations Meet the country’s newest lady mining engineers

courtesy of notomininginpalawan.com

Already beset with mine flooding and underground fire problems, now a group is questioning the permit of Greenstone Resources Corporation’s (GRC) Siana Mines in Tubod town, Surigao del Norte. Greenstone, a subsidiary of Australian-based miner Red5 Ltd., has already suspended its operations after its own geotechnical consultants concluded that there is an unquantifiable risk in returning the tailings dam to operating status.

FULL STORY ON PAGE 6

ANNUS HORRIBILIS? A look at recent mining disasters The country has witnessed at least two (2) major mining disasters in the last 12 months, namely the August 2012 mine spill at Philex Mining Corporation’s Benguet mine site and in February this year, when a landslide occured at the coal mine of Semirara Mining Corp in Antique, killing five (5) people.

What led to these disasters? What did the involved companies do to contain the damage and assure regulatory agencies as well as the public?

Mining Week takes a look at these unfortunate events again to hopefully gain insight and relive the lessons learned from these tragedies. FULL STORY ON PAGE 7

x INSIGHT & COMMENTARY Manuel Pangilinan: How can mining work for the Philippines?

Gerard Brimo: Correcting lies and disinformation

ALAN CAYETAN0

Mining is essential for country’s progress

LOREN LEGARDA

Mining exacerbates effects of climate change

NANCY BINAY

No public stand on mining...yet

CHIZ ESCUDERO

More power for LGUs to decide on mining projects

SONNY ANGARA

Bigger mining share for Local governments

BAM AQUINO

KOKO PIMENTEL

antonio tRILLANES

cynthia villar

jv ejercito

gringo honasan

At Pres. Aquino’s beck and call?

Family has mining interests in Kingking

Mining is country’s economic driver

A ‘responsible mining’ skeptic

Review Mining Act of 1995

Pro-responsible mining, with ‘reservations’

Nickel wars: Shuley Mine vows to keep the fight Nonoc nickel miner Shuley Mine Inc. (SMI) said it will continue to press its rights amid the cease and desist order issued against it by the Mines and Geosciences Bureau (MGB), arguing the agency violated an IN existing court injunction.

The Nonoc dispute is a complex government and corporate clash, which pitted SMI

against its former partner, Pacific Nickel, with MGB and Department of Finance (DoF) seeking to stop mining in the island because it is supposedly onerous to the government.

It has already alarmed FOCUS u local officials, wary about the massive job loss in the island where some 2,000 residents in three barangays are employed.

FULL STORY ON PAGE 6

MainStory E

arly in his presidency, President Benigno Simeon Aquino III made it clear that his administration will undertake wide-ranging reforms on the country’s minerals sector to “strengthen environmental protection, promote responsible mining and provide a more equitable revenue-sharing scheme.”

The first of these reforms is embodied in EO 79, whose IRR raised not a few hackles within the industry when it came out in Septemer 2012. EO 70 seeks to specify areas that would be closed to mining applications—the no-go-zones.

Embedded in EO 79 is a caveat: no new mineral agreements will be issued pending the passage of a law that will increase the government’s share in mining profits. Mining permit applications resumed in March after a two-year moratorium, but these will have to wait for the much talked-about legislation that will pave way for a new mining tax regime.

There has never been an opportune moment for Malacañang to push for the President’s pet legislation than in the next opening of Congress, where administration allies are expected to dominate both chambers.

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newcomer but definitely not a greenhorn, the daughter of then presidential contender Fernando Poe Jr. will prove to be a credible voice in the Senate, having garnered the top spot in the May 13 elections. Although largely inexperienced in public office, her view on mining is well-developed, and she proved this during her campaign sorties where she sufficiently expressed her views about the industry.

On mining taxation Senator-elect Poe will certainly be a reliable ally of local government units (LGUs) who clamor for a bigger pie in mining revenues.

“I will push for higher share for LGUs to fund basic services. We all know that the Philippines is rich in minerals, but we can observe that where these precious resources are being mined, there is widespread poverty and misery,” Ms. Poe told Mining Week during one of her sorties in

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June 3-9, 2013

TEXT BY DANILO V. ADORADOR III, Editor At the Senate, Team PNoy captured nine (9) of the 12 seats—an overwhelming majority that could help deliver the administration the needed votes to advance key legislations to reform the mining industry. And that’s as far as it gets.

In a country where each senator is often regarded as an independent institution unto himself/herself, Malacañang may find it difficult—through not entirely impossible—to make the Upper House dance to its tune. Every senator has his/her own advocacies and pet legislations, and Senate members have been known to oppose, even criticize, Malacañang— even if its chief occupant belongs to their own party.

Then there is the national factor.

Unlike Lower House lawmakers who generally focus on parochial matters and can stay under the radar through their sheer number, each senator is heavily scrutinized according to his/her stand or vote on almost all hot-button issues that affect the country’s 94 million Filipinos.

Surigao del Norte in April.

Asked to specify figures, Ms. Poe asked to be given time to make a thorough review on the matter. It is believed that she will mainly rely on the wisdom of Malacañang when it comes to the nitty-gritty part—as long as her demand for bigger LGU share is satisfied.

with her mining stance, namely increased tax take for LGUs and the national government. AMMB proposes the following: • At least 10% share from the gross revenues for the national government • Share of LGUs from net revenues • Share of at least 10% of gross revenues on mineral operations within ancestral domains/lands for Indigenous Peoples (IPs) She also bats for the development of the minerals sector’s downstream industry “so that there would be no need for local manufacturers to import the processed mineral.” Such nationalistic outlook will certainly make Ms. Poe an important prospect for AMMB advocates as they seek crucial support in the Upper House.

On AMMB Ms. Poe has not yet declared any position on the controversial AMMB, though some elements of the bill hew slightly hew

Overall mining stand Balanced, with particular concern for strict environmental compliance, as well as better living standards for impact communities.

Grace Poe

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n the 24-member Senate none has a claim on having helped plant over two (2) million standing trees other than reelected Sen. Loren Legarda. In fact, Legarda’s over-a-decade lawmaking career is largely identifiable with environmental issues.

Sheltered in green accents, her website (www.lorenlegarda.com.ph) describes her as a “passionate environmentalist and “environmental champion. Owing to her environmental advocacies, Ms. Legarda is one of the few senators who has attained a fully developed view on mining. This requires her to play the role of an astute politician in tackling each bill, weighing every measure in relation to her advocacies rather decide based on a set of doctrinaire beliefs.

| Governance

Loren Legarda On mining taxation Ms. Legarda’s support in raising the government take in mining revenues is certainly assured, though it is not farfetched that she would push for higher rates than the five (5) to seven (7) percent range—as what the government is expected to

propose, sources told Mining Week.

As chair of Senate Committee on Cultural Communities (which would be likely handed to her again in the next Congress), Ms. Legarda has championed several measures protecting the rights of IPs. She has voiced support on increasing the mining royalty share of the IPs, as well as host communities, and is likely to favor the 10 percent increase espoused by AMMB. On AMMB When EO 79 came out, Ms. Legarda wasted no time in describing President Aquino’s mining policy as “written by mining companies themselves.” This might seem unfair because the mining industry itself, through the Chamber of

All told, a review by Mining Week on voting records, authored laws, advocacies, political and professional backgrounds and even policy declarations of the 12 winning senators reveal a confluence of factors that are likely to influence their vote on mining-related issues: personal belief or ideology, business and political interests and party decision.

To put everything in perspective, the tax regime overhaul proposed by President Aquino is not the only mining-related legislation on the table. The Alternative Minerals Management Bill (AMMB)—described by the Chamber of Mines of the Philippines as destructive—is pending in both houses. At the House, AMMB is being advanced by a united front of progressive partylists—one of which, Akbayan, is a key Malacañang ally, and a potential supporter of Mar Roxas’ presidential bid in 2016. At the Senate, Sen. Serge Osmeña’s version of the bill is pending before the Natural Resources Committee, chaired at present by reelectionist Sen. Chiz Escudero.

Where does each of these 12 new senators stand on mining issues? How do they view mining and what have they said about it in the past? Mining Week investigates.

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am not against mining per se.”

Ask reelected Sen. Chiz Escudero and you’ll get the automatic answer. In fact, majority—if not all—of his colleagues will respond the same way. The real deal is in the details.

Touted as a potential presidential contender in 2016, Mr. Escudero is expected to handle mining issues at the Senate in the shrewdest way possible. He will make sure he doesn’t get the ire of the industry and the hundreds of thousands who directly and indirectly benefit from it. On the flip side, he’d be careful not to make enemies of green and leftist groups, many of whom count President Aquino as their ally, and just as important should he decide to enter the presidential or vice race.

