Issue 3, 2014

Philippine Resources Mining, Petroleum & Energy Journal Issue 3, 2014

Benham RiseThe Rising Star of Philippine Resources?

Reversing the Resources�Curse�

World Bank predicts continuing good times for Philippine economy

Index

Issue 3 2014 www.philippine-resources.com

Headlines in this issue

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Front cover: Indodrill undertaking low level cable bolt anchor drilling in a major project for Philex. See page 42

67

Resources Commentary

8 “Ronnie” Penarroyo asks is “Benham Rise the Rising Star of Philippine Resources?”

34

16 Patricia A. O. Bunye looks at Reversing the Resources “Curse” 22 Pacific Strategies says providing safe drinking water is vital for the Philippines

Economic Commentary

Mining

34 Coal man Rufino “Boomie” Bomasang provides a coal industry overview

24 World Bank predicts continuing good times for Philippine economy

38

Philippine Mining Briefs with Jimbo Gulle

30 Ruth Yu-Owen from PhilCarbon says the Philippine energy sector needs to step up to keep pace with possible AEMI

42

Indodrill goes horizontal for Philex project

Community Resources

48

Diwata celebrates second anniversary

4 Philippine Resources

Editorial

Philippine Resources Mining, Petroleum & Energy Journal Issue 3 2014 Philippine Resources Journal is published independently for executives in Philippine mining, petroleum and energy and associated business sectors.

Publisher Elizabeth Galura Charismatic (WA) Pty Limited

Issue 3 2014 www.philippine-resources.com

Another milestone for Philippine Resources as we continue to report what matters

T

his issue of Philippine Resources marks the fourth anniversary of our first publication in August 2010.

During that time we have continued to add to our loyal contributors, advertisers and most importanly, you - our readers. To you all, thank you very much.

As you will read in this issue, our team of high profile contributors and quality journalists are taking Philippine Resources to even greater levels.

Consulting Publisher Greg Brimble

Amongst the many highlights in this issue are:

Editor: Colin Sandell-Hay

•

Sales and Marketing Kevin Lewis kevin@philippine-resources.com & Cecilia Pamular cecille@philippine-resources.com

Regular columnist Fernando “Ronnie” Penarroyo looks at the highly touted offshore feature known as the Benham Rise and asks if the Philippines is ready to develop its potential sub-sea riches.

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Another of our regular columnists Patricia A. O. Bunye examines the issue of what is an equitable and internationally-competitive revenue sharing mechanism between the government and mining companies.

Design/Production Elizabeth Galura

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New contributor Ruth Yu-Owen from PhilCarbon says there is a need to have energy access for all if the Philippine energy sector is to step up and keep pace with the anticipated ASEAN Energy Market Integration (AEMI).

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Philippine Resources reporter Maria Paula Tolentino speaks with local coast industry legend Rufino “Boomie” Bomasang on where the local coal sector is headed

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Maria Paula also reports on Diwata-Women in Resource Development’s second anniversary where the important industry group visited Puerto Princesa and Bataraza, Palawan to learn more about “Nickel Asia Country” and the IPs (indigenous peoples) from the Batak tribe.

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Our industry insider, reporter and columnist Jimbo Gulle provides his latest Mining and Energy Briefs.

Journalists Maria Paula Tolentino Jimbo Gulle Kevin Lewis Steve Hill Contributors Mars Buan Patricia A.O. Bunye Fernando Penarroyo Ruth Yu-Owen ___ Manila publishing office Lomar Offices Paseo de Roxas Bldg, 3rd Floor 111 Paseo de Roxas Legaspi Village Makati, Metro Manila, Philippines Phone +632 815 8836 or +632 714 0029 Individual contacts Greg Brimble greg@philippine-resources.com Australia: +614 172 20759 Manila: +63949 338 3664 Philippine Resources Journal is printed in Manila by NuPrint.

Digital online edition www.philippine-resources.com

6 Philippine Resources

At a time when the Philippines’ economy is growing at an unpredented rate, while the mining and energy sectors are battling global commodity price and investment market issues, it is important to have a reliable place to turn when you need the story behind the story. And thanks to your continuing support we will continue to bring it to you.

IF YOU WOULD LIKE TO RECEIVE OUR HIGHLY INFORMATIVE E-NEWSLETTER VISIT OUR WEBSITE www.philippine-resourcesnews.com

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Benham Rise – The Rising Star of Philippine Resources?

By Fernando Penarroyo

T

he inclusion of the previously unexplored Benham Rise into Philippine waters has stirred public interest as to the resources potential of this jurisdictional region.

Benham Rise is a shallow bathymetric feature comprising a submerged extinct volcanic ridge located east of Luzon, at 16 degrees 30 minutes N, 124 degrees

Figure 1 The bathymetric model of the Benham Rise Region. (Source: ECS Submission of the Republic of the Philippines).

45 minutes E. It has the size of about 250 km in diameter and rises over 2,000 meters (2 km.) above the sea floor, from below 5,000 meters (5 km.) to above 3,000 meters (3 km.) below sea level.

The shallowest part, which is Benham Bank, is less than 50 meters deep. American surveyors who were the probable discoverers of the geological feature named the landform after Admiral Andrew Ellicot Kennedy Benham.

The Philippine Claim

Fernando “Ronnie” Penarroyo is the Managing Partner of Puno and Penarroyo Law (fspenarroyo@punopenalaw. com). He specializes in Energy, Resources and Environmental Law, Business Development and Project Finance.

8 Philippine Resources

The Philippine Government based its claim on the Benham Rise on Republic Act No. 9522, also known as the Archipelagic Baselines Law, and asserted that on the basis of seismic and magnetic data and other geological features, the region is an extension of the Philippines’ continental shelf.

The successful claim can be attributed to the quiet and diligent work and col-

laboration done by a team, which includes scientists and legal experts from the University of the Philippines through the National Institute of Geological Sciences (“UP-NIGS”) and the Institute of International Legal Studies of the UP College of Law (“UP-IILS”). It started with a workshop in 2001 to assist the Department of Foreign Affairs and the National Mapping and Resource Information Authority (“NAMRIA”) with regard to the implementation of the Law of the Sea and discuss the requirements for claiming the extended continental shelf (“ECS”) areas for the Philippines.

The late Dr. Teodoro Santos of UPNIGS identified and proposed Benham Rise, then a relatively unknown area of the Pacific Ocean east of Luzon, as a possible ECS area. Dr. Santos has provided valuable insights for developing national policies on deep seabed mining and the continental shelf under the Law of the Continued on page 10 >

Resources Commentary

< Continued from page 8 Sea, and represented the Philippines in important international scientific gatherings.

The workshop resulted in an inter-agency Memorandum of Agreement among key government agencies and the academe to work together to prepare the ECS claims. NAMRIA conducted hydro-

graphic surveys from 2004 to 2008 and thereafter the Philippines filed its claim for Benham Rise in 2008 in compliance with the requirements of the United Nations Convention on the Law of the Sea (“UNCLOS”).

On 12 April 2012 the Commission on the Limits of the Continental Shelf (“CLCS”) of the United Nations adopted in full the Republic of the Philippines’ Submission

Issue 3 2014 www.philippine-resources.com

for an ECS in the Benham Rise Region.

In late May 2014, a team of marine scientists and divers from the UP Marine Science Institute (“UP-MSI”), Ateneo de Manila University and Xavier University led by Dr. Cesar Villanoy, explored the shallowest parts of Benham Rise’s ocean floor and collected artifacts and data from which plans on future expeditions can be charted. This led Senator Grace Poe to introduce Senate Resolution No. 707 on 09 June 2014 “Urging the Departments of Foreign Affairs and Energy and the UP Marine Science Institute to Conduct Short- and Long-Term Scientific/Marine Research Studies and Exploration and Development Approaches on the Benham Rise”.

On 23 July 2014, the UP Institute for Maritime Affairs and Law of the Sea (“UP-IMLOS”) and the UP-MSI co-hosted a law and policy workshop on the exploration and development of Benham Rise. UP-IMLOS Director Dr. Jay L. Batongbacal, Legal Advisor and Delegate of the Philippine Extended Continental Shelf Project, presented a brief history of the application process before the CLCS while experts from the UP-MSI and UPNIGS presented the findings from the initial expedition.

Dr. Batongbacal explained during the workshop that under UNCLOS, the exploration and development of this new jurisdictional region involves: exclusive sovereign rights for purposes of exploring/exploiting natural resources (Art. 77.1) including mineral and other nonliving resources of seabed and subsoil (Art. 77.4), sedentary species (Art. 77.4); exclusive jurisdiction over establishment of artificial islands, installations (Art. 80); and exclusive right to regulate/authorize drilling (Art. 81).

Nautilus Minerals has been leading the way in modern subsea mining and in developing the techniques for commercialising subsea riches.

10 Philippine Resources

The workshop participants discussed the policy implications and possibilities for exploring and managing the Benham Rise region especially with respect to marine environment, mining and petroleum, fisheries, and maritime security.

Continued on page 12 >

Resources Commentary

< Continued from page 10

luctant to spend exploration capital on a relatively untested area.

Benham Rise is believed to have immense deposits of manganese and natural gas. Government agencies and industry stakeholders are now trying to identify the resources and how best to develop them. But let’s look and ponder at present available data and the state of technology capable of harnessing the resources.

More extensive studies requiring risk capital are necessary to confirm the presence of petroleum resources in commercial quantities in the area.

Petroleum Resources The Department of Energy is open to the idea that exploratory projects in the Benham Rise may be included in the Philippine Energy Contracting Round.

An article in The Economist, (14 May 2009) mentioned that the slopes of the continental shelf can have abundance of methane hydrates, which are white, sorbet-like compounds that exist in profusion under the sea, perhaps containing more energy in total than all known deposits of fossil fuels. However, present technology makes it impossibly awkward to extract.

Deep Seabed Mining

However, the landform is obviously volcanic in nature so there is a need to determine and test the extent of sediments that will generate petroleum.

To begin with, there is scant geologic and geophysical data for grassroots energy exploration. Exploring in water depths of 2,000 to 3,000 meters through bottom sampling or drilling is quite challenging and thus geologically risky and expensive by industry standards.

Private resource companies may be re-

The seabed under territorial and international waters is now considered the next emerging mining arena and the venue of the next “gold rush” by both governments and private industry.

Three types of deep-sea mineral deposits have drawn interest - seafloor massive sulphides (SMS), manganese nodules, and cobalt-rich crusts.

Currently the most commercially feasible are SMS located in the Pacific Ocean,

Issue 3 2014 www.philippine-resources.com

which are created by the activity of deepsea hydrothermal vents. On the other hand, deep-sea manganese nodules can be recovered from the west Mariana and Philippine Basins.

The Economist reported that the technology in the machines needed to carry out deep seabed mining is no longer exotic. Lying on the surface of the seabed, massive sulphide formations with high concentrations of copper, gold, zinc and silver may contain several million tonnes of ore.

Miners are able to work 1-2 kilometers below water level because at this depth, technology developed for the offshore oil industry can be employed for mining using the deep-water pumps and suction pipes developed to bring subsea oil up to the surface.

The petroleum industry has also developed remotely operated vehicles to make trenches for seabed pipelines, which can be adapted for cutting ore, even though it may lie much deeper.

Deep seabed mining summits are now being held regularly as a forum for stakeholders, entrepreneurs and governments to set out their vision for the future of the industry.

UK Prime Minister David Cameron estimated that the seabed mining industry could be worth up to £40 billion to the United Kingdom (The Guardian, 14 March 2013).

The president of the International Marine Minerals Society and noted Russian marine geologist, Dr. Georgy Cherkashov, linked the scramble for seafloor exploration licenses to the reality of “first come, first get,” saying the rush to secure the most promising sites represents “the last redivision of the world.” (New York Times, 09 July 2012) Deuterium Delirium

DOE is open to the idea that exploratory projects in the Benham Rise may be included in the Philippine Energy Contracting Round.

12 Philippine Resources

Jules Verne predicted in 1874 that hydrogen from water would be the fuel of the future. Deuterium, a fuel for fusion reactors and other high-tech uses Continued on page 14 >

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Resources Commentary

<Continued from page 12 > can be extracted through a tedious and expensive laboratory process but some scientists, by virtue of the characteristics of the isotope, believe that huge deposits can be found in the deepest part of the ocean including that of the Philippine Trench. However, this energy source is highly controversial and dismissed as a pseudo-science fraud, and functional fusion reactors exist only in Star Trek.

The South China Morning Post, (02 September 2004) reported that among those who lent credibility to the idea was then Senator Aquilino Pimentel, who brought the matter up for discussion in a congressional committee deliberation, and Communist Party spokesperson, Luis Jalandoni, who castigated the Philippine government for not exploiting “alternative energy sources” like the deuterium in the Philippine Deep.

Bloomberg Business Week (24 October 2013) narrated that Imelda R. Marcos, widow of the late Philippine strongman Ferdinand Marcos, has by her own admission spent “millions of dollars a year” to secure an exclusive right to extract water from the Philippine Trench.

According to Mrs. Marcos, Edward Teller the father of the H-Bomb first broached the idea of the country’s unknown treasure in 1971 during a visit to Manila.

Mrs. Marcos plans to harvest the Philippines’ astonishingly vast reserves of deuterium lying in the lower reaches of the Philippine Trench concentrated by the tremendous pressure of one of the ocean’s deepest places. Imelda’s son Senator Ferdinand R. Marcos, Jr. even introduced Senate Bill No. 2593 on 10 November 2015 seeking to create a Hydrogen Research and Development Center which shall be managed, operated and maintained by the Department of Science and Technology.

During a Congressional inquiry in 1988, deuterium as an energy source, was dismissed as a hoax by scientists led by the then dean of the UP College of Science,

14 Philippine Resources

Dr. Roger Posadas. Dr. Posadas offered a scathing assessment of the enthusiasm for the potential of deuterium, saying the whole yarn was “a gauge of our country’s extremely unscientific culture and strong proclivity toward reliance on miracles as solutions to our national problems.”

Issues to Consider As the insatiable demand for minerals and energy surges bringing explorationists to once untouched deep-water frontiers, new technological developments are helping to drive forward this new industry. However as in any resource ventures, the challenges facing seabed exploration in the Benham Rise needs to be identified.

No legal regime for deep seabed Mining

Issue 3 2014 www.philippine-resources.com

nology or the financial capability to explore or exploit the Benham Rise on its own.

The country’s limitations open it to partnerships with foreign interests both government and private industry, offering opportunities for research and eventually shared exploitation of the resources. In this regard, the government has to enter into the necessary agreements with interested foreign governments and deep seabed mining companies from developed countries.

Further, the information generated from research and exploration in the Benham Rise can also be vital for the exploration and development of resources in the seabed area beyond the limits of Philippine national jurisdiction.

Environment

The Mines and Geosciences Bureau admitted that there are no administrative rules that will regulate deep seabed exploration and development of mineral resources.

Currently the MGB issues Government Seabed Quarry Permits, which are clearly inapplicable and inadequate for such capital-intensive and high-risk operations.

Government regulators should be able to come out with something similar to the “Mining Code”, which refers to the comprehensive set of rules, regulations and procedures issued by the International Seabed Authority (“ISA”) to regulate prospecting, exploration and exploitation of marine minerals in the international seabed area.

Based in Kingston, Jamaica, the ISA is an intergovernmental body established by the Law of the Sea Convention that was established to organize and control all mineral-related activities in the international seabed area beyond the limits of national jurisdiction, an area underlying most of the world’s oceans.

Lack of data and technology The Philippines does not have the tech-

For environmental advocates the idea of this emerging mining enterprise coming to fruition is concerning. Little is known about the biodiversity that exists deep below; some scientists suggest it would take 10-15 years of extensive research before we can even begin to understand this deep marine ecosystem.

