Philippine Resources Issue 3 Aug-Oct 2013 by PaperlessTrail

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Current Resources August - October 2013

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Headlines in this issue

Resources Commentary

The Threat of Resource Nationalism to the Philippine Mining Industry

Illicit Oil Trade in the Philippines

Diwata Looks Ahead

The two faces of Mining in the Philippines

Warning Mining Act petitions will cause major fiscal issues

Political Resources

Sitting on a Gold Mine: An Aussieâ&#x20AC;&#x2122;s Take on Investing in the Philippines

4 Philippine Resources

Community Resources

OceanaGold Puts Major Focus On Sustainability

King king making a major difference in the community

DIWATA and the Ambassador - symbols of class and quality

Resources Viewpoint August - October 2013

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Philippine Resources Mining, Petroleum & Energy Journal

August - October 2013 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 Consulting Publisher Greg Brimble Editor: Colin Sandell-Hay Sales and Marketing Kevin Lewis kevin@philippine-resources.com & Cecilia Pamular cecille@philippine-resources.com Design/Production Elizabeth Galura Journalists Paula Tolentino Kevin Lewis Steve Hill Contributors Mars Buan Patricia A.O. Bunye Fernando Penarroyo ___ 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 IPrint. Digital online edition www.Philippine-Resources.com

6 Philippine Resources

Resources sector a critical part of the community

he recent floods that created chaos in Manila and surrounding areas demonstrates the power of nature and the strength of the people of the Philippines.

It is also timely reminder that for all the modern development that has taken place in the country, there is still a long way to go in the building of better infrastrcuture to assist in overcoming major incidents like this. Of course a key to meeting that challenge is having the capital to build the right infrastructure. And much of that funding will be supplied via industry and the Philippine resources sector. And it is not only in providing critical export earnings and royalties for the government that the mining and petroleum industries are vital. As you have read previously in Philippine Resources, the mining and petroleum companies are often amongst the first to provide support in the case of a major catastrophe And As you will read in this issue, the resource companies are also providing vital support to the communtites within which they operate. This is also a simgicant benefit to the local government agencies in the areas as it reduces a significant burden on their often restriced budgets.

That is why it is so critical for Government to be strong in its support of the resources sector and in setting rules by which the mining and petroleum companies can operate. â&#x2013;

Resources Commentary August - October 2013

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The Threat of Resource Nationalism to the Philippine Mining Industry By Fernando Penarroyo

esource nationalism has been hounding the mining industry worldwide as governments initiate regulations to intervene in the contractual provisions of resource development agreements.

Resource nationalism ranges from outright nationalization of resources to regulatory and fiscal measures, which deprive an investor of the value of the resources it is exploiting thereby increasing the host government’s “take” (“regulatory expropriation”). While resource nationalism is largely perceived to be widely practiced in de-

veloping resource-rich countries in Africa and South America, developed economies like the United States, Australia and Canada have also joined the fray in adopting resource nationalist policies. According to Ernst & Young’s report, “Business Risks Facing Mining and Metals 2011-2012,” resource nationalism is the highest ranking risk faced by resources companies with many governments going beyond taxation in seeking a greater take from the sector with a range of requirements introduced like mandated beneficiation, export levies and limits on foreign ownership. Resource nationalism can also manifest itself in subtle forms like special treatment for domestic companies or forcing foreign companies to use favored entities for transporting or processing commodities. Dr. Oladiran Bello, Head of the South African Institute of International Affairs’ Governance of Africa’s Resources Programme said that resource nationalism has been applied to all kinds of efforts by governments of resource-producing countries to gain a greater degree of control over the way in which mining activities are carried out within their jurisdictions. On the other hand, Sir Mark Moody-Stuart, former Chair of Anglo American and Shell, said that resource nationalism concerns become even more serious when prices are high, as resource-producing countries seek to take a larger share of the windfall.

Fernando “Ronnie” Penarroyo, Managing Partner of Puno and Penarroyo Law Offices (www.punopenalaw.com). He specialises in Energy and Resources Law, Project Finance and Business Development. 8 Philippine Resources

David Humphreys, who has served as an analyst for Rio Tinto and Russia’s top mining company, Norilsk Nickel, said that there is a growing perception from producer countries’ governments that they Continued on page 10 >

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< Continued from page 8 were losing out to resource companies although he argued that this perception was not borne out by any research. Fitch Ratings’ Report: Resource Nationalism indicated that while greater state participation in large commodity windfalls can provide additional revenues to improve government finances and accelerate economic development, the longterm effect, however, is that it may curb the revenue-generating capacity of the mining sector. Excessive taxation and/or regulatory uncertainty can undermine the potential of the sector to attract new investments and place marginal assets into early retirement.

The Philippines joins the bandwagon Resource nationalism has become highly contagious, as there is now a faster transmission and exchange of ideas and experience between some resource-rich countries. The Philippines has been no exception. Executive Order No. 79, which seeks to set the policy framework to guide the government and other stakeholders in the implementation and operationalization of mining legislations aims among others, to increase revenues to promote

sustainable economic development and social growth.

ing fiscal regime to raise more revenues for the government.

To this end, EO 79 mandates the establishment of mineral reservations for strategic mineral reserves to be able to collect 5% additional royalties and the creation of a national plan and road map for the development of value-adding activities and downstream industries for strategic metallic ores.

More alarming is the proposed People’s Mineral Resources Act, which seeks, among others, the removal or prohibition of full foreign participation in mining and an increase of the government’s share in mining agreements from 2% to 10%.

The Mining Industry Coordinating Council (“MICC”), a body created under EO 79, is further directed to conduct a study on existing mechanisms for benefit sharing and review of existing taxes, fees and incentives receive by mining companies. The MICC is also tasked to consider the imposition of higher export fees for metallic and non-metallic minerals in the country, rationalize revenue-sharing schemes, mechanisms and incentives given to mining companies, and implement resource accounting or full-cost benefit analysis. In addition, the Department of Environment and Natural Resources is also directed to increase mine wastes and tailings and occupation fees and impose processing fees for all mining applications. The Department of Finance has also been pushing for the passing of a mining revenue bill that will rationalize the min-

On the judicial front, the Supreme Court is once again reviewing petitions assailing the constitutionality of the Philippine Mining Act of 1995 particularly the validity of sections 80 and 81. According to the petitioners, the questioned provisions foster inequitable sharing of wealth by limiting the share of the government in Mineral Production Sharing Agreements to excise taxes and confining government’s share to taxes, fees and royalties instead of letting it have full control over the exploration, development and utilization of mineral resources. These developments have clearly manifested that the Philippine mining industry is under threat from resource nationalism with the recent regulatory, legislative and judicial initiatives to revise and amend fiscal and contractual regimes.

Non-impairment Clause The question remains whether the Philippine government can justify changing the rules in the middle of the ballgame. Art. III, Sec. 10 of the Constitution provides that: “No law impairing the obligation of contracts shall be passed.” Law includes statutes enacted by the national legislature, executive orders and administrative regulations promulgated under a valid delegation of power, and municipal ordinances passed by the local legislative bodies. The purpose of the non-impairment clause is to safeguard the integrity of Continued on page 14 >

10 Philippine Resources

Resources Commentary August - October 2013

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< Continued from page 10

valid contractual agreements against unwarranted interference by the State. To impair, the law must apply retroactively so as to affect existing contracts concluded before its enactment. While non-impairment of contracts is constitutionally guaranteed, the rule is not absolute, since it has to be reconciled with the legitimate exercise by the State of police power. A contract cannot be raised as a deterrent to police power, designed precisely to promote health, safety, peace, and enhance the common good, at the expense of contractual rights. Resource companies operating in the country face the risk that the government to assert control over natural resources for strategic and economic reasons will invoke its police powers to modify, amend or repeal resource development contracts.

Minimizing Risks In response to the risks of resource nationalism, mining companies have employed both contractual safeguards and socio-economic considerations to minimize the impact on their investments. Contractual safeguards include meticulous provisions on the choice of law, the forum and method for resolving disputes, and instituting stabilisation and adaptation clauses. Foreign investors have also utilized an increasingly robust international legal framework that  included bilateral investment treaties and options for direct investor-state arbitration under the auspices of arbitral authorities such as the International Centre for Settlement of Investment Disputes and the International Chamber of Commerce. Political risk insurance taken by developers also provides cover against expropriation and breach of contract by host governments.

12 Philippine Resources

Nevertheless, the industry is now beginning to realize that the traditional legal boilerplate provisions to address resource nationalism are outdated and inadequate. The disturbing trend is that governments in emerging markets are forming statecontrolled companies or mandating local equity through the support of judicial and regulatory environments, which directly competes with foreign investors sometimes using aggressive but often controversial legal measures. Economic liberalism once employed by government to attract private risk capital to resource development projects is now giving way to mandated local participation in favor of larger state- or domestically-owned companies. While contractual provisions contribute to minimizing the risks associated with the various expressions of resource nationalism, the mining industry have resorted to engagements with governments to foster a greater understanding of the value a project brings to the host country. By communicating the benefits of the project, the industry hopes to encourage governments to take a broader view of the return from natural resource development. Using this approach, the industry hopes to be better able to negotiate appropriate trade-offs that preserve the value to both mining companies and governments through tax incentives and offsets.

confident that they stand a better chance of fair treatment from governments through their tangible investments in the environment and host communities, the assumption that social development spending assure them against resource nationalist policies is unrealistic according to Nader Mousavizadeh of Oxford Analytica. Resource projects with the concomitant infrastructure improvements they bring to the host country are most of the time held hostage to political rhetoric and strategy employed by populist governments vulnerable to unrest over pollution, corruption, and inequitable sharing of wealth. Companies are now more particularly vulnerable to both the emotional and economic aspects of resource nationalism especially during times of peak commodity prices as higher revenue will translate into greater public demands for rents and governments will be increasingly wary of foreign control of these commodities. Mousavizadeh believes that when government and foreign companies negotiate, there is no set ratio or formula for arriving at the best practice to channel resource nationalist tendencies away from zero-sum thinking. Deals will vary according to contract lifetime, type of mineral, bargaining positions, and many other factors.

At the same time, mining companies are developing corporate social responsibility initiatives by supporting local entrepreneurship and investing in public services and infrastructure.

So rather than thinking about an optimum distribution of production or profits, the parties should think about optimum deal structures. By recognizing joint interests, the contracting parties can create shared value instead of a playing a zero-sum game where one has to win at the expense of the other.

Foreign companies are collaborating with local companies, as the rise of resource nationalism has brought with it a requirement imposed by host governments for greater local content and participation in resource development.

The contracting parties must apply strategies for constructive engagement instead of counter-productive opposing positions. For foreign resource developers, they must realize that local content development can play a huge part in miti-

While some mining companies appear

Continued on page 16 >

Resources Commentary August - October 2013

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Illicit Oil Trade in the Philippines By Grace Gato, Manila-based analyst, Business Intelligence Department, Pacific Strategies & Assessments (PSA)

n the Philippines, independent oil companies currently account for 25% of the total market share, according to the Department of Energy’s (DOE) Oil Management Bureau.

The low-priced petroleum products offered by independent players have created a low-cost market boom. Presently, there are almost 150 independent oil companies with more than 800 gas stations in the Philippines. The robust growth of these minor players comes more than a decade after the passing of the Downstream Oil Deregulation Law, which opened the industry to more oil players and gave consumers more options.

< Continued from page 12 gating resource nationalism by addressing the issue of equitable distribution of economic benefits and the build up local industries so that they can directly benefit from the exploitation of the resources.

Conclusion Resource nationalism has become much more sophisticated and complex in the forms it takes, being not purely driven by nationalistic policies but by wider political, economic, social and environmental drivers.

14 Philippine Resources

However, not all of the independent companies operating in the Philippines are registered, licensed, and regulated. Despite diversifying the industry, the oil deregulation law opened the market to illegal companies selling illicitly acquired fuel at very low prices, unfairly competing with the prices of major fuel players. This practice will continue to exist as long as these players have access to cheap and, sometimes substandard, fuel products. A number of unlicensed oil companies also resort to purchasing cheap, smuggled fuel. By doing so, they avoid paying taxes and import duties. Under Philippine law, petroleum importers are required to pay excise and value-added tax (VAT). According to the Philippine Institute of Petroleum (PIP), at least a third of diesel in the market is smuggled product. Oil pilferage on land and on the high seas remains a serious threat to industry growth. A local modus operandi called

Effective risk-mitigation strategies will involve not only careful thought as to contractual protection, but also to effective early engagement by the resource developer with the host state and its communities to deliver the socio-economic benefits. The Philippine government must realize that policy uncertainty can be extremely damaging to both investors and the host country and can hamper the successful exploitation of mineral endowments. It is imperative then that any legislative and regulatory measure imposed by the government should be properly vetted and go to a proper consultation process

“pa-ihi” involves the rupturing of pipelines and tanker vessels to siphon crude oil into barges, drums, or small vessels. Pilferers target not only oil company tankers, but also barges docked at ports. The pilfered oil is then sold on the black market, where companies that commission oil illegally can pass the pilfered oil on to re-filling stations at a cheaper rate. These companies that purchase oil at prices well below the world market rate unfairly compete with the petroleum products of major players by selling them at a cheaper rate. As a result, cost conscious consumers unknowingly purchase smuggled oil. In addition to the financial costs incurred by companies that have been targeted by smugglers, the practice raises the potential for environmental damage and risks. The unsafe transport of fuel across land and water can lead to oil spills, pollution, poisoning, fires, and oil dumping—all of which are potentially harmful to humans and wildlife. Nonetheless, the lucrative nature of the illicit trade provides Continued on page 18>

with the affected stakeholders less regulators may be unwittingly putting the finishing touches to the demise of the mining industry. The key challenge is the creation of an investment climate that can assure appropriate profit to investors, protect host states’ natural resources and provide other long-term benefits to the state and its people. 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. ■

Resources Commentary Training August - October 2013

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Oil Pilferage Hot-spots Illegal gas outlets and “pa-ihi” operations are particularly prevalent in the following areas: •

Mountain Province

•

Nasugbu, Batangas

•

Laguna

•

Cebu City

•

Iloilo

•

Bataan

•

Subic Bay Freeport

•

Phividec Industrial Estate in Misamis Oriental

< Continued from page 14 enough incentive for criminals to perpetuate these activities. Any rise in world market oil prices can lead to increased pilferage and losses for the Philippine government. Recent data reveals that fuel sales have not matched the higher rates of vehicle registration and economic growth. This discrepancy is indicative of costly and widespread smuggling and pilferage. For instance, the Philippine government loses PhP30 billion (US$714 million) in import taxes annually due to smuggled fuel products, according to Pilipinas Shell Petroleum Corporation.

