2012 - Issue 4 by angie abeleda

Philippine Resources Mining, Petroleum & Energy Journal Issue 4 2012, November - January

The Philippines Asiaâ&#x20AC;&#x2122;s Next Tiger?

Of Bangsamoro and other musings

Mining Versus Tourism

Philippine Capital Markets Running Hot

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Current Resources November - January 2012

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Headlines in this issue

Resources Commentary

Of Bangsamoro And Other Musings

Should it be a choice between mining and tourtism?

Aquino receives offer of mining support from Australia

Resources Investment

PSEi Capital-raising reaches new record levels

Austalâ&#x20AC;&#x2122;s Philippine Investment Starting To Pay Dividends

Resources Training

32 Making Good Business Better With Safety Training 4 Philippine Resources

Resources Spotlight

Meet GHD Philippines Country Manager, Anne Lavers

Weatherford Tasting Growing Philippine Interest

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PMSEA To Reaffirm Commitment To Responsible Mining At Annual Conference

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Philippine Resources Mining, Petroleum & Energy Journal Issue 4 2012 November- January 2012

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

Mining Rule Uncertainty Major Concern For Asia’s New Tiger

Consulting Publisher Greg Brimble greg@philippine-resources.com

uring his recent visit to Australia, Philippine President Benigno S. Aquino III, told an audience of distinguished businessman that the country has been transformed from its position of being the ‘Sick Man of Asia’ to ‘Asia’s Next Tiger.’’

Journalist/Marketing Steve Hill Steve@philippine-resources.com +63 918 669 8611

That was no idle boast. There is no doubt that the present government has done a remarkable job to create a growing economy in the face of one of the world’s most dire economic periods.

Design/Production Elizabeth Galura Editor Colin Sandell-Hay

And the Australian and New Zealand businessmen seemed to like what they heard as the President is returning home with a full bag of potential opportunities for new investment in the country.

Sales and Marketing Cecilia Pamular +63 920 967 8342

The country has recently received a positive tick from the World Bank for its current financial status, not an easy achievement at the best of times.

Contributors Patricia A.O. Bunye Fernando Penarroyo ___

The Philippines received even more kudos recently when the London-headquartered Economist Intelligence Unit ranks it as one of the best places for micro-financing in the world.

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

Ad Sales: Derek Mullen derek@philippine-resources.com +63949 782 3999 Philippine Resources Journal is printed in Manila by IPrint. Digital online edition www.Philippine-Resources.com

6 Philippine Resources

The country was again named one of the countries with the most favourable environment for micro enterprises, rising two places to 4th among 55 countries surveyed by the EIU. The EIU said that regulations imposed by government entities like the Central Bank helped the Philippines remain in the top 10 countries with the most micro businessfriendly environments. The government has also received widespread applause for its work in the lead-up to the recent historic signing of the Framework Agreement between the government and the Moro Islamic Liberation Front. The only dark cloud, and it is a very dark cloud, is the uncertainty created by the failure to finalise new mining regulations. There is nothing that scares off investors quicker than uncertainty over what the rules are. Hopefully the government will act with the same steady hand it has had on the economic tiller and come up with legislation that will be fair to all parties and attractive to future investors. ■

Resources Commentary November - January 2012

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Of Bangsamoro And Other Musings By Fernando Penarroyo

he Framework Agreement on the Bangsamoro (“Framework”) signed between the Republic of the Philippines and the Moro Islamic

Liberation Front is a major milestone not just for the ongoing peace process and reconciliation in Mindanao, but also for the improvement of the economic conditions of the area.

The signing of the Framework shall serve as an invitation for investors to take a second look at the potential wealth of Mindanao’s natural resources once the region is stabilized and ready for economic utilization. Peace and order will bring in the entry of investments in power generation, transmission lines, and mineral and energy exploration and development projects. The agreement consists of several subjects which shall serve as the preparatory skeletal framework for the eventual creation of a new entity, the Bangsamoro. While the constitutionality of the Framework is presumed, it will be subject to future challenges on issues questioning its legality and validity. The negotiators share the belief that, unlike the Memorandum of Agreement on the Ancestral Domain, the Philippine Government will not cede or surrender ownership and possession of certain territorial lands. The Framework discusses the governmental and administrative aspects to be delegated to the Bangsamoro, which will remain part of the Philippines where the Philippine government will continue to exercise its power, authority and sovereignty. Barring any potential legal obstacles, the Framework may yet be the single biggest achievement of the Aquino Administration that will spur long lasting stability and economic growth in Mindanao until such time that the Final Peace Agreement is signed. The Bangsamoro government shall be vested with exclusive powers to create its sources of wealth in the region. As succinctly provided in the Framework, “con-

Fernando “Ronnie” Penarroyo is the Managing Partner of Puno and Penarroyo Law Offices. 8 Philippine Resources

Continued on page 10 >

Resources Commentary November - January 2012

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< Continued from page 8 sistent with the Bangsamoro Basic Law, the Bangsamoro will have the power to create its own sources of revenues and to levy taxes, fees, and charges, subject to limitations as may be mutually agreed upon by the Parties. This power shall include the power to determine tax bases and tax rates, guided by the principles of devolution of power, equalization, equity, accountability, administrative simplicity, harmonization, economic efficiency, and fiscal autonomy.” The ability to create its own internal revenue code may prove to be both advantageous and disadvantageous. On one hand, the Bangsamoro legislative body can provide for less bureaucratic processes of implementing and paying tax schedules, entice investments by providing tax breaks and incentives as well as favorable tax treatments, prescribe tax rates, and provide for its own tariffs and customs code governing importation. On the other hand, the creation of a tax law may not be as efficient as anticipated if obstacles would come from the numerous vested and powerful interests that will represent the legislative body causing a stalemate over important provisions of the law. Needless to say, the implementation of the tax laws shall be left to the sole authority of the Bangsamoro, following the provisions of the Framework on the exclusive powers of the Bangsamoro government. Equitable share of resources More importantly, the Bangsamoro government shall have just and equitable share in the revenue generated through the exploration, development, or utilization of natural resources obtaining in all the areas/territories of the Bangsamoro based on an agreement on the revenue and wealth sharing with the Philippine government.

10 Philippine Resources

The Bangsamoro can enter into resources exploration contracts and control the flow of revenue through its different tax provisions as well as financial mechanisms while the Philippine government gets its share in the revenue income that the Bangsamoro will raise. Resource developers will then have to be guided as to what legal and regulatory framework will be followed on intended future investments in Bangsamoro. Should Imperial Manila continue to grant exploration permits, mining agreements, petroleum service contracts, coal operating agreements, renewable energy service contracts and other form of resources agreements over areas located in Bangsamoro under the fiscal regimes of energy presidential decrees, the Mining Act of 1995, the Renewable Energy Act of 2008, the Foreign Investments Act of 1991 and other related laws? And in relation thereto, can the Bangsamoro veto resources projects of national significance or interest? Is the Regalian Doctrine enshrined under the Philippine Constitution applicable to Bangsamoro? The Bangsamoro agreement will also have repercussions on the just recently concluded Philippine Energy Contracting Round (“PECR”) No. 4 for petroleum, which included among other areas, Area 12 – Cotabato Basin. Covering an onshore area of 456,000 hectares where around 820 line-km of 2D seismic has been acquired and five wells drilled, the Cotabato Basin has an estimated mean total risked recoverable resource (excluding speculative unmapped resources) of ~ 71 MMbbl oil and 312 Bcf gas, according to the Department of Energy (“DOE”). About 1 billion cubic meter of natural gas in the Sultan-sa-Barongis structure is considered potential resources. Will the Bangsamoro honor the service contract of the winning bidder or proceed to look for another contractor? The same goes with the service contracts cov-