Marine experts, government representatives and campaigners alike want to see the “precautionary principle” applied, citing the serious environmental risks seabed mining poses.

The scale of the potential environmental impacts has not been thoroughly studied and currently there is no system in place to protect the marine life of the high seas, despite the fact that the world’s governments have long been committed to establish a global network of marine reserves. (www.greenpeace.org/international/deep-sea-mining) On the other hand, the role of “coastal stakeholders” should be identified and delineated. This is to determine if their consent is needed and compensation agreed to if mining activities are likely to impinge on fishing and other customary rights.

Continued on page 16 >

Resources Commentary

Issue 3 2014 www.philippine-resources.com

Reversing the Resources “Curse”

By Patricia A. O. Bunye

T

he McKinsey Global Institute and Asia Society Philippines recently hosted a briefing at the Asian Institute of Management on McKinsey’s recently released report entitled “Reverse the curse: Maximizing the potential of resource-driven economies”.

Dr. Fraser Thompson, the lead author of the report, discussed the challenges and opportunities in “resource-based economies”, which are defined as those economies where the oil, gas, and mineral sectors play a dominant role using three criteria: (1) resources account for more than 20 percent of exports; (2) resources generate more than 20 percent of fiscal revenue; or (3) resource rents are more than 10 percent of economic output.

terms of mineralization [3rd in the world for gold, 4th in the world for copper and tt in the world for nickel], total exports of minerals and mineral products amounting to USD664 million account for only 4.6% of our country’s total exports.

Meanwhile, the total exports of nonmetallic mineral manufactures represent 0.5% (USD77 million) of our country’s total exports. Further, the mining sector’s contribution to our country’s GDP was estimated at only 0.7 percent in 2013.

However, as the debate rages on what constitutes an equitable and internationally-competitive revenue sharing mechanism between the government and mining companies, the lessons that may be learned from the experiences of these resources-driven economies are instructive.

Using the above criteria, the Philippines does not yet fall under the definition of a resource-driven economy and is not covered by the current study. While the Philippines ranks 5th in the world in

Rather than falling victim to the socalled “curse”, or the failure to convert resource endowments into long-term prosperity, the study shows that the Philippines still has the opportunity to adopt

< Continued from page 14

China cannot establish direct claim over the Benham Rise, not with the Philippines in its way. While relations between Beijing and Taiwan have seesawed between aggression and attempts at rapprochement, in the event of reunification, China may use Taiwan as a stepping-stone and assert a counter-claim for the Benham Rise.

Benham Rise was purportedly part of the culture of ancient Filipinos with ancient Catanduanes people have fished and roamed the area long before the colonial era and celebrated in local folktales, legends and poetry. (http://en.wikipedia. org/wiki/Benham_Rise) Security matters Unlike offshore petroleum development projects undertaken in the West Philippine Sea that faces substantial difficulties in attracting risk capital given the political tensions with other claimants particularly China, Benham Rise is undisputedly peaceful and resources found in the area are free for the country to utilize and develop.

16 Philippine Resources

Thus it is important that the Philippine government as this early stage assert a strategic stronghold on this maritime region with the possibility of putting up installations not farfetched.

Conclusion As we move into an era of mining the deep-ocean floor, the world’s most remote and least understood environment, resource companies and state-spon-

what these resources-driven economies did right and avoid they appear to have done wrong.

It was therefore opportune that the presentation finally brought government and industry together to the discussion table, albeit for a very limited period, as the panel of reactors was composed of Philip Romualdez (President, Chamber of Mines of the Philippines), Jocot de Dios (CEO, General Electric Philippines), Secretary Nereus Acosta [Presidential Adviser for Environment Protection, Office of the President, and member of the Minerals Industry Coordinating Council (MICC)] and Guillermo Luz (Private Sector Co-Chairman, National Competitiveness Council and member of the MICC).

Based on the McKinsey study, almost 80 percent of these resource-driven countries have per capita income below the global average and, since 1995, more than half of these countries have failed to match the average growth rate of all countries.

Continued on page 18 >

sored resources ventures are working on overcoming the perceived challenges while environmental activists are keenly on guard.

There is now significant interest in the ocean’s resources within territorial waters, particularly in the Pacific Ocean.

The Benham Rise is the country’s latest frontier and will certainly open up an understanding of the adjacent seafloor currently under or being applied for exploration grants from the seabed authority.

By undisputedly and unequivocally controlling resources rights in its jurisdictional waters, the Philippine government can fully exercise exclusive sovereignty by getting to the bottom of what lies beneath and zealously guarding the metes and bounds of this newly acquired territory.

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Resources Commentary

perception of risk.

< Continued from page 16 Even fewer have translated growth into broad-based prosperity and only onethird of them have been able to maintain growth beyond the boom.

Given this, McKinsey outlined the following areas in which policy makers may focus their efforts in order to “break the curse”, i.e., adopt a new growth model to transform their potential resource windfall into long-term prosperity: 1. Building the resource sector’s institutions and governance; 2. Developing infrastructure;

“Risk” certainly concerns investors and is a major factor influencing a country’s competitiveness. In the Policy Perception Index of the Fraser Institute in its “Survey of Mining Companies 2013” [widely considered the “report card” to governments on the attractiveness of their mining policies], the Philippines ranks the 3rd worst among the 112 jurisdictions evaluated.

The survey considered the following key areas: uncertainty concerning the administration of current regulations, environmental regulations, regulatory duplication, the legal system and taxa-

3. Ensuring robust fiscal policy and competitiveness;

Issue 3 2014 www.philippine-resources.com

sources, how should these be spent? The McKinsey study is replete with examples of resources revenue squandered or lost to corruption, misuse or misappropriation.

Even in cases where there was no misappropriation, resource revenues were not always wisely or efficiently used.

The McKinsey study notes that governments should consider the following in order to reap the full benefits from their resource endowments: * Set expectations – government needs to set policies/principles on how the resource wealth will be used and manage its citizens’ expectations accordingly

4. Supporting local content;

* Ensure spending is transparent and benefits are visible

5. Deciding how to spend resource windfalls wisely;

* Smooth government expenditure

6. Transforming resource wealth into broader economic development

* Keep government lean * Shift from consumption to investment

Competitiveness and Fiscal Policy One of the key messages in the briefing was that there are instances when countries tend to focus too narrowly on fiscal policies. McKinsey has a Resource Competitiveness Index which covers three major areas of competitiveness: production costs, country risks and government take, i.e., the share of revenue that accrues to government.

* Boost domestic capabilities to use funds well

Government should not overlook the “fundamental trade-off between tax revenue and a competitive extractive industry”. the

Governments, McKinsey says, should not overlook the “fundamental trade-off between tax revenue and a competitive extractive industry”. Rather than focusing purely on the appropriate take, the study states that governments and companies would achieve higher revenue, and therefore a higher take for the government, when efforts are made to drive production costs down and improve the 18 Philippine Resources

tion regime. In order to reverse this situation, the country must manage political and regulatory risks to a level acceptable to potential investors.

It is notable that the Philippines’ ranking in the Policy Perception Index has steadily declined in the last three years.

Spending windfall Assuming that a country attains its primary goal of obtaining revenues from re-

The study also underscores that companies operating in resource-driven economies need to create partnerships with governments and communities that are based fundamentally on shared value.

This implies that companies are expected not only to be responsible operators, but also positive forces for job creation, economic development and community building.

One striking finding of the McKinsey study is that extractive companies need to realize that there is sometimes a mismatch between a company’s perception of its contribution to the countries in Continued on page 20 >

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Issue 3 2014 www.philippine-resources.com

*** Postscript to Diwata’s Second Anniversary: On the heels of its July 17-19 trip to Palawan to visit Rio Tuba Nickel Corporation in Bataraza and the Batak Community in Puerto Princesa, respectively (cf. pages 48 to 50 of this issue), Diwata-Women in Resources, Development, Inc. held another educational tour on August 9, this time to Rizal Province.

Diwata and its guests enjoyed a “view stop” at an outcrop of limestone in Antipolo-Teresa, Rizal Province,

< Continued from page 18 which they operate and the expectations and priorities of the host government.

This is often borne by the fact that the company’s priorities for development are sometimes set at the global level and may be “disconnected” from those of local stakeholders.

Clearly the highlight of the trip was the “view stop” at an outcrop of limestone in Antipolo-Teresa, Rizal Province, where Teresa Marble Corporation undertakes quarrying.

This can also be traced to a failure to communicate the company’s efforts effectively, leading to a lack of support from the government and local communities.

According to Redempta Baluda, Diwata trustee and Vice President for Exploration of Philex Mining Corporation: “Geologically, this limestone bed, known in Philippine stratigraphy as the Binangonan Formation, was formed 20 to 30 million years ago (Late Oligocene to Early Miocene epoch) in a shallow marine environment (i.e., below sea level).

It also does not help that many policy makers have a limited (or perhaps different) understanding of the true contributions of the resources sector to the economy.

It is therefore incumbent upon the industry to ensure that not only are policy makers provided the right facts, but that these are conveyed in terms that they will appreciate and accept.

Patricia A. O. Bunye is a senior partner at Cruz Marcelo & Tenefrancia and head of its mining and energy practice.

She is also President of Diwata-Women in Resource Development, Inc. Questions and comments are welcome at po.bunye@cruzmarcelo.com.

20 Philippine Resources

In cooperation with the Land Rover Club of the Philippines and the Eastern Rizal Miners Association (ERMA), Diwata and its guests enjoyed presentations by the Mines & Geosciences Bureau Region IV, Teresa Marble Corporation, Rapid City Realty Corporation, Lafarge Teresa Plant and Solid Cement Corporation, followed by visits to the Teresa Marble Corporation Quarry via the Solid Cement Quarry.

In this connection, those who heard the McKinsey report were unanimous in the view that its dispassionate and sober presentation, backed by data from across the globe, should also be made to the MICC. Our policy makers certainly need to consider the views of credible third parties in setting the direction for the industry.

It consists of a series of carbonate deposits with allodapic limestones as its lower member and reefal limestone as its upper member. Through time these sedimentary deposits were subjected to geological processes, heat and pressure, folding and faulting and finally uplifted to its present elevation or position.”

The group also briefly stopped at the Parish of St. Rose of Lima, beautifully decorated with “lilok” or marble sculptures of Teresa Marble, which is celebrating its town fiesta on August 23 with the “AMarA Festival, recognizing that Adobe, “Marmol” and “Apog” (limestone) are cornerstones of the community and its church.

Resources Commentary

Down at the Watering Hole: Sourcing Safe H2O for All

By Pacific Strategies & Assessments (PSA).

R

ecently, the Department of Environment and Natural Resources (DENR) classified two rivers and two lakes in the Visayas and Mindanao as potential sources of drinking water. The department said waters from Lake Danao in Ormoc City, Leyte Province, Lake Lanao in Lanao del Sur Province, and Paypayan and Langaran rivers in Misamis Occidental Province “require complete treatment to meet national standards for drinking water.”

According to the DENR, the classification will allow local and national government officials, as well as water managers and planners, to implement programs to manage water resources and protect them from pollution and man-made destruction. Since the passage of the Philippine Clean Water Act of 2004, the department has classified 691 bodies of water according to quality, purpose and vulnerability to pollution.

The preservation and protection of potential sources of drinking water is vital.

With a water crisis looming by 2025, the Philippine government will have to provide for 17 million Filipinos at risk of having no access to drinkable water.

Extreme weather conditions due to climate change, such as drought from El Nino, may make it harder for the government to stave off a water shortage.

Both the US Climate Prediction Center and the United Nations World Meteorological Organization warn we may see El Nino later this year. In the past, summer drought lowered water levels in reservoirs and lakes and caused water shortages throughout Metro Manila.

The Japan International Cooperation 22 Philippine Resources

Agency and the National Water Resources Board estimate that all major cities of the Philippines, including Metro Manila, Cebu, Davao, Baguio, Angeles, Bacolod, Iloilo, Cagayan de Oro and Zamboanga cities, will experience water shortages by 2025. Under the Millennium Development Goals, the Philippines should increase the proportion of families with access to safe water supply to 86.5 percent by 2015.

The Philippines, along with Vietnam and Cambodia, ranked poorly in the Asian Development Bank’s urban water security index, which measures water-related services. The three countries got the lowest score of 1 out of 5 behind Hong Kong (4), Malaysia (3), Singapore (3), Japan (2), China (2), South Korea (2), and Thailand (2).

Two water distribution companies service Manila and surrounding areas: • Maynilad supplies water to Manila, Caloocan, Malabon, Navotas, Valenzuela, Muntinlupa, Las Pinas, parts of Quezon City and Makati City; and Cavite City, Imus, Bacoor, Rosario, Kawit, and Noveleta in Cavite Province.

• Manila Water supplies water to the Municipality of Pateros, Mandaluyong, Marikina, San Juan, Taguig, Makati, parts of Quezon City and Manila, cities and towns of Rizal Province.

Although the Philippines may meet its Millennium Development Goals for providing access to safe drinking water, sustained population growth and rapid urbanization may limit access to this basic human need.

Waste materials from houses, commercial establishments, and factories have contaminated water in the cities. Illegal methods of mining and fishing, and destructive agricultural practices have reduced watershed areas in the countryside. A 2003 environmental study showed that 66 percent of the Philippine’s 611 in-

Issue 3 2014 www.philippine-resources.com

land bodies of water are considered unfit for human consumption and 57 percent of deep wells were contaminated with human waste.

The water supply is also threatened when the government fails to manage forest resources and curb illegal logging.

Rapid deforestation reduces watershed areas that protect potential new sources of drinking water to residential areas.

In urban areas, busted water pipes and illegal connections in communities have compromised the quality of the water and led to the outbreak of diarrhea and water-borne diseases. Water companies like Manila Water and Maynilad claim that they provide safe drinking water to their consumers.

But many still doubt the quality of water that comes out of their faucets and depend on refilling stations for their drinking water. Market research firm Kantar Worldpanel Philippines estimated that 6 out 10 households in Metro Manila bought water from refilling stations at least once in 2010.

The Philippine’s lack of focus and weak resource management also compounds the problem. A UN study in 2012 said that at least 40 government agencies and institutions are involved in water sector management. There are so many agencies involved that have different priorities that it will make it difficult for the national government to come up with a clear policy and roadmap for water resource management.

Unless the Philippine government introduces sweeping reforms and exercises political will by enforcing laws to protect our water resources, shortages may become a fact of life for many years to come.

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Econimic Commentary

Issue 3 2014 www.philippine-resources.com

World Bank predicts continuing good times for Philippine economy

T

he World Bank has forecast the Philippines to maintain its position as one of the world’s dynamic developing economies.

While it has downgraded its forecastes slightly, the World Bank reported in its recently released Philippine Economic Update (PEU) the country’s economy was predicted to continue to grow strongly at 6.4 percent in 2014 and 6.7 percent in 2015. It had previously tipped 6.6 and 6.9 percent growth respectively, but reigned those figures back in largely due to the financial effects related to Typhoon Yolanda.

World Bank Lead Economist for the Philippines.

The World Bank Group estimates that the country needs to spend an additional 5 percent of GDP on health and education to raise labor productivity and competitiveness of Filipino workers. This is on top of the Government’s planned doubling of infrastructure spending to 5 percent of GDP. “Going forward, the Philippines can sustain high growth by accelerating struc-

These numbers are a slight revision from the previous projections of 6.6 percent and 6.9 percent in 2014 and 2015, respectively.

However, recent data trends suggest that higher growth has now begun to translate into significant poverty reduction.