On the other hand, the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR), both tasked with ensuring the due collection of duties and taxes, continue to be unsuccessful in enforcing the mandate vis-a-vis illegally operating oil companies. As a result, billions of pesos in potential government revenues are lost to smuggling and pilferage. Last year, the police reported that several politicians and election candidates engage in hijacking and pilferage of fuel tankers to increase campaign funds.

The systemic incapacity of the government to monitor the adherence of independent oil companies to industry regulations, taxes, and safeguards further perpetuates the illegal practice. Bribery of government officials and security personnel by oil pilferers likewise remains a roadblock to curbing criminality in the industry. For instance, former Customs Commissioner Napoleon Morales faced graft charges for colluding with an oil company to smuggle oil and avoid paying import duties. Meanwhile, the Philippine Coast Guard (PCG), tasked to enforce the law within territorial waters, lacks modern capabili-

The Bathroom Humor of “pa-ihi” Gangs “Pa-ihi” is a Tagalog slang term referring to oil pilferers and is associated with the act of urinating. Locals see the use of a siphon tube or pipe to steal oil as analogous to the process of urinating. This inspired the term, which is now used to describe both the act of oil pilferage and the gangs associated with the practice. In 2011, the Department of Energy revealed receiving reports of pilfered or “paihi” gasoline or diesel sold in plastic bottles and other containers. This is most rampant in rural areas. Authorities have urged the public to refrain from patronizing these illegal outlets. ■ 16 Philippine Resources

ties to respond to widespread smuggling in the high seas. Maritime patrols continue to be limited by subpar equipment.

For instance, according to the Criminal Investigation and Detection Group (CIDG), the son of a provincial official running for office in Bulacan Province operates an unlicensed gas station in Valenzuela City, Metro Manila. Police also confirmed the existence of organized criminal organizations engaged in syndicated oil theft. Oil products from major players undergo an extensive refining and additive process that adheres to international and environmental standards, which ensures that the products are safe for use. Importantly, these legitimate fuel companies have the financial capability to invest in offshore exploration of rich deep-water resources. Incentivizing legitimate fuel players could help the country alleviate its reliance on imported oil and deter the expansion of illegal and unregistered companies. ■ Pacific Strategies & Assessments (PSA) conducts specialized industry research and generates customized reports covering a broad range of client interests. PSA also conducts focused security, socio-political, economic, as well as operational and business risk assessments across the AsiaPacific. For more information, contact PSA at info.services@psagroup.com

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Diwata Looks Ahead By Patricia A. O. Bunye

n the occasion of its first anniversary, Diwata-Women in Resource Development, Inc. presented a panel at the “Bulong Pulungan sa Sofitel, featuring its “rock stars”, three geologists and a mining engineer – all accomplished women who were ready to answer “Everything You Wanted to Know About Mining But Were Afraid to Ask (Geology 101)”. The Bulong Pulungan forum has been in existence for 26 years, and is headlined by veteran women journalists like former Press Secretary Deedee Siytangco, respected columnists Rina Jimenez David, Domini Torevillas and Joanne Rae Ramirez, and others who have just about seen and hear it all in Philippine politics, business and society. Yet on July 23, they were genuinely engaged and interested to hear how the women in the resources industry are

contributing to national development through their work. The same forum had previously featured the anti-mining talking heads, and it was apparent from the journalists’ questions that they were hungry for information on responsible minerals development. Diwata Chairman Delia Albert never fails to point out that Diwata was founded on July 18, 2012, the birthday of the acknowledged father of the South African nation, Nelson Mandela. Mandela has said that, to address poverty, you must create wealth and to create wealth, you must use both natural and human resources. This, she says, spells out in one sentence what the mining industry could contribute to the development of our country, and that Diwata’s role is to serve as a platform for learned dialogue on this.

Patricia A. O. Bunye

18 Philippine Resources

The first speaker, Eliza (Ging) Laudencia, the Executive Director of Geoscience Foundation Inc., who has worked with the National Power Corporation as Principal Geophysicist, introduced the work involved in geology and its various fields (economic geology, marine geology, petroleum geology, among others).

She debunked the misconception that women only do the easy work when she stated that she continued to work in the field until her fourth month of pregnancy. Dr. Maria Ines Rosana (Sana) Dacanay Balangue-Tarriela, an Associate Professor in the University of the Philippines National Institute of Geological Sciences and its Deputy Director for Academic Affairs, explained that while many geologists are involved in the mining industry, many others are immersed in other fields such as energy, environment and volcanology.

Mining essential Her presentation on “One Normal Day in Mining” left no doubt that mining is essential for daily human activities, both for material and non-material needs. Redempta (Dempta) Baluda, Vice President for Exploration of Philex Mining Corporation, recalled that, early in her career at Philex, there no women in technical positions or management. This began to change in the 1990s and today, there are 17 female managers [roughly 20% of managerial force] at Philex’ Padcal Mine alone. Continued on page 20>

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< Continued from page 18 She credits Philex for the best years of her professional and personal life. Professionally, her work has developed her leadership over the years, from strengthening the company’s exploration team to her involvement in community development. On the personal front, she met her husband, an Ibaloi from Tuba, Benguet and a nurse at Philex, and they raised their four sons (a geologist, a mining engineer, an IT professional and a physician) in the mines. Rodalee Ofiaza, a Mining Engineer from the University of the Philippines and board topnotcher during the 2009 Mining Engineering Licensure Examinations, was the youngest presenter. She said that her license number, 2856, shows that there are not very many in her profession compared to accountants, doctors and nurses notwithstanding that it is one of the oldest engineering courses in the Philippines. In her work, she is heavily involved in development and monitoring of the Chamber of Mines of the Philippines’ “mining scorecard” for mining companies’ social and environmental programs. She explained that, long before the term

“corporate social responsibility” or CSR was defined, it was already being practiced by mining companies, starting with the Philippines’ oldest mining companies, which built roads, power plants and infrastructure even before beginning to operate and even before they profit. She expressed hope that mining companies will be recognized for being responsible for the development of remote localities into first class municipalities or even cities, through their presence and operations. With this type of development, she said that it will one day be possible that people in the provinces will not have to come to Manila in search of livelihood as there would be ample opportunities in their hometowns. The speakers are conscious of their role in encouraging young women to consider careers in the same fields. Dr. Tarriela, in particular, said that her being a professor has allowed her to mentor many students, some of whom continue to consult her even after they had become professionals themselves. Barely three weeks after the Bulong Pulungan forum, an opportunity arose for Diwata to informally mentor young geology and mining engineering students who had attended the presentation of Mitch Hooke, CEO of the Minerals Council of

Australia (MCA), at the Philippine Mining Luncheon. Immediately after the luncheon and Mr. Hooke’s press conference, Diwata members had a brief but lively meeting with him and these students, as well as our special guests, South Africa Ambassador to the Philippines Agnes Nyamande Pitso; Catherine Rees, First Secretary of the Australian Embassy; Tata Corpus of Austrade; and Nelia Halcon, Executive Vice President of the Chamber of Mines. A note of thanks must also be extended to our “honorary Diwata”, Atty. Leo Dominguez (who has supported Diwata from Day One and made the effort to participate in all our major activities), who together with Gavan Collery of Indophil and the Melbourne Mining Club, kindly arranged the meeting with Mr. Hooke. As we waited for Mr. Hooke to conclude his press conference, the Diwatas got to know the students (Paola Grace D. Tuyor, Rializza Maramba, Lia Hernandez, Jolly Joyce Sulapas, Regina Marie Maximo and Marie Grace Gabuyo, as well as Nandini Narayanan, an AIM graduate student from India who is interning at SGV), who shared with us their reasons for choosing to major in geology or mining engineering. They all struck us as smart and idealistic – very well the future of not just Diwata, but the Philippine resources industry! Mr. Hooke revealed that he had a personal stake in ensuring a diverse workplace, being the father of three girls. This would only be possible, he said, with the right culture and an attitude “built on a platform of respect”. Without these “all institutional arrangements we’ve made to encourage women in the industry would be worthless.” Perhaps the most valuable advice that he imparted to the young women that day was to “(B)e courageous. Only you can allow yourself to be discriminated against and put down”. ■

20 Philippine Resources

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The two faces of Mining in the Philippines

ome of the largest nickel reserve, third in the world when it comes to gold and fifth in copper, and more minerals yet to be utilized, the Philippines is considered as the fifth richest country in the world when it comes to mineral resources.

The Philippines is also abundant in nonmetallic and industrial minerals such as marble, limestone, clays, feldspar, rock aggregates, dolomite, guano, and other quarry resources. Many of these deposits are located in areas of rich biodiversity which contain the country’s few remaining forests, in geo-hazard zones prone to typhoons, earthquakes, landslides and volcanoes, or within the ancestral domain of Indigenous Peoples. The Mines and Geosciences Bureau (MGB) said that the Philippines has an estimated of $840 Billion worth of untapped mineral wealth. This figure is 10 times the country’s annual GDP and 15 times its total foreign debt. In addition MGB said that the country has an estimated 14 Billion tons of metallic ore deposits and over 69 Billion tons of non-metallic ore deposits. As of

gram covering the period of the mineral agreement or permit be prepared and approved prior to commencement of mining or exploration. today, all regions in the Philippines, except for National Capital Region (NCR) and the Autonomous Region of Muslim Mindanao (ARMM) are allowing mining operations. The country has a total land area of 30 Million Hectares (Ha) and 9 Million Ha of which have been identified as having “high mineral potential”. In fact in January 2012, 1.14 Million hectares of the said high mineral potential land area was already covered by mining tenements. Nickel, which is commonly used for coins, have mines are located in Zambales, Palawan, Agusan del Sur, Surigao del Norte and Surigao del Sur, while the gold with silver mines are in Benguet, Masbate, Camarines Norte, Davao del Norte and Agusan del Sur. The copper with gold and silver mines are located in Benguet, Cebu and Zamboanga del Norte. The copper mine with gold, silver and zinc is in Albay, while the metallurgical chromite mines are in Surigao del Norte and Eastern Samar. The iron mine is in Leyte. According to the latest Mining industry statistics released by MGB in October 2012, there is a total of 35 operating metallic mines in the country. Most of them are from Nickel mining. On the other hand they listed 2, 358 operating nonmetallic mines in 2009. (See table 1 &2)

MINING LAWS The existing Philippine Mining Act of 1995 and its Revised Implementing Rules and Regulations, DENR AO 96-40, as amended, requires that an Environmental Protection and Enhancement Pro22 Philippine Resources

The environmental program shall be incorporated in the work program which the contractor shall submit as an accompanying document to the application for a mining permit or exploration permit. The work program shall include not only plans relative to mining operations but also to rehabilitation, regeneration, revegetation and reforestation of mineralized areas, slope stabilization of minedout and tailings covered areas, aquaculture, watershed development and water conservation; and socioeconomic development. With the growth of the mining industry in the Philippines, the recent administration of President Benigno Aquino III has expanded the “no-go” mining zones in the country through the Executive Order (EO) no. 79. EO 79, which was signed by the president last July 6 that identifies mine-free areas in the country under the administration’s mining reforms program. The new policy includes 78 tourism sites, prime agricultural lands/farms and fishery zones, marine sanctuaries and other critical areas and ecosystems as identified by Department of Environment and Natural Resources (DENR) in response to public demand to protect the environment on mining. The EO 79 has also highlighted policy regarding to the mining industry: • Moratorium on the grant of new mining agreements until congress shall

Continued on page 24>

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< Continued from page 22 have come up with a revenue-sharing scheme between the government and mining firms. • Consistency of ordinances with national laws.

• Island ecosystems to be determined by the Department of Environment and Natural Resources (DENR) through mapping technology.

• Confining small-scale mining to designated areas to be called “Minahang Bayan.”

THE FIRST FACE

• Review and possible renegotiation of existing contracts. • Awarding of areas with verified reserves through public bidding. • State ownership of mine tailings and wastes upon expiration of contract. • Formation of mining industry coordinating council to implement industry reforms. • Ban on the use of mercury in smallscale mining. On top of the protected areas cited in the Philippine Mining Act of 1995 and the National Integrated Protected Area System, EO 79 bans mining in these areas: • Tourism development areas identified by the National Tourism Development Plan (NTDP); • Prime agricultural lands such as plantations and other properties devoted to valuable crops; • Fisheries development zones and marine sanctuaries as declared by the agriculture secretary;

The Chamber of Mines of the Philippines (CMP) has expressed support on the EO 79. According to the CMP the government’s mining policy offers solutions that will encourage the development of the country’s mineral sources. “The Mining Policy is a signal to all investors of government’s desire to establish a consistent and stable business environment founded on level playing field. We are hopeful that the policy will harmonize conflicting interests, encourage investments and foster sustainable development especially in the countryside where it is greatly needed” CMP said. According to CMP they respect the decision about closing certain areas to mining. CMP also lauded the government’s intention to improve the small-scale mining industry and develop downstream industries. The Methodist Federation for Social Action (MFSA), a worldwide church and has members in Africa, Europe, Philippines and the United States, has also expressed their support indigenous mining in the Philippines. The MFSA participated in an advocacy trip in Mindanao in August 2012 to draw attention to the plight of indigenous miners and the economic and ecological devastation being wrought by mining conglomerates. MFSA supports desires of all peoples and communities for self-determination including the small scale miners. MFSA also is concerned about the responsible use of the world’s resources” Methodist Federation for Social Action said.