ering the Sulu Sea particularly areas in offshore Sulu and Sabah. Resource developers will be closely monitoring the preparatory work on the drafting of the annexes to the framework agreement and the law that will govern a new Bangsamoro region that will be drafted by a 15-man Transition Commission. ******** Professor Marvic M.V.F. Leonen, former dean of the University of the Philippines College of Law and noted indigenous peoples rights and anti-mining advocate may be appointed Justice of the Supreme Court by President Benigno Aquino as a reward for negotiating the Bangsamoro agreement. It should be remembered that Dean Leonen represented the petitioners in the La Bugal-B’Laan Tribal Association vs. Ramos (01 December 2004), which questioned the constitutionality of the Philippine Mining Act of 1995 and argued for an intervenor in the case of Cruz vs. Sec. of Environment and Natural Resources (06 December 2000), which questioned the constitutionality of IPRA. If appointed, Prof. Leonen will join another colleague from UP Law, Chief Justice Lourdes Aranal-Sereno. CJ Sereno by the way, co-authored in 1983 with now IBP President Roan Libarios, an article published in the Philippine Law Journal entitled “The Interface Between National Land Law and Kalinga Land Law” recommending recognition of ancestral land rights, protection of indigenous system of land ownership, and promotion of the indigenous mode of settling land dispute. IPRA was upheld on a technicality resulting from a 7-7 deadlock vote among the SC justices so if ever the law is challenged again, we have CJ Sereno and a possible J Leonen in the bench. Continued on page 12 >

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******** The 2013 national and local elections are upon us and mining is expected to become a hot election issue. In South Cotabato candidates are being measured according to where they stand on the $5.9 billion stalled Tampakan copperand-gold mining project by Xstrata Plc’s Philippine-unit, Sagittarius Mines, Inc. where candidates have been branded as either anti or pro mining, which could affect the way they handle their campaigns. In Nueva Vizcaya on the other hand, environmentalists are not comfortable over some politicians’ apparent campaign platforms riding on the anti-mining sentiment in the province as a move to win votes in next year’s elections. In the meantime President Benigno Aquino said he wants to wait for the passage of a mining taxation reform law before approving the Tampakan mining project. Sagittarius has asked Aquino to reverse the Department of Environment and Natural Resources’ decision not to issue an environmental compliance certificate for the project. In Leyte, the much-anticipated political showdown between the Romualdez and Petilla families in Leyte is not going to happen as Chamber of Mines President, Benjamin Philip G. Romualdez will not be throwing his hat to the gubernatorial race against Leopoldo Dominico L. Petilla. In response, incumbent Leyte Governor Carlos Jericho L. Petilla dropped his plan to challenge Ferdinand Martin G. Romualdez to represent the first district. Gov. Petilla is being groomed instead to be the next DOE Secretary replacing Sec. Rene Almendras who is reportedly heading off to Malacanang to be designated as head of the Presidential Management Staff. The good news is that Mr. Romualdez will still be available to lead the local mining industry, which he described in 12 Philippine Resources

the recent mining conference as “at a crossroads”. Secretary Almendras’ promotion will also help the energy industry as it has somebody to push the paper works in the Palace when energy issues are under deliberation. His push is also needed to coordinate the often times dysfunctional relationship between the energy and environment departments. ******** The DOE has concluded the bidding round for petroleum exploration under PECR 4 in July but no service contract has been awarded to the winning bidders yet. It seems that the initial expectation of a warm reception from the international petroleum industry on the bidding round did not materialize, as the big boys prefer to remain in the sideline. Despite numerous roadshows conducted in Australia, Singapore, and Italy, no bids came from the major petroleum exploration firms. The reason could be the still unresolved territorial dispute with China over portions of the West Philippine Sea where the main petroleum prospects are located. ******** Kudos to the quiet and diligent work and collaboration done by a team which includes scientists and legal experts from my alma mater, the University of the Philippines (“UP”) through the National Institute of Geological Sciences and the Institute of International Legal Studies of the UP College of Law. The team was responsible for the recognition of Philippine jurisdiction over the Benham Rise Region, which is the Philippines’ first successful validation of a claim in accord with the 1982 Law of the Sea Convention. It is the first major expansion of the Philippines’ maritime boundaries since the

late 1970s when it declared its exclusive economic zone. The DOE is set to conduct seismic surveys to determine the oil and gas potential of Benham Rise, with the possibility of including the area in the next contracting round for petroleum exploration in PECR 5. The Benham Rise is believed to be rich in natural gas and manganese nodules and is reportedly being eyed by a number of interested bidders. ******** President Benigno Aquino III capped his recent state visit to New Zealand by witnessing the signing of a bilateral agreement entered into by Philippine Foreign Affairs Secretary Albert Del Rosario and New Zealand Minister of Foreign Affairs Murray McCully meant to provide a government-to-government framework to support geothermal development between the two countries. The agreement aims to build more competence for human resources at the DOE through scholarships and development of opportunities not just for investment but also for transfer of technology. Foreign Minister McCully believes that both countries are well placed to develop business opportunities around the world, including in Indonesia and South America. Fernando “Ronnie” Penarroyo is the Managing Partner of Puno and Penarroyo Law Offices (fspenarroyo@punopenalaw.com). He specializes in Energy, Resources and Environmental Law, Business Development and Project Finance. He is a trustee of the International Geothermal Association, the National Geothermal Association of the Philippines and the Philippine Mineral Exploration Association. ■

Resources Commentary November - January 2012

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Should it be a choice between mining and tourism? By Patricia A. O. Bunye

ection 1 of Executive Order No. 79 (“EO 79”) provides that, among the areas closed to mining applications are tourism development areas as identified in the National Tourism Development Plan (“NTDP”). However, under Section 3 of EO 79’s Implementing Rules and Regulations, as embodied in Department Administrative Order No. 2012-07 (“DAO 201207”), “tourism development areas” refer to specific tourism sites within an area, including its attendant landscapes, identified in national and local tourism development plans, as well as those designated through legislative and executive issuances, to be developed into Tourism Enterprise Zones, tourism complexes, integrated resorts, leisure and recreation centers, and other tourism related facilities and activities. Not only is the definition of “tourism development areas” found in Section 3 of DAO 2012-07 an expansion of what EO

Patricia A. O. Bunye is a senior partner at Villaraza Cruz Marcelo & Angangco (website www.cvclaw.com). Her areas of specialization are mining and natural resources, power and energy and intellectual property (particularly IP commercialization). She may be reached at po.bunye@cvclaw.com. 14 Philippine Resources

79 provides, i.e., that tourism development areas must be actually be identified in the NTDP, Section 1 of EO 79 itself is an expansion of the areas closed to mining provided in Republic Act 7942, the Philippine Mining Act of 1995 (“Mining Act”).

Notably, based on the NTDP, these “tourism development areas” are not delineated nor do they pertain to specific locations in a city or region. For instance, in Central Luzon, the NTDP names Pampanga, Nueva Ecija, Zambales Coast, among others.

While Section 1 of EO 79 was revised to include a definition of “expired mining tenements”, the aforementioned definition of “tourism development areas” remains, and unless and until EO 79 is invalidated, it is something we will have to live with.

Based on the massive areas designated for tourism development, and which are consequently “no-go” zones for mining, an argument could be made by anti-mining advocates that practically the entire Philippines is a “tourism development area” closed to mining.

On 05 May 2012, during the 45th Annual Meeting of the Board of Governors of the Asian Development Bank, the NTDP was unveiled, calling for a total investment of P265 billion from 2011-2016, for the country to be able to reach its target arrivals of 10 million international and 35.5 million domestic tourists by 2016.

Are mining and tourism mutually exclusive such that a choice has to be made between them?