“After many years of slow poverty reduction, poverty incidence declined by 3 percentage points from 27.9 percent in 2012 to 24.9 percent in 2013, lifting 2.5 million Filipinos out of poverty. And in April this year, the economy created 1.7 million jobs,” said Rogier van den Brink, 24 Philippine Resources

According to Chua, financing the increase in investments will need to come from a combination of tax policy and administration reforms to make the tax system simpler, more efficient, and more equitable. In particular, in the interest of job creation, the tax burden and cost of compliance for small businesses need to be reduced.

“The government has successfully raised tax revenue equivalent to 1.2 percent of GDP in the last three years through the sin tax reform, improved tax administration, and higher growth. Accelerating the current reform momentum would help the country yield additional tax revenues to further expand growth that can benefit more poor Filipinos,” said Mr Chua.

“This projected growth remains one of the fastest in the East Asia region, second only to China among the major economies,” said World Bank Country Director Motoo Konishi.

The revision reflects the slow start of the economy in the first quarter of 2014 given the effects of Typhoon Yolanda, lower government spending in the second quarter, and monetary policy tightening in the first seven months of the year.

• The Philippines spends 30-50 percent less in infrastructure, health and education compared to its fast-growing neighbors.

tural reforms and increasing investments in infrastructure and in the health and education of the Filipino people,” said Karl Kendrick Chua, World Bank Senior Country Economist for the Philippines.

In addition, accelerating key reforms to secure access to land, promote competition, and simplify business regulations will also help create more and better jobs and bring more people out of poverty.

Budget measures

In the last four years, the Government has doubled spending on social services and has provided more money for developing the country’s infrastructure.

Sustaining these efforts will close the remaining gaps brought about by decades of lagging public investment: • The country’s spending on roads, bridges, ports, airports, as well as machines and equipment has generally been declining since the 1970s, and is now well below that of its peers.

On the same day that the World Bank was handing down in health report on the Philippine economy, the Secretary for the country’s Department of Budget and Management (DBM), Florencio “Butch” Abad, announced that the Aquino administration’s proposed P2.606-trillion 2015 budget was designed specifically to fuel economic growth.

Continued on page 26>

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Econimic Commentary

Issue 3 2014 www.philippine-resources.com

A Competitive Philippines in an Integrating ASEAN Energy Market

By Ruth Yu-Owen

A

s economies prepare for the coming ASEAN Economic Integration by 2015, the Philippine energy sector has to step up to keep pace with the anticipated ASEAN Energy Market Integration (AEMI).

And no matter how diverse the economic and cultural background of the ASEAN countries, there is one common and basic core principle for integration - the need to have energy access for all.

In today’s fast-paced and technology advanced world, energy access especially for the Philippines, because it is an archipelago, is an important tool in economic

< Continued from page 24 “The very blueprint of the Aquino administration’s 2015 budget was designed precisely to bring inclusive growth to the country,” Secretary Abad said.

“We’ve already established some crucial budgetary reforms to make public expenditure more transparent, accountable, and participatory. Those same reforms now allow us to focus our resources better on the people’s most urgent needs, as well as on other initiatives that will catalyze economic growth,” he said.

According to Abad, the proposed 2015 budget - which is 15.1 percent higher than the current year’s budget of P2.265 trillion - will respond to the growth demands of the country’s poorest and most disaster-prone provinces.

The Administration’s 2015 expenditure plan, which was dubbed Paggugol na Matuwid: Kaunlaran Para sa Lahat, will also direct greater investments into the Philippines’ most promising industries, 26 Philippine Resources

development.

its existing power problems as it prepares for the ASEAN Energy Market Integration.

It cannot be denied, however, that many areas in the Philippines is still without access to electricity and the structural integrity of the power grid has been put into question due to the recent calamities and natural disasters.

Energy experts have raised concern on the Philippines’ need for an appropriate and adequate energy mix compared to the rest of Asia.

At the recent State of the Nation Address of President Aquino, he admitted the need for additional generating capacity by next year due as some power plants are not expected to come online due to permuting delays and other power plants are aging and has reliability issues.

With this, the Philippines need to make sure that it has the capability to address including the agriculture, tourism, and manufacturing sectors.

“The budget proposal hews very closely to the unique requirements of our most impoverished provinces, including those that are regularly in the path of natural calamities. We’re also prepared to make even more dedicated investments into quick-expanding industries that have proven instrumental in fueling the economy,” Secretary Abad said.

“When the National Budget gives proper and sufficient support to these high-impact sectors—such as industry and agriculture—we can expect energetic public construction, brisk commercial activity, and even more job opportunities for our growing workforce,” he added.

The Budget Secretary said the 2015 spending program increases budgetary support to social and economic services, while managing the country’s debt-to-GDP ratio.

Aside from the current lack of power reserves, the Philippines continues to be dependent on imported fuels.

Imported oil at 33.6 percent is still the second largest source of energy under the country’s primary energy supply mix next to indigenous energy at 57.51 percent.

Continued on page 28 >

“Our investments in social protection and economic services have been unmatched. Under the proposed budget, expenditures under the social and economic sectors now comprise 6.8 percent and 4.9 percent of GDP, respectively. Even better, however, is the fact that spending for interest payments will now amount to just 2.6 percent of GDP. This means that we’re spending more on our people and less on debt payments, so that efficient public spending will translate to clear and tangible benefits for all.

“The Administration’s proposed 2015 budget is not mere abstraction; instead, it is the primary vehicle for the delivery of much-needed goods and services to the public. Through this expenditure program, the economic and governance gains we’ve so far recorded should manifest in the improved quality of life among Filipinos, as well as in the expansion of our economy and the strengthening of our public institutions,” he said.

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Econimic Commentary

Issue 3 2014 www.philippine-resources.com

Several years ago, the Trans Asean Gas Pipeline Network have already been raised but up to now no concrete action has been taken.

< Continued from page 26 The Philippines is also lagging in terms of oil, gas and coal production compared to its ASEAN neighbors. The Philippines ranks only 85th in oil production, 52nd in gas production and 31st in coal production.

In renewable energy production, however, the Philippines is now at 30 percent and targets to reach the 50 percent level by 2030.

The Philippines is rich in renewable energy resources and has the potential to generate 235.7 MW of biomass, 1,200 MW of geothermal, 10,500 MW of hydro, 170,000 MW of ocean energy, 76,600 MW of Wind resources.

The Department of Energy has projected power supply deficit of around Luzon 200 MW in April-May 2015 while Visayas and Mindanao continue to experience power supply outages.

In the Asia-Pacific, meantime, demand is expected to continue to growth by 2.1 percent yearly until 2035 although renewable energy is being eyed to meet this demand growth.

Another challenge for the AEMI is the infrastructure constraints to link the energy trade among ASEAN countries.

The Philippines transmission backbone has its own share of challenges due to its archipelagic position.

28 Philippine Resources

The pipeline network and LNG facilities will allow export of power or fuel from one country to another.

Over 5,000 MW of capacity is expected to come in from LNG sources as government prepares for the impending depletion of the Malampaya gas by 2024-2025.

Experts also believe energy market integration should go beyond trading of electricity over wires. There should be an assessment of energy trading potential with emphasis on mutual gains from trade.

ASEAN members could agree to remove border and behind-the-border barriers to trading energy products and investing in energy infrastructure.

Aside from power, other energy products can be traded among ASEAN such as biomass, natural gas, petroleum, among others.

The other ASEAN member Nations are currently interconnected. Natural gas is being exported through a pipeline from Indonesia to Malaysia and Singapore.

Electricity is exported from Laos to Cambodia, Thailand and Vietnam. Cambodia imports electricity from Vietnam and Thailand.

The Philippines has to continue to entice foreign investments to the country. Foreign investment in the Philippines is not as good as its other ASEAN neighbors because only 40% foreign ownership is allowed while in Singapore and Malaysia there is no hard limit to foreign ownership.

Indonesia is the biggest exporters of Coal. Traded volumes for coal within Asian is very small compared to exports to other region.

Thailand has a 50% cap but is flexible to increase on a case by case basis. As full ASEAN integration is inevitable, Philippines will have to be ready to revisit restrictions on foreign investments.

Infrastructure is one of the key challenges in physical connection of transmission lines within the ASEAN region. The Philippines alone has problem with transmission connections. There should be a long term plan through private sector investments and assistance from development banks to make this happen.

It should show to the ASEAN countries that it is an investment friendly location and it is transparent and willing to do business with the rest of the world.

It’s interesting to look at the Greater Mekong Subregion (GMS) where in 1992 the Asian Development Bank (ADB) brought together the 6 states of the Mekong Power basin namely Cambodia, Laos, Myanmar, Thailand, Vietnam and Yunan Province.

Transmission interconnections were built allowing electricity trade flows within the region. The initiative in this region has contributed to rapid economic growth among Mekong nations and therefore to poverty alleviation. This should be extended to the rest of the ASEAN nations.

Ruth Yu-Owen is the President and CEO of PhilCarbon, a leading renewable energy project developer and a keen observer of regional developments in energy.

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Mining News

Issue 3 2014 www.philippine-resources.com

Benguet confident it can turn tailings into golden riches

A

subsidiary of Benguet Corp., the first and oldest mining company in the Philippines, will attempt to recover around 180,000 ounces of gold from the decades-old tailings of its Acupan mine starting in 2016 once it closes the financial quotes within 120 days for the estimated US$28million project.

Renato “Toto” Claravall, Chief Finance Officer and Senior Vice President of Benguet Corp., disclosed this to Philippine Resources Journal as he discussed the Balatoc Tailings Project (BTP) as the featured speaker in the Philippine Mining

Club’s 20th Mining Luncheon on August 8 at the Manila Polo Club in Makati City.

Located in Barangay Virac in Itogon, Benguet province, the Balatoc project will be the country’s first large-scale gold recovery project from mill tailings. Managed by Balatoc Gold Resources Corp. (BGRC), the BTP involves the processing of 16.7 million metric tons (MT) of gold tailings, which are currently deposited in three ponds.

In an exclusive interview, Claravall said the project is “ready to go” with only the financing requirements being sorted out and hopefully completed within four

months or before end-2014.

Although the BTP is targeted to be fully operational sometime in mid-2016, Claravall said there’s no specific date for it as of now. “What happens is I report on the status of the project at every (Benguet Corp.) Board meeting. When the financing closes, hopefully in the next 90 to 120 days, I will make a definitive presentation to the board for final approval,” he added.

The idea of recovering the gold from the three tailings ponds of the Acupan mine, which have been used since the 1970s, came to Benguet Corp.’s leaders “about six years ago” as gold prices went over $1,000 an ounce, Claravall said. Also, gold recovery in past decades was “relatively inefficient” “All of a sudden, the possibility of making money out of tailings processing came up,” added the Benguet CFO, who joined the mining firm four years ago after over 35 years in the financial industry.

The company’s past tailings processing was inefficient “to the extent that when we started checking the grades of the tailings impounded in the pond, we realized that on average, they came up to approximately 0.65 grams per ton of ore. And then there were preliminary table evaluations made that made it look worthwhile recovering, and that’s the basic premise,” he added.

Although fluctuating in recent years and reaching a high of almost $1,900 in year 2011, current gold prices are expected to hold at the $1,300 level going forward, making the Balatoc tailings project a feasible one, Claravall said.

The BTP “could be construed as a green project” that if successful could also lead Continued on page 32 >

30 Philippine Resources

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Mining News

< Continued from page 30 to a parallel, continuous revenue stream for Benguet, as this early other local large-scale gold miners have expressed interest in having their tailings processed

by BGRC. “We’re not adding or creating new tailings, we’re effectively just cleaning them up,” Claravall said.

“Theoretically, the 16.5 million tons would have been reprocessed over a period of 10 years (the expected shelf life of the tailings). But we continue to mine Acupan, and we have plans as well to expand the mining in Acupan.”

Issue 3 2014 www.philippine-resources.com Issue 3 2014 www.philippine-resources.com

sary permits, including one for minerals processing from the Mines and Geosciences Bureau -- which would be a first as no large-scale mining company in the Philippines has yet started a tailings recovery project.

Benguet Corp., which celebrated its 111th anniversary on August 12, has an impressive portfolio of expanding gold

The company is also securing all neces32 Philippine Resources

Claravall has been the CFO and SVP of Benguet Corp. since March 16, 2010 and serves as its Principal Accounting officer and Comptroller. He has served as the Chief Financial Officer of Creative Hotel Concepts Group since 2009.

He served as President of MRC Allied Inc. (a.k.a. MRC Allied Industries Inc.,) since April 25, 2008 and also served as its Chief Executive Officer.

Claravall is a senior executive with a multifaceted 35 years’ experience in Financial Services: Banking (Commercial and Investment) and Insurance.

“What will happen then is you may have a perpetual situation where as you keep on mining ore, although the tailings may be lower grade, you already have a reprocessing facility already, (so) what you will have is a continuous parallel production – a mining production that continually gets recycled through another plant,” he added.

The new plant for Balatoc – which is the native Igorot word for gold – would be built on the site of Benguet’s old ore mill beside the tailings ponds and would be able to process about 4,000 tons per day, Claravall said. Even small-scale miners who bring their tailings to the plant could benefit from the new mill, which would have fine-grinding capability.

things are built into the social development components that are imposed on mining (in the Philippines). But you’ve got to be ahead of the curve,” he said.

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He served as Deputy General Manager of Bank of Boston from 1984 to 1997; Treasurer and Senior Vice President of Urban Bank Inc. from 1997 to 2000; Officer in Charge of UrbanCorp Investments, Inc. from 2000 to 2002; Senior Vice President of Export & Industry Bank from 2001 to 2002; General Manager of ValueGen Financial Insurance Co. from 2002 to 2008; and Senior Manager of Union Bank of the Philippines from 1979 to 1984.

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Mineral Resources

Issue 3 2014 www.philippine-resources.com

Coal man Rufino “Boomie” Bomasang provides an expert’s view on where the local coal sector is headed

By Maria Paula Tolentino.

O

rganized by the Philippine Mining Club, the recent Mining Luncheon at the Manila Polo Club was well attended thanks to its “celebrity” guest speaker Otto Energy and PhilCarbon Chairman Rufino “Boomie” Bomasang.

In this article “Boomie” shares with Philippine Resources Journal his take on the current state of the Philippine coal industry and where the country is now in terms of renewable energy, particulary wind and biomass.

Rufino Bomasang suggests the 2,700 megawatts of gas fired power generation will have to be fueled by expensive imported LNG.

PRJ: According to the Philippine Daily Inquirer (June 20 2014), industrial analysts forecast coal could make up at least 70% of total generation capacity by 2030.

Your thoughts.

plants and private companies would like to have low cost fuel as much as possible. Coal is still the least expensive fuel for power generation. So if your talking about big power plants, which is what this country needs, you have to go coal.

RBB: The Philippines is dependent on the private sector to develop power

Natural gas is definitely cleaner than coal, but at the moment, we only have

one source of natural gas and it is in Malampaya, which is projected to be depleted fully by 2024. So unless we find a replacement for Malampaya, this 2,700 megawatts of gas fired power generation will have to be fueled by liquified natural gas which is imported and is not cheap.

And you still have to put up the infrastructure for it. So given the constraints of fuel cost and infrastructure, coal is still the best option.

PRJ: The World Bank, Euro Investment Bank and Euro Bank for Reconstruction and Development have put energy policies that seek or limit financing for coal fired generation. What is your take on this?

RBB: Well, that is their policy. I can understand. They want to promote cleaner forms of energy. I fully agree. That is understandable. But inspite of that, we are not wholly dependent on the World Bank. The private companies have already made their decision. Look at the power plants being built here in the Philippines.

Almost all of them are coal fired power plants.

Coal industry veteran Rufino “Boomie” Bomasang.