On mining taxation Mr. Escudero said he will back President Aquino’s effort to overhaul the tax regime for the mining sector.

Mines of the Philippines (COMP), branded EO 79’s IRR as “illegal.” Nevertheless, the senator’s “unfriendly” words on EO 79 offer a glimpse on how most of her advocacies have found their voice in AMMB. Though she has no public stand yet on AMMB, Sen. Legarda is likely to embrace provisions in AMMB which find commonality in her views as regard to the environment, IP rights and Climate Change—a key advocacy where she has gained international prestige. AMMB advocates will not find Sen. Legarda difficult to sway into their fold.

Overall mining stand Leans more with restrictive regulation of mining industry, especially on environmental side and IP rights.

revenues back to LGUs and affected communities,” he told Mining Week during one of his campaign sorties.

He said he will have to wait for a definitive proposal from Malacañang regarding specific rates before he can come up with his own.

Chiz Escudero He is in the best position to do so as he is expected to return as chairman of the Natural Resources Committee.

“I think it’s time that we get more share from mining profits, and plow the

On AMMB When asked on the position of local officials in his native Sorsogon not to allow commercial mining in the province, the senator responded: “It will be the decision of each province to allow mining.”

Mr. Escudero is thus seen to favor at least two features of AMMB, namely more LGU powers over large-scale miners and an increase in revenue sharing in favor of local governments.

Overall mining stand Balanced. Tends to take popular position on mining.

No-go-zone map ready

by June 1: Dir. Jasareno The technical work group (TWG) of the Mining Industry Coordinating Council (MICC) is ready to issue a final no-go-zone map, which specify areas open or closed to minerals exploitation, by June 1.

This was according to Mines and Geosciences Bureau Director Leo L. Jasareno, who added that by early June, MICC would have also completed its final draft on mining revenue-sharing legislation.

“MICC has already wrapped up its consultation. We may have a final no-go-zone map as early as May 30,” Director Jasareno told Mining Week in an interview.

Jasareno said the no-mining zone map is expected to be implemented by early June.

“The map is an integrated map, and it contains the additional areas closed to mining as provided by EO 79, such as small island ecosystems, agricultural lands, tourism and key biodiversity sites, among others,” the MGB chief said.

Earlier, Jasareno admitted that MICC had struggled to define the no-go-zone areas, specifically on the scope of island ecosystems.

If he can have it his way, Jasareno said he would ban mining on “small islands that are rich in biodiversity and mineral deposits,” such as Sibuyan Island in Romblon, which has nickel deposits. MW

QUICK FACTS

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New York-based think tank lists reelected Sen. Alan Cayetano as a viable presidential contender from the administration party, along with Interior Secretary Mar Roxas, Senators Francis Escudero and senatorial race topnotcher Grace Poe. Among the four—in fact among his Senate peers—there is not a shred of doubt that Mr. Cayetano is one of mining industry’s friendliest politician.

The boyish senator acknowledged the mining industry’s contribution to national progress, and praises its efforts to uplift the living standards of impact communities. During a gathering of mining engineers last year, he issued a challenge for those who describe themselves as “anti-mining”: “Prove to me that really you’re anti-mining. Stop using products that are brought about by mining.

Do we have computers, cellphones and microphones if we don’t have mining?”

On mining taxation Mr. Cayetano is expected to toe the party line on a new tax regime, as long as it is within the threshold the industry players can allow. He will likely bat for a set of “win-win” rates or tax schemes—something President Aquino and the mining sector can live with. Unlike newly-minted Sen. Cynthia Villar, Mr. Cayetano has no known pecuniary interests in mining, and this makes

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Alan Cayetano him an ideal go-between as Malacañang seeks to get the industry on board its proposed tax measures.

On AMMB Like most senators, Mr. Cayetano has not publicly declared his stand on AMMB, which is understandable because the measures had not been tackled extensively and remains pending in the Upper House. Based on his present stand on mining, however, it is believed that he will reject restrictive measures contained in the AMMB, preferring instead to support President Aquino’s current reform efforts than overhauling the Mining Act of 1995 altogether.

Overall mining stand For responsible mining.

Likely to reject any measure deemed to inhibit growth in the industry, but prefers that mining sector allocate its social development resources to education.

ewly-elected Sen. Nancy Binay’s vaunted 20-year OJT (on-thejob training) has not produced any intelligible view on mining, so we’ll leave it at that. Like Bam Aquino, she’s a complete tabula rasa, though that doesn’t imply she won’t ever have a say when mining-related measures reach the Senate. Because of her relative inexperience, Ms. Binay’s view on mining—at least in earliest period of her career—will be influenced heavily by her own party and that of his father and chief tutor, Vice President Jejomar Binay. This entails a review of the vice president’s views on mining.

On mining taxation Sen. Binay will likely view President Aquino’s proposed tax regime from her own father’s prism.

Vice President Binay prefers consensus on thorny

Gold and copper were the first metals to be discovered by man, around 5000BC, and together with silver these three elements are found in a metallic state in the earth’s crust. Gold and copper are the only two non-white colored metals.

tial 2016 presidential candidates, the vice president will place his bet where it is safest, politically speaking. His daughter will make sure not to ruin that.

Nancy Binay industry issues rather than having the government acting it out alone. He has publicly supported EO 79 and President Aquino’s other reform efforts in the mining sector. His current views on mining indicate he favors moderate increases in taxes, something that would not be too seen as prohibitive by industry players. Like Sen. Escudero and other poten-

On AMMB Vice President Binay has described mining as a “social justice” issue, and that the future of Philippine mining should be anchored on that guiding principle. Curiously, AMMB proponents also cite social and economic justice in advancing the measure.

Where Binay and AMMB advocates diverge, however, is the scope of reforms needed to make the industry more responsive to environment and the economy. Whereas AMMB supporters favor a more drastic approach to reform the mining sector— such as barring foreigners from engaging in mining and minerals processing—the vice president prefers slight,

incremental changes, those that do not upset the status quo and harm the country’s investment image.

Vice President Binay spoke of a “multipartite approach” to mining to “help redefine the industry.” This participatory method highlights his inclination for a balanced, consensus-based response to mining issues. For him, any changes to the current mining law would have to be a product of consent by all parties—something the AMMB proponents may find hard to agree.

Considering all factors involved, Sen. Nancy Binay, again, will find it difficult not to agree with his father’s views.

Overall mining stand Will most likely follow his father’s mining stance, with tendencies to approach mining issues according to popular views.

2 miner partylists fail to get seat Ang Minero and the Alliance of Advocates in Mining Advancement for National Progress (AAMA) have failed to get the number votes needed to capture any of the 58 partylist seats in the Lower House.

Ang Minero, headed by Engr. Louie Sarmiento, got 50,242 votes; AAMA obtained 32,937 votes. The figures are based on the Comelec transparency serv-

er, with 76 percent of the votes counted.

AAMA represents the “marginalized mine workers, underrepresented small scale mining entrepreneurs and mining advocates.” It started to participate in elections in 2010.

Ang Minero, meanwhile, aims to give miners a strong voice in Congress, push for much needed reforms in the mining industry, pro-

mote responsible mining and mine safety, and ensure that miners get what they deserve in terms of equal distribution of wealth, according to Engr. Sarmiento, who also head the Philippine Mine Safety and Environment Association (PMSEA).

“Miners have to stand up and be counted. This is just not a fight for the largescale investors or small-scale

mining operators. But we are battling for the rights of all mine workers. These include hundreds of thousands of Filipinos from host and neighboring communities who will benefit from employment, livelihood and basic social services as well as Filipinos from other provinces who will benefit from development projects funded by mining taxes and revenues,” said Sarmiento. MW

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June 3-9, 2013

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MainStory T

he Angaras are known in Aurora province— their bailiwick—for their anti-mining stance. All politics being local, it’s no surprise that when he was congressman, Juan Edgardo Angara staunchly supported his aunt, Bellaflor Angara-Castillo, in the latter’s decision to keep mining companies out of Aurora.

But the story about the freshman senator’s stand on mining doesn’t end in local politics.

Along with newcomer Sen. Cynthia Villar, Angara was targeted by anti-mining groups during the May elections because he was deemed to be pro-mining. Jaybee Garganera of Alyansa Tigil Mina said they see Angara as someone who would push the mining sector’s agenda in the Senate. This seems to be an unfair characterization because during his stint in the Lower House, Sonny Angara adopted a middle-of-the-road approach on mining that is aligned with mainstream viewpoints—very much like his father, incumbent Sen. Edgardo Angara.