24 Philippine Resources

In the statement from MFSA, they urged to have development of international agreements concerning equitable utilization of the world’s resources for human benefit so long as the integrity of the earth is maintained. MFSA believes that a better course of action would work with the small scale miners. MFSA added that if the government has previously provided generous incentives to corporate miners there is no reason it cannot extend similar assistance to small scale miners. Members of Church-Military Advisory Group (CMAG) in Abra, led by Commander of the 503rd Infantry Brigade Colonel Eliseo C. Posadas, Bishop Leopoldo C. Juancian, Abra Ministerial Association Pastor Dominador Subagan had taken the issue of small scale mining seriously in the province. CMAG realizes the need to support the local miners because they simply cannot be deprived of their livelihood. Manuel V. Pangilinan, chairman of Philex Mining Corporation, left Ateneo de Manila University over the University’s publication entitled: The Golden Mean in Mining: Talking Points written by the Society of Jesus Social Apostolate (SJSA). According to the paper, Pangilinan has irreconcilable differences between himself and his companies with the principles and positions of the Jesuit University. Pangilinan expressed his concerns through a letter to Ateneo President Fr. Jett Villarin, SJ. In his letter stated his discomfort over the “talking points” that environmental impact can and should be avoided at all costs. According to Pangilinan, humans can and should attempt to mitigate, the fact remains that “every human attempt at progress I dare say will have some impact ‘at the expense of

Continued on page 26>

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< Continued from page 24 the environment’- even the building and maintenance of places of worship and of education. There should be no debate here, correct?” Pangilinan also stressed the importance of mining that it is enshrined in the constitution relating it to the development of natural wealth and national patrimony. He also added that value as a tool for national progress is expressed in the Mining Act. “The Jesuit Paper reflects in parts, ignorance of the terms of EO 79 and the Implementing Rules and Regulations.” Pangilinan said. These proponents are maintaining their support to mining for the reason that the Philippines has the potential to boom. Growth in employment was also seen generating through mining and quarry, from 158,000 in 2008 to 258,000 in 2012. The mining industry contributed roughly 1 percent in the total employment of the country. The Mining industry also continues to contribute in the governments’ revenue. In 2008, the total revenue generated from mining was P87.1 Billion and came up across P51.2 Billion in 2012. With this a total of P760.1 Million was collected from taxes, fees and royalties from mining.

THE SECOND FACE Bayan Muna Partylist Representative Teddy Casino, said the EO 79 and Mining Act of 1995 preserves the status quo in the mining industry and favors big mining companies in the country. Casino and other lawmakers seek for the approval of new mining law that would replace the EO 79 and Mining Act of 1995. Casino said that “the EO 79 closes specific areas to any mining activity and also

26 Philippine Resources

acknowledges what we have been pointing out that there is no centralized database and information on our country’s mine resources per mineral, it also creates a one-stop shop for all mining applications.” According to Casino that the EO legitimizes the big mining players’ practice of going through export processing zones that give them more profits with so much exemptions on tariffs, duties and other fees. Leaders from the Philippine Roman Catholic and Protestant Groups have joined the renewed campaign against big mining firms. The Catholic Church believes the EO 79 of the government on mining will not cure the ill-effects of the mining industry to the environment and communities. The National Council of Churches in the Philippines (NCCP) has opposed since the passage of Philippine Mining Act of 1995until the passage of the latest EO 79. NCCP deemed that the mining policy is favoring foreign mining firms. According to NCCP it intensifies the extraction of the country’s mineral resources endowed by the Almighty Creator and violates the patrimony and sovereignty of the country with expropriation of the people’s land for foreign mining corporations. In the statement on mining in the Philippines by the NCCP, they said that “EO 79 does not negate the Mining act of 1995. EO 79’s main and sole intent is to be a bargaining chip of the government to acquire bigger cut from foreign mining firms… We are therefore, very concerned that this executive order intends to stifle the initiatives of local government units for environmental protection and posterity.” The NCCP was dismayed and disappointed on the passage of the EO 79. According to their statement, instead of revising the Mining Act of 1995 into a rational mining legislation the government has open a way to heighten economic plunder, furthers the reckless destruction of the country’s already frail envi-

ronment and disturbs irreversibly the balance of ecology. Father Edu Gariguez, executive secretary of Catholic Bishops’ Conference of the Philippines-National Secretariat for Social Action (CBCP-NASSA) was recently awarded the Goldman Environmental Prize for his anti-mining advocacy. Fr. Gariguez said that EO 79 is not the solution to the country’s mining problem however there is a need to push for the passage of an Alternative Minerals Management Bill (AMMB) by Congress, the fact that the CMP is rejoicing about the passage of EO 79, it is an indicator that the policy actually favors mining companies. Fr. Gariguez said NASSA was confident that the signature campaign and its position on the matter would be supported by the bishops, who had called in 2006 for the repeal of the Mining Act of 1995. He added that the Church hierarchy’s social arm, will eventually submit their position paper to the President, Senate and the House of Representatives. “Our problem in our mining policy cannot be cured by a mere EO because that’s just palliative. That’s not enough... there’s a need to overhaul our mining policy,” Fr. Gariguez said. Bishop Dinualdo Gutierrez of Marbel town, Mindanao has call the mining companies villains of the environment and even asked the Christian followers not to vote for politicians who support mining in the coming 2013 mid-term elections. Gutierrez and the church workers and volunteers will conduct a voter education drive in the 25 parishes of the diocese to enlighten people about the “evils” of open-pit mines. The diocese covers South Cotabato province where Continued on page 30>

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< Continued from page 26 Sagittarius Mine Inc aims to start working on the largest undeveloped coppergold reserve in Southeast Asia. Private sector also takes part in antimining campaign in the Philippines. ABSCBN foundation Managing Director Gina Lopez, said in the conferences on Mining’s Impact on Philippine Economy and Ecology that Filipinos can get out of poverty if they invest in their islands and not in mining. According to Lopez, the poorest areas in the country are those that engage and allow mining. She added that the government can deal with poverty by investing in eco-system and backing sustainable tourism as an alternative to mining. Between biodiversity and rich mineral resources, Lopez said that the focus must be always be on biodiversity. Rampant Killings of Anti-Mining Activists As the campaign against mining in the Philippines continues to gain support from different sectors, there is also an increasing number of the killings of antimining activists. The New York-based Human Rights Watch (HRW) cited three cases since October last 2011 of three anti-mining and environmental acts. There were also some reports from various news websites that there were some extrajudicial killing incidents involving paramilitaries. The killings have not stopped. The list also includes the names of those who stood up in defense of their lands against mining - Gaurilmin Malid, Virgilio Lagaro, Bulane Brothers, Atong Pacaide, Boy Billianes, Ronald and Alex Maley (Tiruray farmers).

28 Philippine Resources

There were also some activists who fear for their lives due to supporting campaign against mining. Donna Rabang Peta, a 39 year old environmental advocate, has filed a complaint before the Commission on Human Rights (CHR) in ilocos after police and local officials accused her of being a communist rebel. Peta accused Dumalneg mayor Francis Espiritu of questioning her association with an anti-mining activist group. According to Peta she is not safe and does not deserve to be harassed by being monitored by the police. She added that it was not the first time she was included in an issues like that since her advocacy is against to large-scale and destructive mining. In an article by the group Kalikasan-People’s Network for the Environment titled 2012 Human Rights for Environmental Advocates in the Philippines, from 2001 up to 2012, a total of 58 environmental advocates have fallen victim to various human rights violations (HVR) and none in each instance a suspect was arrested by the police. Under the regime of Gloria Macapagal Arroyo, a total of 36 environmental defenders were murdered, along with two reported cases of enforced disappearances and two cases of frustrated murder. On the other hand there were 17 cases of politically-motivated killings and one case of abduction and torture have already been recorded under the recent Administration, including the high-profile cases of Palawan environmentalist Dr. Gerry Ortega and world-renowned botanist Leonard Co. Katribu party list have also cited 27 cases of extra judicial killing under the administration of President Benigno Aquino III. Katribu, together with the NCCP held a pinag-aapoy – an indigenous ceremony practice in Sagada, Mountain Province where pine wood was burned to honor the souls of departed loved ones – in time for all saints and all souls’ days to honor martyred IPs who were victims to extra judicial killings also according

to Katribu, 1,156 individuals from the indigenous Mamanwa Tribe were displaced from their ancestral lands early this year because of military operations.

Responsible Mining There are also those who does not promote nor oppose mining in the country. However they wanted these mining companies to practice responsible mining. Several sectors such as Local Government Unit Officials, Labor Unions, Some Indigenous Peoples Group, Professional Organizations and Individuals, Academe, Companies and Foundations, Religious Groups, Regional Alliances, Chamber Of Mines’ Company Member as well as Peoples Organizations And Concerned Citizens seen that responsible mining can boost the economy. Through responsible mining, the country attracts investments that between 2007 to 2010, investments in operating and expanding projects reached to $3 Billion. It also generated over 2 Million direct and indirect employments. An increase in government revenues were also seen from P7.7 Billion in 2008, it doubled to nearly P14 Billion by 2010. According to CMP, the mining industry continues to implement environmental projects including ecological solid waste management, tailings dam maintenance and stability, erosion control, forest protection and reforestation. The large-scale mining will also contribute 25 Million seedlings from 2011 to 2012 to the National Greening Program on top of the 10.4 Million trees the industry planted over 11,600 hectares as of 2010. Vice President Jejomar Binay is also urging miners and owners of mining companies in the country to observe responsible mining. Binay had a speech before the Mining Philippines Conference and Exhibition noting that the environment is directly affected by the mining activity and communities both proximate and reContinued on page 32>

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< Continued from page 28 mote from the mining areas are not immune to the changes that mining brings. “Mining and responsibility are inherently joined at the hip for good reason. The target of mining is wealth of finite quantity that is usually non-renewable… Our environmental and social ecosystems are profoundly touched by our actions and we must move with purpose, knowing full well that our deeds breed lasting consequences” Binay said. Kalikasan Partylist said that responsible mining is not equivalent in just having a mining permit. According to Kalikasan responsible mining means giving back to the community more than what was taken. Dr. Jean Lindo of Kalikasan Partylist said that “The mining industry must be environment friendly and must contribute to the national industrialization of the country. We deserve a pro-people and pro-environment mining policy.” Even international mining sector have set standards and developed comprehensive principles in what responsible mining is all about. The International Council on Mining and Metals (ICMM), an industry association based in London, UK, has developed a comprehensive set of industry standards based upon the growing list of considerations mining companies are seen to require in order to qualify as ‘responsible’ operators: 1. Implement and maintain ethical business practices and sound systems of corporate governance. 2. Integrate sustainable development considerations within the corporate decision-making process.

4. Implement risk management strategies based on valid data and sound science. 5. Seek continual improvement of our health and safety performance. 6. Seek continual improvement of our environmental performance. 7. Contribute to conservation of biodiversity and integrated approaches to land use planning. 8. Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products. 9. Contribute to the social, economic and institutional development of the communities in which we operate. 10. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders. In a report titled Responsible Mining: The Key to Profitable Resource Development by The World Bank Group: Bank Information Center, Eight principles are outlined on how to become responsible: 1. Social and environmental assessment 2. Transparency 3. Acceptance by stakeholders 4. Food production trumps questionable mining 5. Compliance standards

with

international

6. Corporate prequalification before permitting 7. Insurance and performance bonds 8. Royalties, taxes and fees

3. Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities.

30 Philippine Resources

Nickel Asia Corporation, one of the country’s biggest mining firms, operates Rio Tuba mining site in southern Palawan boasts about its policy of ensuring

residents of Rio Tuba Bataraza town are treated well. Also apart from the mining site, there are schools, hospitals and housing facilities provided for employees, villagers and indigenous peoples. All 4,000 employees consisting of regular, contractual and contractor’s employees of both Rio Tuba Nickel Mining Corporation get benefits including bonuses, medical access, free education, yearly bonuses and a “generous retirement pay.” In 2011, both firms spent over P215 million on health care, education and infrastructure projects. ■

Large scale mining has big role to play

espected economist Bernardo Villegas believes large-scale responsible mining is primed to develop the Philippine countryside and should be promoted alongside agriculture to help uplift the three-fourths of the country’s poor. “It is obvious that mineral resources are usually in the boondocks, in the most remote areas. And it’s also obvious that 75 percent of the poor, those who belong to the so-called base of the pyramid, are in the countryside and rural areas. So if we are going to benefit the poor, we must have economic activities in the countryside,” Villegas said in a recent briefing. Villegas said it would be “prejudicing the poorest of the poor if we prevented investment activities” like mining and agriculture in the countryside. He put both industries “in the same category of having a direct contribution to addressing our poverty problem.” Villegas said having urban poor—a clear and present concern for Metro Manila and other cities across the country— is “really a result of not having done enough in the countryside.” ■

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Warning: Mining Act petitions will cause major fiscal issues

ccording to the Chamber of Mines of the Philippines (COMP), the petitions against the Mining Act before the Supreme Court will only hurt the country’s investments and confuse investors.

Rolando Recidoro, vice president for legal affairs of the mining association says that “Mining capital invested in the countryside--a crucial driver of inclusive growth that benefits all particularly development of far flung areas where mineral reserves have been confirmed... (These) investments support job creation, inclusive growth and poverty alleviation, at the same time protect the environment and uphold human rights”.

Revisiting La Bugal-B’laan About P173 billion (US$4 billion) in mining investments have been poured into the country since 2004 following the Supreme Court’s landmark ruling in La Bugal-B’laan upholding the constitutionality of the Mining Act or Republic Act 7942, making the industry a significant contributor to national development. While the mining industry as represented by COMP believes that the current fiscal regime already gives government a fair and adequate share in the proceeds from mining, it also acknowledges government’s need for additional revenues to fund its development projects. “The mining industry is always ready to work with government in achieving a revenue sharing scheme that will be fair and equitable for all stakeholders, government and investors alike,” Recidoro said. In a resolution of the Supreme Court en banc dated June 25, 2013, the Chamber was allowed to intervene in the petitions filed by former AKBAYAN Partylist Rep. Hontiveros, BAYAN mem32 Philippine Resources

ber Casino, and others. Mining companies who intervened in the case argued that the high court already declared the law constitutional in its previous ruling and there is no reason to revisit it. The chamber is represented by former Chief Justice Reynato Puno--responsible for the promulgation of the Supreme Court’s Writ of Kalikasan and former Associate Justice Vicente Mendoza. Both known constitutionalists. Senior Associate Justice Antonio Carpio and Associate Justice Roberto Abad asked about the equitable share of the government in the mining industry. Under the law, the government is entitled to 2% excise tax on metallic and nonmetallic minerals.

but also broadly across all industries, severely impacting the investment climate and harming the country’s credibility. This will once again be seen by international investors as the country changing the rules in the middle of the game,” Recidoro added. A stable fiscal and regulatory regime is a necessary “foundation” upon which mining investors will be encouraged to explore, develop, and ultimately operate large-scale mines. Its members have established viable mining operations under RA 7942 and have existing agreements with the Philippine government. The agreement should be honored, the chamber said.