34 Philippine Resources

Continued on page 32>

Mineral Resources

< Continued from page 30 PRJ: Tell us more about your involvement in renewable energy particularly wind and biomass.

RBB: I have an ecumenical attitude towards energy resources. In the Philippines, we need all of these indigenous sources of energy, whether it is coal, oil and gas, or renewable energy. Of course, there is a law which puts priority on renewable energy since it is cleaner and I fully agree, but we also need to recognize its limitations.

Apart from being more expensive than fossil fuels, solar and wind energy are intermittent and you are talking of, at best, a few megawatts. In some cases, you only talk of watts and kilowatts...well, we need hundreds and thousands of megawatts!

Coal is still the best option in terms of being able to secure fuel supply over the long term.

I fully agree that in the long term we should reduce our dependence on fossil fuel. That can only happen if we can expand the market for renewable energy to make it cost competitive and that is why I am involved in developing and promoting a wind farm in Oriental Mindoro.

With regards to biomass, we are looking at various areas in the Philippines where there is agri-waste that can be used to fuel a power plant. This being an agricultural country there is substantial supply of biomass. The challenge there is in the economics of gathering biomass because they come from various areas, and are not located in one central area.

Coal is still the Philipinest cheapest fuel option.

36 Philippine Resources

Issue 3 2014 www.philippine-resources.com

PRJ: There will be a large demand for renewable energy (wind, solar and biomass) in the next 10 years. Where is the Philippines in this loop?

RBB: We have put up a 40 megawatt wind farm in Ilocos Norte. This is the first wind farm in South East Asia and so we are the leader in this region in terms of promoting wind energy. Thailand is probably the most advanced in terms of using biomass for power generation. We have to follow the example of Thailand.

PRJ: From coal to renewable energy, why the shift?

RBB: It’s all a question of timing. We need both. We need to think of the short, medium, and long term. For the short and medium term, we still need all the fossil fuels, including coal, especially if they are produced locally. For the long term, as renewables become economically competitive, we should shift from fossil fuels to non fossil fuels.

servation earlier on a conflict of priorities between DENR and DOE. Where do you stand on this?

RBB: I don’t want to be seen as pitting one agency against another. What I am saying is that we are fortunate that the DOE recognizes its role not just as a regulator, but also as a developer/partner.

The private sector provides the expertise and money but in the end, the net proceeds are shared between the private sector and the government as the owner of the resource and partner.

And luckily for us, the DOE has played its dual role as both regulator and partner.

In my view, The MPSA (Mines Production & Sharing Agreement) in the minerals sector and FTAA (Financial Technical Assistancce Agreement) in the minerals sector are similar to a service contract in the energy sector. If the DOE has been able to play a dual role, I believe the DENR can also do the same.

PRJ: Quite the optimist...

PRJ: A “Champion” in the energy sector, would you consider this role?

RBB: I have been in the energy sector since 1976 trying my best to promote the development of indigenous sources of energy. My involvement has been primarily in the upstream sector, or in energy development. Whether it is coal, oil and gas, geothermal, or renewable energy, I have been championing their development.

As to the title of Champion, you can give the title to the Secretary of Energy. I’m not really title concious. Regardless of how you call me, however, I do believe that the original objective of promoting energy reliance is still very relevant as the Philippines is still heavily dependent on imported oil which mainly comes from the highly volatile Middle East.

Even just for energy security alone, it is imperative that we develop our own energy resources and that is what I have been involved in, originally in the public sector and now in the private sector.

PRJ: Atty. Leo Dominguez made an ob-

RBB: There really is no room for pessimism.

With a 50 year career as a professional engineer and manager of being in the mining and energy business, Mr. Rufino “Boomie” Bomasang has successfully served under 6 administrations from Marcos to Aquino.

From 1996 to 2004, Mr. Bomasang was President/CEO of PNOC Exploration Corporation (PNOC-EC) and successfully turned around PNOC-EC from a losing company to one of the country’s top 100 corporations and currently PNOC’s most profitable subsidiary through its participation in the $4.5 billion Malampaya gas-to-power project, where he had been involved since gas discovery in 1989.

In 2011, Mr. Bomasang was recalled from retirement by President Benigno Aquino to serve once again as the PNOC Director.

Mr. Rufino Bomasang is the current Chairman of the Philippine Chamber of Coal Mines, Otto Energy Philippines, and renewable energy company, PhilCarbon.

Mining Breifs

Issue 3 2014 www.philippine-resources.com

Philippine mining briefs - with Jimbo Gulle Goodearth gains first mining exploration permit under EO 79 The government has issued the first mining exploration permit in two years since President Benigno Simeon Aquino III signed Executive Order No. 79 to introduce reforms to the industry in July 2012.

The Mines and Geosciences Bureau (MGB) recently said it had approved the exploration permit (EP) of Goodearth Mining and Development Inc. for a 1,968-hectare area in Dinapigue, Isabela, according to a Manila Standard Today report.

An exploration permit allows a qualified company to undertake exploration activities for mineral resources in certain areas open to mining.

“The EP issued on May 19, 2014 grants Goodearth the right to explore the potential nickel, chromite and other associated mineral deposits within the permit area for a period of two years renewable for like periods but not to exceed a total term of six years, as such (is) the case for metallic minerals,” MGB said.

Goodearth’s exploration permit will expire on May 19, 2016.

“The said approval of the EP is in accordance to the pertinent provisions of Republic Act No. 7942, otherwise known as The Philippine Mining Act of 1995 and implementing rules and guidelines,” MGB said.

More companies support transparency standard

PH

More local companies in the extractive industry have submitted waivers to the government for participation in the Philippines’ candidacy to the Extractive Industries Transparency Initiative (EITI), allowing authorities to look at their tax payments and credits for reporting under the initiative.

38 Philippine Resources

Finance Assistant Secretary Ma. Teresa S. Habitan said a total of 33 firms have submitted waivers to the Bureau of Internal Revenue (BIR), since the National Internal Revenue Code prevents the BIR from disclosing the tax payments of individuals and companies.

“We have a total of 28 mining companies and five oil and gas firms, ”Habitan, a member of the Philippine-EITI multistakeholder group (PH-EITI MSG), said in a BusinessWorld report. “The waivers will allow the PH-EITI to include their tax and royalty declarations in our country report.”

However, the group hopes to sign up all 51 resource companies identified under the initiative before the end of the year, or else the Philippines would fail to comply with the disclosure requirements, said PHL-EITI national coordinator Marie Gay Ordenes.

The seven mining firms that were added to the list of EITI signatories were Apex Mining Co., Inc.; Philippine Mining Development Corp.; LNL Archipelago Minerals, Inc.; Johson Gold Mining Corp.; Shenzhou Mining Group Corp.; Krominco, Inc.; and Oriental Synergy Mining Corp.

Galoc Production Co. also joined the list of oil and gas companies with waivers.

Canadian traders opportunities in Phl

see

growth

Ed Fast, Canada’s Minister of International Trade, has reiterated his country’s desire to have more mining partnerships with the Philippines as the Canadian government sees opportunities to grow its trade and investment ties with the country.

“We would love to increase partnerships with Filipino companies in the mining sector,” Fast said at a recent joint meeting of the Canadian Chamber of Commerce of the Philippines, Makati Business Club and Management Association of the

Philippines.

Certain key conditions needed to be present to attract more mining investments from Canada to the Philippines, the minister noted, such as a “secure, stable and predictable environment” for Canadian businesses to invest in the country.

“We have tremendous (mining) expertise and Canadians are looking to the Philippines as a possible investment destination,” Fast said in a Philippine Star report.

“And what they have suggested is for the mining regime that is eventually adopted by the Philippine government is one that protects investors, has a fair tax regime and that takes into account the significant risks involved in mining, and the significant costs that mining firms incur as they explore and move towards production,” he added.

Canada has encouraged the Philippine government that it be the case because if right signals are set through future legislations on mining, “there will be significantly increased investments in mining,” Fast said.

He noted there is still potential to grow the bilateral trade of the two countries, valued at $1.7 billion last year, as well as investments being made by Canadian firms here.

The Canadian government intends to work with the Philippines to address hurdles for business such as infrastructure gaps as well as challenges in the regulatory and trade environment, Fast added.

“We recognize that the Philippines is one of the fastest growing economies in the region and presents tremendous opportunities for Canadians who are bold enough to recognize opportunities here on the ground,” the minister said.

Continued on opposite page >

Mining Breifs

Issue 3 2014 www.philippine-resources.com Issue 3 2014 www.philippine-resources.com

< Continued from opposite page Ph metal production value grows 17.11% in 1Q 2014 With three mining projects churning out more gold, Philippine metallic mineral production rose by 17.11 percent in terms of value in the first quarter of 2014 on increased revenues from gold production, the Mines and Geosciences Bureau (MGB) said in a Philippine Star report.

The aggregate value of metal production from January to March 2014 reached P21.98 billion (about US$503 million), up P3.21 billion from P18.77 billion ($430 million) recorded in the same period last year.

Gold production accounted for nearly four-tenths of the total production value during the period with aggregate earnings of P8.48 billion ($190 million), up 17 percent from the same period last year.

Revenues from direct shipping nickel ore and nickel sulfides comprised 34.80 percent with production value at P7.65 billion ($180 million).

Copper production revenues made up 24.30 percent, valued during the period at P5.34 billion ($120 million), and up by 33 percent from the comparative period.

The remaining 2.34 percent, or P514 million ($11.77 million), came from the combined values of silver, zinc, iron ore and chromite.

Revenues from Iron ore from small-scale mining operations amounted to about P320 million ($7.33 million), the MGB added.

The “substantial” increase in production from the Didipio gold project of Oceana Gold Philippines Inc. in Nueva Vizcaya, the Toledo copper project of Carmen Copper Corp. in Cebu, and the Padcal

copper-gold project of Philex Mining Corp. in Benguet led to the higher figures, the bureau said.

However, the production value of nickel direct shipping ore (DSO) actually dropped 14 percent in the first quarter to P3.59 billion ($82 million) compared to 2013, as the MGB said storms that hit Dinagat Island and Surigao del Norte from January to March forced the mines to close shop temporarily.

That area of Northern Mindanao has 18 of the 27 actively operating nickel mines in the country, but owing to “unfavorable weather conditions” 11 mines reported zero production in the first quarter.

“A nickel mining operation, being surface mining, is always vulnerable to the weather condition,” MGB director Leo Jasareno told Philippine Star.

Continued on following page >

Philippine Resources 39

Mining Breifs

< Continued from previous page Two mines also stopped producing before and during the first quarter. The polymetallic project of Rapu-Rapu Processing Inc. (RRPI) in Albay ended its operations last year and has started its final mine rehabilitation activities, while the Canatuan project of TVI Resource Development Philippines Inc. in Zamboanga del Norte ceased production mid-January after its ore reserves had been exhausted.

Three new projects are expected to take their place this year: * the Vitali Iron Ore Mining Project of Atro Mining-Vitali Inc. in Zamboanga City, which has a mine life of 10 years;

Issue 3 2014 www.philippine-resources.com

In SONA, PNoy orders 2015 energy demand met; silent on mining again In his fifth State of the Nation (SONA) Address, President Benigno Simeon Aquino III ordered Energy Secretary Jericho Petilla to ensure enough supply for the projected power shortfall in 2015, even as he continued to be silent on his programs for the local mining industry entering the last two years of his six-year term.

“Let us turn to the energy situation. We are doing everything in our power to ensure that the growing energy demand in our country is met,” the President said

* the Libjo Nickel Laterite Project of East Coast Mineral Resources Co. Inc. in Dinagat Island that has a life of 10 years; and * the Agata Nickel Laterite Project of Minimax Mineral Exploration Corp. in Agusan del Norte that has a mine life of 11 years.

These projects, under Mineral Production Sharing Agreements (MPSAs), have total investments of P1.46 billion.

Once they begin contributing to the production stream, the country would have 46 operating mines all in all, the MGB added.

in the SONA. “In spite of this, there have been some unforeseen events, which Metal prices were less favorable for may lead to problems in the next year.” producers from January to March 2014 compared to the same period last year. “For instance, we need to make up for Gold fell by as much as 20.77 percent the shortages caused by the scheduled to $1,292.93 per troy ounce in the first maintenance outages of old plants, the quarter, from $1,631.81 in the compara- sudden halting of plant operations due to tive period. breakdowns, and delays in the progress of new plants,” Aquino added.

The MGB said the average gold price is expected to become steady at $1,300 The President also noted that the comper troy ounce for the meantime. ing El Niño season “also threatens to affect the capacities of our hydro power Gold demand during the first quarter plants, and to raise energy demand even came mostly from the jewelry industry, further.” investment and Bangko Sentral purchases.

“If our use of electric fans and air conditioners in our own homes will increase 40 Philippine Resources

due to the warm temperature, then imagine the spike in the usage of businesses and whole industries. And it is not as if we can just go to the store and ask to buy a 600 megawatt generator, to be installed the following day,” he said.

Aquino said the government wants “to be completely ready so that we can avoid paralysis if the worst-case scenario arises,” with the goal of having “planned solutions for problems that will not arise until next year (2015).”

“This is precisely why I have tasked Secretary Icot Petilla of the DOE (Department of Energy) to coordinate with the Joint Congressional Power Commission, the Energy Regulatory Commission, members of industry, and, most importantly, the consumers, in order to increase our capacity to respond to this problem,” the President said.

In recent days, clamor has increased for Aquino to be allowed to use emergency powers to help resolve the looming energy crisis. A shortfall of as much as 400 megawatts, according to an estimate by the European Chamber of Commerce of the Philippines (ECCP), could lead to rotating brownouts in Luzon in the summer next year.

Meanwhile, Aquino again did not discuss mining in his penultimate SONA, even as left-wing lawmakers, before the address, urged the President to certify as urgent an alternative mining bill that would replace Republic Act 7942 or the Mining Act of 1995.

In pushing for their proposal, party-list Rep. Ibarra Gutierrez III of Akbayan said the Alternative Minerals Management Bill is “the best alternative to the current mining policy that promotes large-scale mining and exploitation of the country’s mineral resources and communities.”

Aquino imposed a moratorium on new mining permits in 2012 through Executive Order 79, which expanded the “nogo” mining zones in the country to include 78 tourism sites, farms, marine sanctuaries, and island ecosystems.

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Mining News

Issue 3 2014 www.philippine-resources.com

Indodrill goes horizontal for Philex project`

I

n downturns many companies try to find ways to keep their businesses afloat doing odd jobs or something off the beaten path.

That’s especially true with the mining industry in the Philippines, as current government regulations have ground many an operation to a halt.

It is in this environment that Indodrill Philippines Inc., a subsidiary of a leading global drilling contractor, has shown its innovation by taking on an atypical project for Philex Mining Corp. and leasing its skilled workforce to Singapore Airlines – jobs that are far different than its usual exploration drilling projects.

Horizontal drilling For a company that’s used to drilling into the earth, Indodrill were approached by Philex to bore -- horizontally -- into the concrete-and-steel walls of its Tailings Storage Facility 3 (TSF3) in Padcal, Benguet to help reinforce and stabilize the new spillway’s walls.

It’s an engineering and logistical feat that should be done by end-August, says Andrew Wanstall, Maintenance and Operation Support Manager for Indodrill Philippines, who is overseeing the special drilling project.

Low Level Cable Bolt Anchor Drilling.

It’s definitely another feather in the cap for the company founded in Indonesia, headquartered in Singapore and now has operations across the globe – including Australia, Cambodia, Laos, Malaysia, My-

anmar and EMEA (Europe, the Middle East and Africa).

Indodrill recently brought Philippine Resources to Philex’s Padcal mine site to explain the project and show the bespoke electric drill rig Indodrill crafted for the unusual job -- which required the firm to drill a total of 141 holes through the spillway walls at depths varying from 13 meters to 30 meters (42 feet to 98 feet).