On mining taxation Angara described EO 79

Sonny Angara as “a step in the right direction.” He is seen to support the Malacañang-backed overhaul of the mining current tax regime. He has voiced support for bigger LGU share in mining profits.

On AMMB Angara has advocated “order” in the mining sector, which entails synchronizing local and national laws to avoid conflict and specifying which areas are closed for mining. The latter is already being addressed with the upcoming no-go-zone map as mandated by EO 79, although the synchronization of national and provincial laws

| Governance

is a difficult task. For one, even the national government’s directive to LGUs to respect the superiority of national law is largely ignored, as shown in the Tampakan case.

Aside from the tax regime, Sen. Angara is likely to advocate limited amendments in the country’s mining law and would likely adopt a moderate version of some provisions contained in AMMB, specifically on matters that deal with natural resource governance.

“We need stricter legislation that would ensure that all contractors for mineral permits and agreement shall provide information, such as methods and processes of mining, environmental and social risks to the Mines and Geosciences Bureau (MGB) and affected indigenous peoples, local communities and local government units,” he said recently.

Overall mining stand Balanced. Prefers a more streamlined governance of the country’s minerals sector that may necessarily entails amendment to the current mining law.

CONGRATULATIONS! on your maiden issue.

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At a time when the industry is facing unfair criticisms and trying to correct misplaced fears and fighting bad perceptions, may your brand of responsible journalism shed light on the minerals sector’s vital role in national development.

~ Dulmar M. Raagas President Chamber of Mines-Caraga, Inc. 4

June 3-9, 2013

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ne of the frequent questions that Bam Aquino had to face during the campaign season concerned about his being a presidential cousin. Will he be at President Aquino’s beck and call? No, he was ready to oppose his cousin, Bam responded. That remains to be seen because as the lone Liberal Party winner in the senate (other Team PNoy members belong to other parties), he is expected to toe the line.

This is partly because Bam has not yet developed his views on mining, and President Aquino is likely to play the part of a good mentor.

On mining taxation Sen. Aquino is expected to follow the Malacañang-sponsored tax regime.

On AMMB Malacañang is silent on AMMB despite intense lobbying from allied progressive groups. Senator Aquino is expected to follow the same track, at least in the early part of his term.

Bam Aquino

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eelected Sen. Koko Pimentel’s father, Aquilino III, authored the People’s Small-Scale Mining Act, the law that allows small-scale miners to lawfully engage in mining activities. It is not farfetched that the son will also make his mark on the country’s mining sector, an area where the young senator has been vocal about as he regularly criticizes irresponsible mining companies. All things considered, however, the younger Pimentel believes that sustainable mining practices can be done in the Philippines.

On mining taxation Senator Pimentel has expressed support for a new mining tax regime, saying mining ventures “must benefit the entire country and not the foreign investors alone.”

On AMMB Senator Pimentel has at times expressed skepticism

Koko Pimentel that the country’s operating mines can practice honest to goodness, responsible mining. In an interview in July last year, he said he was leaning on imposing a moratorium on large-scale mining in the country—especially by multinationals—because “maraming reklamo, like the care and concern of the mining company is not there kasi hit-and-run. No mining

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eople in the mining circle would probably remember Senator Antonio Trillanes as the man who almost got MVP (Philex’s boss Manuel V. Pangilinan) to pack up and leave the Philippines, following a public spat involving the West Philippine Sea dispute (Philex has been awarded the right to explore the Reed Bank energy bloc).

His colleagues (and indeed former Pres. Gloria Arroyo) know him for his rebellious streak, and environmentalists may add that he’s a rebel with a cause, being the main proponent of the National Environmental Protection Agency (NEPA).

Senator Trillanes has advocated for stricter enforcement of environmental laws.

He is expected to continue pushing for the creation of NEPA, an environmental ‘superbody’ tasked to craft

Overall mining stand Same as President Aquino’s, at least in the early stage of his lawmaking career.

kung hindi natin maayos…”

Pimentel was a co-petitioner in a Tepo (Temporary environmental protection order) against a magnetite mining firm in Ilocos.

In September of the same year, however, he said: “Mining may be allowed in the country provided that the best practices that foreign investors follow in their own land are also observed here.”

Foreign mining companies, he added,“should be responsible, able to protect the environment, assure us of fair returns, and pay reasonable taxes to the government.”

This maverick attitude suggests that Pimentel may favor the more rigid provisions of AMMB, namely the prohibition of total foreign ownership in mining shares and their participation in minerals processing.

Overall mining stand For responsible mining, with deep reservations.

the current sharing scheme between national and local governments.

Sonny Trillanes policies on enforcement of environmental laws, in his second term.

On mining taxation Senator Trillanes is expected to support Pres. Aquino’s proposed mining tax regime, particularly components that increase the LGU share.

He has described as “unfair”

On AMMB The senator has not publicly voiced position on AMMB, but has expressed support in amending Republic Act 7942, or the Philippine Mining Act. During his campaigns sorties, Trillanes has called for the review of the country’s mining law specifically the provision on the granting of benefits to areas where mining exploration exists. He commented that the current mining law contains “loopholes” and that “corrective measures should be instituted.”

Overall mining stand For responsible mining, and is likely to support stricter regulatory regime in his second term.

QUICK FACTS

Communities | Environment

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s president of Villar Foundation, senator-elect Cynthia Villar has advocated for “green social enterprises,” or livelihood projects out of wastes and garbage such as water hyacinths and coconut husks from her river rehabilitation program. She has also staunchly opposed the planned 635.14-hectare Manila Bay reclamation project because, in her view, it will affect the Las PiñasParañaque Critical Habitat and Ecotourism Area (LPPCHEA). She even filed a petition for Writ of Kalikasan against the project, which the Supreme Court granted on April 10 last year.

But will she ever file a Writ of Kalikasan or a Tepo against a mining company if her environmental advocacies necessitate it? That may seem a trick question but as anti-mining groups will point out, Mrs. Villar will have to walk a fine, delicate thread on mining issues, her family being the owner of

mining, but these will have to be within the range of industry figures. That means she will resist rates or schemes that would be deemed prohibitive by the mining sector itself.

Cynthia Villar Queensberry Mining—one of the major shareholders in the King-king copper-gold project in Compostela Valley. On the other end of the spectrum, she will carefully consider all mining-related measures according to popular sentiment, her husband being a potential 2016 presidential contender.

On mining taxation Mrs. Villar will likely support new tax measures on

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eelected Sen. Gringo Honasan has acknowledged the dual realities of mining: “We cannot lose the employment potential, the productivity for harnessing our God-given natural resources, but we can’t disregard the impact of mining in our communities and environment”. The senator has called on Pres.

Aquino to “provide a clearer direction on mining”—an indication that he will be a reliable supporter of the President’s legislative agenda on mining.

On mining taxation In line with his views, Senator Honasan is expected to support the administra-

Gingo Honasan tion’s effort to reform the current mining incentives scheme.

On AMMB Senator Honasan

has

On AMMB The mining sector generally considers AMMB a threat to its very existence. If AMMB goes full steam in the next congress—the measure already having a Senate version of its own—it would be wise for Sen. Villar to support alternative proposals that Pres. Aquino will push in his last three years in office.

With all her connections to the industry—coupled by her husband’s ambitions— she will be careful not to be seen as its number one fan, identifying herself instead with middle-of-the-road positions on mining.

Copper does not corrode, rust or damage easily. Archeologists have unearthed copper drainpipes from as far back as 3,500 BC, that are still in good condition.

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mong the 12 winning senators, Joseph Victor Ejercito has more extensive LGU background and is expected to view mining from the angle of local governance. He has called for a mining ban in agricultural and tourism areas, as well as clearer definition of no-go-zones. He has consistently expressed views in line with responsible mining, but has recently said he has become a “skeptic” whether the country’s miners are really sincere about responsible mining practices.

On mining taxation Sen. Ejercito’s views and background tend to favor higher mining taxes in favor of LGUs. He is expected to champion similar proposals in the Senate.

JV Ejercito On AMMB Responding to a question during a campaign sortie in Surigao City, Sen. Ejercito said he was inclined to drop his responsible mining stance in favor of a more restrictive regulatory environment.This calls for a halt in all mining opera-

tions until a comprehensive, wide-ranging review of all operating companies are done, he said.

What made him change his mind? Ejercito said passing by the Novienta or Kilometer 90 Road, which connects Surigao del Norte to neighboring Surigao del Sur, he witnessed how the mining companies in the area “caused the appalling siltation” of water bodies.