But Carpio said “when you talk of share of Filipino people, the framers of the constitution emphasized that we also want share in the profits.”

Recidoro said that COMP’s intervention is needed given the legal and economic interests of its members, all of which are large-scale mining firms, would be directly affected by any decision rendered by the High Court in resolving the petition.

He pointed out that there are 28 million Filipinos living in poverty “and we should take only two percent and give everything to the investor?” “Even if these 28 million Filipino who are poor will not get their rightful share, it is okay with you?” Carpio asked.

About P173 billion or $4 billion worth of investments were already placed in the mining industry since 2004 following the Supreme Court’s landmark ruling in La Bugal-B’laan Tribal Association v. Victor O. Ramos et al, upholding the constitutionality of the Mining Act.

INTERESTS IN DANGER:

THE 1995 PHILIPPINE MINGING ACT: WORLD CLASS?

The chamber’s intervention, Recidoro said, was necessitated by the fact that the legal and economic interests of its members—all large scale mining companies—would be directly affected by any decision that may be rendered by the Court in resolving the petition. In a statement, the mining lobby said the petitions against Republic Act 7942 filed before the Supreme Court will hurt investments as these will ultimately erode confidence in other deals across sectors. “Changing the regulatory regime will not only undermine investments in mining,

According to COMP, the Mining Act is “world class and at par” with other similar legislations in other countries such as Australia, Canada and the US in terms of revenue sharing, environmental protection and social development.

SECTION 80 & 81: However, former Akbayan Representative Risa Hontiveros begs to differ. In her petition, she asked the high court to deContinued on page 34>

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< Continued from page 32

clare as unconstitutional Sections 80 and 81 of Republic Act 7942 or the Mining Act of 1995.32Section 80 states that the total government share in a mineral production sharing agreement (MPSA) shall be the excise tax on mineral products while Section 81 specifies the government share in Financial or Technical Assistance Agreements or FTAAs. Other petitioners include Quezon Representative Lorenzo “Erin” Tanada III, Bayan Muna Rep. Teddy Casiño and several others said both sections are unconstitutional because they foster inequitable sharing of wealth. They said Section 80 for instance limits the share of the government in MPSA to excise taxes while Section 81 confines government shares to taxes, fees and royalties instead of allowing it to have full control over the exploration, development and utilization of mineral resources. Petitioners, during the oral argument said they want the high court to set a guideline which Congress could use in passing a new law that would amend the Mining Act.

QUESTIONABLE ENVIRONMENTAL PROTECTION Chief Justice Maria Lourdes Sereno on Tuesday slammed the Department of Environment and Natural Resources (DENR) for failing to ensure that mining firms in the Philippines have measures to protect the environment from their mining activities. Sereno, reading from a list submitted by the DENR to the high court, revealed that most of the 350 registered mining companies in the country apparently do not have or have not indicated any “environmental work program” (EWP) in their mining concessions with the government. The chief justice slammed the DENR for 34 Philippine Resources

being “an agency which is not even able to share to the court how much is being spent to protect the environment.” “Data submitted to us [so far] does not give this court comfort that the posterity of the country is being taken care of [sufficiently],” Sereno told Assistant Solicitor General Magtanggol Castro, who is representing the government in the case. Making things worse during Tuesday’s oral arguments, Sereno found out that Castro has not gone over the data from the DENR. “You had gone here very strongly defending what has been happening and you haven’t looked at data of the DENR? How can we say you are credible,” Sereno asked. “If this is the kind of data coming to this court, [then] we have no basis to believe you,” she added. “This has been disastrous for you because you are not looking at the facts and you want us to turn a blind eye.”

OPENING A CAN OF WORMS:

coming from the government does not provide any comfort to the people,” Ms. Sereno said. “If you will just say that in 2004 that we already decided and we just ignore everything else that happened, you are terribly wrong. The very cases you have cited in fact give us impetus to review what has been happening,” she added. Ms. Sereno further criticized Mr. Castro for “assuming” that mining companies are compliant with the payment of taxes without looking into their financial conditions. The Chief Justice cited a number of mining companies lacking in environmental work program, and budgets for environmental rehabilitation. She said there was a need to review what has happened to the mining industry since the high court in 2004 ruled that the Mining Act of 1995 was constitutional (La Bugal et al vs. Ramos). “You convince this court to restrain itself but we dont have anything to hold on to,” Sereno said. “Assumptions of La Bugal are out the window. They don’t hold,” she said.

Castro insisted there was no “viable reason to revisit” the La Bugal decision. Upon questioning from Associate Justice Antonio Carpio, Castro expressed fears that mining companies might pull out if the high court strikes Section 80 and 81 as unconstitutional. Associate Justice Roberto Abad emphasized that the high court was not concerned with economics but with the constitutionality of laws.

REFERENCES:

“The Constitution did not define equitable share. Congress has passed a law to implement it, but it has not fixed a permanent ratio of mining,” he said. Associate Justice Teresita Leonardo-De Castro told Castro to include in the memorandum that his camp should later submit to the SC ways on how the government could monitor compliance of the mining firms with the mining law requirements.

http://www.gmanetwork.com/news/story/317736/economy/agricultureandmining/most-mining-firms-have-no-environmental-work-program-cj-sereno

“From 2004 to 2013, that’s already nine years. The kind of issuances that has been

http://www.interaksyon.com/business/66549/fair-mining--petitionsagainst-mining-act-confusing-investorssays-industry-lobby http://www.malaya.com.ph/index.php/ business/business-news/36136-honormine-pact-with-the-state

http://business.inquirer.net/132729/ change-in-mining-law-bucked http://www.bworldonline.com/content.php?section=Nation&title=Ju st i c e s - qu e st i on - St ate - on - m i n i ng law&id=73497 ■

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Sitting on a Gold Mine: An Aussie’s Take on Investing in the Philippines By: Maria Paula Tolentino

R: What is your role here as the Minister Counsellor & Senior Trade Commissioner of Australia? AW: My role is to help Australian companies in the Philippines. This includes invest¬ment, trade and education. On the education side, we promote Australia as an education destination. On the investment side, it’s about helping Australian companies invest in the Philippines but also, importantly, helping Philippine companies invest in Australia. On the trade side, it’s about helping Australian companies sell their goods and services to the Philippines.

PR: What makes your role vital for both these countries? AW: Trade and investment are vital ingredients for economic growth. With a population of around 22 million people Australia has a small domestic market. The best way for us to trigger growth in the Australian economy is to help Australian companies engage in the international markets. And the same can be said for the Philippines. The Philippines has a lot to offer but is also lacking in some areas. If we both specialize in our areas of expertise, it will enable the economies of both coun¬tries to grow. PR: At present, how are Australia-Philippine relations? AW: I think it’s fair to say that the rela¬tionship between Australia and the Phil¬ippines has never been better. We had President Aquino visit Australia in Octo¬ber last year. The two-way trade between Australia and the Philippines is now valued at 3.5 billion Dollars per annum, and the growth has been at 15-16 percent from the previous year. A big factor in that growth was the free trade agreement that was entered in the January 1, 2010, ANZFTA. PR: How many Australian firms are located here in the Philippines

Australian Minister Counsellor and Senior Trade Commissioner Anthony Weymouth.

AW: It’s hard to give you an exact number but according to our count, there are approximately 200 Australian firms with a presence in the Philippines. PR: How many Australian firms are involved in resources?

AW: The Phil¬ippines is vastly underdeveloped in the mining sector, with only about 1.4% of mineral resource being developed at the moment, I think there are about 37 operating mines and there are several Australian companies operating mines or who have shares in some of the operating mines. Australian companies are also supplying goods and ser¬vices to mining operations. PR: What could be done to encourage more Australian resource firms to come and do business in the Philippines? AW: The key thing to attract more Australian resource companies into the Philippines will be for the Philippine gov¬ernment to put in place a clear mining platform. The legislation that’s already in place, the mining act, is very good, the challenge that I see has been the implementation. So to encourage more invest¬ment from Australian companies in the resources sector, it would be critical to ensure that the mining platform, the regulations that govern mining are all in place, are fair and transparent and are implemented not only from a national government perspective but also from the local government. PR: What makes the Philippines attractive to Australian investors? AW: Australian companies that are looking to invest in the mining sec¬tor in the Philippines are attracted to the large untapped resource base. The reason we don’t see Australian companies coming into the market is because of the uncertainty that is currently being felt in the Philippine mining industry. Continued on page 38>

36 Philippine Resources

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< Continued from page 36 The lack of certainty around the revenue sharing model, lack of certainty around the no-go-zones in terms of where companies can mine or not mine, lack of certainty around law of na¬tional gov-

ernment and local government. These issues are preventing new investment from Australia. PR: In the Philippine Market Summary Austrade has on its website, it was mentioned that “Australian firms have a rep-

utation for responsible mining and are well positioned to increase investment and become mining, mining equipment and technology suppliers of choice”, how so? Please expound. AW: The Australian economy has had 22 years of continuous economic growth. A big part of that growth can be attrib¬uted to our mining resources and min¬ing expertise. Australian companies are able to demonstrate their credentials around socially responsible mining, around environmental considerations and they operate to world’s best standards. In Australia mining, agriculture and tourism live and thrive together. So if the Philippines is looking for a mining partner, somebody who can help the Philippines develop the mining sector in the country, Australia to me, is the natural choice. PR: Also in the same Market Summary, it was mentioned that “Australians can assist by providing expertise in LNG and other sustainable technologies” how is this coming about? What are the developments? AW: One of the greatest challenges facing the Philippines at the moment relates to the energy sector. The Philippines has the second highest energy cost in Asia and needs new energy infrastructure. The Malampaya Gas Field is not a finite resource. Estimates predict that the gas reserves will expire somewhere between 2018 and 2022. There are several Australian companies (BHP Billiton, Otto Energy, Nido Petroleum, etc.) actively exploring to try to find new reserves to help the Philippines with their energy challenges. Australia is also a very significant exporter of natural gas, so there could be an opportunity at some stage for the Philippines to import gas from Australia.

Australian companies like Otto Energy and Nido Petroleum are major contributors to the Philippine economy through projects like Galoc. 38 Philippine Resources

Continued on opposite page>

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< Continued from opposite page

with off-grid solutions.

The Department of Energy is also looking to develop an LNG Masterplan for the Philippines. Australian companies have expertise in developing Masterplan’s in the energy sector and I believe, can contribute to the development of the long-term sustainable energy solutions for the Philippines.

PR: What advice can you give to Australian resource firms looking at doing business and investing in the Philippines?

On the renewable energy side, Australia is a large country with a widely dispersed population where remote power solutions are very important for small communities all around our vast country. Getting energy to those remote communities is a challenge. I’m pleased to say that Australia does have the technologies to assist remote communities. I think there is an opportunity for Australian companies to help the Philippines

PR: What makes you optimistic (or pessimistic) about the prospects for Australian resource companies here?

AW: The key thing that I would say to Australian resource firms looking at the Philippines at the moment would be, you need to do your homework and take your time.

AW: I think at this point in time, the Philippine economy is going in the right direction. The administration is committed to positive change, for the country and for Filipinos. So I think, over all, it’s the right time to be looking in the Philippines.

You need to get a good understanding of what is happen¬ing in the market, particularly as the government reviews the mining industry - whether it’s the fiscal regime, the no-go zones, national government and local government regulations.

The one area that the government needs to pay some serious attention to is the mining industry, and I believe there is a lot of opportunity for the mining industry to contribute to the growth of the Philippines, as it has in Australia.

The best way to do this is to talk to local partners, local law firms, key allies such as the Chamber of Mines and the Australian-New Zealand Chamber of Commerce.

And I hope the Philippine government do put in place regulations or platforms that enable foreign investment to come into the mining sector to help with this inclusive growth the President and his Continued on following page>

Philippine Resources 39

Community Resources August - October 2013

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OceanaGold Puts Major Focus On Sustainability

ustainability means meeting the current needs of our society in ways that enable future generations to meet their own needs also at OceanaGold, this is how we do business – and it’s an increasing part of our business success. We have been living it for years as “Doing Business the Right Way” and it is central to our vision to become the most admired multinational gold producer, employer and gold company of choice.

The company is on innovative and effective sustainability outcomes in the areas of environment, community, health and safety and workplace programs. Developing sustainable business practices is not only critical to the future of our company; it is also for the benefit of future generations. Sustainable practices are leading OceanaGold to sustainable growth, both profitably and responsibly.

Environment

vironmental regulation and management. We cannot overstate our commitment to managing the environmental impact of our activities and wherever possible we strive to exceed industry benchmarks through the implementation of innovative environmental programs across our operations. We remain focused on key areas that we used to evaluate our environmental management performance each year: - Compliance

Our ability to operate is dependent on our adherence to sound practices in en-

- Energy Use and greenhouse emissions -

Water use

Waste and Tailings management

Land use biodiversity

Recent Achievements: 1. Achieved 100% compliance with all environment provisions within Didipio’s environmental permits 2. The settling pond for the plant operations has been constructed and is already functioning. 3. Significant improvement in monitoring daily turbidity for water quality measContinued on page 42>

< Continued on previous page ad¬ministration are trying to deliver for the Filipino people. PR: How much longer will you be in the Philippines for, and would you eventually retire here? AW: I’ve been lucky to be in the Philip40 Philippine Resources

pines for almost 2 years. I arrived here in December 2011. I’ll be here for 4 or 5 years. I don’t know whether I’ll retire here! I’m an old man, there is no doubt about that but I’m not sure I’m ready to retire yet. Too early to say (he laughs). PR: Would you recommend your fellow Aussies to retire here? Why?

AW: I’m aware of quite a few Australians who are moving into the Philippines to live in their retirement. As the marketing campaign goes “It’s more fun in the Philippines”, and that’s what they have told me. So, sure why not (he smiles). ■

Community Resources August - October 2013

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< Continued from page 40 urement of the Didipio River. 4. We have implemented numerous environmental programs and research studies designed to enhance and support the biodiversity. 5. At Didipio, we continued to advance our Agro Forestry program and in 2012, we launched the Community Partnership Plantation Program (CPPP). The CPPP forms part of our commitment to the Philippine National Greening Program by committing to plant one million trees over the next five years. The CPPP will build on the success of our longstanding Didipio tree nursery and reforestation program which has seen 320 hectares of reforestation achieved since its establishment in 2007. The program resulted to the formation of OceanaGold Sustainble Agro Forestry Inc. which aims to go beyond simple “greening initiative” and develop a sustainable business that carries on beyond Didipio’s current 16 year mine life.