The project also required the Indodrill rig to pierce the thick concrete walls at heights of up to 7 meters (22 feet) while fitting the whole rig in between the rather narrow spillway walls, which are set about 4.5 meters (14 feet) apart.

Work Deck Fabrication Clark Workshop.

42 Philippine Resources

Continued on page 44 >

Mining News

< Continued from page 42> Indodrill are no stranger to difficult drilling projects. They completed an underground project at the Lepanto mines, also in Benguet, which required them to complete 130 kilometres of directional holes, with some holes 2 kilometres deep.

“That was a feat never achieved before throughout the world,” Wanstall tells Philippine Resources.

When Golder Associates, on behalf of Philex, approached Indodrill for the TSF3 project, the main attraction to Indodrill was the challenge of the job. It was out of the ordinary, it was something that not everybody does, and something that they put a lot of thought into to pull off.

Issue 3 2014 www.philippine-resources.com

Indodrill started the project in June, and repurposed an underground drill rig similar to what the firm had used for Lepanto, The benefits of that rig was the size of it: it is a very powerful rig, yet with a very small footprint, as the criteria was that it had to fit between the spillway walls.

The project was always going to be challenging, working in restricted spaces on a raised platform some 7 meters high, drilling through the reinforced concrete and steel spillway walls.

The crew also needed to drill larger holes so that another Philex subcontractor, VSL, could fit the cable bolts that would be threaded through the holes, cemented and tensioned to specifications to finally reinforce the TSF3 walls.

And since they needed larger-diameter polycrystalline diamond drill bits, Indodrill had them custom-made at their factories in China “especially for the job.”

Upon getting the necessary equipment to the project, Indodrill had 10 employees onsite working in daytime hours only, due to the safety aspects of the project, and they drilled two holes a day on average, it’s been very successful.

Indodrill are very happy with the result, if anything the equipment is over-engineered, but failure was not an option; we wanted to be successful from start to finish.

Completing the spillway wall-reinforcement project shows the versatility that Indodrill have at their disposal, Projects such as this traditionally are not something they would undertake, as exploration has been pretty good for Indodrill, but with the downturn in exploration in the Philippines it shows that Indodrill can adapt and change according to the environment and also remain competitive.

Indodrill’s commitment to their employees to keep their “quality of life” during the mining downturn resulted in Indodrill “leasing” some of their exceptionally skilled welders and fabricators to the construction company employed

by Singapore Airlines to construct their new aircraft service hangars on Clark Airfield.

Indodrill is also undertaking commercial water bores project for Clark Water, a subsidiary of Manila Water Entering its sixth year in the Philippines, Indodrill is also poised to assist local companies in the geothermal and natural gas industries.

Work Deck Site Installation.

44 Philippine Resources

With a well-established workshop that has recently achieved ISO 9001:2008 Quality management certification at the Clark Freeport Zone, Indodrill are equipped to produce or manufacture just about anything they set their mind too, so they can plan and adapt for just about anything that comes their way.

Energy News

Issue 3 2014 www.philippine-resources.com

Mindanao wants more power plants

W

ith government nearing a self-imposed deadline to end Mindanao’s power crisis, businessmen from the region are clamoring for additional generating plants to sustain its growing economy.

Rey D. Billena, Philippine Chamber of Commerce and Industry (PCCI) regional governor for Southwestern Mindanao, said the region still requires additional investments in the generation sector despite a bevy of coal plants set to be completed within the next few years.

“We know that is not yet enough to drive faster progress in industries in Mindanao.

You’re driving investors [to] Mindanao, the 5 percent is not a realistic assumption. Putting up just 1 mall in Mindanao, the consumption of that mall is already 4 megawatts (MW),” Billena, who flew to Manila from Mindanao to drum up interest in PCCI’s annual meet in the region, said.

The 5 percent refers to the Department of Energy’s (DOE) energy demand growth forecast for the region, a report on Interaksyon.com noted.

Among the coal plants that will be put up in Mindanao are Aboitiz Power Corp’s 300-MW and San Miguel Corp’s 1,200MW projects in Davao del Sur; and FDC Utilities Inc’s 400-MW facility in Cagayan de Oro. The government is banking on the construction of the facilities to help ease the power crisis in Mindanao brought about by the region’s reliance on aging stateowned hydroelectric facilities, the output of which is stunted during the summer months.

Billena said the three plants are not enough to address Mindanao’s long-term requirements, as those facilities would hike the region’s generating capacity from 1,200 MW today to 3,000 MW in four to five years, barely meeting project-

ed demand for that period.

“We’re looking at more investors [because] we are positioning Mindanao as a gateway not only to the BIMP-EAGA but also to the ASEAN market,” Billena said.

The region’s gross domestic product (GDP) growth accelerated from 4.2 percent in 2011 to 8.2 percent in 2012, outpacing the national average of 3.6 percent and 6.8 percent, respectively.

In 2013, Mindanao’s growth slowed down to 6.3 percent amid another bout of insufficient generation that had led to hours-long power interruptions.

Billena said the Mindanao Development Authority however has projected the region’s GDP will grow to 7.2 percent for the year.

“With the priming of Mindanao as the growth area for the Philippines, 7.2 percent is just conservative,” he said.

Malampaya shutdown can no longer be moved, Petilla

T

he consortium running the Malampaya natural gas platform has informed the Department of Energy (DOE) that it could no longer reschedule the maintenance shutdown of the facility.

“SPEX (Shell Philippines Exploration B.V.) is not yet ready,” said Energy Secretary Carlos Jericho Petilla in a Rappler. com report, when asked if maintenance work can be done in January to February next year.

The Malampaya facility is scheduled to go offline in 2015 from March 15 to April 14 to commence the installation of a platform aimed at maintaining the fuel supply to power plants providing half of Luzon’s power needs.

Power distributor Manila Electric Company (Meralco) had suggested to move

46 Philippine Resources

the maintenance shutdown earlier or after the summer months when electricity demand is not at its peak. Meralco said this would help address the anticipated power shortage next year.

Reacting to Meralco’s proposal, Petilla said: “We have vetted this and SPEX is saying that it’s the only window they have.”

A delay in the maintenance work could affect the Malampaya facility’s output, Petilla noted. “Our worry is gas production if Malampaya maintenance is delayed.”

The Malampaya facility is expected to run out of gas by 2024. It currently fuels three power plants – the 1,000-megawatt (MW) Sta. Rita, 500-MW San Lorenzo, and 1,200-MW Ilijan plants.

Petilla said there would be a shortage in

power supply next year. He said the projected demand in Luzon by 2015 is 9,011 MW – higher than this year’s demand of 8,717 MW. This can be attributed to the massive economic expansion and development in the country, he explained.

Based on DOE projections, there will be a deficit of 200 MW. To address this, Petilla said an additional 400 MW to 500 MW capacity is needed to act as a buffer supply during the peak months.

Petilla earlier recommended to President Benigno Aquino III to declare emergency powers so that the government could produce the needed capacity by renting modular generator sets to avert blackouts.

As of July 30, Petilla said there was still no word from the President. “We will just make do with whatever powers we have” he said.

Community Resources

Issue 3 2014 www.philippine-resources.com

Diwata Visits ‘Nickel Asia Country’, Celebrates 2nd Year Anniversary and Mandela Day in Palawan

By Maria Paula Tolentino

D

iwata-Women in Resource Development, Inc. together with representatives from the South African embassy particularly Madame Tshireletso Kau (Charge D’ Affaires) took a trip to Puerto Princesa and Bataraza, Palawan from July 17 – 19 2014 to learn more about “Nickel Asia Country” and the IPs (indigenous peoples) from the Batak tribe.

The three day event marked the celebration of Mandela Day and Diwata’s 2nd Year Anniversary.

Since its establishment two years ago, Diwata has, among others, launched the 1st Diwata dialogue entitled “EO 79: The IPs and Women’s Views” (August 30 2012), spearheaded a dialogue on “Mining as A Means for Development” (November 14 2012); and held a photo exhibit called “Kababaihan: Tanglaw ng Minahan” in celebration of Women’s Month at the Yuchengco Museum (March 19 2013). For its 1st anniversary, Diwata together with one of the country’s most

established media fora, Bulong Pulungan, co-sponsored a forum entitled “Geology 101: Everything You Wanted to Know About Mining But Were Afraid to Ask” (July 23, 2013) at the Sofitel Hotel.

To celebrate its 2nd year, Diwata jetted off to Palawan to get a glimpse of mine life, the rehabilitation and the SDMP activities of “Nickel Asia Country” Bataraza.

Evidence of RTNMC’s Ongoing Mine Area Rehabilitation and Social Development Programs Upon arrival, Diwata was immediately welcomed by the RTNMC (Rio Tuba Nickel Mining Corporation) committee, headed by Dr. Bibiano Ranes. The team gave Diwata a comprehensive tour of RTN’s rehabilitation area (GP4, minesite), hospital and school (Leonides S. Virata Memorial School), townsite, the Gawad Kalinga Village, port, and other livelihood project sites launched by RTNMC and Coral Bay Plant.

Currently, the RTN Hospital employs an

On July 18, 2014, the Diwatas hosted a dinner celebration at Hotel Centro with honored guest, Mayor Lucilo R. Bayron of Puerto Princesa, Palawan estimated 90 employees with 3rd generation families benefitting from the company’s social development programs. The children of these families are provided education at the Leonides Virata Memorial School (LVMS) with a tuition fee of only Php500 per year! The tour guides Diwata had on board were the same students who studied in LVMS and are now fully employed by the RTNMC. Over dinner, officials of RTN, including the Resident Mine Manager, Mr. Philip Ines, presented the company’s rehabilitation program, CSR initiatives and SDMP projects.

The 2nd Anniversary of Diwata was attended by the Palawan Provincial Government, Puerto Princesa City Government, business and civic leaders, and representatives from RTNMC.

48 Philippine Resources

Social Development and Management Program (SDMP) Director, Rene Cinco emphasizes that RTNMC does not condone dole outs and are in fact, striving to make the IPs and the rest of the employees become self-reliant through social enterprise. The success of SDMP is vital to the independence of a community once a mine closes. He reiterates that RTNMC even ‘adopted’ 11 barangays not located around the impact area of the Continued on page 50 >

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Community Resources

< Continued from page 48 mine to include in their social development programs.

“When mine life is over, our communities will not be like ghost towns. We will live and thrive, and it is through social enterprise and agri-tourism will the community of Bataraza progress. It is SDMP’s vision, as well as RTNMC’s, that our communities become self-reliant” Cinco adds.

Accompanied by representatives of the Palawan Provincial Government and Puerto Princesa City Government, the mine tour was a good opportunity for Diwata to see for themselves the innovative and impactful programs of RTN. Diwata also met with the Indigenous Women to inform them about Diwata and its “Tanging Tanglaw: Turning IP Grandmothers into Solar Engineers” project. The project involves the selection of IP women from non-electrified communities for training at the Barefoot College in India. Upon completion of their studies, these women will be responsible for the solar electrification of their communities. Several of RTN’s IP women were identified as potential candidates for training and will undergo further qualification. The meeting also revealed how the IP women appreciated the help of RTN especially through the Indigenous Learning System (ILS) and other programs that have significantly improved their lives. One of which is 53 year old widow and mother of five (5), Mrs. Edwina Tabangay Alaska.

“My husband, a native, was also the kagawad here. I didn’t have any plans of

Diwata President Atty. Patricia Bunye together with ILS graduates Mrs. Edwina Tabangay Alaska and Maribel Seradje.

50 Philippine Resources

Issue 3 2014 www.philippine-resources.com

getting into school, but when I passed in ILS (Indigenous Learning System), I was asked by sir JR if I wanted to study. I said that I would try, thinking if others can do it, so can I. There were a lot of challenges along the way. While studying, I was working in the fields, and selling goods on Sundays but I was able to soldier on due to my determination to finish. Before I knew it, I was already taking up a college degree with Bachelor of Science majoring in Agricultural Business. I just wish that my fellow tribesmen could see that someone like me, people like us, could get an education and finish school”.

Diwata President Atty. Patricia Bunye asks Mrs. Alaska “Wasn’t it more difficult for you to see fellow students attending classes who were much younger than you? Also with children these days taking their educations for granted, what advice would you give them?”

Without missing a beat, Mrs. Alaska answers the seasoned lawyer “I can only speak for those who are taking up classes in ILS. I would advise these students to keep going, do well in their studies and make the most of this opportunity being provided by these two companies (RTNMC & sister company, Coral Bay Plant). If it weren’t for these two companies and ILS, I would have remained in my 6th grade education. It is indeed a huge priviledge and with that, I am grateful”.

Anniversary Dinner wan Leaders

with

Pala-

On the evening of its anniversary on July 18, the Diwatas hosted a dinner celebration at Hotel Centro with honored guest, Mayor Lucilo R. Bayron of Puerto Princesa, Palawan.

Over dinner and cocktails, elder IP women and youth from the Batak tribe each gave stunning performances of song and dance as tribute. The dinner was attended by the Palawan Provincial Government, Puerto Princesa City Government, business and civic leaders, and representatives from RTNMC.

Mandela Remembered With South African Embassy And Batak IPs On the final day of the trip, Diwata was given a tour of the Batak Community Center where they witnessed a cultural welcome from the tribe before the program commenced at the Tanabag open gym. Engaging the support from the South African Embassy, the adult IPs underwent a lecture on basic fire safety and basic wound treatment followed by the distribution of wound kits, courtesy of Watson’s. An estimated 294 Batak tribe members from different sitios attended the Mandela Day Celebration.

In a country where mining is controversial (and even frowned upon), legitimate mining companies like Rio Tuba Nickel Mining Corporation (RTNMC) and Coral Bay Nickel Corporation are constantly under the microscope from anti-mining groups due to the environmental compromise mining imposes on nature. RTNMC and Coral Bay Nickel Corporation, however, go above and beyond what the law requires and showcase best practices in education, employment, housing, communities and human resources development.

And at the forefront of this advocacy, the women of Diwata are there to keep a close watch that responsible resource development is observed for many more years to come. With Mining Philippines 2014 looming just around the corner, it makes one question: is economic progress with environmental protection even feasible? From someone looking in, the Diwatas are more than willing to show anyone that, yes, it is.

The Diwatas are on Facebook and Twitter. You may visit and like their FB page Diwata – Women for Resource Development and follow them @DiwataResrcDevt on Twitter.

[Maria Paula Tolentino is a freelance journalist representing a number of publications. The views of the author are her own and do not reflect the publication or entity she

represents.

For

comments

regarding

this story, you may reach her at paulatolentino@gmail.com]

Community Resources

Issue 3 2014 www.philippine-resources.com

ANZCHAM and PR Company EON Discuss 2015 ASEAN Integration

By Maria Paula Tolentino The upcoming ASEAN 2015 will affect the Philippines current economic, business, cultural and political set-up. The conference is a series of seminars that discusses the blueprint of ASEAN Integration.

Sessions will also focus on its impact on major business operations as taxation, political security, customs concerns, borderless online commerce and Intellectual Property Rights. Other challenges and issues that may be faced by businesses will be tackled by highly-qualified summit speakers during the event’s freeflowing discussion time. Find opportunities tomorrow with the possibilities provided today.

Tower Club (PhilamLife Building, Makati City) June 10 2014 - Australian-New Zealand Chamber of Commerce or ANZCHAM together with guest speaker Ju-

nie del Mundo, Chairman & CEO of PR company EON, led the discussion on the opportunities of the ASEAN Economic Community and how to better understand and prepare for the integration come 2015.