“It made me question the beliefs I held about mining.

Can responsible mining be done in this country? I don’t think so at the moment,” he told Mining Week.

AMMB supporters can count Sen. Ejercito as a potential supporter if his mind doesn’t change once more.

Overall mining view Skeptic about responsible mining.

Overall mining stand For responsible mining, generally with a more favorable view of the industry.

called for a balanced approach to governing the country’s minerals sector.

He said this was not possible under the current mining law, and that an amendment would have to be made. Specifically, he wants more regulation to address environmental concerns.

He will certainly find favor in some of the more rigid environmental provisions of AMMB, but would likely be discouraged by other salient features of the bill considered by many as industry-killer.

Overall mining stand For responsible mining, with preference for more environmental regulations.

MORE POWER & CONGRATULATIONS!

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Responsible journalism goes hand in hand with responsible mining. May your reports and commentary highlight the potentials of the mining industry as a catalyst for economic growth.

~ Dir. Roger A. De Dios Mines and Geosciences Bureau-13

SMMCI, or Silangan Mindanao Mining Co., Inc., partners with Surigao Runners’ Club for Surigao City’s first half-marathon event, May 5.

CONTRIBUTED PHOTO

Silangan joins historic run to save Surigao River SURIGAO CITY—At least 150 employees of Silangan Mindanao Mining Co., Inc. (SMMCI) participated in a fun run held recently in this southern Philippine city, in order to raise awareness on the need to save Surigao River from environmental ruin.

They joined some 2,000 participants in the 21-, 10-, five-, and three-kilometer run dubbed “Silangan Surigao Marathon 2013: Run for Surigao River” held on May 5 through a partnership between SMMCI, a part of Philex Mining Corp., and Surigao Runners’ Club (SRC).

“We were overwhelmed

by the support of the runners here in Surigao and even those coming from as far as Butuan and Manila,” Jay Gonzales, race director, said.

“Their participation contributed to the success of our first half-marathon event.”

As the event’s major sponsor, SMMCI was one with Surigao City and the entire province of Surigao del Norte in raising awareness on the current state of Surigao River and the need to bring it back to its former glory.

“This is the biggest achievement for this event— having made people aware of the current state of Surigao

River,” said Gonzales, who revealed that SRC will use part of the proceeds to conduct tree-planting activities along the river before the rainy season starts next month.

SMMCI’s Clarence Alipao, a community relations officer, clocked 0:16:45 to clinch the third place at the 3-km run together with Johanna Piao in the female category.

Surigao River, also known as Kinabutan River, meanders Surigao Valley, emptying to the Surigao tidal basin. It used to boast a vast mangrove swamp that had been overtaken by the city’s rapid expansion. PR

June 3-9, 2013

5

News

Environment | Communities | Mines&Money

Siana Mines permit questioned

Suspended Greenstone, a subsidiary of Australian miner Red5 Ltd., said millings operations have been suspended for over a month now, but clarified that “there has been no spill and therefore no consequential environmental damage.”

“Activity on site currently comprises mitigation to minimize any spill, should it occur,” Greenstone Managing Director Steve Norregaard said in a May 13 disclosure to the Australian Stock Exchange (ASX).

courtesy of redlimited.com

An international expert wants to know why the Mines and Geosciences Bureau (MGB) approved the reopening of the old Siana Mines— including the use of its old tailings dam—without rehabilitating first the decades-old facilities.

Dr. Robert Goodland, a social and environmental assessment specialist and member of the London Working Group in the country, said MGB must answer why it issued a permit to Greenstone Resources Corporation (GRC) without first ensuring that all safety assessments are properly conducted.

The company made the decision following independent advice from at least three geotechnical consultants, who all concluded that “there is an unquantifiable risk in returning the tailings dam to operating status,” said Norregaard.

Greenstone is said to be

BRIEFLY Mining output down The value of metal production in the country dropped by nearly a fifth in 2012, data on metallic mineral production from the Mines and Geosciences Bureau (MGB) showed.

The total output value plunged 18.04 percent to P100.8 billion in 2012 from P122.98 billion in 2011.

Atlas profits up Atlas Consolidated Mining and Development Corp. has reported a 48% rise in 2012 earnings owing to higher production of its copper mine in Cebu.

In a statement, Atlas Mining said its net income rose to P3.44 billion in 2012 from P2.33 billion in 2011 as revenues jumped 21% to P15.54 billion from P12.83 billion.

Fixed mining tax The Mining Industry Coordinating Council (MICC) has agreed on a fixed government-private sector revenue share on gross and net profit, said Trade and Industry Secretary Gregory L. Domingo.

A member of the MICC, Sec. Domingo said that MICC has agreed on a “certain percentage of gross and participation of the bottomline.”

He disclosed that under new the proposals, mining companies are no longer entitled to income tax holidays.

NAC record output Nickel Asia said its total volume of nickel ore sold and delivered from its 4 operating mines reached 11.7 million wet metric tonnes, a 12.5%

6

June 3-9, 2013

Shuley Mine vows to exhaust legal means

increase from the previous year and a record high.

But lower prices dragged total value of the shipments. Estimated value of nickel ore shipments reach only P11.2 billion in 2012, a 7.4% drop.

The company operates four operating mines: Rio Tuba in Palawan, Taganito in Surigao del Norte, Hinatuan in Surigao del Sur, and Cagdianao in the Dinagat Island. $1B mining investments Te $1 billion projected investments in the mining sector is “achievable” this year, said Mines and Geosciences Bureau (MGB) chief Leo Jasareno.

Jasareno said MGB will expedite the processing of applications and act on them within six months of filing, following the lifting of the moratorium on accepting applications for mining permits in March.

SAGC announcement St. Augustine Gold and Copper Limited has announced on May 31 that it has closed its previously announced private placement with Queensberry Mining and Development Corp. for 55,000,000 shares at a subscription price of US$0.20 per share for a total investment of US$11 million.

The funds received will be used for working capital and to further advance the King-king Project.

The shares issued pursuant to this private placement will be subject to trading restrictions until October 1, 2013. PR

facing a shutdown of up to 12 months, as it seeks alternative funding options to cover the construction of a new tailings dam. It said, however, that mining activities,“including the stockpiling of ore, will continue in the interim, as the Company considers its financial position.”

Unstable While not directly pointing the blame on Greenstone, Goodland and the anti-mining Alyansa Tigil Mina (ATM) group have trained their guns on the MGB for issuing permit for the “unstable old mines.”

“The group is also wary of the silence of the government agency pertaining to recent reports of land instability in mines since April,” ATM said in a press statement, pointing out that the Siana Mines are replete with “historical reports of mine flooding and underground fire.”

Jaybee Garganera, national coordinator of ATM, said the case of Siana Mines demonstrates that MGB was being “very careless in its issuances to mining companies.”

The Siana Mines, located in Tubod town, Surigal del Norte, have previously been owned and operated by Surigao Consolidated Mining Co., Inc. It began commercial operations in the early 40’s, only to close during World War II and re-opened in 1946, producing 4,800 kilograms of gold and 8,000 kilograms of silver.

Persistent occurrence of mine flooding and underground fire forced it to close down again in the succeeding years.

Actrion plan In 2002, Red5 secured a mining permit and was grant-

ed an Environmental Compliance Certificate (ECC) in April 2009, despite a prior scheduled Final Mine Rehabilitation and Decommissioning Plan expected in late May of 2009.

“MGB should know better than that before permitting the reopening without rehabilitating the old facilities,” Dr. Robert Goodland commented, adding that a transparent emergency action plan was essential.

“There must be an immediate halt in all milling operations, an immediate alert on local authorities and downstream communities of the big risks and encourage them to get out of the way of any breach that looks likely to happen at any time, and immediately get MGB to conduct an onsite safety/risk assessment to prevent damage and reduce risks to some semblance of acceptability,” Goodland said.

Dr. Goodland and ATM said the environmental bureau should: • “Immediately alert local authorities and downstream communities of the big risks and encourage them to get out of the way of any breach that looks likely to happen at any time; • Immediately get MGB to conduct an onsite safety/risk assessment to prevent damage and reduce risks to some semblance of acceptability.

The Siana gold project, as originally designed, delivers a minimum 849,000 ounces of gold production at a cash cost of sub US$400 per ounce over a ten year life, according the Red5 website. Commercial production started on April last year. MW

Nonoc nickel miner Shuley Mine Inc. (SMI) said it will continue to press its rights amid the cease and desist order issued against it by the Mines and Geosciences Bureau (MGB), arguing the agency violated an existing court injunction.