In this regard, the Department of Tourism has listed 78 “existing and emerging tourism development areas” that will be ostensibly protected from mining activities. [Please refer to the attachment]

Under Section 69 of the Mining Act, every contractor shall undertake an environmental protection and enhancement

Responsible miners do not think so, particular since they are obligated under the Mining Act to rehabilitate and restore the mining areas after utilizing the same.

< Continued on page 16

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Continued from page 14 > program covering the period of the mineral agreement or permit. Such environmental program shall be incorporated in the work program which the contractor or permittee shall submit as an accompanying document to the application for a mineral agreement or 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 mined-out and tailings covered areas, aquaculture, watershed development and water conservation; and socioeconomic development. In fact, under Section 167 of the Mining Act’s IRR, during every stage of the mining operation, as well as after the termination stage thereof, all open pit work areas, underground workplaces, mine waste and tailings impoundment systems, quarry sites and other mining-disturbed landforms, including those disturbed during exploration, shall be progressively rehabilitated to a condition prescribed in the Environmental Compliance Certificate and/or Environmental Protection and Enhancement Program. In addition, mine site decommissioning and rehabilitation shall aim to establish a land use capability that is functional and proximate to the land use prior to the disturbance of the mine area, unless other more beneficial land uses are predetermined and agreed in partnership with local communities and local government units. As mining is only a temporary land use, and with the safeguards provided by the Mining Act and proper implementation, mine sites can be rehabilitated and thereafter developed for tourism. There are countless examples throughout the world of these, particularly in Malaysia, New Zealand, Australia and Canada. In Selangor, Malaysia, both the Integrated Sunway City and the Sunway Lagoon Resort, which was adjudged as the best leisure project by the International Real Estate Federation in Paris in 2002, used to form part of a tin mine. In South Africa efforts have been made to declare certain mining areas as UNESCO World Heritage Sites, which means that they are of outstanding importance, either cultural or natural, to the common heritage of humankind. It reportedly has four mining heritage-related sites on UNESCO’s Tentative List, including the Kimberley Mines and Associated Early Industries site, the site of Africa’s first significant mineral discovery, which launched their mineral revolution, and the Namaqualand Copper Mining Landscape, the site of the first sustained modern mining operation in Southern Africa. As the Mining Minister of South Africa will visit Baguio on the occasion of this year’s Philippine Mine Safety and Environment Association’s Annual Conference to launch “South Africa Month”, it would be interesting to learn how South African tourism has been built around old and existing mines, demonstrating that it is not even necessary to wait for the end of a mine’s life in order for it to be a tourist attraction. Nota bene: A dialogue sponsored by Diwata-Women in Resource Development, Inc. will also be held between the South Africa Mining Minister and Cordillera Women on 14 November 2012 to discuss the lessons learned from 100 years of mining in Baguio and how the South Africa experience may be instructive. ■

16 Philippine Resources

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Aquino receives offer of mining support from Australia

ustralian Prime Minister Julia Gillard has proposed that Australia’s mining sector could provide specials support to the Philippines. In her meeting with President Benigno S. Aquino III in Canberra, Prime Minister Gillard outlined the importance of the mining sector to Australia’s economic success, its leadership in environmentally sustainable and socially responsible mining, and the contribution Australian companies could make in the responsible development of the Philippine mining sector, particularly the development of Mindanao. Both leaders discussed the potential of the mining sector to the Philippines’ development though there were no significant investment commitments made as the Philippines delegation to Australia made a point of highlighting that new legislation covering the sector has yet to be finalised.

“We haven’t actually quantified yet what kind of investments we expect to get from mining right now. What we told them and what they understand is that we have not put in place the rules (yet),” Philippines Presidential Communications Development and Strategic Planning Secretary Ramon Carandang told a press briefing in Canberra. Prime Minister Gillard also welcomed President Aquino’s recent announcement that the Philippines will apply to join the Extractive Industries Transparency Initiative. They also noted the development cooperation activities provided by Australia that will support responsible mining in the Philippines. Both Prime Minister Gillard and President Aquino described bilateral, meetings in Ausralia in late October as having strengthened the economic relationship and regional partnership between the two nations.

In a joint statement issued after a meeting at Parliament House in Canberra, President Aquino and Prime Minister Gillard shared the objective of increasing two-way trade and investment flows and agreed on the importance of a stable and predictable regulatory environment. “The leaders agreed that the economic relationship between Australia and the Philippines holds great promise, building on the strong foundation provided by the agreement establishing the ASEAN-Australia-New Zealand Free Trade Area,” the joint statement said. Prime Minister Gillard acknowledged President Aquino’s reform agenda to promote good governance, transparency and accountability in government as they agreed to continue working in regional and multilateral forums to advance regional economic integration and promote trade. A recent agreement to extend Australian market access for Philippine mangoes was also announced by Prime Minister Gillard which will be welcomed equally by Australian consumers and mango growers in the Philippines. Prime Minister Gillard and President Aquino also witnessed the signing of a new Air Services Agreement between Australia and the Philippines which will help lay the groundwork for increased trade and people to people links. Both leaders also welcomed the recent entry into force of the Status of Visiting Forces Agreement between Australia and the Philippines as well as the recent signing of a Memorandum of Understanding on Combating Transnational Crime and Developing Police Cooperation between the Australian Federal Police and the

Philippine President Benigno S. Aquino III and Australian Prime Minister Julia Gillard share a lighter moment during their meeting in the Australian capital, Canberra. 18 Philippine Resources

Continued on page 20>

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Resources Training November - January 2012

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Aquino confident of strong investment return from trip A

number of significant resource developments feature amongst the “significant investments, job opportunities for Filipinos” identified by President Benigno S. Aquino III during his state visits to New Zealand and Australia in October. In New Zealand President Aquino met with the highly regarded GNS Science body, which is tieing up with the Philippines’s Energy Development Corp. to enhance the country’s capability in harnessing geothermal energy. The President said he and the members of his delegation also assisted the Philippine company Alliance Select in talking to Akaroa Salmon, a New Zealand company. Alliance Select bought 80 percent of Akaroa Salmon. In Australia the President’s delegation, including Batangas-based Atlantic Gulf & Pacific, held a meeting with interna-

tional engineering and the consortium Japan Gas Corp., Kellogg Brown and Root and JKC to discuss a $200 million natural gas project. Discussions included the potential for Filipinos to undertake critical aspects of their operations. The contract between AG&P and JKC will create additional 1,500 new jobs at AG&P’s facility in Batangas, according to President Aquino. Leading Australian banking firm, Macquarie Bank discussed its work with the Government Service Insurance System (GSIS) to create the Pinai fund worth $625 million. According to the President, the fund will be used to bid for infrastructure projects in the Philippines noting that Macquarie has expressied interest in bidding for the NAIA expressway project.