Proofing SMEs for the ASEAN Economic Community,” an action-oriented conference that will equip SMEs with prescriptive knowledge on the impending challenges and opportunities brought about by the integration.

Less than a year before the target realization of the ASEAN Economic Community (AEC), competitiveness is no longer an option but an imperative for enterprises.

“The ASEAN integration urges SMEs to level up and adapt to changes, as the demand increases for higher quality of products and regional competition becomes stiffer,” says PLDT First Vice President and Head of SME Business Kat Luna-Abelarde.

While the government is aware of its responsibilities in ensuring that the country is well-prepared for the AEC, small and medium enterprises (SMEs), being the backbone of our nation, should fully realize the significance of the upcoming integration, as well as the great impact that their community can collectively contribute to the integrated economy.

PLDT SME Nation, aims to raise awareness on the ASEAN integration through Future Talks, “Ready for 2015: Future-

“The diversity, however, will provide them the freedom and creativity to develop new products and services that can potentially spur economic growth within their local economies and the ASEAN economy as a whole.”

On top of harnessing the benefits of a single ASEAN market, SMEs should also understand their crucial impact to the local and regional economy. For one, they are considered the main drivers of the economic landscape for most of the ASEAN countries, as they account for more than 90 percent of business enterprises throughout the region, and employ between 50 to 99 percent of its respective country’s workforce.

In the Philippines, they represent 99.6 percent of the operating business enterprises, generating up to 32 per cent of the country’s Gross Domestic Product.

This highlights the role that they play in providing jobs for the local and regional workforce, which translates to more income for their own businesses and local economies.

ANZCHAM President Ian Porter with EON CEO Junie Del Mundo.

52 Philippine Resources

“Future-proofing the SME sector by providing world class infrastructure and building an ICT culture can spell the success of the industry, and more import antly, the economy, as the AEC materializes,”

Energy News

Issue 3 2014 www.philippine-resources.com

The Shift to LPG, a Work in Progress for DOE

By Maria Paula Tolentino.

I

n 2013, 40% of the world’s population use firewood, charcoal and kerosene to cook their meals and heat their homes. This results in the premature death of four million people each year from associated indoor air pollution.

UN Sustainable Energy for All (SE4ALL) Initiative and World LP Gas Association (WLPGA) announced a cooperation agreement to transition 1 billion people from traditional fuels to Liquefied Petroleum Gas (LP Gas), an efficient and clean cooking fuel.

With companies such as Petron and

Liquigaz (SHV Netherlands) getting the lion’s share of the gas industry, the use of LPG is still a work in progress for the Department of Energy (DOE).

In the recent Asian LP Gas Summit, held at Manila Hotel last March 10 – 12 2014, Philippine Resources Journal had the opportunity to sit down and talk to DOE Director, Zenaida Monsada (Oil Industry Management Bureau) on the challenges of advocating the use of LPG to Philippine households and even, to the regular public transport: the jeepney.

PRJ: What are your thoughts on the current state of the gas industry?

Director Monsada: LPG has plateaud in terms of demand and one of the rea-

sons we see is the price. For this year (2014), we have had three rollbacks, but not as much as the big increase last December. When LPG becomes expensive, the tendency is for people in the rural areas to shift to firewood and charcoal while those in the urban areas, to kerosene.

If you look at the bigger picture, LPG is actually much cheaper, besides being cleaner and easier to handle, compared to charcoal and kerosene. For instance, an 11-kilogram tank of LPG can last a month for a family of five and costs Php 800 more or less.

Street vendors like fishball dealers who use a small cylinder of LPG (2.7 kg at Continued on following page >

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Philippine Resources 53

Energy News

< Continued from previous page around Php200 for 1 week) are now shifting to kerosene (costing 30-40 php per liter a day). Many realize that the latter ends up more expensive but because it is difficult to save for a tank of LPG, they end up using the more expensive alternative.

In the transport sector, the conversion to auto: LPG has practically stopped because of certain misconceptions on its use.

PRJ: What are the initiatives DOE is taking to push LPG? Director Monsada: LPG is considered a major alternative fuel for the transport sector. DOE is assisting some transport groups on various tests with jeepneys using auto-LPG. We are focusing on cooperation among government agencies, including Congress, and the private sector.

Joint initiatives include the reviewing of respective guidelines to address the issues raised on auto-LPG, especially on health and safety, e.g., LTO/LTFRB on vehicle registration and franchising, DTI on vehicle/engine conversion/retrofitting

Issue 3 2014 www.philippine-resources.com

and LPG cylinder standards, DOH on health issues, DENR/EMB on emissions, DOE on quality of product and autoLPG dispensing stations and DOTC on the overall alternative fuels program promotion and support.

At the same time, we are campaigning for the proper use and handling of LPG, as well as safety and buying tips, through information, education and communication (IEC) campaigns with the different stakeholders.

Under the Gender and Development program of the DOE are lectures on Safe LPG, up to the household level. We are also actively advocating for the enactment of the LPG Bill which we hope can better guide the players towards fair, orderly and safe competition. What better way to improve the industry but to have clearer regulations.

PRJ: What are the the industry is facing?

challenges

Director Monsada: If there is any increase in demand for petroleum, there should be more for LPG since it is cleaner. There is definitely a lot of growth potential here in the Philippines for LPG, however, there are a lot of misconcep-

tions, and fears, especially on auto-LPG. On top of those mentioned earlier is the fear of supply shortage because it is imported. But there are now many “players” in this industry, though not all are behaving properly, and many without supply contracts.

Some unscrupulous players insist that the industry is deregulated so they can do anything, which is not the case since there are and standards that merchants should be adhering to when selling LPG. LPG has been one of the major causes of fires because of poor cylinder maintenance. Thus, as I mentioned, DOE’s efforts are focused on improving regulations, and better yet a comprehensive law, to affect better monitoring, enforcement and prosecution, so that those who are ruining the industry and causing damage to life and property, are held accountable, or better yet discouraged. And these are complemented with consultations and IECs with the stakeholders.

The economics of conversion to autoLPG and fuel cost, is also a challenge, but with consideration of LPG being a cleaner fuel, jeepneys will have no problem with smoke belching, thus less apprehension; healthier environment, less medical cost, less absence from work, etc., therefore more “take home pay”.

Moreover, auto-LPG users should have access to proper maintenance. The other alternative fuels may compete with LPG. However, among them, LPG is the most versatile, readily accessible, currently available, and ultimately possibly least cost.

“LPG being a cleaner fuel, jeepneys will have no problem with smoke belching.”

54 Philippine Resources

With the jeepney modernization program looming nearby, Director Monsada reflects that though it will be a challenge to convince the jeepney operators and drivers to make that shift to LPG, the effort will be well worth it in the end. She suggests that for new vehicles coming in, it is best to transition to cleaner fuel. A shift will be inevitable in the future, and it would do us good (health-wise especially) to embrace this change.

Energy News

Issue 3 2014 www.philippine-resources.com

Empowering the Future with Solar Energy

By Maria Paula Tolentino.

U

nsustainable and destructive mining practices have had a serious impact on the environment, ecosystems, and human health since the industry’s inception. In the Journal’s pursuit of creating a discussion on renewable energy and its various components, geologist Honorio “Rod” Tolentino opens his home and office to further dialogue on the importance and urgency of harnessing renewable energy to power homes, businesses, and eventually, empower the future.

PRJ: Why the passion for renewable energy?

HRT: Being in the mining and energy industry for over three decades, and seeing the dynamics of such an industry, I came to a point where I thought “What could be a related industry that is more sustainable and with great potential for growth?” I love reading science journals, and I’ve always seen turbines, and solar power in those journals. I thought, “perhaps it is worth exploring the energy conservation and renewable energy business, and worth looking into LED lights and solar power.”

The Philippines, being in the tropics, has one of the highest insolations in the world, thus, effectively the photovoltaics (PV) should be a good source of alternative energy. With solar power, there are no moving parts and should have the lowest maintenance cost. Sunlight is converted into electricity which is stored in the batteries. With the increasing fuel and electricity costs, the future looks into reliable sources of power, particularly during brown-outs, which was very frequent then, particularly in Visayas and Mindanao regions.

I started experimenting in 2007 with LEDs and solar power as they complement each other. High illumination LEDs started in 2006 and they were not popular for general lighting because they were much more expensive then.

Anyone can get frustrated especially during the years when we were starting.

There is lack in technical people in this field and I had to study through the internet. This is practically a new commercial field with a high potential for growth. What drove me was the fact that it can be done. In other countries, like Germany, over 50% of their power generation is from photovoltaics then.

I undertook a lot of research and invested in developing LED lights through

Nickel Phil Consultants and LEDs Lighting System Inc.’s President, Honorio “Rod” Tolentino, his wife Lyn and the solar team.

56 Philippine Resources

our original equipment manufacturer overseas and I have also experimented on solar power implements, such as controllers and inverters. We invested around Php10M on RE and LEDs, developing products to make them work for local general use. It took us almost 5 years before we recovered such an investment and for the business to gestate. Had we stopped, we could have lost all of our investments.

One day, I ordered different kinds of bulbs, with varying voltages from 12V DC to 220V AC; out of excitement I blew up many of them when testing as I plugged them in the wrong power supplies. My wife jokingly told me that I might come home one day with a sooted face and burnt hair because of the bad experiments. But I didn’t stop. This was way back in 2007.

As we decided to push through, I hired jobless people from informal dwelling communities around our parish. As they are trainable, they became our good technicians until now. There were no trade school graduates with suitable skill sets back then. Part of our training, aside from the technical skills, was spiritual and family values, good manners and right conduct, health and safety.

We started with small contracts supplying LED bulbs. Now, our products compete with the best ones in the market.

Our main advantage is the technical knowledge of our products, because we help design and develop them. Clients require quick response time and we meet that. LEDs are repairable and we provide service to our clients through the life span of our lamps.

I’m still much into earth sciences, particularly exploration and mineral resource evaluations in our overseas projects. My interest in electronics is my balancer to get into RE and energy conservation. As a geologist, I fully understand that fossil fuels will get depleted in the near future and Continued on page 58 >

Energy News

< Continued from page 56 that conserving/developing alternative sources will be the key to the future of the energy business.

PRJ: “Renewable energy has the ability to lift the poor to new levels of prosperity” (United Nations’ Secretary-General Ban Ki-moon). Is this possible?

HRT: That is a true yet general statement.

A serious plan and direction has to be led by the government towards sustainability.

With the government’s direction, particularly in tropical countries, there should be less dependence on fossil fuels and sustainability becomes an actual programme. Mind you, Germany is in the northern hemisphere and gets much less insolation than the Philippines, but it uses 56% RE. The question is, can renewable energy lift us out of poverty? Not in the immediate, until much of the population uses RE. We have to develop RE locally to have a multiplier effect. We also have to consider that any alternative power source has its own carbon footprint/ equivalent. There has to be a balance also as there is cost of importing implements. The government has to take lead through regulations and incentives.

The key driver for developing nations to RE is that private enterprises capitalize on projects that will be the catalysts for the shift. The application of the Feed-in Tariff (FIT) by the government is a first step. Definitely, the lower cost of RE can hasten the lead to their use from the household level. Apparently, it will take a gradual growth as public education has a great role in the shift to RE. The best solution is to include responsible use of energy and application of RE from grade school by training the trainors first.

Common households use 65-35 ratio of electricity: 65% for lighting and 35% for appliances. If the use of LEDs alone can cut lighting energy by 75%, fuel importation should easily decrease roughly by an equivalent of over P230B in 2007. That is a lot of money for good social programmes and infrastructures.

PRJ: If there are pros, there are also 58 Philippine Resources

Issue 3 2014 www.philippine-resources.com

cons. What are the side effects of using solar energy?

HRT: There are two things that come to mind: immediate and long term. In the immediate, there is none. In the long term, it’s in handling the disposal of the recyclable materials such as the batteries and used solar cells. That’s about it!

After 6 or 7 years, you should change your solar batteries. Solar panels last for 25-30 years. LED lights last at least 3 times longer compared to fluorescent lamps which have toxic elements and compounds, aside from high UV emission.

The savings are significant. It has already been six years and I still use the same bulbs when we started business.

LEDs can easily cut power consumption by 75% as compared to fluorescents.

It is at least 95% vs halogens and metal halides. The savings is immense and using them alone will give you a return on investment at 8-9 months.

PRJ: How reliable and efficient is a solar energy kit? How much does it cost?

HRT: A kit varies from Php3000/set; there is no ceiling. Some of our clients even use RE for their air-conditioning and they spend millions of pesos. It really depends on how big you want it. If you want air conditioning using solar power, it is expensive and the payback period can be over 5 years. For an office like ours, I invested around Php70,000.

It’s an automatic system wherein it can function on and off without human intervention. Most of our lights run on solar power. I can use some of our convenience outlets for our PV power to run computers and other light appliances so that we will not be affected by any Meralco power outage. Our business is mainly internet-based and RE keeps us connected and operational even without Meralco electricity.

PRJ: How can solar power be stored for later use? How about the maintenance of solar energy kits? How long does it take to charge the batteries?

HRT: Solar energy is stored in batteries.

Between a solar panel and a battery is

a charge controller so that charging from the sun is properly regulated. The batteries used are the deep-cycle types, not the car batteries.

Maintenance is quite easy, you just have to wipe the panels and clean the cable terminals. The PVs and battery size are calculated based on the load requirements. Matching is important for optimal use. The best full charging time of batteries should be within 6 hours. A simple set up should allow one to use the PV system for a day of no good weather or poor sunlight.

PRJ: But how can you charge the solar panels given bad weather?

HRT: Even if there is rain or a typhoon, as long as there is a little sunlight, the solar panels charge, although at a lower rate. On good weather during summer time, there is 11 hours to charge batteries. Overcast skies can still charge PVs the whole day with the right design of a solar power system.

PRJ: What are your challenges when it comes to solar enery?

HRT: Technicians (people with the right skill set) and the source of other supplies for reliable RE implements.

There is no readily available specialized technicians for RE and LED lights. As this is our business, we have to develop them. Likewise, for products, we have to design and develop them so that they suit our local conditions and specific local market demands.

PRJ: From the consumer level, what is the economic value of using solar energy?

HRT: In my computation way back in 2007, our total consumption of diesel fuel and coal (for lighting alone) is around PHP200B. A typical Filipino household consumes an average of 65% of energy lighting alone. If you can save 75% of that, that is easily the economics of it. This is where Ban Ki-moon can effectively say renewable energy can alleviate poverty, if and only if, the government can rechannel the money saved, to the socio Continued on page 60 >

Energy News

Issue 3 2014 www.philippine-resources.com

< Continued from page 56

energy?

economic development of the country.

The savings from fuel importations can be spent instead for socio economic programmes.

HRT: Companies won’t have to fully rely on Meralco for energy if RE is used. In remote site operations such as construction, mineral exploration, surveys, researches, etc. PV is something handy to set up. Running basic lights and appliances using RE can save on fuel costs and its transport to remote areas of work.

From our experience with our long time clients, it has already been six years already and our same LED products are still in use. Whereas if they still used fluorescent lights, replacements are normal every 6 months. This shift to LEDs saved them a lot of money in terms of energy, maintenance and repair costs.

The estimate is at 82% total savings for lighting alone.

PRJ: On the issue of sustainability, do we have the manpower, structure and money to sustain renewable energy?

HRT: Our country has to formally train people through the technical schools so that we can gear up for sustainability of RE. The future is definitely going there and there seems to be no other viable option, as fossil fuel gets depleted.

Anybody can easily maintain a household system. Batteries last for 5-7 years and the PVs 25-30 years. Educating the public and creating local facilities to manufacture the implements should equate to the sustainability of the industry as a whole.

PRJ: How is renewable energy helpful to the environment?