The Nonoc dispute is a complex government and corporate clash, which pitted SMI against its former partner, Pacific Nickel, with MGB and Department of Finance (DoF) seeking to stop mining in the island because it is supposedly onerous to the government.

It has already alarmed local officials, wary about the massive job loss in the island where some 2,000 residents in three barangays are employed.

Mayor Ernesto T. Matugas has called on the MGB and other relevant government agencies to ensure that the mining operations in the island remain uninterrupted, noting that the locals’ livelihood was of paramount concern for the city government.

The region’s 21 operating mines, meanwhile, are in panic because the Nonoc legal row has caused the transfer of ore shipping permit processing to the bureau’s central office.

The latest conflict emerged when MGB Director Leo L. Jasareno issued a stoppage order against SMI on May 10, despite a 2011 Temporary Restraining Order (TRO) barring the agency from impeding SMI’s mining and shipping operations.

MGB-Caraga Director Roger A. De Dios admitted the Nonoc dispute has cost him his job, following his decision to respect the court decision for fear of being cited in contempt.

Dir. Jasareno relieved De Dios on May 15 for allowing SMI to ship nickel ores since the latter assumed office in October last year, “despite the bureau’s order to the contrary.”

Jasareno said MGB was merely following DoF Secretary Caesar Purisima’s order to stop mining activities in Nonoc.

DOF, through the Privatization Management Office which controls the Nonoc mines, has demanded payment of some US$263 million dollars from Philnico, the orig-

inal holder of the 23,000-hectare Mineral Sharing and Production Agreement (MPSA) in Nonoc.

Philnico has since transferred its rights over the MPSA to Pacific Nickel, which has an existing Mines Operating Agreement (MOA) with SMI to haul, ship and market low-

grade nickel ores.

While Pacific Nickel earlier joined SMI in questioning MGB’s 2011 stoppage order, it also now wants to boot out SMI from the latter’s 1,400-hectare mine, as it has a pending joint venture with diversified conglomerate giant San Miguel Corporation to develop the Nonoc nickel mines, which has an estimated ore deposits of 1.44 million metric tons.

In April, Pacific Nickel tried to expel SMI from the mine site, but was thwarted when a Surigao court issued an injunction against it. The case is still being heard.

SMI’s Jacob L. Arroyo defended their continued operations in Nonoc, noting that it is covered by two court injunctions. He appealed for MGB and Pacific Nickel to “respect the status quo and observe existing court orders.”

“Without prior investigation and legal basis, MGB can’t just stop an operating mine just because the DoF and PMO said so,” Arroyo argued, pointing out that MGB itself was the one that approved it’s four-year Mines Operating Agreement with Pacific Nickel.

Arroyo said SMI is “sufficiently prepared and more than willing to defend its rights” over its Nonoc concession.

“When you are on the right side, the only thing you can do is to soldier on and press your case. We believe that what we are fighting for is just and proper, and we are not about to turn our backs on our employees,” he added.

He also highlighted the plight of their personnel, majority of whom, he disclosed, “can’t enroll their children in June because they are being deprived of their main source of income.” MW

Communities | Health&Safety | Mines&Movers

A look at recent mining disasters At least two major and one minor mine accidents have occured in the last 12 months.

While the damage done in each of these accidents is undeniable, it is worth noting that companies involved—all publicly traded companies— have positively responded to their obligations.

‘Biggest mining disaster’ With some 20 million metric tons of sediments finding their way into nearby water channels, the Philex mine spill in Benguet last August is easily the “biggest mining disaster” in the Philippines in terms of volume, according to environment officials The staggering figure is 10 times more than the volume of mine tailings that spilled out of the Marcopper mine in 1996 in Marinduque, which dumped some two (2) million metric tons of waste into the Boac River.

Philex was quick to add that while the spill of it s tailings pond in Itogon is the biggest in terms of volume, the Marcopper incident remains the Philippines’ worst mining disaster in terms of toxicity.

While the company initially insisted that “forces of nature cannot be prevented 100 percent,” it nevertheless paid the P1.034 billion fines imposed by the Department of Environment and Natural Resources (MGB-DENR).

Tailings Pond 3—Philex’s only operating tailings pond at the time of the incident—is the largest in the country at 80 hectares, and can hold up to 160 million metric tons of wastewater and sediments from the mining operations.

Philex said that torrential monsoon rains caused the breach, which spilled waste into nearby water channels, particularly Balog Creek, which flows into the Agno River.

Amid all this, the company has expressed its humility in admitting that leak weighs heavily on the public’s perception of mining operations in the country.

“Ang face ng mining will be at stake [dito]. Ayaw din namin na i-fail,” said Philex spokesperson Atty. Eduardo Aratas. “Hindi lang Philex kasi ito. We are carrying the burden of proving that mining is really responsible.”

As expected, the spill took a toll on the 57-year-old company’s bottom line. Philex, the country’s largest listed mining firm, saw its net income

in the first quarter of 2013 plunge 68% from a year ago due to the suspension of its Padcal mine operations.

Since the resumption of its operations, some 611,801 tons of minerals were milled from the mine: 7,610 ounces of gold and 2.434 million pounds of copper.

Meanwhile, the company’s clean-up operations continue.

The mine was allowed to temporarily operate on March 8 to fill the void in its tailings pond, a necessary procedure to prevent the pond from collapsing again.

Philex said it was using the time to complete a P2-billion “beaching process meant to fortify” the portion of the mine damaged by heavy rains when the accident occurred.

Philex senior vice president for corporate affairs Mike Toledo said that while the accident was a force majeure as “it was a result of the elements of nature…But even as we were not at fault, we share the concern of the government for the environment, thus we are paying the fee, as set by regulators, to cover the costs of remediation and rehabilitation activities.”

As it stands, the Pollution Adjudication Board (PAB on Thursday, May 23, that Philex must first complete its mining rehabilitation program

by July, the deadline BAC gave, before it can be given the green light to operate again.

“While there is still trace of pollution, the PAB will not allow them to operate again,” Environment Undersecretary Demetrio Ignacio, who also acts as PAB presiding officer.

“Right now, if you will go to the river, most of the tailings are still there. The saving grace here is that the tailings do not contain harmful chemicals,” he said. “The cleanup is still not substantial as of this time,” Ignacio said.

The state pollution body has fined Philex P200,000 per day until the pollution is completely cleared from the waterways. As of May 23, Philex faces a penalty of P180 million. The mining firm has filed a motion before the board two months ago, questioning the “parameters of computation of the fine.”

Semirara landslide Five miners were instantly killed when a section of the wall of Semirara Mining Corp.’s Panian mine caved in at 11:55 p.m. on February 13.

Semirara Mining Corp.— the country’s biggest coal

producer—said it “stopped mine operations to ensure the safety of its personnel.” It added its management is still trying to determine the cause of the accident “in coordination with relevant government authorities.”

The company’s shares immediately plunged the next day.

It posted a 42-percent decline in its net income after tax to P1.01 billion in the first quarter in 2013 from P1.73 billion in the same period last year.

Semirara has assured the victims’ families of compensation, as well educational packages for the children of the deceased workers.

Citinickel spill Three months after the Padcal incident, silt spilled from the Toronto mine of Citinickel Mines and Development Corp. (CMDC) in Narra, Palawan. The waste flowed into a river and irrigation canals affecting farms and a fish pond.

CMDC immediately embarked on a clean-up on areas affected by the silt spill from its mines’ silt ponds, and installed environmental mitigating structures in the surrounding areas the day after the spill was discovered on Nov. 25, 2012.

CMDC suspended all mining operation from Nov. 26 to Dec. 9, 2012 to concentrate its manpower on the clean-up of the river and the farms. The company stressed that the spill could not do permanent damage on affected farmlands because it does not have a processing plant and as such, does not use chemicals in its operations.

According to Ferdinand Pallera, CMDC president, remediation measures in the affected areas included vacuuming of sediments, manually and mechanically dredging silted water, and regularly testing of the quality of water in the affected areas until the desired results were achieved.

He said the company’s immediate clean-up action is evident on the removal of some 50 percent of the silt overflow into the Pinagduguan River five days after the spill. He added that within 15 days, the affected farms and portion of the Pinagduguan River were restored to their former condition, “in an even better condition actually.” MW

Musarapa Insiang (left) from Datu Paglas, Maguindanao and Haiza Pigkaulan from Columbio, Sultan Kudarat are the country’s first Muslim female mining engineers from Mindanao.