The President also highlighted Australian shipbuilder Austal’s plans to expand its operations in Cebu, which will create 1,000 new jobs. Australian communications specialist Telstra also revealed it is planning to expand its operations in the country. Currently the employer of 10,000 people in the Philippines, the Telstra expansion could result in additional 2,000 to 4,000 new jobs in the country. The President also said that Australia and the Philippines signed an air services agreement that will help enhance the commercial airline services in the Philippines. He noted that The Philippines and New Zealand likewise sealed several agreements that will strengthen their ties particularly in energy and defence cooperation. ■

Continued from page 18> Philippine National Police. “The leaders noted the high level of cooperation between Australia and the Philippines on counter-terrorism,” the joint statement said. On the issue of the South China Sea, the Australian government shied away from taking a position on competing territorial claims but vouched for the Philippines’ view to settle the dispute through a rules-based multilateral approach. “Prime Minister Gillard noted that Australia did not take a position on competing territorial claims, but called on claimant governments to clarify and pursue their territorial claims in accordance with international law, including the UN Convention on the Law of the Sea,” the joint statement said. 20 Philippine Resources

“President Aquino stressed that peace and stability in the region is a concern of all states and that central to this is a rules-based approach in addressing issues in accordance with international law. Both leaders recognized the need for governments to exercise restraint and refrain from actions that could further increase tensions. The two leaders encouraged ASEAN countries and China to conclude a regional Code of Conduct in the South China Sea at an early date,” continued the statement. In conclusion, both President Aquino and Prime Minister Gillard expressed satisfaction with the two countries’ strong government to government relations underpinned by their close and growing people-to-people ties. Filipinos are one of the fastest growing

immigrant communities in Australia, with some 225,000 currently living in Australia, making an important contribution to the Australian economy and society. In addition, some 6000 Filipino students are currently enrolled across all sectors of the Australian education system, according to the statement. The two leaders welcomed their deepening and broadening partnership that would further enhance already strong bilateral, regional and multilateral cooperation on shared strategic interests. They also welcomed the inaugural bilateral Strategic Dialogue held in October 2012 and agreed to consider ways to further deepen and broaden the political, security, economic, and people-to-people relationship. ■

Resources News November - January 2012

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MINER’S GOOD WORKS HIGHLIGHTED IN SNOWDEN COMPETITION

Ramon I Castillo photograph of a teacher and students in a schoolroom provided by Responsible Mining at Padcal.

Two projects featuring a strong relationship between the Philippine mining industry and local communities have been recognised in a major global photography competition.

photographer Nikki Sandino Victoriano, has taken out the prize in the “Environmental or Sustainability Successes in Mining” section of the prestigious competition.

An image of mine worker’s children planting trees at the Tibagan Quarry by

While a “Highly Commended” award was handed down to Photographer Ra-

mon I Castillo, for his image of a teacher and students in a schoolroom provided by Responsible Mining at Padcal. The well respected Snowden Photo Competition has been staged since 2005 and highlights images from around the world “Celebrating” the mining industry. Each year a panel of judges, lead by world-renowned photographer Richard Woldendorp, select the winning entries from a large and high quality entry pool. This year four new categories were introduced by Snowden, as a way of providing additional options and inspiration in ‘celebrating the mining industry’. The two Philippine images along with the rest of the pictures chosen in the top 65 are being displayed at a number of exhibitions around the world.

Perth, Western Australia-based Snowden, a leading mining consultancy, is celebratNikki Sandino Victoriano’s colourful image of mine worker’s children planting trees at the ing its 25th anniversary this year. ■ Tibagan Quarry. 22 Philippine Resources

Resource Investment November - January 2012

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PSEi Capital-raising reaches new record levels T he strength of the Philippine economy has been demonstrated again with the Philippine Stock Exchange index (PSEi) achieving a new record in capital raising.

Total capital raised from the Philippine stock market set a new record as the total amount reached P174.97 billion for the January to September period, with the total capital raised in 2012 easily surppassing the full year 2011 figure of P107.50 billion - which was previously the highest total amount raised in a single year.

According to the PSEi, the increase was due to initial public offerings of GT Capital Holdings, Inc., East West Banking Corporation, and Calata Corporation, the follow-on offerings of San Miguel Corporation and First Gen Corporation, stock rights offerings of BDO Unibank, Inc., Belle Corporation, Alcorn Gold Resources Corporation, and The Philodrill Corporation. Total capital raised also represented a 171 percent improvement over the P64.54 billion raised in the first nine months of 2011.

“The market’s sustained increase has presented attractive valuations for listed firms to raise capital at the Exchange this year,” PSE President and Chief Executive Officer Hans B. Sicat said.

Overall trading activity remained robust during the first nine months in 2012 on account of a third round of quantitative easing in the US coupled with the country’s sound economic environment. On September 13, the US Federal Reserve announced that it will purchase an additional US$40 billion 24 Philippine Resources

worth of agency mortgage backed securities per month to further stimulate the world’s largest economy.

The Services sector rose by 11.4 percent while the Mining and Oil index decreased by 15.6 percent.

The Philippine Stock Exchange index surged by 22.3 percent or 974.14 points year-to-date to end at 5,346.10 as of September 28.

“The upbeat performance of the stock market is a sign that the Exchange’s efforts in further developing the market are paying off,” Mr Sicat said.

On Thursday, October 4, the PSE index staged a new record high at 5,443.74 bringing the year-to-date all-time high instances to a total of 23 times.

To boost liquidity, the PSE extended trading hours until 3:30 PM starting in January to align trading hours with that of the PSE’s neighboring bourses in the ASEAN region.

Reflecting increased investor confidence, preliminary figures also show that foreign investors were net buyers during the first nine months in the amount of P95.21 billion which is a six-fold increase from P15.61 billion in the same period last year.

Total value turnover for the nine-month period reached P1.31 trillion, 25.0 percent higher than the P1.05 trillion registered in the same period last year. The nine-month value turnover already approximates the full year total value turnover of P1.42 trillion in 2011. The combined market capitalization of listed issues in the PSE at the end of the nine-month period rose by 28.5 percent to P10.54 trillion compared with P8.20 trillion in the same period last year. In terms of sectoral indices, the Financials index emerged as the best performer, climbing by 41.5 percent during the January to September period. This was closely followed by the Property Index with a 40 percent rise during the ninemonth period. The Holding Firms sector meanwhile gained 28.2 percent followed by the Industrial sector which increased by 15.0 percent.

In 2012, the Capital Markets Integrity Corporation commenced operations as an independent audit, surveillance and compliance unit. CMIC utilizes the state-of-the-art Total Market Surveillance system developed by Korea Exchange to enhance its capability in monitoring stock market transactions. The creation of CMIC allowed PSE to focus on business and market development.

In order to align with international best practices in the region, the PSE is proposing to consolidate its listing boards which currently comprise the first, second and small and medium enterprises boards. The move will also provide a clearer classification of listed stocks that will help investors evaluate business prospects of companies belonging to the abovementioned listing boards.

To promote good corporate governance, the PSE will be conducting the first PSE Bell Awards in December which will recognize listed firms and trading parContinued on page 26>

Mineral Resources

Resource Investment November - January 2012

www.philippine-resources.com

Austal’s Philippine Investment Starting To Pay Dividends

nternational shipbuilder Austal’s Philippines’ yard will build three specialist vessels to sercive offshore windfarms in the UK. The 27 metre catamarans will be used by UK-based Turbine Transfers to support wind turbine installation and maintenance activities in European waters. The vessels will be built at Australianheadquartered Austal’s Philippines yard over a period of approximately nine months, commencing in March 2013. “Austal decided to pursue the growing market for wind farm boats in mid-2010. Having spent the first year working hard to better understand the market’s expectations we signed our first contract in July last year,” Austal’s Chief Executive Officer, Andrew Bellamy, said.

"During that initial 12 month marketing period we did a lot of research and design development and also confirmed that Austal needed to regionalise its manufacturing base in order to be successful. The company acquired a shipyard in the Philippines last November for that very reason. “Now, as our contracts demonstrate, Austal has the vessel designs customers want and the right production cost base to successfully leverage that intellectual property. Our strategy has been so successful that the Philippines shipyard now employs over 220 staff, continues to grow and is currently fully utilised into the first quarter of next financial year,” he added. “The capacity and efficiency of our Philippines shipyard means we are still able to meet market demand for vessels deliv-

ered in the first half of 2014. We continue to aggressively pursue further projects for wind farm boats, ferries and other commercial vessels,” Mr Bellamy said. This is Austal’s third new project for Turbine Transfers in a little over 15 months. Three 21 metre catamarans were ordered in July 2011 and delivered to Europe earlier this year. Construction of a 27 metre TRI SWATH ordered in January 2012 is nearing completion at the Philippines shipyard. The $7 million acquisition of the former FBMA Marine shipyard enables Austal to establish shipbuilding operations at the West Cebu Industrial Park at Balamban, in the province of Cebu. Austal will invest a further $5 million to enhance the shipyard’s existing facilities. Austal plans to commence vessel construction in the first quarter of 2012, dependant on orders, and expects to employ about 30 workers during the startup phase. Future workforce growth is expected in line with market demand, and the site allows for efficient expansion of the facility when future operational and market conditions require. Austal Chief Executive Officer Andrew Bellamy said the acquisition of the former FBMA shipyard is an important

The specialist vessels will be built at Austal’s Philippines yard.