HRT: RE such as PVs has a carbon footprint also, but definitely smaller than burning fossil fuels. PVs and LEDs do not emit pollutants and much heat.

Everytime coal or oil is burned for for power generation, close to 10 kilograms of sulphur is dissipated in the air, for each tonne of fuel consumed.

For Metro Manila alone, thousands of tonnes of fuel is burned each day.

That creates acid in the atmosphere.

High acidity in rain adversely affects vegetation and other organisms, thus create imbalance to nature. The heat emission contributes to global warming as well.

PRJ: From the corporate level, what is the industrial value of using renewable 60 Philippine Resources

PRJ: Do you think renewable energy can solve the country’s (or even the world’s) energy crisis?

HRT: Oil production is one of the biggest global businesses. The politics in such an enterprise will not allow a quick and major shift to RE. Oil is therefore a necessary commodity and it will be here for the long term. RE is an option and it tends to soften the global dependency on oil as a source of energy. Philippines also has other alternative energy sources such as geothermal and hydropower.

In the field of RE, there is not much technical people to grow the industry rapidly. As far as our clients are concerned, the use of RE is both energy conservation and comfort from power outage. The growth in RE now is mainly driven by the private sector’s initiative and it is a slow growth in the Philippines.

PRJ: Do you think the typical consumer can afford solar energy or is it a luxury?

HRT: Funny you should ask. In provinces, a number of folks are willing to invest in small solar power systems. They are even willing to pay in installments. Whereas here in Manila, owners of big houses don’t want it because they say they have the money to pay for their electricity bills, in the backdrop of increasing energy costs. It’s a bit of an irony.

An example was Fr Mario Baclig of Bukidnon. He bought a solar power kit from us because the farm barrio, people in his area, have to go to a bigger town to re-charge the batteries of their cellphones. Communications in his place was difficult. I thought that in the advent of renewable energy, this shouldn’t be happening. The priest said “Can I buy

one so that I can charge my cellphone?”

He got one kit.

After several months, he came back. He said, “I need to buy some more because people are lining up waiting to charge their cellphones. I can’t use it anymore. I had to donate it to the barrio.” I decided to donate a set for the community. They were so happy.

After less than a year, he came back and was buying a bigger solar power module for their area that remains to be out of the power grid. Again, I donated a system and a set of LED lights. After a week, I was surprised to get sack of red rice delivered to us via air freight! I believe that what I gave them was a small system, but the impact of having such a facility for the basic communications and lighting made a big a difference in the lives of so many people.

The use of RE and energy conservation can be a common mindset that is cost centered. This has to changed so that people think of it as an investment.

Education is primordial and the young have to be taught in school. Practical science in elementary and high school should include these in the curriculum in the same manner as caring for the environment is.

Honorio “Rod”Tolentino is the President and owner of NickelPhil Consultants and LEDS Lighting Systems, Inc. A licensed geologist, Rod is affiliated with the Geological Society of the Philippines where his countries of exposure include the USA, Australia, New Caledonia, Singapore, South Korea, China & Indonesia.

For the past 10 years to the present, Rod has acted as a consultant for a leading Indonesian firm engaged in exploration, mining and refining of nickel and bauxite resources. He is also currently involved in the design, development and distribution of LED lighting and Renewable Energy.

Rod was previously the President & Country Manager of QNI Philippines (1996 – 2006, BHPBilliton subsidiary) and Director & President for Surigao Integrated Resources Corp (2003 – 2006).

Energy News

Issue 3 2014 www.philippine-resources.com Issue 3 2014 www.philippine-resources.com

Bid Round areas included in Pinatubo 2D seismic programme

A

cquisition has begun on the first modern seismic 2D coverage to evaluate the West Luzon Basin in the Philippines.

Australia’s Searcher Seismic is acquiring the ~4,400km Pinatubo multiclient 2D seismic survey covering a 10 by 10 km grid in the West Luzon Basin. The survey will include coverage over the Philippine Government’s PECR5 bid round blocks 8,9,10 and 11.

Barrett Cameron, Sales and Business Development Manager for Searcher Seismic, said the Pinatubo 2D survey covers an unexplored area and will provide data sufficient to define major structural trends and plan detailed follow up surveys.

“The location of the Pinatubo survey in the West Luzon Basin is in a forearc position today but has all the elements for a viable petroleum system as it was adjacent to the Mindoro Basin in the middle Miocene when proven petroleum systems of the area were being generated.”

“The Pinatubo multi-client 2D survey provides 4,400km of long offset, broadband data critical to progressing the evaluation of this area,” Mr Cameron added.

The Pinatubo multi-client 2D survey provides 3,843 km of long offset, broadband data critical to progressing the evaluation of this area.

The acquisition programe is due for completion in late August. Fast track data will be available to ensure ample time for evaluation of the blocks for PECR5 bidding round.

The Pinatubo 2D survey is approved and in cooperation with the Philippines Department of Energy.

Philippines puts forward South China Sea proposal

T

he Philippines has joined with a number of its South East Asian neighbours in calling for urgent action to reduce the rising level of tension in the South China Sea, where there is a major dispute brewing over subsea oil rights.

As part of the “calming” process the Philippines has put forward a proposal – the Triple Action Plan (TAP) – for dicussioon at the ASEAN meetings in Nay Pyi Taw in August.

TAP was first informally announced by

the Philippines in late June 2014 as tensions in the waters off Vietnam heightened due to emplacement of the Chinese Oil Rig HD981.

brings to fore the need for a more concrete definition of paragraph 5 of the ASEAN-China Declaration of Conduct on the South China Sea (DOC)

Specifically, the TAP contains 1) immediate; 2) intermediate; and 3) final approaches to address what I claims are provocative and destabilising activities in the region without prejudice to existing territorial claims.

For the intermediate approach, the TAP calls for the full and effective implementation of the DOC and the expeditious conclusion of the Code of Conduct.

As an immediate approach, the TAP calls for a moratorium on specific activities that lead to an escalation tensions in the South China Sea. It says this approach

As a final approach, the TAP underscores the need for settlement mechanism to bring the disputes to a final and enduring resolution anchored on international law.

Philippine Resources 61

Energy Breifs

Issue 3 2014 www.philippine-resources.com Issue 3 2014 www.philippine-resources.com

Philippine energy briefs - with Jimbo Gulle Palace welcomes private sector aid in energy woes Malacañang welcomed the proposal of the Federation of Philippine Industries (FPI), which recently offered its assistance in addressing the country’s energy concerns, particularly the supply of electricity.

FPI offered to lend the government its power-generating capacities to address the impending power shortage next year, a Philippine Information Agency report said.

“That’s a very welcome proposal and expression of support from that particular federation, and we are quite certain that Secretary Petilla and the rest of DOE will be coordinating with them to see what they can do to help, now that they’ve expressed na handa po silang tumulong,” deputy presidential spokesperson Abigail Valte said in an interview over dzRB Radyo ng Bayan.

shortly after announcing a tie-up with Megawide Construction Corp., which would involve $100 million worth of investments for various projects, a BusinessWorld report noted.

“In response to the government’s lead, PhilCarbon is focusing on the development of wind, geothermal and mini-hydro renewable energy sources and promoting energy efficiency,” the statement quoted PhilCarbon Chairman Rufino B. Bomasang as saying.

Bomasang added that the company’s strategy is to “partner with foreign and the local companies to achieve the optimum blend of local and international experience to ensure effective implementation of its projects.”

troleum Public Co. Ltd. is set to acquire a minority interest in Nido Petroleum Ltd., an Australian oil and gas firm with main operations in the Philippines, BusinessWorld reported.

In a report to the Australian Securities Exchange, Nido said BCP Energy International Pte. Ltd. “has agreed to acquire 402,951,875 ordinary shares of Nido (comprising 19.66 percent of Nido’s issued share capital) from Petroleum International Investment Corp.”

“The acquisition of shares is subject to relevant conditions and approvals,” the report read.

Meanwhile, PhilCarbon President Ruth Y. Owen said the company is keen on developing renewable energy projects amid the need to protect the environment and reduce the impact of power projects on climate change.

BCP Energy is a wholly owned subsidiary set up by Bangchak Petroleum in Singapore mainly to enter into a share sale agreement with Petroleum International, which is incorporated in the British Virgin Islands.

Regarding proposals to use renewable energy to solve the country’s energy woes, Valte said those are “all good suggestions” but the concern is the cost of carrying out such projects.

“PhilCarbon, as a renewable energy company, is committed to fulfill the government’s vision of energy independence under the Renewable Energy Act of 2008,” Owen said.

BCP Energy is engaged in overseas investments, trading, and operation of energy, natural resources and petrochemical businesses.

Although the use of solar energy and wind power is gaining traction, Valte said such sources of renewable energy are at present too costly for companies and ordinary consumers.

The partnership with Megawide is expected to boost PhilCarbon’s competitiveness in renewable energy projects given the former’s “construction expertise and financial muscle,” she said.

Hydroelectric power plants and coal powered plants are still the preferred sources of power because these are cheaper, she said.

The two companies have agreed to jointly develop a portfolio of renewable energy projects ranging from biomass, wind, hydro, solar and geothermal, with a combined capacity of 100 megawatts (MW).

PhilCarbon seeking more partners for renewable energy projects

PhilCarbon is planning to develop a 33.4MW wind power project in Bulalacao, Oriental Mindoro in 2016.

PhilCarbon Inc. said it is banking on more partnerships with local and foreign companies for its renewable energy projects.

Unit of Thailand’s Bangchak to buy stake in Nido Petroleum

The company made the statement

A subsidiary of Thailand’s Bangchak Pe-

62 Philippine Resources

“The transaction has a value of not exceeding A$22.2 million, which is less than 15% according to the rules on the acquisition and disposition of assets,” the report stated.

Nido is headquartered in Perth, Western Australia and maintains a fully staffed office in the Philippines.

The company holds a 22.88% interest in Service Contract (SC) 14C1, which covers the Galoc oil field in waters northwest of Palawan.

It also holds interests in other exploration assets in the Philippines: 50% in SC 63; 42.4% in SC 54A; 60% in SC 54B; 10% in SC 58; 7.81% in SC 6B -- all located offshore Palawan.

Company News

Issue 3 2014 www.philippine-resources.com

Cebu Mining Convention Pushes For 2016 Reforms

By Maria Paula Tolentino

I

n the recent Mining Engineers’ Convention (MINECON) held last June 12 – 14 2014 at Radisson Blu Hotel in Cebu City, professionals and companies from the mining industry shared a common goal: to unite and strengthen entities and professionals in the resources sector with the purpose of nation building through the theme Mining Engineering: Beyond 2016.

The biennial meet, which started in Davao in 2010, has once again gathered the mining engineers from all over the country to participate and share their knowledge in the advancement of the mining engineering profession and technologies.

This

year’s

3rd

Mining

Cutting the ribbon. L to r: Roger de Dios, PSEM Visayas Incoming President, Felizardo A. Gacad, Jr., PSEM National Incoming President, Ric EPresidentsquierres, PSEM Palawan Chapter Past, Ceasar I. Laoas, PSEM National Outgoing President, APresidentlexis Baligod, PSEM Davao (MAEM), Lorel Castillo, PSEM NCR Outgoing President, Ed Paglinawan. PSEM Toledo Outgoing President.

Convention was hosted by the National Board of the Philippine Society of Mining Engineers (PSEM) who shared the stage with co-hosts, PSEM-Visayas Chapter.

Engineers’

The convention’s role was to create dialogue for earth science professionals, companies and technologies to discuss Continued on following page >

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Resourceful Event

Issue 3 2014 www.philippine-resources.com

Investalk 2014 Cuts Age Demographic in First Investment Conference

By Maria Paula Tolentino

T

en year old Christian Anggala raises his hand and asks MoneyDoctors President Mr. Joe Ferreria “What sources do you recommend to teach kids to learn more about the stock market?” To a stunned (and a very amused) audience, the Investalk 2014 guest speaker answers the young man’s question with the same authority and expert tone he uses for his many well-heeled clients.

Inspired by his own father to dabble in the stock market, Christian maybe the youngest participant of Investalk 2014 but he sure knows why he’s there: to learn as much as he can about the Philippine economy, personal finance, stock investing and how he can put these skills

< Continued from previous page

to good use in his father’s brokerage firm.

Quite a head start for a 10 year old!

Such is the demographic and the kind of mindset online finance community Investalk.ph attracted during their grand launch held at Solaire Resorts and Casino, Pasay City Philippines last July 12, 2014.

With the aim to promote financial literacy among Filipinos, Investalk.ph boldly set its very first Investment Talk called “Investalk2014: a Mid-Year Market Outlook” with over 300 young professionals, entrepreneurs, novice investors and students who are interested to learn more about investing.

With major sponsor and co presenter BPI Trade, Investalk 2014 was a well-attended event that featured top finance and investment speakers that discussed: Philippine Equity Strategy (BPI Trade CEO Mike Oyson), Guru Investing

Strategies (BPI Securities Corp. Director Richard Liboro), Economic Outlook (Economist Dr. Alvin Ang), Implementing Personal Finance Plans (Money Doctors President Joe Ferreria), Finance 101 (Professor Tommy Tiu), Stock Market Psychology (Professor Jay Peñaflor), and Value Investing (ANC’s On the Money, Salve Duplito).

With the support of BPI Trade, Investalk 2014 was able to get a good mix of participants and media partners who are currently involved in a variety of industries. Congratulations Investalk.ph for a successful launch! The finance, investing and resources community is looking forward to your 2015 event!

the current state of the Mining Engineering profession and where it should be going come 2016. One of the issues brought up was the concern for depleting professionals (brain-drain) particularly in an industry that has been a catalyst for development.

Though the Philippines is the fastest growing economy in Asia, there are only 11 schools that specialize in mining. On the average, only about 110 graduates take the board exam and only half of these students pass those exams.

L to r: Victor Bantol, PSEM Visayas Outgoing President, Ceasar I. Lao-as, PSEM National Outgoing President and Felizardo A. Gacad, Jr., PSEM National Incoming President.

64 Philippine Resources

Unfortunately, those who do get their degrees choose to work for foreign companies simply because the Philippine mining industry is very small or lacks the support it deserves. In effect, there are only a few professionals who get to be hired locally because of low job demand.

This year’s MINECON was well attended with exhibitors from Orica, Monark, Philex Mining Corp., BF Metal Corp., Yaskawa, FDR-IRRMI, Pacific Underground Innovative Solutions Co., Life Gear, Kinetech Phils. Inc., Carmen Copper Corp., Ultimate Skills Phils. Inc., Asia Pacific Energy Resources Ventures Inc., Maxima Machineries Inc., and Krypton Industrial Resources Company.

Company News

Issue 3 2014 www.philippine-resources.com Issue 3 2014 www.philippine-resources.com

Going Beyond Job Description the Monark Way

By Maria Paula Tolentino.

I

n the past year or so, Monark, the sole and authorized dealer of Caterpillar in the Philippines, has had its ups and downs especially with an unsteady Philippine economy.

The company has encountered tough competition from industry rivals who are taking the war path of offering bargainbasement products.

Filipinoowned company Monark stands unfazed.

actually an Electrical Engineer by degree and volunteers his time at Rescue Team 926, Inc. during the weekends.

He adds that the company culture in Monark is energetic, service-oriented yet also very down to earth.

“We have this ‘will-do’ attitude which is why we have survived in this industry for so long. Monark has always been resilient and has had a steady revenue stream despite the ups and downs of the various industries and the Philippine economy.

Also, the individuals I work for and the people I work with are no-fuss, compassionate, client-centric men and women

who go the extra mile. The greatest asset of Monark is its people”.