USAID-GEM PHOTO

Meet the country’s first Muslim female mining engineers Haiza Pigkaulan and Musarapa Insiang, both 23, could have been teachers, or nurses. But they took the path less taken and enrolled in mining engineering course—a largely unknown academic field in the country—and became trailblazers after becoming Mindanao’s first licensed Muslim female mining engineers.

Pigkaulan and Insiang were among the 13 mining scholars who passed the board exam for mining engineers last year with the support of US Agency for International Development’s (USAID) Investments in Vocational, Elementary, Secondary and Tertiary Studies (INVESTS) project, which is being implemented by Growth with Equity in Mindanao (GEM) program.

The two lady mining engineers joined 57 new licensed mining engineers in 2012, with Pigkaulan ranking third.

According to USAID, there are only few colleges in the country that offer mining engineering and geology courses. It noted that the Phil-

ippines only produce about three dozens of licensed mining engineers annually while the expanding industry requires at least 100 per year.

In 2011, 32 graduates passed the national board examination for mining engineers; 22 passed in 2010.

Pigkaulan and Insiang completed their degrees at the Palawan State University in Puerto Princesa City. The women also finished a course on environmental science and mining law in addition

to technical engineering subjects.

Pigkaulan, is a native of Columbio, a remote Muslim-Christian community in Sultan Kudarat, while Insiang is a resident of Datu Paglas, Maguindanao.

As full-fledged mining engineers, Insiang and Pigkaulan now look forward to helping develop the industry in their home region and working in socially and environmentally responsible mining companies. MW/USAID

QUICK FACTS 4 At a median range of P55,638 per month, mining and metallurgical engineers jobs are the country’s fourth highest paid, according to Dole.

4Philippines only has around 4,000 registered mining engineers since the 1950s, and only about half of them are believed to be active, according to Ceasar Lao-as, president of the Asia Pacific Energy Resources Ven-

tures Inc. 4Republic Act 4274, otherwise known as the “Mining Engineering Law of the Philippines,” is the law that regulates mining engineering profession in the Philippines.

4Only about 800 from the country’s 3,000 mining engineers are working with the local mining industry and most of these are either in their twilight years or working abroad, according to MGB-13

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June 3-9, 2013

7

Correcting lies and

I

6

Insight&Commentary Gerard Brimo, Guest Columnist

disinformation

presented at the Mining Forum to correct lies (yes, lies!), disinformation, and also ignorance (I left that out in the title).

If you think that the mining industry in our country can affect food security, biodiversity, Palawan, and if you think that nothing good can come out of it, read on!

The attack by the Save Palawan Movement that was started

by Gina Lopez and allied organizations is on the large-scale metallic industry. There is never any mention of small scale-scale mining.

This is the face of it.

make you believe that if mining were to grow in the country, we would run out of food! That is preposterous!

Well, let’s not mince words. It is a lie!

The same mistake was made in the case of Palawan. The map on the left shows the many applications for exploration permits, many of them in protected or no-go areas for mining, and they will not be approved.

Again, the map has been badly misinterpreted to mean that Palawan will be mined out!

Why so many exploration permit applications and only so few operating large-scale metallic mines? Because the odds of finding a commercially viable mineral deposit are very low. See the global statistics on mining on the left of the slide below.

I do not begrudge small-scale miners. They are driven by poverty, the same kind of poverty that drives people to do dynamite fishing or ‘slash and burn’ farming which is rampant all over the country.

Nevertheless, it is destructive to the environment and can seriously affect the safety and health of the small-scale miners.

In fact, mercury is still being used by this sector. Why is there no mention of this in Gina’s presentation? Is she not concerned about the environment?

It is a big “industry.” In 2010, P42.9-B in gold was sold to the Bangko Sentral ng Pilipinas on a “no-names” basis, much larger than the gold output of the large-scale sector.

This is counted as output from the minerals sector, but since there are no taxes being paid on this portion, it distorts the ratio of taxes paid by the industry vis-à-vis its total output.

On to large-scale mining, the map on the left hand side of the slide is from the Mines and Geosciences Bureau (MGB), and the yellow dots indicate applications for exploration permits all over the country.

The map above shows that there are only 3 large-scale nickel mines in Palawan, all in the southern portion of the province, far from the Underground River and the UNESCO heritage sites.

Right in the middle of the map is a large protected area under the National Integrated Protected Areas Systems (NIPAS), a no-go zone for mining or even agriculture. So what is the fuss all about?

If the fear that Palawan would be all mined-out was based on the left hand map, that fear was unfounded and was a serious mistake!

There are in fact many areas closed to mining, as the illustration below indicates.

The odds might be better in the Philippines, which is well mineralized, but even if we assume a doubling of the large-scale mines, it would occupy only 0.4% of the country’s entire landmass.

One need not be a scientist to figure out that such small area of the total country’s landmass cannot possibly affect food security, and one would indeed be correct!

This is apart from the fact that mineralized lands are simply not conducive to agriculture. Mining and agriculture are not mutually exclusive. It’s never been the case and any attempt to link the two is simply tantamount to scare tactics, to This has been badly misinterpreted by Gina and others to mean that the country will be mined out! Who can blame them, though, for that is what the map indicates at first glance, but is it enough to stop at first glance and not get to the bottom of things?

When one files for an exploration permit, no matter where the application lies, the application gets plotted on a ‘control’ map. That is why there are so many dots.

Later on the MGB will process the application, determine if it is in an area that is open to exploration (and mining) and if so, approve. If not, the application is disapproved and the dot is taken out of the map. Many of the yellow dots in the map will not be approved.

The red dots in the map on the right shows the large-scale metallic mines, occupying only 60,000 hectares or 0.2% of the country’s entire landmass. That’s all.

8

June 3-9, 2013

It is interesting to note that Palawan has its own environmental law that specifies no-go zones for mining or other activities.

So there you have it. Three laws “protect” Palawan – the Mining Act itself, the Strategic Environmental Plan for Palawan and the NIPAS. So what is the fuss all about?

These pictures below show the mining areas in Rio Tuba in Bataraza, Palawan.

Feedback: phminingjournal@gmail.com

MORE NEWS That is a 1970s photo that shows the surface of the lateritic nickel deposit as it looked like before mine development started.

Laterite is a type of soil full of iron (beyond 40% in some cases) and, in the case of the Philippines, some nickel.

It is not an agricultural area (you can’t grow rice there!), much less bio-diverse.

The picture in the middle shows Berong Nickel, also in Palawan, tertiary grown with stunted trees because of the lateritic condition of the soil.

On its right, an aerial photo of the mountains in Surigao Norte, within the Surigao Mineral Reservation. The laterite here goes all the way to the surface – scratch the surface and you get red-looking soil, iron oxide.

No forest, no agriculture within the lateritic area and prone to erosion and siltation when the rains come, discoloring coastal waters quite visibly because of the color of the soil.

The next photos below show Philex Mining in Benguet province and, on the right, Tampakan area in South Cotabato.

Because Rio Tuba has been going on for some time now, there are mined out areas that have already been rehabilitated. It’s what is called progressive rehabilitation. Here’s how one such area looks like.

BY VANESSA L. ALMEDA

Rio Tuba has rehabilitated about a fourth of its total mining area, planting over half a million trees (hardwood species) in the process. In one year (2011), it spent close to P60 million in environmental expenses, including rehabilitation.

And here’s what it looks like inside a rehabilitated mine area.

Philex Mining in Benguet has steep terrain, logged out in the 1950s and no agriculture.

Tampakan area in South Cotabato was logged out for the most part or subject to “slash and burn” farming as what the photo (right, above) shows. There is still a small primary forest in the area that won’t be touched (by law it cannot be) should mine development proceed.

Are these areas bio-diverse or agricultural areas? I think by now you know the answer.

The pictures above show the lateritic nickel mine operation of Rio Tuba in Bataraza, Palawan.

We’ve created a forest where none existed before. Those are hardwood trees grown in the Rio Tuba nursery, interspersed with some fruit trees to encourage wildlife to populate the area.

I could have shown slide after slide of the wildlife that is eventually found in the rehabilitated areas since we track each and every one of them, but I only had 15 minutes to present.

Talking about wildlife, I showed this slide.

Again, it is not an agricultural area and the vegetation is mostly shrubs and stunted trees.

There are 4 things to note here.

First, this is an industrial area, not an area suitable for picnics eco-tourism. There are other areas for that.

Second, minerals are God-given and we can’t live without them. I should have told Gina that God willing, her arteries would remain clean and she would not need a cardiovascular or coronary stent. It is partially made of nickel due to its non-corrosive properties.