>Continued from page 24

suggested the record setting effort reflected continued upbeat expectations on the economy’s growth for 2012.

ticipants adhering to high standards of corporate governance in the country. Record high close The strength of the Philippine Stock Exchange index was demonstrated further on October 3 with the PSEi closing at a new record high. Analysts have 26 Philippine Resources

The PSEi finished at 5,375.52, up 26.84 points or 0.50 percent, surpassing the July 5 record close at 5,369.98. To date, the PSEi has breached new record highs by a total of 22 times.

Continued on page 28>

“The upbeat outlook of the economy, including the Asian Development Bank’s assessment in its recent report, affirms confidence in the Philippine market, pushing the main index to yet another unprecedented level,” PSE Chairman Jose T. Pardo said.

Oil & Gas Resources November - January 2012

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Continued from page 26> milestone in Austal’s corporate strategy to meet the requirements of key commercial vessel markets by further regionalising its shipbuilding operations. “Our strategic review earlier this year found that there is strong demand in specific segments of the international commercial vessel market, such as fast crew transfer boats, work boats and 30 metre to 50 metre ferries,” he said. “With our Australian and United States

manufacturing operations increasingly defence focussed, we identified the need to regionalise our manufacturing base in order to be successful in those commercial vessel markets.” Austal will primarily construct small and medium sized aluminium passenger ferries, work boats and transfer vessels such as Austal’s Wind Express series of wind farm support vessels at the Philippines shipyard. The shipyard is purposedesigned and built for building aluminium vessels of that size and type and will also have the skilled workforce and facil-

Artist’s impression of the new vessels to be built in the Philippines.

ities to be able to undertake service and maintenance work. Austal is retaining its large commercial vessel manufacturing capability in Australia. The Philippines shipyard has a history of aluminium vessel fabrication, and has previously delivered medium and high speed ferries, patrol boats and specialist work boats to operators based in Europe, Mexico, Australia and Asia. Austal’s significant intellectual property in the design and construction of commercial vessels will be utilised at its Philippines operations, which will help ensure that Austal’s quality and performance standards are maintained. “Our planned infrastructure enhancements combined with the existing pool of skilled local tradespeople and ancillary industries will support the same safe, efficient, high quality production we achieve in our other shipyards,” said Mr Bellamy. “Austal now has an order book of approximately $1.8 billion, nearly all of it related to defence work and over 80 per cent attributable to our US operations. The new shipyard in the Philippines provides the right foundation to grow that order book further through increased commercial vessel sales,” he said. The acquisition of the Asian shipyard will have no adverse effects on Austal’s Australian and US operations, with both manufacturing facilities currently under contract for several significant multi-vessel, multi-year defence programs. Continued on page 30

28 Philippine Resources

November - January 2012

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Resource Investment November - January 2012

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WORLD BANK PLANS MAJOR STRATEGY STUDY

he World Bank Group in planning to hold nationwide consultations for its new Country Partnership Strategy (CPS) that will set the direction for the Bank’s engagement in the Philippines for a 3-year period from July 2013 to June 2016.

The series of consultation meetings with the government, the private sector and civil society will take place in Makati City, Naga, Davao and Iloilo from October 23 to November 8, 2012. According to the Word Bank, this is the first time that various stakeholder groups will be coming together in broader nationwide consultations to discuss the new CPS.

Prepared every three years, the strategy outlines the priorities of the World Bank Group’s support for a country, consistent with its own development plan, while incorporating the feedback and views of various stakeholders including government partners, civil society and the business sector. In the Philippines, the Bank’s country strategy is aligned with the government’s Philippine Development Plan (PDP). The next country strategy will be pre-

sented to the World Bank Group Executive Board in July of next year. World Bank Country Director, Motoo Konishi, expressed optimism that the new round of consultations across the country will yield a diverse range of perspectives and recommendations that will inform the next country strategy.

“We look forward to hearing from government officials, leaders of civil society and the business sector, as well as representatives from the academe, trade unions and other groups, whose views on the current development challenges facing the country are important in preparing the new Country Partnership Strategy,” Mr Konishi said.

He stressed the importance of consulting with as many stakeholders as possible, given the changing development landscape, as well as challenges in the global economic environment. “While the Philippines has weathered the lingering global financial and economic crisis with its strong economic fundamentals, much needs to be done to support the kind of growth that generates jobs, reduces poverty, and improves the lives of the Filipino people,’’ he added.

The current country strategy (July 2009June 2013) focuses on improving governance and achieving growth that works for the poor, in line with the Government’s development objectives. The strategy supports efforts to achieve macroeconomic stability, an improved investment climate, better public service delivery for the poor and reduced vulnerabilities to income shocks and natural disasters.

The CPS is also an opportunity for even deeper collaboration between the Bank and the International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, which have worked together in the areas of infrastructure, agribusiness and the financial sector.

IFC Resident Representative Jesse Ang expressed optimism that the IFC, together with the World Bank can continue to provide support in these sectors, as well as forge new paths that will secure much-needed financing for the private sector, while reducing their risks due to an uncertain global environment.

Continued from page 28> Managing Director of Turbine Transfers, Captain Mark Meade, said his company was using Austal technology to support the next phase of wind farm development which would see a much larger number of turbines installed farther offshore and in other areas with rougher sea conditions. Rugged and versatile, the new Wind Express 27 catamarans will be able to transport 12 personnel and 10 tonnes of equipment/ stores to and from turbines. This includes containerised items on forward and/or aft decks. Powered by four Caterpillar C18 diesels and propelled and steered by Rolls Royce Kamewa waterjets, they will be able to operate at in excess of 27 knots. An Austal integrated monitoring, alarm and control system with touch screen interface will be configured such that all vessels functions are available from a central location on the bridge. The catamarans are being designed and built to Det Norske Veritas +1A1 HSLC Windfarm Service 1 R1 classification and United Kingdom MGN 280 Area Category 1 requirements. ■ 30 Philippine Resources

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Making Good Business Better With Safety Training By Patricia Demdam Dubbed as “the economy to watch,” the Philippines received positive forecasts in 2012. With the right initiatives and business opportunities, the country may even be the “next investment hub” in the Southeast Asian region. Our economic potential in the mining sector alone—ranking third in gold, fourth in copper, and fifth in nickel reserves in the world—has translated into a significant GDP growth contribution and employment generation for many in the countryside. And if the strong attendance of foreign investors, managers, and representatives to the recently concluded Mining Philippines Conference & Exhibition were an

indication of the healthy industry, then the industry seems to be in the pink of health. But along with these promising developments is a growing awareness of risk management – due to the challenging nature of the mining, petroleum, and energy sectors. According to the International Labour Organization (ILO), an estimated 2.2 million work-related deaths happen each year. That’s why from a business perspective, the axioms “prevention is better than cure” and “health is wealth” have evolved from mere clichés to sound business wisdom —especially with the benefits and opportunities that compliance and risk mitigation generate : less hazards and accidents; reduced costs and absenteeism;

better productivity and reputation. Emerging Occupational Safety Standards No wonder progressive countries were quick to recognize the importance of a safer workplace and a healthier workforce. The United States, for instance, has created several federal agencies to set and implement standards for safe and healthy working conditions—the Occupational Safety and Health Administration (OSHA) provides training, education, and assistance to working men and women; and the Mine Safety and Health Administration (MSHA) enforces safety and health measures in all US mining and mineral processing operations. In the local landscape, the establishment of the Occupational Safety and Health Center (OSHC) in 1987 echoed the government’s efforts to uphold a safer and healthier working environment. OSHC Executive Director Ma. Teresita Cucueco, MD reports, “Occupational safety training in the Philippines is growing, evolving. . . . responding to the need.” “We were host to the 13th Coordinating Board Meeting of the ASEAN Occupational Safety and Health Network (ASEAN OSHNET) in April this year, and will serve as Secretariat of the organization through 2014,” she adds.