What is next for Monark? “We want to be part of nation building. From various dams and major infrastructure projects like the San Roque dam, NLEX and SCTEX, to mining projects located in Masbate, Carmen Copper, Didipio and the rest of the country, expect Monark to be there.”

We almost forget that the success of any organization comes from the men and women who make it. When it comes to work, Eric and the rest of the Monark team, go beyond the job description.

“We may be expensive, but our products? Tough. Our after sales support, flawless” Monark Business Development Manager Eric Cabrera firmly states.

“The greatest strength of Monark is that clients are assured that they get their money’s worth. We are a company that provides consistent and reliable after sales support. With over 500 mechanics and technicians at 25 locations (and growing), no other company, not even our competitor can beat that!”

Monark isn’t the biggest in the construction business for nothing. A solution-centric company with 98% serviceability on equipment parts, Monark has been continuously applying a culture of excellence through its people for 27 years. CHAMP, an abbreviation for Customer first, Honesty, Attitude, Malasakit, Passion for excellence, and TEAMwork is breathed and lived inside Monark.

“We have always been a straight arrow.

Monark is transparent about its taxes and we’re being fair in the way we do business. We also adopt to changes by continuously improving our processes” says Cabrera.

Unassuming and very low key, no one would believe that this savvy business development manager of nine (9) years is

Monark Business Development Manager Eric Cabrera.

Philippine Resources 65

Company News

Issue 3 2014 www.philippine-resources.com

NCH Adheres to Green Products for Notoriously Destructive Industries

By Maria Paula Tolentino

I

n theory, environmentally safe products are those that degrade quickly and naturally with nontoxic decomposed fractions that are based on renewable sources.

These products must be formulated with renewable and readily biodegradable oils that are free from heavy metals and other toxic ingredients and by products. The growing reason for this green initiative is the increase in awareness and demand to use more environmentally safe products.

The fact that petroleum-derived mineral stocks have finite resources has also created a pressing need to find alternative/ renewable sources.

NCH Philippines, a manufacturer of industrial maintenance products, is critically listening to this need. Providing biodegradable lubricants for a variety of machineries and equipment to a variety of industries, NCH is keeping a close watch particularly at the industry of mining.

“NCH is a company that serves all industries, mining is just one of them” says NCH Philippines Country Manager Rod Arellano. Case in point, Carmen Copper

NCH Philippines Country Manager Rod Arellano

66 Philippine Resources

had an emission issue a few years back.

NCH Philippines was able to solve this issue through providing support in the form of products and services during a very critical period of the mine operations such as lubricants, greasers, motor cleaners, and services in the form of scaling equipment, cleaning and maintening machines, etc.

Also providing oil and gas solutions, NCH manufactures several oil products such as hydraulic and penetrating oil best suited for high-temperature compressors which are not only helpful to mining but to the manufacturing and shipping industries as well.

One notable product is NCH’s Lubemaster System Purge.

An oil product that flushes out deposits in the oil line, Lubemaster System Purge has the ability of cleaning the oil lines system of an engine and amazingly, (based on constant experiments) those who used it experienced remarkable gas efficiency (operating hours to liter ratio). A product that maximizes resources can be helpful particularly in notoriously wasteful industries such as manufacturing and mining.

Would you say that NCH products are environmentally friendly? “Absolutely! In fact, we are helping companies become environmentally compliant. With an existing product such as the Lubemaster System Purge, it will help clean and maximize engine and equipment performance” says Rod.

NCH’s Lubemaster System Purge. tenance products and equipment.

So where is NCH Philippines headed in the next 10 years? “The vision is to become the leading provider of maintenance products that is known for its quality, efficiency and biodegradable components that industries such as mining, shipping, and manufacturing will find useful during operations” Rod beams.

From an industry perspective, the best maintenance products are those that are environmentally-friendly and can be easily broken down into components not damaging to the environment.

However, to be commercially viable, it must also perform acceptably, is capable of sustaining large-scale production and most importantly, cost-effective. Based from these standards, NCH is meeting and exceeding industry expectations.

Currently, NCH Philippines provides lubricants and other maintenance products to the wind mills of Ilocos, Pasukin Banggi (Wind Mill), Magat Dam, NAPOCOR (CDO) and Maria Cristina Falls (Agus 1, First Stage).

Rod Arellano holds a Bachelor’s degree in Aeronautical Engineering from FEATI University. Previously a Maintenance Engineer from 1979 to 1981 in Philippine Airlines, Rod is currently the Country Manager of NCH Philippines.

NCH continues to create and distribute environmentally safe lubricants and degreasers while providing a supporting role to companies who may need main-

NCH Philippines is a wholly owned subsidiary of NCH Corporation in Dallas Texas.

Company News

Issue 3 2014 www.philippine-resources.com

Buckets For Jesus: Bringing The Good News To The Poor Since 2010

B

uckets For Jesus ministry was born in 2009 and the inaugural Apostolic mission took place in the Philippines in January 2010, followed by another one in April 2010 and monthly missions in Perth, Western Australia. Since then, Buckets for Jesus has distributed in excess of 120,000 buckets in many different provinces in the Philippines.

Buckets For Jesus’ aim is to bring God’s word to poor people, including the forgotten and the unloved in the slums, the sick in mind, body & spirit, street children, prisons, orphanages, homes for the elderly and hospitals. Those were some of the people and places that they have been ministering through since its’ establishment.

various locations have been multiplying as well. During Buckets For Jesus’ first mission to the Philippines in January 2010, Ruby, Mike and their two children Michael and Kamila Soh were the only four missionaries at the start of that mission. Then four more volunteers joined them at the Manila sector of their mission. And it increased to 18 in Cebu as they were working in tandem with Youth With A Mission Cebu, which is headed by the Sohs’ former nanny, Lucille Ebrado.

travelling contingent, including the Sohs, who are grateful for all the volunteers.

“People can associate with this cause for the poor; they have many avenues to help either as volunteers to pack or collect donations and then load them into the containers,” Mrs Soh said.

“They can feel the joy of helping others and they want to do more. Perth people are very helpful and generous especially with their pre-owned things.”

Since then the Sohs have been accompanied by volunteers from Perth who have been touched by the cause and will want to experience it themselves. In July 2013, four students from Acts 2 Come Bible College and their principal, Jane Borg, and architecture students Nicholas Scott and Nica Javadi joined the mission. That made it the Buckets For Jesus’ biggest

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Company News

Issue 3 2014 www.philippine-resources.com

Philippines Mining Sector Can Benefit From Simulation

W

ith advanced mining training simulation making fast inroads into the Asia Pacific region, including countries such as Australia, Indonesia and Mongolia, it’s clear that this technology is being seen by more and more mining companies as a sound investment to improve operator safety and proficiency.

With its vast mineral wealth, it’s hoped that the Philippines will start following this trend towards simulation soon. The archipelago is rich in copper, chromium, gold and silver and produces over 10% of the world’s nickel.

But there are certainly some key challenges that lie ahead in the Philippines mining sector and surrounding region.

With several mine operations looking to move from surface to underground mining, there is a need to train operators to make the transition quickly and efficiently. Normally this would require equipment to be taken out of the working fleet for operators to train on, but with simulation this problem can be circumvented.

“Because mine vehicles are being used for fewer training tasks, the associated

running costs of training are greatly reduced,” says Greg Lew, Executive Vice President of Global Business Development at training simulator provider, ThoroughTec Simulation.

“Damage and wear-and-tear on mine vehicles decreases as operators are able to familiarise themselves with the controls of the machines and iron out their mistakes on the simulator instead of the real machine. This means less unscheduled maintenance and lower maintenance and training costs.”

According to the Philippines Mine Safety and Environment Association for the Fis-

cal Year 2012 – 2013, there were 20 nonfatal lost time accidents in underground mines and 20 in surface mines. Over the same period the industry suffered seven and four fatalities respectively. The Philippines mining sector needs to invest in ways to lower these accident and fatality rates. Simulation is designed to achieve exactly this.

ThoroughTec already has experience in helping a mine develop its workforce before it starts underground operations.

During construction of its underground mine, Rio Tinto’s massive Oyu Tolgoi copper and gold operation in Mongolia utilised ThoroughTec’s fourth-generation CYBERMINE Full Mission Simulators (FMS) for an ADT, bolter, LHD and shotcrete sprayer. A key part of the project was employing and up-skilling local Mongolians because there was no real skill pool for underground mining in the country, this is why simulators were so vital.

At full capacity the mine was using their simulators up to 20 hours a day across all cab types. The latest version of CYBERMINE has been upgraded with many new features including full 360° panoramic display, enhanced reporting software Continued on page 66>

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Company News

Issue 3 2014 www.philippine-resources.com

dent to eliminate these violations and thus save the mine a fortune in unnecessary maintenance bills and prevent hazardous safety situations,” says Lew. As an example, Sandvik, one of ThoroughTec’s longstanding customers, was experiencing excessive breakdowns of their machines at a mine site and could not identify any mechanical fault. Sandvik suggested that the mine operators brush up their skills on Sandvik’s CYBERMINE4 simulator system.

< Continued from page 64 and two HD instructor screens in an improved classroom-like design.

The specified cabs were purposely chosen to cover the main development activities at the mine and afforded all employees valuable training experience before heading underground. A custom mine world developed by ThoroughTec accurately replicated the tunnel geometry and operating conditions.

Back to the Philippines and another challenge is ensuring the existing operator workforce is up-skilled in conjunction with training novice operators to become Overseas Filipino Workers (OFW), so they can ply their trade overseas and earn money for their families.

There is a mixed perception in this region when it comes to simulation however. “We have found that mines that have been exposed to simulators know that it is a powerful tool to develop an operator workforce for greater mining efficiencies as well as the safest means to train local communities who are interested in becoming operators,” says Lew. But in some cases, those who have not been exposed to simulator training feel it is unnecessary. There is a drive in this region to change this perception, as it’s a proven tool to enhance training effectiveness.

“CYBERMINE4 software automatically identifies operational violations such as speeding, simultaneous brake and accelerator engagement and incorrect gear selection, to which the instructor can then take corrective action with the stu-

They soon discovered that many operators were scoring high on the fault: ‘Used the accelerator and brake pedal simultaneously.’ This was due to the operators resting their foot on the brake pedal instead of the foot rest, causing an increase in wear and tear. Upon completion of the simulator training course the problem disappeared and the mine site enjoyed a considerable reduction in maintenance costs.

ThoroughTec is continuously receiving reports from mines about how their CYBERMINE advanced mining training simulators aid in the recruitment process, and improve productivity and reaction times in emergency situations.

“More and more mine operators are realising the advantages that simulation can bring to their mine sites,” says Lew. Recently, ThoroughTec expanded its range of training products to include the CYBERMINE Computer Based Trainer (CBT) and Operator Familiarisation Trainer (OFT). This broad range of simulators helps walk novice recruits through the various stages of training.

The CBT is the first part of the comprehensive training programme and introduces a new recruit to a particular vehicle’s basic controls and operation, as well as the mine environment, site operating procedures and safety checks.

“It was developed in collaboration with recognised training specialists and makes use of 2D and 3D computer animations, Continued on opposite page >

70 Philippine Resources

Company News

Issue 3 2014 www.philippine-resources.com

< Continued from opposite page

video, audio and still photographs displayed on a high performance off-theshelf PC,” says Greg Lew, ThoroughTec’s Executive Vice President of Business Development.

A wide variety of course topics are available, including machine introduction, roles and responsibilities, standard operating procedures, occupational health and safety, production techniques and machine operation in emergency situations. All users and their results can be recorded on a central database.

Next up is the OFT which is designed to increase the depth of their knowledge once the trainee has mastered the theory on the CBT. “The OFT operates as an alternative, limited function base-unit for CYBERMINE’s high-fidelity interchangeable vehicle cabs and is designed to familiarise operators with the identification and operation of the instruments and controls of a specific vehicle,” says Lew. Students interface with the OFT system via HD touch-screen display and through the various instruments and controls of the replicated cab. Three different modes (Exploration, Training and Evaluation Modes) allow for a complete familiarisation, learning and evaluation process, while all users and results can be recorded on a central database.

mont, Rio Tinto and Vale. They’re also proud of their vast range of surface and underground equipment simulators, including ADTs, bolters, continuous miners, double drum winches, dozers, draglines, drill rigs, excavators, graders, haul trucks, heavy duty haulers, LHDs, light utility vehicles, locomotives, personnel carriers, scalers, shotcrete sprayers, shovels, shuttle cars, tracked loaders and wheel loaders.

So far, OEM cabs simulated by the firm include Atlas Copco, Bell, Bucyrus, CAT, DUX, Fermel, Fletcher, Goodman, Hitachi, Joy, Komatsu, Le Tourneau, Liebherr, Maclean, Marion, MTI, Normet, O&K Ter-

rex, P&H, Salzgitter, Sandvik, Sullivan, Taiyuan Heavy Industry, Toyota, Trident and Volvo.

ThoroughTec already has a solid footprint in the Asia Pacific region with previous sales to Argyle Diamond Mine, Curtin University’s Western Australian School of Mines, Northparkes Mine and Wesfarmers Curragh (Australia); Balai Diklat Tambang Bawah Tanah (BDTBT) and Grasberg Mine (Indonesia); and Oyu Tolgoi (Mongolia).

Article courtesy of ThoroughTec Simulation.

The OFT adds significant value to a training programme by allowing operators to make use of your CYBERMINE cabs even when the FMS is being used, so that the capital invested is providing optimal return.

This three-pronged product offensive is topped off by the flagship Full Mission Simulator (FMS) which comes either containerised for easy transportation or as a fixed facility for training school type situations.

ThoroughTec has a global customer base that includes companies such as Anglo American, BHP Billiton, Goldcorp, NewPhilippine Resources 71

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Issue 3 2014 www.philippine-resources.com

TSYS licences PRIME payment system to Metrobank Cards

T

SYS has signed an agreement to license its PRIME payment transaction processing platform to Metrobank Card Corporation (MCC) in the Philippines. MCC is a strategic joint venture between Metrobank and Australia New Zealand Bank and is one of the largest issuers and acquirers in the Philippines’ market.

MCC will license PRIME 4, the latest version of the payment processing platform, to manage its multi-payment card issuing and merchant acquiring together with online authorization and switching on a single platform.

Value-added services for installments, credit, loyalty, collections, dispute and chargeback management and acquirer fraud monitoring will also be offered as part of PRIME 4’s integrated payment solution.

“We chose TSYS after an in-depth analysis of global vendors and their payment processing solutions. TSYS stood out for us, not simply as a vendor — but as a provider who could support our future vision and growth ambitions,” said Riko Abdurrahman, president, MCC. “With PRIME’s inherent flexibility and user-empowerment capabilities including Web-based services, high level of paramaterisation, a unique integration layer and extensive APIs, we will be excellently positioned to accelerate our speed-to-market in launching new card products and creating greater customer value through flexible payment options and innovative services for the Philippines’ market.”

Growing credit and commercial card portfolios

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MCC will deploy PRIME 4 to manage its growing credit and commercial card portfolios and will leverage PRIME’s global expertise to bring to market new and innovative payment products.

“Our migration expertise and feature-rich platform, combined with best-of-breed fraud monitoring and value-added services, create a compelling value proposition for MCC,” said Amit Sethi, Managing Director, Asia, Middle East and Africa, TSYS International.

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72 Philippine Resources

“We are delighted with the opportunity to work with MCC to further accelerate the growth of the Philippines’ payments market and broaden access to a wider range of card payment services for MCC customers.”

In 2013, TSYS celebrated its 30-year anniversary in the payments industry. Its inhouse, outsourced and hybrid payment solution offerings have an established footprint across approximately 400 clients in 80 countries around the globe — spread across the Americas, EMEA and Asia-Pacific. Its clients are supported by a dedicated team of more than 9,800 team members.

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