If she did, it is nickel, possibly from Rio Tuba or the other nickel mines in the Philippines, which would save her life! What a supreme irony!

Third, lateritic nickel mines are shallow, no more than 20 meters deep on the average, and therefore not difficult to rehabilitate.

Fourth, mine rehabilitation is a requirement of the 1995 Mining Act and we all have to set aside funds for this.

Any discussion on un-rehabilitated mines of the past, the socalled legacy mines, is irrelevant to the discussion on mining today. It’s that simple.

Tribal barricade forces MMDC to shutdown operations in Cantilan

Mr. Brimo is President and CEO of Nickel Asia and a director of the Chamber of Mines of the Philippines. Reprinted with permission, this article originally formed part of Mr. Brimo’s presentation during a mining forum held last year.

Read this article’s conclusion in the next issue.

CARRASCAL, Surigao del Sur–Besieged by tribal discontent and a strong Catholic Church-backed anti-mining opposition, Marcventures Mining and Development Corp. (MMDC) finally decided to temporarily shutdown its operation in Barangay Cabangahan in Cantilan town, Surigao del Sur. Jegie Pereda, MMDC vice president for operations, confirmed Wednesday the company closed its Cabangahan operations but did not say for how long the suspension will last.

“We cannot enter the area because of the barricade. It is temporary (closure). As of now, we are operating at another area not affected by the barricade,” the official said.

Members of the Manobo tribe have been barricading the road in Barangay Cabangahan leading to the mining operations of MMDC in the past several weeks.

Pereda did not disclose where the new mining operation is but anti-mining groups claimed the company is operating in Sitio Pili at Barangay Panikian in Carrascal. The mining executive did not confirm or deny this.

This town’s Mayor Vicente “Baby Boy” Pimentel separately confirmed that the mining firm shutdown its Cabangahan operations and has pulled out its equipment allegedly due to threats from Lumads to burn them.

Pimentel said the closure presents a “great loss” for the people of Cantilan to lose the investment of MMDC, accusing anti-mining groups, including the Cantilan local government unit, of depriving its people of the economic benefits of mining.

The mayor, known for crit-

icizing anti-mining groups, blamed Manobo tribal chieftain and evangelical pastor Jimmy “Datu Dagsaan” Bat-ao as the “troublemaker” that led MMDC to suspend its operation in Cantilan.

Pimentel alleged that Batao and his clan asked a very “unreasonable demand” of P50 million outside the one percent royalty fee mining firms are mandated to give to indigenous peoples.

The mayor disclosed that MMDC will transfer its mining operation in his town, which could further boost the municipality’s income to an estimated P220 million in 2014 from P185 million in 2012.

Demands Pereda declined to comment on the alleged P50 million demand, saying he is “not aware of those figures because I am not part of the negotiating team.”

“Of course, the company will not agree to unreasonable demands,” he said, noting the barricade is illegal and that the company intends to file charges against the protest leaders.

The Bat-ao and Hunanhunan clans of Barangay Cabangahan are claimants to areas covered by MMDC’s mining operation.

Earlier, Bat-ao said they want MMDC out of their ancestral lands and to pay them damages amounting to P150 million for the desecration of their burial grounds and other sacred places and the destruction of their main water source.

He denied the P50 million demand, as alleged by Pimentel, as well as demanding a royalty fee and a 10 percent share solely for their family.

The scholarships offered by MMDC also benefited a handful of youth only, Bat-ao said.

Members of the Manobo Tribe hold a barricade on a road being used by local nickel miner MMDC as an important access road to its mine site in Brgy. Cabangahan in Cantilan town, Surigao del Sur.

CONTRIBUTED PHOTO

June 3-9, 2013

9

Insight&Commentary How can mining work

MANUEL V. PANGILINAN, Guest Columnist

for the Philippines

W

ho of you does not have a cellphone? Do you know that an average cellphone contains about 24 mgs of gold, 250 mgs of silver, 3,800 mgs of cobalt, and 9 mgs of palladium?

As with cellphones, mining touches most aspects of our daily life – when you build your home, use your laptops, take your car to work, or even protest against mining.

Clearly, we cannot live without mining.

Why invest in mining You may ask – why did we invest in mining? The answer is simple.

Rapid economic development in emerging markets has led to rising demand for resources – fuel, food, minerals, even water.

According to McKinsey, we have never before seen growth in income of such speed and magnitude: China and India are doubling their per capita income at about 10 times the pace which England achieved during the Industrial Revolution.

Both countries are adding floor space every year at 3.5x the entire residential and commercial square footage of Chicago.

And in the coming decades, up to 3 billion people – and their spending power – will be added to the global middle class.

The world is indeed entering an era of sustained resource demand, and high resource prices.

So the questions for us must be – Does the Philippines have the capacity to supply some of these resources? Is it reasonable to stop developing our resources, knowing the world and the country need them?

The answer to the first question is, yes, we do. The Philippines is the 5th most mineralized country in the world and, in terms of defined resource, 2nd in gold and 3rd in copper. We have the potential to develop world-class mines.

On the second question – if we choose not to participate in the global supply chain for minerals – either by outright ban or a moratorium - our need for mining products will not stop.

Our only recourse would be to import. We would then pay for the foreign exporter’s cost of production and profit – and the cost of protecting his environment.

This is not common sense. Why should we pay somebody else to do the job we ought to be doing?

Alternatives to mining What are the alternatives to the use of mineral land? Tourism is certainly an option to consider. However, most mining sites are not ideal for tourism. Our mines in Padcal and Surigao are hardly suitable for tourism simply because they don’t have the features of an attractive tourist site.

And even if tourism were possible, we must ask: Are the expected returns from tourism comparable to the benefits which mining can provide?

Another suggested land use is agriculture. I’m a believer in the potential and need for agriculture in this country. I consider the imperative of feeding ourselves as an urgent national priority.

But again, most mines are situated in areas that are inhospitable to agriculture.

The land is often too steep, too arid or too mineralized for agriculture to prosper.

Related to this, there’s an attempt to introduce the new concept of “total economic value” or TEV in assessing mining opportunities. The thrust of TEV is to measure environmental hazards and social costs in calculating gains and losses from mining projects. The goal is commendable.

But the calculus of the value is intangible, elusive, and extremely subjective. How does one quantify and test the value attached to the beauty of a sunset, the feel of early morning mist, or the music of water rippling through a stream?

Please don’t get me wrong. I value the beauty of nature as much as you do. All I ask is for some objective and tangible standard by which any proposed economic activity in a locality – be it tourism, agriculture, or mining – can be evaluated. For mining, that standard is already in place.

Mining projects require an environmental compliance certificate (ECC) and a feasibility study – which together quantify the potential benefits to all stakeholders, especially the community and the government, along with the environment impact.

Addressing the problems of mining Our country has enough laws to address concerns in most areas of our lives. This is true insofar as environmental protection and social welfare in the mining industry are concerned.

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June 3-9, 2013

DENR in a policy dilemma. Our suggestion therefore is to spin off the EMB into a separate and independent body, similar to the environmental protection agency in the U.S.

The problem has always been enforcement and implementation of such laws.

I admit that our industry is not perfect, and could benefit from improvements.

Unfortunate accidents have happened, even to large mines, which lead to a perception that mining is dangerous and destructive.

But the mistakes of a few should not be construed that the whole is wrong – anymore than one car accident or one oil spill should shutdown an entire industry.

Let me briefly discuss some of our thoughts: First, health-related and safety concerns, exploitation of women and child workers, the absence of livelihood plans and post-mining rehabilitation are issues brought about, in large part, by small-scale and illegal miners.

These miners operate freely and thrive without being subjected to the regulation and sanctions imposed on large-scale mining.

The solution is to subject small-scale miners to the same regulations and sanctions for large-scale mining.

Correlatively, national and local policies on mining need to be harmonized, and the cooperation of LGUs in their enforcement must be procured.

Second, the capacity and competence of our regulators must be improved, particularly in regard to equipment and quantity and quality of regulatory staff.

For example, in Surigao del Norte, there are only 9 mining engineers and one geologist to oversee mining activities – which include 3 major mining projects, several exploration projects, 18 approved small scale mining permits and more than a thousand illegal small-scale miners.

The private sector should help government raise its supervisory capabilities through funding of scholarships and training here and abroad, procurement of equipment, and hiring of requisite personnel. Part of the funding could come by way of a fee on mining companies, akin to the supervisory and regulatory fee payable by telecoms companies to the NTC (National Telecommunications Commission).