This will engage land owners through the Debibi Tree Farmers Association and has planted over 100 hectares of specially cloned G-melina trees that will mature in nine years and grow straight resulting in high a yield per hectare and immediate benefits for the farmers. The goal is to plant in 200 hectares of plantation each year for a period of 10 years via rental agreements with local landholders. Benefits to participating farmers include: a. Rental Fees for 10 years b. Direct employment through the seedling nursery, land preparation, planting and maintenance of trees c. Share of net income from the tree plantation harvest. The program addresses two primary needs: a. To plant soil establishing trees in denuded areas of Quirino and Nueva Vizcaya provinces b. To provide a sustainable source of

income and livelihood for farmers on land that is not sustainable for other agricultural crops like citrus or rice. 6. We also maintained our involvement in the Mines Rehabilitation Fund Committee which is responsible for the engagement to local communities regarding the eventual Didipio mine closure and restoration. 7. OceanaGold has committed to plant one million trees over five years in the municipalities of Cabarroguis, Quirino and Kasibu Nueva Vizcaya under President Benigno S. Aquino III National Greening Program which seeks to plant 1.5 Billion seedlings on 1.5 Million hectares of public lands nationwide in six years from 2011 – 2016. 8. OceanaGold Didipio implemented the Wealth on Waste (WOW) program designed to segregate and recycle nonhazardous waste at the mine site and adjacent communities. With a focus on risk management, we will look for opportunities in 2013 to further expand our risk management program as it pertains to the environment including the impacts of climate change. Community and Stakeholder Management Achievements: 1. Stakeholders signed the Memorandum of Agreements to established the implementation mechanism of the Social Development Management Plan ( SDMP) fund completed for the nine adjacent Barangays thus sustaining partnership with our communities 2. Implemented a community grievance management program at Didipio to address community and employee concerns. 3. Supported sustainable enterprise Continued on page 44>

42 Philippine Resources

Community Resources

August - October 2013

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to its host and neighboring communities but more than the initiative are our corporate social responsibilities performed outside Didipio. • OceanaGold rendered Medical Missions which includes medical treatment, dental and circumcision that catered around 300 residents in Alloy Kasibu, Nueva Vizcaya. • Provision of medicine and necessary medical and dental supplies and safety lectures during the medical missions in Papaya Kasibu Nueva Vuzcaya. The Medical missions are coordinated with the local government units in the area.

< Continued from page 42 development in the community. The Dicorp (Didipio Community Development Corporation) is established in 2011 and owned by the long term residents of Didipio, they assists local communities build the capacity required to directly bid on various mine services contracts. In 2012, Dicorp was successfully awarded contracts for services such as access road maintenance, housekeeping, camp catering, laundry waste and recycling, employee transport, construction equipment hire services and Didipio concentrate loading and handling with more than P8 Million in revenue. Dicorp also complements and strengthens our local employment policy. During Didipio’s construction, employment picked at 1,700 people of which 98% are Filipino. 4. The company spent nearly US$900,000 to implement capital infrastructure projects such as construction of main access road, drainage canals and school buildings 5. Increased purchasing from Nueva Vizcaya based businesses and contractors by 100%. Also numerous contracts 44 Philippine Resources

were awarded for minor construction and food purchases . Community Activities in Greater Philippines More than the usual social development management programs, OceanaGold is also active in Corporate Social activities. The company has been an active supporter of various medical missions and advocacy programs such as the Brigada Eskwela, Earth Hour and numerous Health and Safety activities. Brigada Eskwela – A project coordinated with the Department of Education and local government units. Brigada Eskwela is an initiative to help local elementary and high schools in the construction and renovation of the schools. OceanaGold with the initiative of helping outside its host and neighboring communities donated school supplies, instructional materials and forest tree seedlings for the celebration of the World Environment Month. The Brigada Eskwela is a yearly initiative of the company in helping schools in Nueva Vizcaya and Quirino Province. Medical Missions - Yearly health and safety projects is delivered by the company

• Implemented Corporate Social Responsibility at Compostella Valley in coordination with local government units and Pusong Minero organization during Typhoon Pablo through donations and moral support to the affected victims. 1. Donated assorted medicine to Gen. Benito Ramos of National Disaster Risk Management team at Camp Aguinaldo in Dec. 2012 2. Distributed bottles of water Dec. 12, 2012

last

3. Distributed packs of personal hygiene kit in April 2013. ENACTUS - OceanaGold has been very big in education and students over all development. The company have been supporting Enactus yearly,an international non-profit organization that composes of students, academic and business leaders committed in using the power of entrepreneurial action in transforming the lives of many thus shaping a more sustainable community. OceanaGold provides capacity building to students and young leaders and engages its employees to the organization as part of the company’s employee volunteerism program. Continued on opposite page>

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< Continued from opposite page

Connecting our Communities 1. At the end of 2012, at least four major sections of our road development project were under construction. Three contractors are currently working on sections that connect the Didipio Mine to the circumferential road linking to Kasibu Town to two major commercial towns of Nueva Vizcaya The company has committed UD$1.4 million for concreting one kilometer per year of the access road to the Didipio Mine prioritizing difficult road sections and where houses are concentrated. 2. Information, Education and Communication Program – integral to a broader stakeholder engagement plan. The program was developed to provide our stakeholders and the general public

with timely, consistent and clear information. The ultimate goal is to provide an avenue for transparent and effective communications and education of the company’s operations, achievements and the mining industry. This year we have launched the Didipio News Letter and opened two information centers.

SDMP Project Highlights 1. Infrastructure – farm to market road upgrades, canal construction, water system rehabilitation, construction of school buildings, classrooms and other school facility improvements, community hall repairs, bridge renovations. 2. Education and Educational Support Program – includes scholarship grants, salary assistance to teachers, educational assistance to children of lot owners, donation of educational equipment and materials.

Alimit Elementary School Building – Part of OceanaGold’s commitment to Education is also construction of school buildings. This is a project in coordination with the Department of Education and Local Government in Alimit, Kasibu Nueva Vizcaya. 3. Human Resource Development and Capacity Building – this initiative includes workshops, office and fund management, conduct of spiritual enhancements and external engagement in the community. 4. Sports Development and Socio Cultural Preservation – projects and activities cultivating leadership and socio cultural enhancements. Attendance to various festivals, summer league and celebration of barangay fiestas. Donation to Children’s Hour: Oceana< Continued on following page

Philippine Resources 45

Community Resources August - October 2013

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< Continued from previous page

capacity building.

Gold employees donate one hour of their annual earnings to Children’s Hour,a nonprofit organization. Through Childrens Hour OceanaGold employees help the Didipio Elementary School students develop their skills and talents in arts, music and sports.

A great majority (90%) of the expenditure comprised of infrastructure projects followed by education, sports and socio-cultural, human resource and capacity building and health components.

Through continued commitment of the employees, the first drum and lyre team in Didipio was organized. Instruments and training are provided by OceanaGold through employees yearly contributions. 5. Access to Health Services and Facilities – this includes various medical missions, medical assistance and salaries to health workers in Didipio. Development efforts for its host and adjacent communities also ramped up with total expenditure of P21Million on community investments during the first quarter of 2013. The majority of these projects and activities were funded through the company’s commitment fund and the rest were through the SDMP fund for Didipio and the nine adjacent barangays. Expenditure covers the Community Development components on infrastructure development and support services, access to education and educational support programs, health services and facilities, sports and socio-cultural programs and human resource development and

Health and Safety and the Workplace Health and Safety of OceanaGold employees, contractors and surrounding communities is the forefront of what we do in all the areas the company operates and beyond the day – to day operations of the company. In 2012, OceanaGold was awarded a plaque of appreciation by the Mines and Geosciences Bureau in the Philippines for our Health, Safety and Environment Programs. The recognition marked the first time a mining company in the region had received the award. In pursuit of an accident free workplace the company has implemented an over arching Health and Safety framework, we developed the Health and Safety and environment compliance standards manual which is based on industry best practices. New Zealand and Philippines Operations and explorations undertake numerous health and safety training programs to ensure every employee is equipped with the knowledge and expertise required to operate safely at all times

New health safety initiatives implemented this year: 1. Journey to PASS program – provides staff with a safety passport earned by reporting hazards, participating in safety contacts, attending safety training and undertaking safety observation. 2. Health Toolbox Program - provides lectures and daily health monitoring for keeping employees healthy and always fit to work. Because of this training and knowledge acquired, employees actively seek out opportunities to volunteer as local fire fighters and community leaders. To offer more learning opportunities for employees and contractors, the Didipio Academy was formed, a training facility to formally certify training acquired by employees and contractors. Additional Scholarships were given to deserving students that later on joined the Didipio Operations Team, inter cultural competence training is also provided to all employees and contractors for better understanding of the diverse culture at OceanaGold. The training program exists for Didipio Mine worker who wish to advance and develop their skills and capabilities. This allows the company to realize its hiring “locally first” policy. The Academy is currently in partnership with the Technical Education Skills Development Authority (TESDA) - a regulated agency responsible for the proper certification of individuals seeking to work in skilled labour positions. The program has certified nearly 60 workers, comprising of men and women from Didipio and local communities operating heavy vehicles having produced the first female trainer for articulated dump trucks and rigid operator certification. ■

46 Philippine Resources

Community Resources August - October 2013

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King king making a major difference in the community By Ben O. Tesiorna

n just a little over two years since it started working in the mining community of Pantukan, Compostela Valley, the King king CopperGold Project has spent about $700,000 or roughly P30 million on community development projects.

KCGP is a partnership between Nationwide Development Corporation (NADECOR) and St. Augustine Gold & Copper Ltd. (SAGCL) wherein the two companies are working together to develop the project while partnering with the community to meet the needs of Pantukan. One of KCGP’s missions is the delivery of free health and medical care services, including free use of its ambulance and paramedic team, to the people of Pantukan and provides free medicines to those diagnosed with ailments. These include immunization of infants and small children to safeguard against diseases. They have also donated to the local hospital an ultrasound machine with printer and UPS, surgical equipment and tools, air-conditioning units for X-ray room, dental room and the ultrasound room. Their medical outreach clinics and programs that also extend to other municipalities within Compostela Valley in partnership with local government and health officials, small-scale miners associations and the Mansaka Tribal Council is a continuing effort to meet this objective. KCGP is also participating in efforts to alleviate malnutrition and promote health by providing proper nutrition to local school children through feeding programs in partnership with the 48 Philippine Resources

KCGP has partnered with Gawad Kalinga to provide funding for affordable housing units in Pantukan. This effort is a province-wide program to house the homeless, and is part of KCGP’s commitment to support and provide assistance to the community projects initiated by the local government and leaders.

school administration, Parents-Teachers Association and the Municipal Nutrition Council. Aside from its medical outreach programs, KCGP is also actively involved in creating jobs and livelihood programs for the community. King-king Copper-Gold Project works closely with community officials and Mansaka tribal leaders to provide opportunities for local residents. Their community guide program, in which residents accompany staff on their field studies, is a great example of this. The guides serve an important community link between KCGP and the people and help educate Pantukan residents about the project, while at the same time helping the company understand the local culture. The Project also employs a highly skilled work force and is run by some of the top industry leaders with a proven record of discovering, exploring and developing valuable assets that require an overall understanding of the industry that only majors can provide.

Their expert team is fortified with both the technical and financial experience that is essential to being a leader in the mining industry as well as building shareholder value for our investors. Education is also a vital component of KCGP’s community works. The company is committed to investing in the growth and development of the community through education and to encourage Pantukan’s growth by helping the young people have a brighter future. They have provided generous scholarships, including housing allowances, to the young members of the Mansaka tribe and Pantukan community so they are able to attend college or vocational school. The scholars were selected with the involvement and endorsement of the tribal council and local Barangay Council. They have also provided internship opportunities at their offices for several of the scholars. KCGP’s motto for education is “looking Continued on page 50>

Mineral Resources August - October 2013

www.philippine-resources.com < Continued from page 48 after the welfare of the indigent students gives them a better chance in school thus better chance in life.” KCGP is committed to long-term educational enhancement with the management’s desire that the students of the impact communities will one day become future employees of KCGP. In line with this they are coordinating with the TESDA Regional Training center in Davao city in preparation for a skills training program that will target the residents of the impacted community to equip them with needed skills for possible job opportunities once the construction and operation of the project begins. More than just providing scholarships, KCGP has also donated audio-visual equipment and computer sets, to schools for better teaching and learning. (Ayan Elementary School; Doroteo de Castro Elementary School, Sta. Teresa Elementary School), construction materials to the Magnaga Elementary school to repair and improve school infrastructure, school supplies to indigenous students, computer, printer, and digital camera to Gumayan Mansaka Tribal Council to provide information and technology equipment to indigenous people organization, and air-conditioning units, office equipment, audio-visual equipment to Pantukan National High School, Doroteo de Castro Elementary School.

The Wheelchair Donation Program is part of the King-king Copper-Gold Project’s effort to provide medical care, services and equipment to the indigent people in the community.

They also assisted in the construction of restrooms in Bongbong Elementary School to promote proper hygiene among students and the Alternative Learning System Building to provide a suitable place for learning, and the rehabilitation of the Department of Education’s District Supervisor’s office to improve the working environment for the Supervisor and the staff. Other community projects conducted by KCGP include donations of wheelchairs to assist the differently abled individuals,

- KCGP has a continuing program of donating school supplies to indigent students of the community. These donations continue to represent Nadecor and SAGCL’s commitment to long-term educational enhancement. 50 Philippine Resources

steel basketball goals to support sports development, computer sets and office equipment to several organizations in the community (San Jose Parish, Pantukan Adventist Learning Center), sewing equipment to the Magnaga Tribal Council of Women to provide tools for additional livelihood to the tribal community, one (1) unit Koppel 3-hp wall-mounted air conditioner to the Kolehiyo ng Pantukan, motorcycles to the Gumayan Mansaka Tribal Council to provide transport for indigenous people living within the tenement, cash assistance to help in the construction of new barangay halls for the Magnaga barangay Council, cellular phones to the Magnaga Tribal Council to provide communication tools for tribal officials, and a community water system. They were are actively involved in the rescue and recovery efforts in the wake of typhoon Pablo and other natural calamities that have visited the Pantukan and the rest of the province. KCGP also has a far-reaching tree planting and reforestation program insupport the National Greening Program KCGP has also partnered with Gawad Kalinga to provide funding for affordable housing units in Pantukan. Continued on page 52>

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DIWATA and the Ambassador - symbols of class and quality By: Maria Paula Tolentino.

ressed to the nines, the beaming Ambassador, Delia Domingo Albert (DDA) walks towards me and flashes the smile that has won so many hearts here and abroad. With a casual hello, the good Ambassador starts to bring out what seems to be a media kit for DIWATA, a woman’s NGO she founded last year.