The 360training.com-PH Management Team (Back row, L to R): James Palinsad, SEO Manager; Christopher Medez, Channel Manager for International Business Development; Fredelito Suarez, Senior Business Development Manager; Angelo Sureta,Admission Advisory Manager). (Front row, L to R): Tess Zetha, Senior HR Manager; Chit Noveloso, Financial Controller; Sharmeen Niaz, Director for Operations and International Business Development; Katherine Casimiro, Business Development Manager. 32 Philippine Resources

By virtue of Administrative Order #53 series of 2010 issued by the Department of Labor and Employment (DOLE), a collaborative network for “the advancement and promotion of occupational safety, and health and environment concerns throughout the Philippines” was created. OSHNET is composed of occupational safety and health practitioners –from both the private and government sectors, as well as representatives from related professional groups, industry asContinued on page 34>

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Continued from page 32> sociations, employer groups, trade unions, and other related non-government organizations in the various Philippine administrative regions. Through this network, compliance standards are being set and implemented. The Basic Occupational Safety and Health (BOSH) training is one such emerging standard – providing 40-hour non-construction as well as construction safety training. However, OSHC recognizes that a staggering “90% of the Philippine workforce does not enjoy such favorable working conditions.” While rising training activities validate the desire to improve the current situation, the demand for occupational health and safety (OHS) services overshadows the limited number of trainers available. Online training mitigates this obstacle to safety education. “This year, we just launched the Online Basic Occupational Safety and Health (BOSH) training. . . . designed for those who may not be able to attend face-to-face sessions,” Dr. Cucueco explains. “This lets students take the course on their own time, at their own pace.”

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Fortunately, technological advancements have made training and compliance more accessible to professionals and organizations. Compliance, eLearning, and content providers like 360training.com offer part of the solution by delivering comprehensive workforce training and career education in various industries.

360training.com is making its presence felt in the Philippines at a time when cases of occupational injuries in the mining and quarrying sector are rising. From 156 incidents in 2003, the number of occupational injuries increased to 331 in 2009. Similarly, data showed that the number of work days resulting from these injuries doubled in 2009.

With over 3,000 eLearning partners, 360training.com has trained more than 3 million users worldwide. Since its establishment in 1997, major breakthroughs molded the Texas-based enterprise into an industry leader. These include their launching the industry’s first learning management system and course delivery engine (2000); their development of the first computer-based testing platform in the industry (2001); their introduction of an alternative method of meeting mandatory continuing education requirements in certain states (2001); their acquisition of LKI International, a top provider of transmission, power, and distribution training (2004); their being ranked as the 62nd fastest growing company in the Technology Deloitte & Touché Fast 500 US Awards (2006); their expansion into the European market (2008); their opening the company’s off-shore support office in Manila (2009); and their becoming a top provider of OSHA 10/30-hour training courses (2010). 360training.com’s competitive advantage and unique business proposition emanates from their recognition of the usual hindrances to further professional education: busy schedules; being based in remote locations where classroom training is not practical; and the high cost of training. Hence, 360training.com offers secure and updated online courses that are available via the Internet anytime, anywhere, at costs much less than faceto-face or classroom education.

34 Philippine Resources

As OSHC points out, training improves business value by preventing injuries and illnesses—and 360training.com agrees. The online training pioneer offers over 6,000 courses, with no less than 27 titles dedicated to mining compliance. MSHA safety training courses include General Physical Characteristics of Surface Mines, Preventing Accidents, Emergency Procedures, Working in a Confined Space, and Working with Explosives. Although the manufacturing industry recorded the most cases of occupational injuries (TABLE 1) with 23,548 reported instances, data from the 2009/2010 BLES Integrated Survey showed that the Electricity, Gas, and Water Supply industry had the highest severity rate of “workdays lost from cases of occupational injuries resulting to temporary incapacity per 1,000,000 employee-hours of exposure.” In an effort to reduce risks and improve productivity, four out of five non-agricultural establishments (with 20 or more employees) sought assistance of other agencies that provide OHS training. 360training.com has full libraries of course offerings that are authorized by the Occupational Safety and Health Administration (OSHA), the International Association for Continuing Education and Training, the Department of Professional and Occupational Regulation, and the Bureau of Professional Continued on page 36>

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Resources Training

November - January 2012

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Continued from page 34> and Occupational Affairs – to name a few accrediting and regulatory agencies in the US. 360training.com Integrated and Customizable Solutions 360training.com offers complete eTraining solutions to companies and provides technology, content and services to meet the Risk and Compliance, and Learning and Development needs of organizations. The eLearning pioneer, with over 20 industry websites, can also customize a compliance and risk management system to meet the needs of any facility. 360training.com’s Predict360 provides a software solution that helps organizations achieve their compliance goals efficiently, with the least resources expended. With its advanced framework, Predict360 offers tools to facilitate visibility, compliance planning, and execution. This “one-window solution” helps companies avoid costly penalties, loss of opportunities, and damage to reputation. Supported regulatory frameworks include NERC, OSHA, MSHA, Standardized Emergency Management System (SEMS), and the International Standards Organization (ISO), among others. 360training.com has a comprehensive library of courses written by experts in their respective fields, and is certified or recognized by over 300 regulatory bodies in the United States. Electrical Fundamentals, Condition Monitoring, Heat Rate Optimization, and Grid Dynamics are among the North American Electric Reliability Corporation (NERC)-approved training modules for specialists in the power and utilities sector. Training programs for workers in the oil and gas sector are also readily available. Learners can access courses on: Energy Trading Jargon, Technical Analysis, Fundamentals of Crude Oil, Refinery Economics, and Basics of Petroleum Refining, among others. Members of the construction industry can take advantage of OSHA training courses on 36 Philippine Resources

construction safety, general safety, supervisor certification, and industrial hygiene. 360training.com provides training programs that are recognized by industry experts—including the American Institute of Architects and the Oklahoma Construction Industries Board. Online selections from 360training.com also address the need to regulate and fulfill environmental compliance programs. Spill Prevention and Release Reporting, Identifying Your Hazardous Wastes, Stormwater Discharges and Permits, and Certified Environmental Specialist are among their web-based course offerings. 360training.com is a recognized U.S. Green Building Council (USGBC) education provider and is affiliated with various industry associations such as the American Society of Safety Engineers, the Associated General Contractors of America. Workers dealing with green building infrastructure can take courses on site assessment, construction, landscape, and utilities. The eLearning pioneer, offering courses approved by the International Association for Continuing Education and Training (IACET), with over 20 industry websites, can also customize a compliance and risk management system to meet the needs of any facility. With Predict360, organizations can seamlessly plan for and achieve their compliance goals. With its advanced framework, Predict360 offers tools and visibility for efficient compliance planning and execution, eliminating costly penalties, loss of opportunities and damage to reputation. Supported regulatory frameworks include NERC, OSHA, MSHA, Standardized Emergency Management System (SEMS), and International Standards Organization (ISO). The Business of Safety is Good Business The need for health and safety programs in environmental and occupational settings is not unique to the mining, energy, and petroleum industries. Continuous