Our industry must learn to accept that proper regulatory attention will provide the comfort to all stakeholders – and critics – that responsible mining is possible in our country – as it has been, and still is, in other countries like Australia, South Africa, Canada, Sweden, and even Indonesia.

Third, creating an independent environmental commission responsible for supervising and enforcing environmental concerns. At present, both the EMB (Environmental Management Bureau) and MGB (Mines and Geosciences Bureau) are agencies under the DENR (Department of Environment and Natural Resources).

MGB is charged with the promotion, development, and supervision of mining. EMB’s mandate is to enforce environmental laws.

These apparently conflicting goals can, at times, place the

‘Our task is to find the common ground of reason, through patient dialogue and constructive suggestions...’

Profit-sharing scheme Fourth, the private sector should be open to a profit-sharing scheme, which will assure the government of a more appropriate share in the benefits derived from the resources it owns.

Frankly, I’m not suggesting something new. Profit sharing is standard in the oil and gas industry in most parts of the world, as indeed it exists in our FTAA (Financial or Technical Assistance Agreement) regime.

In the case of Philex, despite operating under an MPSA, we paid P2.3 billion in national and local taxes, representing 37% of our pre-tax income for 2011.

Finally, the mining benefits between host LGUs and the national government should be shared more equitably.

Further, the national government must ensure the timely remittance of taxes due lgu’s. After all, mining is location-specific, and I sympathize with LGUs’ desire to realize the fruits of the resources situated in their communities.

Economies of scale If we continue to stifle mining, the criticism that it promises much and delivers little could be self-fulfilling.

Yet when we look elsewhere, mining has been a driver of economic development. Mining in Australia contributes US$142 billion each year; in Canada, $37.5 billion; in the US, $1.9 trillion, and in Brazil, $24 billion.

The challenge is precisely to grow mining so that it creates more value-added for all of us. Only a larger and healthier industry can enable us to achieve forward linkages in downstream processing plants.

We can’t have more refineries and smelters simply because there are no economies of scale to make them commercially feasible.

Only an operation as large as Tampakan or Far Southeast or Silangan can generate the volume which could justify processing in the Philippines. I understand Tampakan will cost $6 billion to develop.

In our (Philex) case, Silangan will require an investment of more than $1 billion.

Conclusion Let me close by saying that mining is not the enemy. Poverty is.

The lack of means, the lack of the most basic necessities, the lack of opportunities, the lack of choices – for far too long, in far too many places – these pernicious inadequacies have plagued our people.

Yet the supreme irony is that, in the midst of all this poverty, lie some of the world’s richest natural resources, a gift of providence for our people to make use of – not abuse.

It really is as simple as this – where poverty persists, small scale mining continues.

Poverty for us is not just some utopian notion. Its stark imperatives go beyond the poetry of blue skies and tangerine sunsets. You and I in this hall are not ordinary folks who worry about the next meal, the next rent, the next Meralco or PLDT bill – who do not have a 2nd home somewhere in the foothills of Mount Makiling.

This isn’t a contest between those of us who would protect the environment and those who would favor development.

We should be neither one nor the other.

In the end, it all comes down to a very basic choice that we have to make for our future. Other peoples – Australians, Indonesians, Canadians, Brazilians – have already made their choice. If they can do it and succeed, so can we.

We have a choice between fear and faith, between hardship and hope, between division and unity.

Our task is to find the common ground of reason, through patient dialogue and constructive suggestions – and from there, move forward to the more prosperous future our people deserve.

Mr. Manuel V. Pangilinan delivered this speech during a mining forum last year. Pangilinan heads the country’s largest gold producer, Philex Mining Corp. Reprinted with permission.

Stuffbox Mining Week aims to highlight in this page the important work that Community Relations officers do in their respective companies.

Through pictures and simple words, this corner will give color to community events, company activities and other happenings in mining communities that best demonstrate the fun and colorful side of mining. Contribute now! It’s free!

MINING WEEK AT GREENSTONE. Mining Week Staffers Danni Adorador (extreme right), Vanessa Almeda (second to left) and Jojo Ferol visited Greenstone Resources Corporation’s Siana Mines early this year, and they are graciously welcomed by its new managing director, Steve NorPHOTO BY VANESSA L. ALMEDA regaard.

Getting to know the Mining Week Staff These journalists represent the core staff of Mining Week. We will feature more of our staff members from around the country on this page in the succeeding issues.

DANILO V. ADORADOR III Regional Correspondent for Caraga Region, Philippine Daily Inquirer (Present) n Editor in chief, The Agusan-Surigao Enquirer (Present) n Editor in chief, Sun.Star Cagayan de Oro (2008-2010) n Assistant Team Leader, Louis Berger Group, Tampakan Copper-Gold Project Resettlement Documentation Team (2011)

JOCELYN B. FEROL

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SILANGAN CARES FOR SCHOOLCHILDREN. Employees of Silangan Mindanao Mining Company, Inc. conduct tree planning in the school grounds of Dakung Patag Elementary CONTRIBUTED PHOTO School, in Sison, Surigao delNorte.

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VANESSA L. ALMEDA n

CROSSWORD PUZZLE

Across 2. Use of a hose to direct a powerful stream of water at a hillside with buried gold deposits 4. Method of mining that left deep holes and tunnels in the ground 5. A 12-foot wooden trough with riffles nailedalong the bottom to catch the gold 7. Method that uses a large pan with slanted sides to wash gold from gravel 8. Precious metal valued for its rarity 10. Series of riffle boxes that water continuously flows down 11. Discovery of a vein or large deposit of gold 12. A wooden box used for washing gold, also called a cradle 13. An area where gold has been deposited in streambeds Down 1. Wooden slide that carries water from higher mountain streams to the diggings 3. Placer mining area that lacks abundant water 6. A 120-mile long vein bearing vast deposits of gold located in the foothills

Program Director, RMN-dxKS (Present) As marketing services head, Ms. Ferol will leverage her years of reportageof the mining industry as a veteran broadcaster to clients to ensure that every communication collateral (advertisements, advertorials, sponsored content) is of quality optics, in touch with their intended publics and in synch with current trends and industry policies. n

Correspondent: BusinessWorld (2011-Present) Interaksyon.com (2012-Present) Mindanews.com (2002-Present) Vera Files (2012-Present)

Tenements assistant, Wallaby Mining (2011) Editor in chief, Sun.Star Cagayan de Oro (2003) n Editor in chief, Sun.Star Cagayan de Oro (2001-2002) n Asst. Business Editor The Freeman, Cebu City (1999 to 2000) n Managing Editor Caraga Today (1995) n Secretary to RMM, Taganito Mining Corporation 1995 n n

ROEL N. CATOTO Correspondent: Mindanews.com (2008-Present) Vera Files (2012) n Managing Editor, The Agusan-Surigao

Enquirer (2007-Present) n Reporter, The Freeman Cebu

(2008) n Philippine media representative,

2012 US Elections, US State Department

International Visitors Program (2012) n

of the northern Sierra Nevada 9. A dug-out or tunneled area that leads to mineral deposits

June 3-9, 2013

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FEATURED COMPANY

Mining for the Future COMPANY PROFILE Carrascal Nickel Corporation is a company focused on operating, acquiring, exploring and developing nickel properties in the Philippines. Our mine site is located in Carrascal, Surigao del Sur. Our main clients are from China, where we export low to high grade nickel. With the expected future increase in ore production, the company will target other export markets such as India and South Korea.

Carrascal Nickel Corporation mine nickel ores from Laterite, Limonite, Saprolite, which are originally formed from the deep weathering of bedrock in tropical and subtropical regions. The company’s current mining operations are all conducted above ground using bench mining techniques.

Vision Mining that Makes a Difference

AWARDS

Mission To be an active participant in the development of the Philippine Mining Industry; for the Philippines to reach the same level of technology and value as with other advanced mining countries; To value the rich natural resources of the country by extracting maximum value and minimizing waste and pollution; To be a conscientious link in the World Nickel Supply Chain; To be unique mining company in that its existence is intricately linked to Corporate Social Responsibility. We will make a difference to our partner communities, through sustainable programs that add value.

Our Objectives The efficient and economic extraction and export of nickel ore consistent with world standards of excellence on Health, Environment, Safety, and the Community.

The use of the world’s best practices on mining and social/ environmental management.

The balanced and sustainable development of the host and surrounding communities.

Award-winning mining practices. Left, certificate of commendation from the Mines and Geosciences Bureau for having achieved 1 million man-hours with no lost time accident. Right, and endorsement from MGB-Caraga for the 2011 Presidential Mineral Industry and Environmental Award.

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