“Do you see the fern leaf Paula?” she points to the moss-gold colored box with a beautifully laminated leaf embossed on the surface “That symbolizes DIWATA: health, strength and abundance.” A fern leaf to symbolize growth and prosperity is certainly most appropriate. It has been found that whenever a fern leaf grows in a certain area, it means that the soil is rich and robust. Thus, the suitability of the fern leaf to represent DIWATA is perfect. As I hand her my card, the Ambassador non-nonchalantly hands over hers and begins what I think is the start of our interview. This woman does take charge. Philippine Resources: With mining being a predominantly male industry, why is there an emphasis on the role of women? What makes their role so important? DDA: Most industries are male dominated including in my field (diplomacy). Mining is no different. I emphasize wom-

< Continued from page 50 This effort is a province-wide program to house the homeless, and is part of KCGP’s commitment to support and 52 Philippine Resources

en in my practice and in most of my endeavors because they are proven to be responsible “doers”. Just to cite an example, when we invited IP women from Mindanao to a dialogue on mining, they made family the center of the discussion. Many of these women came well prepared. They may not have academic training but they have the spirit to discuss openly and intelligently. Women are able to take care of responsibilities at different levels and at the same time are articulate, sincere, thorough and have a caring nature.

job of ensuring that laws on resource development are followed. PR: In relation to DIWATA, why is there a focus on the Filipino woman? What are the qualities the make her the best advocate for responsible mining?

What is important to them is their ability to take care of the family. By doing so, they contribute to the community, and eventually the country.

DDA: Filipino women are most caring and protective about things concerning their families and homes. She is the best advocate for responsible mining because she embodies responsibility to her family and community. I noted that the women who actively participated in the former Minerals Development Council had solid and constructive ideas about the industry, so I invited them to take part in our group discussions that eventually led to “Diwata”.

PR: What are the challenges you faced in this industry?

PR: It has been a year since DIWATA was launched, what are the changes? Milestones?

DDA: Mining is not just extracting. It is also about development. Although that is the action that goes with it (extraction), there is more to it than that. I look at the industry from a development point of view. As a diplomat, we are instructed to convince investors to come to the country and participate in the development of our resources by bringing in the needed technology and capital. There are two ways of looking at mining: a half filled glass or a half empty glass. I choose to look at it from a development point of view which means creating wealth.

DDA: Well, I am very pleased to share that we are celebratedour first year on July 18th. Changes? I cannot measure that.

We are sitting on gold mines, and we should make use of our resources like most progressive countries do and that we should do so in a responsible way. The government should perform their

provide assistance to the community projects initiated by the local government and leaders. The project is also involved in various other government community development initiatives, such

We want to change a mind set perhaps. Have we done it? I don’t think so. It will take sometime. You have to do a lot of educating people. Milestones? We have brought society a certain degree of consciousness. DIWATA has been an eye opener for many people. For this reason our women geologist in DIWATA will share their knowledge and experience at the July 23rd Bulong-Pulungan. Continued on page 54>

as the National Greening Program with its tree-planting and reforestation efforts, and the Food Always The Home (FAITH) program, a family based gardening program at the purok and household level to ensure sustainable food source.

August - October 2013

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< Continued from page 52 PR: What are the challenges you faced while working on DIWATA? DDA: While challenges are numerous, I take them as opportunities. So long as you know your subject well, I don’t think you will see them as challenges. Of course, you have to respect the opinion of others so we encourage dialogues. The Philippines is so richly endowed. You will see proof of it by simply going to the Ayala museum to see how the country is gifted with both natural and human resources. Certainly, the environment needs to be protected. Today’s technology has given the industry the possibility to extract responsibly. Also, I am very concerned with poverty in this country. It is mind boggling how this country has so much poverty. If you go out there in the countryside, things have not changed for the past

years. As Mr. Manny Pangilinan declared “poverty, not mining, is the problem”. There are many issues to address but as Fr. Bernas said “whatever you say about mining, even the constitution provides for it”. I thought that was a significant statement. PR: How did your role help catapult DIWATA? DDA: The Minerals Development Council which I initiated in 2005 was representing the public sector. My idea was to bring these two sectors together so that there is a common understanding of what the problems are and a common understanding of how to address them. As a diplomat, I always opted for learned dialogue. When I say learned, I mean that both parties who sit at the table are fully prepared and aim to find solutions to common problems. Based on my experience, I thought of continuing the use of public

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54 Philippine Resources

space where women could share their constructive ideas hence, Diwata. PR: How can an ordinary citizen help your cause? DDA: Study the history of this country. Study the geology of this country.The way I see it, there is a need for education, for the Filipinos to get to know the country better. I’ve had a continuing educational experience. There is always something new to learn, and this country has a very rich history, an exciting geography and geology. Knowing the country well really inspires you to find a way on what role you can play in the larger picture. There is no role or job too small or too big if you really want to contribute or “give back” to the country. PR: For those that are not in tune with mining, how can DIWATA educate others on its advocacies? Continued on page 56>

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< Continued from page 54 DDA: Expose them to people whose lives are touched by the industry in a proper atmosphere where you all agree to listen to each others views. Again, it is a diplomat’s job to bring people together and to try to understand the concerns of the different sectors because if you don’t know why they think the way they do, you will be unable to address your problems. You need a table and this is what DIWATA provides. Again, DIWATA provides the public space where you can have dialogue with different points of view that sometimes divide communities. As a diplomat, I have negotiated for the life of a Filipino hostage. I have negotiated for strategic supply of basic needs. These are all big issues but down there, are just as big issues that should be addressed through dialogue and an open mindedness. You have to talk. For me, the important role that we can provide is a table

where we can communicate bearing in mind the “greater good for a greater number of people.” PR: DIWATA is not only committed to the advancement of women but indigenous peoples’ (IP) rights as well. How are things on this side of the fence? DDA: The first activity we had was to bring to Manila and the city-women to the indigenous communities who are very articulate in telling the public what the industry meant to them. Of course, there will always be division of opinion. That is part of the democratic process. I remember when I was the Ambassador to Australia, one of my favorite projects was to bring to the consciousness of Australians the wonderful indigenous culture especially the music of the Matigsalug tribe that lived in Bukidnon. A couple came with their jewelry and musical instruments which meant that they had a culture of making ornaments and instruments which came from their own

resources. They were very proud to wear them. You can see how creative they were, how they were able to fashion things out of them and eventually enrich their lives and eventually be proud of what they can make and do. PR: What are the current projects of DIWATA? DDA: DIWATA will be having its first anniversary on July 18th. We will celebrate with a jewelry artist Celia Molano known for her Philippine “enchanted ornaments” using indigenous gold, silver and beads. Another celebration will be on the 23rd of July. DIWATA will be featured in a media forum called Bulongpulungan. With regards to other projects, I have taken a step back. I let the Diwatas do it. I believe I have done my share, I have opened the door. Now their creativity should move. I also have other proContinued on page 58>

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56 Philippine Resources

Zijin Mining Group “Our team uses IntierraLive everyday to find projects that we might not normally identify. It is a quick and efficient means of accessing comprehensive information and improves our ability to analyse and assess mining and exploration projects.” Mr Li General Manager, Overseas Division

Contact: marketing@intierraRMG.com

Supply Resources August - October 2013

November 2011 - January 2012

www.philippine-resources.com

DDA: You realize you canâ&#x20AC;&#x2122;t do things all Brunel, willing to listen. WeSite donâ&#x20AC;&#x2122;t talk big, we just Monark boosts support for mining by yourself. Inspire people to get the job do what we think we can do and bring team jects going43&70 on in Baguio, something that done. Also, you canâ&#x20AC;&#x2122;t others to do Works about an understanding of andup apprecia9-* 841* &9*75.11&7 89&'1.8-*) .3 expect 9-* +4:3)& < Continued from page 56

I have always wanted to do. For the past )*&1*7 .3 9-* -.1.55.3*8 .8 8 years, we have worked on a museum .3(7*&8.3, .98 8:55479 (&5&'.1 that will define the history of the Baguio.9> +47 9-* 2.3.3, 8*(947 <.9- 9-* *89&' Benguet district. 1.8-2*39 4+ & 2.3.3, ':8.3*88 :3.9 !-* 3*< :3.9 .8 -*&)*) '> 11&3 $&7) But we do that, we are ge&3) before *3(425&88*8 89&++ .3 doing 8&1*8 a&3) ological park to show everyone how ex574):(9 8:55479 citing the Kennon road is. U.P. Geologists 43&70 8&>8 9-* 24;* :3)*71.3*8 .98 tell me that the Kennon road is typical of 7*(4,3.9.43 4+ ;*7> ':11.8- 57485*(98 +47 what one can find all over the country. 2.3.3, &2.)89 +&;47&'1* 2*9&1 57.(*8 &3) A& ;*7> -.,- .39*7*89 .3 .3;*892*398 .3 9-* We are in partnership with government 2.3.3, .3):897> C .3 57*5&7&9.43 +47 A*= and hope to launch the project on Ba543*39.&1 ,74<9- .3 9-* 2.3.3, 8*(947 C guio Day, September 1. !-* (425&3> 8**8 9-* :3.9 &8 A& 43* 8945 8-45 )*9*72.3*) 94 574;.)* 14>&1 We also plan to participate at the cel8:55479 <.9- 9-* 4'/*(9.;* 4+ *89&'1.8-.3, ebration the 60th anniversary of PM& )**5*7 of7*1&9.438-.5 '*9<**3 43&70 SEA (Philippine Mining Safety and Envi&3) .98 2.3.3, (:8942*78 C ronment an organization !-* Association), &9*75.11&7 )*&1*7 .8 &184 which originated Baguio. .3 89&++ 97&.3 897*3,9-*3.3, .98 in&(9.;.9.*8 .3, <.9- .98 43&70 4:3)&9.43 389.9:9* PR: What are your thoughts on getting the <-.(- 4++*78 >4:3, .1.5.348 /4' 45547 right people your team? 9:3.9.*8 '> on 574;.).3, 9-*2 <.9- 034<1 *),* 80.118 &3) ;&1:*8

58 Philippine Resources

things for *;41;*) you if you+742 canâ&#x20AC;&#x2122;t/:89 do it574;.).3, yourself. 9.43 -&8 Personal credibility is important to get 9*(-3.(.&38 +47 43&70 6:.52*39 94 the team moving. I also strive to bring 574;.).3, 9*(-3.(.&38 94 .98 14(&1 .3):8 the team backB to our focus and to 4<*7 hard 97> 5&793*78 .3(1:).3, 4<*7 realities. 8.& &1*4 6:.52*39 &3) *9&18 9 8&>8 9-* 5&793*78-.58 <.9- 9-*8* PR: What is -&;* your vision for DIWATA? (425&3.*8 574;.)*) /4' 45547 9:3.9.*8 94

+4:3)&9.43 8(-41&78 &8 DDA: Personally, donâ&#x20AC;&#x2122;t have wild goals. <*11 &8 '4489.3, I 9-*.7 2&354<*7 7* I6:.7*2*398 .3 9-* +.*1) 4+ -*&;> *6:.5 just want to communicate to the public about an important industry which has 2*39 2&.39*3&3(* helped thousands of people. $.9- .98 A!*(-3.(.&3 +47 9-* $471) 74/*(9 C !-* +4:3)&9.43 574):(*8 I9*(-3.(.&38 +47 43&70 6:.52*39 &3) think that people will appreciate this country better if they understand its 49-*7 ! )*&1*78 &74:3) 9-* <471) geological setting and by&557*39.(* knowing its8*7 re 9 :8*8 9-* &9*75.11&7 sources, perhaps we can be more crea;.(* 9*(-3.(.&38 97&.3.3, 574,7&2 &3) tive and &9*75.11&7 innovative in&88*882*39 doing something &551.*8 94418 about them. And DIWATA is a means &3) 1*&73.3, 89&3)&7)8 94 *38:7* 9-&9 to bring about In life, ,7&):&9*8 4+ this 9-* consciousness. 574,7&2 -&;* 9-* you have to be focused. 7*6:.7*) 80.118 94 '*(42* &9*75.11&7 9*(-3.(.&38 94 8:55479 2.3.3, .3):8 You can â&#x20AC;&#x2DC;t preach to everybody. We can 97> ,74<9- 349 431> .3 9-* -.1.55.3*8 only dialogue with the people who are ':9 &184 4;*78*&8 â&#x2013;

tion of-* this 7:3*1 country. ,74:5 -&8 9*&2*) :5 <.9- 9-* :897&1.& '&8*) (425&3> Also, our are.3 very simple: that DI.9* goals $4708 & 897&9*,.( &11.&3(* WATA contribute to the lives of our sis!-* 5&.7 <.11 )*1.;*7 (4251.&3(* *):(&9.43 ters out there. We want to help women ! &3) !7&)* 88*882*39 +47 9-* in those far-flung areas. We would like to :897&1.&3 &3) .39*73&9.43&1 2&70*98 &8 help in their livelihood projects. Itâ&#x20AC;&#x2122;s as <*11 &8 97&)* :5 80.11.3, &3) ! basic as that! You canâ&#x20AC;&#x2122;t finish anything un94 .39*73&9.43&1 (*79.+.(&9.43 +47 9-* -.1.5 less you start it. Itâ&#x20AC;&#x2122;s never too late. There 5.3* )42*89.( 2&70*9 room to do things especially if is always .9* $4708 <.11 :9.1.?* .98 1&70 ):(& you want to do things right. My prior9.43 .9> (&25:8 .3 1&70 3479- 4+ &3.1& ity )*;*145 are women who didnâ&#x20AC;&#x2122;t have the same 94 & <471) (1&88 *):(&9.43 (:7 advantages as I have had and which many 7.(:1:2 )*8.,3*) 94 85*(.+.( (1.*39 7*6:.7* of us take for granted. And there are so 2*398 +47 9-* 438-47* &3) 4++8-47* 4.1 &3) many women like them out there. ,&8 2.3.3, &3) *3*7,> 8*(9478 !-* 7:3*1 ,74:5 *3(425&88*8 When you have received so much in life, 7:3*1 !*(-3.(&1 *7;.(*8 -.1.55.3*8 you really have to give back. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve learned <-.(- .8 1.(*38*) +47 9-* *=5479 4+ that making a â&#x20AC;&#x153;livingâ&#x20AC;? not the same .1.5.34 5*78433*1 &3) is 7:3*1 !*(-3.(&1 thing as making a â&#x20AC;&#x153;life.â&#x20AC;? (Maya Angelou). *7;.(*8 &354<*7 <-.(- .8 & (42 This quote is spot this Lady Am51.&39 (425&3> +47 on 9-* for *2514>2*39 &3) bassador. She truly is DIWATA in the 43 -.7.3, 4+ .1.5.34 5*78433*1 43 '*-&1+ flesh. â&#x2013; 4+ (1.*398 &8 <*11 &8 & +47*.,3 <470 5*72.9 85438478-.5 5&>7411.3, &3) 7*14(&9.43 â&#x2013;