education and compliance have become imperative in virtually every sector— whether due to mandatory training or the need to upgrade skills to stay competitive. As OSHC asserts, “good OHS [occupational health and safety] means good business.” 360training.com is committed to the same belief. Since 1997, the company has been pioneering in providing online training for professionals as well as to businesses in various industries, located in various states all over the US. This in itself is quite a feat as different states have their own requirements for pre-licensing and continuing education that may differ from those of other states. As a result of its robust and reliable technology platform, expertly developed courses, solicitous customer support, and excellent relations with regulatory bodies – it has been consulted by several state agencies with regard to the implementation of online training for accreditation purposes. 360training.com has been instrumental to thousands of companies saving millions of dollars in training costs and has been key to equipping hundreds of thousands of professionals with the knowledge and skills required to stay on the top of their game. Today, 360training.com is in Asian waters – establishing a foothold in one of the centers of learning and education in the region: Manila. Sharmeen Niaz, 360training.com’s Director of Operations and International Business Development leads the charge. The company has set up office at Net Square building, at The Fort’s (Bonifacio Global City) ESquare IT Park, where other global technology companies have also established their offshore units. With the so-called dawning of the “Asian Century,” the company is once again first to tap into eLearning as a powerful tool to leverage the potentials of the region. “Our vision is to be a part of every Continued from page 38>

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November - January 2012

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Anne Can.... Engineer, Manager, Mother, Farmer’s Wife and Mountain Biker – a spotlight on GHD Philippines Country Manager Anne Lavers

hat was background?

your

family

“My Dad was a primary school principal, so we moved home a lot. He was literally very ‘“old school’ and only saw the need to educate our brother, so we four girls left school at 15. A girl’s place was behind a typewriter he used to tell us. Did you plan your career from the start? Ha ha! Does anyone at 15 plan their career? I lived in a mining town, Mount Isa, so I went ina technical direction just

A strong family life is important for Anne.

because that was what my friends were doing. My first job was as a Tracer in a mining company, drawing bore hole logs on canvas and writing 1.5mm high letters. My young eyes suffered!

degree at the University of Southern Queensland.

Later I worked for an architecton the Gold Coast and studied for a Diploma in Civil Engineering at the University of Southern Queensland.

Rather naively, I thought that being a mother was simply a process of not having to work and having plenty of free time to study or whatever.

I was the only girl in the class and had to work extra hard to make up for my lack of previous study in maths and physics but managed to overcome that handicap and gained a High Distinction.

Consequently we started a family when I went back to university to study Civil Engineering. Wrong! Being a mother is no picnic!

Where did your role as a mother fit in with all this?

I then started up a soil testing laboratory, building up to employ 6 staff and achieving NATA registration. We did well in the boom years and then something happened…

I had my work cut out and had to struggle hard to get my degree and raise two babies. Second one was a mistake so I ended up with 2 babies 17 months apart. But we made it. I’m proud of them – my daughter is embarking on her career and my son is at university.

An engineer questioned my report - incorrectly – but questioned my credentials as I “was not an engineer”. This spurred me on to a new direction. I decided to delegate the running of the soil testing lab and study for a Civil Engineering

A key part of all this is having a husband of 25 years who is not only supportive but has followed me around Australia and now around the world. Continued on page 40>

Continued from page 36> learner’s experience worldwide. And that’s why we’re here in the Philippines today,” says Ms. Niaz. “In these few months since we have begun offering our eLearning content and solutions to the local market, we were already able to win the trust of several clients who have experienced our topnotch content firsthand. . . . and this month alone, we have gotten several invitations to present from companies belonging to different sectors. We have been providing eLearning to a leading coal power generating plant in Mindanao for two years now. And more recently, we got an order from one of the oldest power generation companies in the same region,” she adds. 360training Philippines is now the regional headquarters for 360training.com-US, with an employee base of over 100 professionals equipped with tools and technologies to meet the eLearning needs of the region and of the Philippines in particular. Aside from technical training in the different industries, there is a lot of interest among local companies in softskills (business skills) training. From Management Leadership training to Effective communication we offer top notch content that is recognized internationally. In the case of the petroleum and power, and mining sectors, effective safety training – or the lack thereof – can have serious repercussions – these having the highest severity rates in terms of work-related injuries. 360training.com is looking forward to establishing strategic partnerships with the local occupational safety community to build a safer workplace for every Filipino. ■ 38 Philippine Resources

Resources Spotlight

Continued from page 38> And what of the GHD years? With my engineering degree , I decided to sell the lab due to conflict of interest issues and joined GHD and worked as a structural engineer in Cairns, followed by Office Manager stints in Wellington and Townsville before joining Fraser Watt’s Manila team as a Technical Direc-

tor. My role here was largely one of mentoring and tutoring. I learned a lot about the Filipino psyche, and was forced to soften my blunt Aussie ways! You replaced Fraser Watt, apart from not looking like a Bond villain, how does your approach differ? Ha ha! Fraser is a tough act to follow. He may look menacing, but he’s charismatic,

November - January 2012

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generous, warm-hearted and very honest and passionate. I have to work within my own leadership style – M? Moneypenny? Who knows? But I’ll work hard and I love working with Filipinos and am responsible for over 200 of them. 50% are female so I hope I can be a role model for them in some ways. We haven’t talked about “Girl Power” – the obvious fact that you’re female in a largely male industry. How has your gender affected your career? As you’ve learned I’m a fairly conventional married mother, and don’t really get involved in political feminism. I like to let my achievements do the talking. In my career I’ve had two notable incidents where I was criticised and challenged because of my gender. On both occasions I stood my ground. Over here I see that Filipinas have extra depth as they broadly take more responsibility than the boys. How do you break out of work mode and enjoy yourself?

Anne Lavers is a keen Mountain biker in her spare time.

One of 4 girls in family of 5

My husband and I love mountain biking, and cycle with a group organised by the Sabak bike shop in Pasong Tamo. Back home, and I guess in retirement, we’ll enjoy growing avocadoes and mangoes on the farm we own on the Atherton Tablelands, near Cairns.

Left school at 15

So what of the future?

Mother of 2

Well I will be here for some time to come – it’s a job half done and I would like to see GHD expand in size and geographical scope – possibly opening offices in secondary cities. I also want to continue and expand our environmental and humanitarian work and support the Philippines at a community level.

Anne Lavers at a glance: From Atherton Tablelands, North Queensland

Married 25 years Lived In Australia, New Zealand and Philippines (Philippines since 2010) Manages 240 staff in GHD’s Manila Operating Centre Mountain Biker Has a farm in North Queensland

40 Philippine Resources

We’ll retire to the farm but I imagine that we’ll be back here often! ■

November - January 2012

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Fluor awarded major Malampaya contract

S engineering and construction giant Fluor Corporation’s Fluor Offshore Solutions division has been awarded an engineering, procurement and construction (EPC) support contract for Phase 3 of the Malampaya Deep Water Gas-to-Power Project. The project is being undertaken on behalf of the Philippine Government by the Service Contract 38 consortium composed of Shell Philippines Exploration B.V. (Operator), Chevron Malampaya LLC and Philippine National Oil Com-

pany -Exploration Corporation. The landmark project is considered to be among the most significant in the Philippines. Approximately 40 percent of the power for the main island of Luzon is generated by power plants using Malampaya gas. This new contract follows Fluor’s successful completion of the front-end engineering and design (FEED) contract for Phase 3. Fluor booked the undisclosed contract value in the third quarter. “This new EPC contract for the Malam-

paya Deep Water Gas-to-Power Project solidifies our strength in the growing global offshore gas market,” said Peter Oosterveer, Fluor’s president for Energy & Chemicals. “Fluor’s long-term presence in the Philippines is a testament to the outstanding work by our professionals, now 2,220 strong, in our Manila and Cebu offices, who are providing full-service project execution.” Continued on page 44>

Weatherford Tasting Growing Philippine Interest Weatherford, a global drilling and downhole specialist, has achieved a growing demand for its services in the Philippines. Earlier this year Weatherford was awarded a contract for exploration well testing package and completions equipment in North Luzon, Philipines. The contract was for the provision Equipment and Personnel to execute a two Zone Testing Operation with Design specific to Gas Production. The project was completed successfully and further testing plans are in progress. The company had previously been contracted for an Extended Well Test (EWT) offshore, Palawan Philippines. The contract was for the provision of engineering, design, procurement/modified or new build equipment, installation & commissioning of the 20,000 bbl/d plant with water treatment facilities able to process associated water cut of up to 75%. The project was completed within the planned 5 months allocated from contract award.