Philippine Resources 49

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Renewable Resources August - October 2013

November 2011 - January 2012

www.philippine-resources.com

Geothermal energy risk Risk management Manage Earthquake By Fernando Penarroyo

the 63 arthquakes 1C@@3=:7B7 1/: :/<2A1/>3 expensive 6/A =>3<32 => of most >=@BC<7B73A 1:3/<3@ 3<3@5G natural 4=@ disasters. Site =>B7=<A /<2 5=D3@< specificE67:3 soil7<D3AB=@A conditions have ;3@=D723 a profound effect on ground B63 3AA3<B7/: 7<4@/AB@C1BC@3 A3@D713A shaking and liquefaction, both /<2 :35/: significant 4@/;3E=@9 B= 23D3:=> /<2 with consequences 23>:=G <3E build 3<3@5G cost B316<=:=573A for design, and post 34=@3 1=<A723@7<5 A=;3 =4 B63 93G earthquake performance. @7A9A E6716 6/D3 /< 7;>/1B =< @3<3E Understanding site conditions and plan/0:3 3<3@5G >@=831BA /<2 B63 53<3@/: ning for site specific /AA3AA;3>@=/16 B= >@=>3@ 7B 7A effectsB= should be a 0/@@73@A critical part of /@3 your CA34C: 723<B74G B6/B asset management and protection plan>@3D3<B7<5 B63 C>B/93 =4 ' >@=831BA ning for existing structures, and an es =@3;=AB =4 B63A3 /@3 0/@@73@A E6716 sentialB= part your feasibility design and @3:/B3 B63 of:=E :3D3: =4 /E/@3<3AA build of new infrastructure. C<23@AB/<27<5 /<2 /BB3<B7=< /44=@232 B= B63 1=;>:3F /@@/G =4 >=:71G @35C:/ Recent earthquakes in New/<2 Zealand, and B=@G B316<71/: 47</<17<5 =@5/<7 long experience throughout the world H/B7=</: 4/1B=@A /4431B7<5 ' >@=831BA illustrates the high costs of earthquakes 3=B63@;/: >@=831B 47</<17<5 7A <=B either through direct damage (ChristchB63 BG>71/: 0=7:3@>:/B3 A163;3 E7B6

>@= 4=@;/ /5@33;3<BA CB7:7H32 7< =B6 3@ @3A=C@13 >@=831B 23D3:=>;3/<73A 1971), or/07:7BG loss ofB= business continuity and 6/D3 B63 47</<13 ' 7<D3AB delays7< in B316<=:=5G re-start. ;3<BA =@ >@=831BA 4C<2 32 =< / <=< @31=C@A3 47</<13 0/A7A =@ The Philippines is on the â&#x20AC;&#x153;Rim of Fireâ&#x20AC;?, A;/::3@ 0CB 3<B@3>@3<3C@7/: 53=B63@;/: the focus for many 7<D3AB=@A of the worldâ&#x20AC;&#x2122;s major 23D3:=>3@A A3397<5 4=@ B316 earthquakes, of >@=831B the countryâ&#x20AC;&#x2122;s de<=:=5G ' much /<2 =@ 47</<13 velopment is in low lying areas with deep =@ B63A3 3<B@3>@3<3C@7/: 53=B63@;/: soft sediments and B63@3 the earthquake risk 23D3:=>;3<B 47@;A /@3 27443@3<B is high. How prepared are you and your 0CA7<3AA ;=23:A /<2 0/:/<13 A633B A3< sites to manage this significant risk ? A7B7D7B73A B= 1=<A723@ ,67:3 47</<17/: 7<AB7BCB7=<A 1/@3 Site 3D/:C/B3 Effects â&#x20AC;&#x201C;23D3:=>3@ Not all ?C/:7471/B7=< 4C::G Sites are @31=@2 the Same /<2 B@/19 037<5 / ;/8=@ /<2 E3:: 9<=E< 23D3:=>3@ 7A <=B @3?C7@32 Site effects (ground@31=5<7H3 conditions) have 031/CA3 47</<173@A 7<D3AB a profound effect on the intensity of ;3>=@BC<7B73A 6/D7<5 1=<A723@/0:3 ground shaking felt as a 3<3@5G result of any 3F>3@73<13 7< 23D3:=>7<5 >@=8 given earthquake (Southern California 31BA 0G >@=D727<5 3?C7BG =E3D3@ <3E Earthquake23D3:=>3@A Centre), and govern the on53=B63@;/: /@3 @3?C7@32 B= set of potential liquefaction as a result 23;=<AB@/B3 B637@ 1=;>3B3<1G 0G A3 of

:31B7<5 3F>3@73<132 /<2 E3:: @3A>31B32 1=<AC:B/<BA /<2 A>3174G7<5 /<2 CA7<5 that earthquake. In general, shaking may 3?C7>;3@=D3< B@/19 @31=@2 sites by deep be greatest #=AB 74 in<=B /:: underlain 1/>7B/: >@7=@ B= soft / sediments, >@=831B A which may>@=D3< also be43/A707:7BG subject to 53=B63@;/: liquefaction and potential lateral spread. 7A 2=<3 B6@=C56 3?C7BG /<2 <=B 230B 7 Ground shaking effects may be less on </<17<5 =4 3F>:=@/B7=< /<2 1=<47@;/B7=< rock, or where the sediment is consid2@7::7<5 CAC/::G 1=;3A 4@=; 1=;>/<G 3? erably less. Ground conditions are an C7BG =@ @7A9 1/>7B/: >@=D7232 0G 7<D3AB=@A integral component seismic engineer 3<3@/::G 7<D3AB;37B/: performance, and A332 1/>7B/: D3<BC@3 =@ 3?C7BG understanding is critical to your 47</<17<5 4=@ / them 53=B63@;/: 23D3:=>3@ strategic earthquake emergency plan C3 B= B63 6756 @7A9 7<D=:D32 E7B6 53= ning, the design of your new B63@;/: 3F>:=@/B7=< 0/<9A 2= building <=B >@= or facility and potentially the ongoing cost D723 4C<27<5 B6@=C56 :=/<A C<B7: B63 :/B3@ of your insurance bill. Not all sites are AB/53A 7< B63 23D3:=>;3@=13AA and generally all sites will perform equal, C@7<5 B63 1@7B71/: @3A=C@13 723< differently>6/A3 in someB63 way. B7471/B7=< 23D3:=>3@ /7;A B= =0B/7< /A ;C16 7<4=@;/B7=< /A >=A Site /0=CB Specific Assessment A70:3 >=B3<B7/: @3A=C@13A E67:3 7<D3AB=@ 1=ABA /@3 :=E >@=D727<5 B63 Site specific testing and modelling using 23D3:=>3@ E7B6 / AB@=<53@ 4=C<2/B7=< established technology coupled with adContinued on page 32 > Continued on opposite page>

Brunel loc FP

60 Philippine Resources

Philippine Resources 31

Renewable Resources Mineral Resources August - October 2013 2012 November 2011 -2012 January February - April

www.philippine-resources.com

government and est program are understanding of the site specific ground • Engineering geological seismic /0A07:;809? ,> >3:=?0= ;=:50.? ;0=4:/> sector. PhilexandMining’s <private Continued from page 32 < Continued from opposite page response. engineering based hazard assessment usB:@7/ =0/@.0 @9.0=?,49?D 1:= ;:74.D ,9/ In other Padcal operavanced, off-the-shelf industry accepted 8,=60? /D9,84.> B309 8:/07492 0.: ing existing data sets (geology, :9 , 14C0/ >.30/@70 ;0=1:=8,9.0 awards for 2011, B4?3 tions inactive the fault meanalytical software Published codes (National Structural maps, and landslide hazards) screen2@,=,9?00> ,9/ 74<@4/,?0/ /,8,20> 1:= safest mine reduces costs, speeds 9:84. =0?@=9> tallic for category, processeswent and to ensure transparency in Code 0:?30=8,7 of the Philippines, Interna- ing and preliminary engineering ?30 1,47@=0 :1 ,..0;?,9.0 ?0>?> ,9/ ?480 ;=:50.?> 2010; ,=0 .3,=,.?0= awards Holcim La evaluaUnion workflow leading to improved client un- 4E0/ -D >429414.,9? @;1=:9? .,;4?,7 49A0>? tional Building code, AS/NZS1170 Struc- tion of risk and costs. plant in the non7D .:884>>4:9492 TVI Resource derstanding outputs. tural Design Actions, Part 5: Earthquake D 149,9.0 34237D /0 809? 1:= 0C;7:=,?4:9 B077 /=477492 ,9/ ?30 e v#=:50.? e l o p mand e n tsurety s 4> in,7>: metallic categoof shearGold’s wave Actions) provides parameters ;09/09? :9 ?30 ;:B0= ;@=.3,>0 ,2=00 49>?,77,?4:9 :1 ;7,9? generic ,9/ 0<@4;809? @? • Seismic measurement for surface opry, MRL Site specificRepubassessment is the testing and :9.0 for seismic detailing;=:50.?> which ,=0 may;7,.0/ tend velocity (Vs) allows site specific estima809? ## 0C0.@?0/ -0?B009 ?30 /0A07 ?30 20:?30=8,7 eration, Surigao-Agusan evaluation of your to either too conservative or risky in tion of ground shaking and liquefaction :;0= ,9/ ;@=.3,>492 09/ @>0= ?D;4.,77D lic Cement Bu- specific site for earth- 49 .:880=.4,7 :;0=,?4:9 ?30 1@07 >:@=.0 projects in the quake response. Site &30 specific assessment some site-specific dependent ground potential. Shear waveexploration velocity surveys ,9 070.?=4.,7 @?474?D ## ;=:A4/0> 4> >0.@=0 1:= ?30 /0.,/0> :1 0C;0.?0/ 7410 lacan for cement catfor existingoperabuildings and infrastructure ?480 B4?3 , >?0,/D =0A09@0 >?=0,8 conditions due to absence of specific are particularly suitedegory, to screening of 1:= ?30 >,70 :1 .,;,.4?D ,9/ 090=2D ,? ,9 plant with speResource Development, represented by its president Eugene Mateo (second from improves: provisions. Both have consequences of new sites for feasibility, specific design of ,2=00/ ;=4.0 ;=4.0 >?=@.?@=0 ,9/ >;0.4 ? 4> 2::/ ?: 9:?0 ?3,? ?=,/4?4:9,7 tion, Apo Land TVI cial awards for right) and chief operating officer John Ridsdel (far right), won the award for the safest mining increased cost asforasurface result of -0.:8492 an inhersignificant structures and assessment of 140/ ?480 ;0=4:/ 9 ,//4?4:9 ?30 149,9 49>@=,9.0 ;=:/@.?> ,=0 9:B and Quarry for operation as well as safest Apex Mining mine awards operation and mineral processing categories). They received the awards from PMSEA • understanding the resilience of 8:=0 ,A,47,-70 ?: ?30 $ 49/@>?=D B3470 ently more conservative approach, and president existingLouie infrastructureand such as refineries .4,7 49>?4?@?4:9 B477 of(concentrator 49.7@/0 , .,=01@7 quarry operaRio Tuba Sarmiento (far left) and Mines and Geosciences Bureau director Leo Jasareno (second your infrastructure e.g.from building, network of facing hidden threat of which may and have a heavy concentration ,9,7D>4> ?30 49?0=.:990.?4:9 >?@/40> 149,9.4,7 =4>6 8,9,20809? tion, FCF:1 MinerNickel Mining left), with awards 90B committee member Lita Leesubstantial (center)49>?=@ of risk Rapid City Realty or refinery in the event of an earthquake, if site-specific conditions are not known of buried services, or distrib,9/ ?=,9>84>>4:9 ,2=00809?> =:8 ?30 809?> ,=0 0A:7A492 !0A0=?3070>> ?30=0 als for explorafor widely best nursery Development Corporation. and, addressed. transmission or =4>6 ;0=>;0.?4A0 3:B0A0= 4? 4> ;=010=,-70 4> 900/ 1:= .@>?:84E,?4:9 :1 .:A0= uted networks such as tion (category and best rehastrategic • MRL decision making in the use, telecommunications infrastructure. The ?3,? 0.:9:84.> ,9/ /08,9/ 1:= ;:B0= A), Gold Surigao-Agusan for ,20 ,9/ 74960/ ;=:/@.?> ?3,? ;=:A4/0 , Mining Service for mineral process- bilitation strategy respectively. upgrade or future life or an B), existing asset ?:?,7 Typical site specific assessment may be is mobile, no drilling Award is required, /=4A0 ;=:50.?> =,?30= ?3,9 .:9?=,.? ;=: >:7@?4:9 1:= ?30 =4>6> 4930=09? 49 set-up exploration (category Repubing (crushing plant category). PMSEA’s Pasasalamat was or land, undertaken a hierarchical sequence acquisition isupon fast and the data is digital A4>4:9> 7>: .:9?=,.?> 902:?4,?0/ B4?3 /0A07:;809? 20: lic Cement Norzagaray for mineral 20:?30=8,7 Carmenin Copper was )3470 cited for conferred former Mines and designed to manage down cost in- Geosciences for GIS management. 04?30= >4/0 -0492 ,? , /4>,/A,9?,20 ,=0 , 090=2D B477 .:9?49@0 ?: of1,.0 processing (cement category), TVI ?30=8,7 safest combined operation, Northern Bureau director and Deplanning forfor existing as- :->?,.70> ?: 2,49 49A0>?809? 8,=60? ,. • insurance vestigation, drilling spend andperin- Fernando .,@>0 :1 .:9.0=9 1:= 709/0=> Resource Development mineral Cement forreduce most improved safety partment“Ronnie” of Environment Natural Penarroyoand is the at Puno and Penarroyo sets, !00/70>> and crease dataand certainty. Depending on the managing • Conepartner Penetrometer Testing processing ?: >,D >?=0,8749492 ?30 .0;?,9.0 ,9/ ,;;74.,?4:9 ?30=0 4> =::8 (concentrator category), formance TVI Resource DevelopResources undersecretary Jerry(CPT) DoLaw Offices (www.punopenalaw.com). He stage:;?484>8 of project, investigations may specializes measures the bearing and friction ;0=84? ;=:.0>> for -D mineral 2:A0=9809? =02@7, 1:= ,> mining ?30 @>0 :1 ?34> 090=2D Apex Mining processing ment foryour safest operation. lino for his contributions to uplifting in energy and resources law, re• engineering design and through better >:@=.0 4> :97D -02499492 ■ include: ?:=> B477 3,A0 ,9 48;,.? :9 20:?30=8,7 (extraction category) Philippine Awardees for the best mining for- project the Philippine mining industry. ■ 64> financeContinued and business development. on page

Brunel Ovs FP

PhilippineResources Resources 33 61 Philippine 25

August - October 2013

www.philippine-resources.com

Timely update on King-king at luncheon

he Philippine Mining Luncheon on June 7 featured a special presentation from St. Augustine Gold & Copper Ltd on the Kingking Gold Copper Project. Spearheaded by St. Augustine Gold & Copper Ltd, the company is currently engaged in developing one of the largest undeveloped copper-gold deposits in the world found in Pantukan, Compostela Valley, Philippines called the King-king

Copper Gold Project.

& Copper Ltd.

The Mining and Networking Forum, Philippine Mining Luncheon welcomed St. Augustine Gold & Copper Ltd as it discussed its recent venture with the residents of Pantukan, Compostela Valley.

The King-king Copper Gold Project is listed as one of the top priority projects by the Philippine Mines and Geosciences Bureau.

Master of Ceremonies Dominguez welcomed Clyde Gillespie as the special guest speaker. Mr. Gillespie is the Country Manager and Director of Environmental Permitting of St. Augustine Gold

Geoff Boswell of Red Mountain, Anne Lavers, Country Manager, GHD and Tony Tan of I.P.E. Asia Co.

With a project that holds so much potential, St. Augustine is committed to developing the project to the highest environmental standards coupled with robust community engagement. â&#x2013;

Rex Motto with Manny Ancheta of GHD and Jim Moore.

Event MC Leo Dominguez with Joey Leviste and Brad Norman of OceanaGold. Greg Bayly with Troy Lockyer and Matt Brown of Lockforce.

Speaker Mr. Clyde Gillespie, country Manager St Augustine Gold Copper Corp

Jamie Del Rosario SGV,Tata Corpus from Austrade, Romulo Danao, Jose Zabat of SGV and Brian Edang of Queensberry. 62 Philippine Resources

August - October 2013

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< Continued from page 61 sistance to a probe being pushed into the ground, and if coupled with piezometric capability, the pore pressure distribution in the soil. CPT is undertaken for specific assessment of deep and shallow foundations (buildings, ports, bridges, tank farms), embankment stability (dams and soft ground) and numerical including for liquefaction potential. CPT provides for rapid acquisition (allow in the order of 100m – 200m / day depending on ground and testing setup) of high resolution, repeatable, digital datasets, uses no muds so has a relatively small environmental footprint and can be done in urban or rural sites, is one of the preferred methods for evaluation of liquefaction potential in soft ground and is specifically developed for testing in soft sediments. • Rotary drilling primarily for collection of samples for laboratory testing for correlation of geophysical and CPT measurements. Digital Data Drives Rapid Assessment The biggest advances in site specific assessment have been in the analytical power that comes with the computer age, and the quality of the digital data sets from seismic and CPT survey. Data capture and processing is now a streamlined workflow with reduced handling and processing, and resulting in a transparent process which can be readily checked for Quality Assurance.

Analysis is by industry accepted and proven software with analyses also conducted in a hierarchy with increasing detail depending on the entry point for your project: • Risk based parametric studies for screening new sites and assessment of existing infrastructure. This exercise allows assessment of multiple sites, understanding of risk for each site and ranking of priority and expenditure for remediation of existing infrastructure. May be based on geo-hazard assessment with seismic survey. • Detailed analyses for design of foundations, remediation for liquefaction risk (ground improvement, containment, ground replacement) or other geotechnical problem and is nominally based on seismic, CPT and nominally rotary drilling. Closure Asset protection in the event of earthquake must be an essential part of strategic planning for those businesses reliant on infrastructure assets for business continuity, and should be undertaken for others as a part of good business risk management. Modern geophysical and CPT techniques allow for rapid, accurate data acquisition with a high level of Quality Assurance, which combined with modern analytical methods provide powerful, cost effective tools for risk management and detailed design. In our opinion it is simply to costly to guess at how your ground is likely to perform in an earthquake. If you are an owner, manager or safety there is simply no excuse. Get the data, do the maths and make the assessment. Philippines Capability Resource Development Consultants Ltd (RDCL) are specialists in site specific seismic assessment and provide specialist ground testing and assessment services for the civil and mining sector. With a long history of work in the Philippines (RDCL Principle Cam Wylie has worked on projects in the Philippines since 1994) particularly in the mining sector, RDCL opened their Philippines Branch in 2012 with an office established in Ortigas in July 2013. Joel Nunez, RDCL Principal Geotechnical Engineer says that the company has undertaken geophysics based investigations for engineering at a number of leading mining projects and is importing a new CPT unit with near shore capability expected to arrive in country in the next 2 months. This is to strengthen the in-country capacity for high quality geotechnical investigation and engineering. Safety and Quality Assurance are central to RDCL core business philosophy with all staff undergoing NZ based safety management training, and the company being ISO9001 certified. Interesting links: Munich RE – insurance and risk assessment (www.munichre.com); Southern California Earthquake Centre (www.scec.org); National Earthquake Hazard Reduction Program (http://www.training.fema. gov/emiweb/earthquake/index.htm); Philippine Institute of Volcanology and Seismology (http://www.phivolcs.dost.gov.ph) ■

64 Philippine Resources

August - October 2013

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NGAP Celebrates 10th Year Anniversary

he National Geothermal Association of the Philippines celebrated its 10th Year Anniversary on 19 June 2013 at the Ballroom of the Dusit Thani Hotel, Makati City with the theme: “Harnessing Geothermal Energy as the Energy of the Future”.

The affair was attended by over 155 participants representing resource developers, service companies and government representatives involved in the geothermal sector. The event was organized by NGAP Trustees and Secretariat with members coming from the Department of Energy, Energy Development Corporation, and

66 Philippine Resources

Chevron/Philippine Geothermal Production Corporation. The keynote speaker was DOE Secretary Carlos Jericho Petilla. In his speech, Sec. Petilla said the government is targeting a 75% increase from its 1,900 MW installed capacity or an additional capacity

of 1,455 MW to reach the installed capacity of 3,303 MW. He also announced the DOE’s plan to create a new bureau on local government units which will deal with the concerns of LGU’s hosting geothermal areas. Continued on page 68>

August - October 2013

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able Energy Service Contracts/Geothermal Service Contracts, seven of which are producing fields with total installed capacity of 1,848 MW, while the remaining are under pre-development/exploration. Among the major regions, Visayas has the highest installed capacity with 915 MW. Luzon has 824 MW and Mindanao has 108 MW of geothermal energy.

<Continued from page 66 He reiterated that DOE will give its full support to serious geothermal developers. DOE Director for Renewable Energy

68 Philippine Resources

Management Bureau Mario Marasigan followed with a presentation on the “Status of Geothermal Energy Development in the Philippines.” Dir. Marasigan reported that to date, the country has 39 Geothermal Renew-

Technical presentations followed which consisted of three main sessions: Exploration, Reservoir Engineering, and Powerplant. Presenters discussed current projects of their respective companies: EDC, Chevron/PGPC, Aboitiz Renewables, and Chevron. Each presentation was followed by a short Q & A where there was a lively exchange of ideas amongst geoscientists and engineers. ■

FREE link to advertising partners’ web pages @

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<Continued from opposite page

Resources Commentary August - October 2013

Open Access (RCOA), which is scheduled to begin commercial operations on 26 June 2013 after a raft of delays. While RCOA will allow reforms to reach more and more customers, it will not solve one of the fundamental challenges facing the and Summary Reports (SR). These documarket: regulation. ments are issued on behalf of commercial cargoes to the PhilipTheclients natureshipping of electricity regulation in the pines, with the surveys either Philippines affects all paid partsforofbythe electhe buyer or seller. tricity supply value chain – from generation to retail. In some instances, the The Philippine isBureau of Customs way regulation applied makes existing (BOC) receives information in aasseproblems worsethis rather than better, we cure electronic discuss below. format directly from SGS prior to the arrival of the goods in the Philippines. While there are many issues that require attention, two are particularly pertinent This enables new the payment ofcontinues duties andto to ensuring generation taxes in in advance and facilitates movebe built the market: That of contracts ment and the power releasestation of imported arunderpinning new-builds ticles. This service allows of SGS assist and the credit-worthiness thetocounterCustoms in theirthose efforts to: parties signing contracts.

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Mindanao split into private investorowned utilities (PIOUs, such as Meralco), not-for-profit distribution cooperatives (ECs) and local government-owned utilities (LGUOUs).

SGS GAINS BULK SURVEYING ACCREDITATION IN PHILIPPINES

The natural monopolies of distribution and transmission would still be regulated, of course. The forces of supply and demand would signal and support new has reported it build inGS generation.

recently successfully Consumers would pay the retailer an of completed their choice a cost-reflective but reasonassessment for renewed able and competitively accreditation to determined the Bulkelec& tricity price. Break Bulk Cargo Clearance Enhancement Program We are, as yet, quite some from that (BBBCCEP). This waycontract destination. extends SGS’ accreditation to process bulk and break While end” ofentering town has beenthe rebulk the “big cargo formed, most consumers still deal excluPhilippines. sively with their local distribution utility, The BBBCCEP, government-mandated which, outside ofa Metro Manila, is likely customs facilitation in the to be a trade regional Electricprogram Cooperative. Philippines, authorizes SGS are as an AccredPrices for most consumers still reguited Cargo Company (ACSC) lated by the Surveying ERC. to inspect bulk and break bulk cargo at the country of export and/ortosupply and The next wave of reform hit the issue Load SurveyCompetition Reports (LPSR) WESM will Port be Retail and

70 Philippine Resources

Clearly, in Luzon the market is dominattion of goods, ed by Meralco – noted by most observers as “the only • Reduce thecredit cycleworthy time incounterparty the customs in the market”. Why is this? entry and release process,

The sheer size of Meralco is partgoing of the • Prevent the theft of cargoes to answer, but for the rest we need to dig the Philippines, deeper into the structure of the ECs and how they are regulated. ECs are • Increase revenue for theMost government. small and cover a small geographic region. Some struggle to collect SGS delivers end-to-end work, revenues from the and payof debts. receipt the required LPSR from the affiliate, to the preparation and submission These are not problems the of all required documentsunique to thetoBOC Philippines—collection challenges agenand and other applicable government non-technical losses are issues in many cies. developing countries—but problems are SGS is a world leader in pre-shipment Continued on page 22> •Figure Improve the assessment of bulk car1 highlights the market share by goes, theof way for the correct valuapeak paving demand Luzon, Visayas and Continue on page 72>

Philippine Resources 21

Philippine Resources part of the community Advertisers’ Index ADEN 41 AECOM Philippines

Antrak Philippines

Austhai Geophysical & Geotechnical 17 Brunel

60 & 61

Chamber of Mines Coffral

69 37 & 53

David Brown Deepcore Drilling

27 5

Drillcorp 25 Elasto Plastic Concrete Asia

Ground Probe

GXD 2 Hansa Mayer IDS Australasia

7 45

Indodrill IBC Indonesian Resources

Indophil 66 Intertek 19 Intierra RMG

Iprint 58 JCL International

King-King Copper Gold Project

Lomar 59 Lycopodium 15 McConnell Dowell

OBC

Metso 3 Mining Australia

Mining Safety Baguio

Mining Philippines Luncheon

Oceana Gold

August - October 2013

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International SOS names new Country Manager

nternational SOS has apppointed Matthew A. Squires as the new Country General Manager for the Philippines.

Matthew has almost 25 years of experience in operations leadership and sales management, and was largely responsible for professionalizing sales teams and implementing global market strategies in his previous roles. Prior to joining the organization, he was the Regional Sales Director for Asia Pacific, Europe & The Middle East of the ADEC Group of Companies - the largest privately owned business and knowledge process outsourcing operator in the Philippines, servicing a global client base. He was also the former Chief Executive Officer and Group Chief Financial Officer of Pacific Healthcare Ltd, for Thailand and the Philippines turning around a family based entity and expanding it into an international organization. Matthew draws on a strong corporate foundation gained over many years with both Dun & Bradstreet International, the world’s leading source of commercial information, and the American global IT and Services company Unisys, which saw him responsible for the establishment and management of production, sales and country units in Hong Kong, India, Indonesia, Malaysia, Sri Lanka, Thailand and the Philippines. ■

Orica 43 Pacific Strategies

Paperless Trail

Philippine Resources

PNG Resources

Power Trends

Prior Industries

QED IFC RDCL 21 Russel Mining Equipment

Sandvik 33 SGS Philippines Inc.

Surtech 54 Survey Graphics

Weatherford 13

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<Continue from page 68 inspection and is pleased to leverage its global network to provide quality and timely service delivery. In the Philippines, SGS offers a range of capabilities to serve the local minerals sector, including coal testing, on-site geochemical analysis and a variety of commercial trade support services. Globally, SGS offers a wide range of services to the minerals sector including geochemical analysis, resource calculation, mineralogy, metallurgy, advanced systems, water treatment and trade services. ■