42 Philippine Resources

The scope of the project included - First stage separation & second stage degassing, electrostatic coalescer, crude oil export trim cooler & metering package. Produced gas was flared. Produced Water Treatment includes De-oiling hydrocyclones, Weatherford designed hybrid gas flotation vessel and a filtration package. Treated water was dumped overboard at 15 ppm and crude oil is transferred to an FSO. Geothermal work In April 2012, leading international drilling and downhole specialist Weatherford was awarded a contract by Chevron Philippines Holdings Inc. to run a 13-3/8 Mechanical SAQC Whipstock for its project in Mak-Ban Geothermal Production Field. The workover objective was to effectively abandon the enlarged hole section and efficiently sidetrack the well. The whipstock was successfully deployed in a single trip with a setting depth of 2,355 ft on the high side, exiting into a volcanic formation.

Weatherford Asia Pacific, Pte Ltd’s Philippine Branch specialises in solving common to geothermal well problems collapsed casing, restricted well opening due to scale deposits, junk in hole, fish in hole and casing exits. Weatherford Whipstocks have been utilized in various sizes and types for geothermal wells in the Philippines. The purpose is to open a new window in the casing and provide new hole that diverts to another geothermal reservoir. Various types of Whipstock are available depending on hole conditions and customer requirements. The majority of the single trip system whipstocks are mechanically activated anchors for hot geothermal well application. Its whipstock is capable of conversion from hydraulic system to mechanically set in the field to adapt with changes due to hole conditions and operations. To date, Weatherford Philippines has achieved 100 percent success rate on whipstock deployments, including the recent workover in Mak-Ban. ■

November - January 2012

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Cadan Celebrates T’Boli Gold Start-up

ancouver-headquartered Cadan Resources Corporation has announced that its Philippines affiliate, Tribal Mining Corporation (TMC), has received the Mines and Geosciences Bureau (MGB) Declaration of Mining Project Feasibility (DMPF), enabling the Company to commence mining production at the T’Boli gold-silver mine within the Mineral Processing and Sharing Agreement (MPSA) No. 090-97-XI.

Cadan reported that the T’Boli Project is now fully equipped, including a trained local workforce, a fully constructed and commissioned Carbon-In-Leach (CIL) gold-silver processing plant, gravity concentrator, electro-winning circuit, tailings storage facility and powerhouse.

Cadan said that in connection with the issuance of the DMPF, the MGB reviewed and verified information on the property regarding available resources, in addition to considering the environmental, social and economic requirements of the Philippines.

T’Boli hosts a reported inferred mineral resource of 2.4Mt at 5.5 g/t Au and 21.0 g/t Ag, equivalent to 420,000 oz of gold and 1.6 million oz of silver.

“This is a tremendous success for Cadan shareholders as the Company transitions to become a gold producer and we are ready to commence operations immediately, the people are ready, the mill plant is ready and the underground development is ready for stoping,” Cadan’s President and CEO, Robert Butchart, said. Milestone “This is also an exciting milestone for the Government, as it is the first DMPF to be granted in South Cotabato, Mindanao and the first to be granted in the Philippines since the recent Executive Order No. 79 by the President Aquino Administration. “Cadan’s new management team has made these achievements possible since they took control in April, 2011.

“With the dynamic combination of local knowledge and technical expertise, we are confident that the Company and the Tribal elders, TMC Directors and CADAN President/CEO Robert Butchart united paying community will prosper by responsible and productive mining.” ■ tribute to the office of the MGB Director in Manila. Continued from page 42> Fluor Offshore Solutions is providing detailed engineering, procurement and selected construction support services as well as supporting the Shell team in managing the local fabricator. Malampaya Phase 3 involves the design, fabrication and installation of a new depletion compression platform that is linked by a bridge to the existing shallow water platform. Fluor is responsible for the engineering and procurement for the new depletion compression platform as well as modifications required on the shallow water platform. Additional Fluor responsibilities include freight forwarding, material management for onshore fabrication and offshore installation, and preparation of work scopes for transportation and installation. The project is being performed locally from Fluor’s burgeoning full-service execution centers in Manila and Cebu as well as a local fabrication yard in the Philippines. The project is under way and is expected to be complete in 2015. Fluor previously provided ongoing engineering services for the existing shallow water platform from 2000 to 2006 and more recently conducted a hazard and operability analysis for the Malampaya project. ■ 44 Philippine Resources

Renewable Resources

Mineral Resources

November - January 2012

November 2011 - January 2012

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Geothermal energy risk Considers management Copper Development By Fernando Penarroyo

>@= 4=@;/ /5@33;3<BA CB7:7H32 7< =B6 :31B7<5 3F>3@73<132 /<2 E3:: @3A>31B32 3@ @3A=C@13 >@=831B 23D3:=>;33174G7<5 /<2 CA7<5 63 1C@@3=:7B7 <D3AB=@A /@3 37B63@ :/@53 /<2 B@/ 3?C7>;3@=D3< B@/19 @31=@2 1/: :/<2A1/>3 6/A =>3<32 => 27B7=</: 3<3@5G A3@D713 1=;>/<73A B6/B #=AB 74 <=B /:: 1/>7B/: >@7=@ B= / opper Development Corporation has/07:7BG reported it may not proceed53=B63@;/: any further>@=831B A with its Basay on >=@BC<7B73A 4=@ 1:3/<3@ 3<3@5G (CDC) 6/D3 B63 B= 47</<13 ' to7<D3AB >@=D3< tenement 43/A707:7BG Island after/<2 receiving disappointing =>B7=<A Negros E67:3 7<D3AB=@A 5=D3@< ;3<BA 7< exploration B316<=:=5G results. =@ >@=831BA 4C<2 7A 2=<3 B6@=C56 3?C7BG /<2 <=B 230B 7 ;3@=D723 32 =< / <=< @31=C@A3 47</<13 0/A7A =@ </<17<5 =4 3F>:=@/B7=< /<2 1=<47@;/B7=< Isle of 7<4@/AB@C1BC@3 Man-headquartered CopperA;/::3@ 0CB 3<B@3>@3<3C@7/: 53=B63@;/: Development Corporation recently completed an internal interim report on the drillB63 3AA3<B7/: A3@D713A 2@7::7<5 CAC/::G 1=;3A 4@=; 1=;>/<G 3? ing :35/: results4@/;3E=@9 and geologyB= at23D3:=> the Basay/<2 licence. /<2 23D3:=>3@A A3397<5 7<D3AB=@A 4=@ B316 C7BG =@ @7A9 1/>7B/: >@=D7232 0G 7<D3AB=@A 23>:=G <3E 3<3@5G B316<=:=573A <=:=5G ' /<2 =@ >@=831B 47</<13 3<3@/::G 7<D3AB;3@3<3C@7/: 53=B63@;/: 1/>7B/: D3<BC@3 1/>7B/: =@ 3?C7BG ficient to support a mining operation. The23D3:=>;3/1B =< @3<3E 47@;A B63@3 /@3 27443@33@ with3<3@5G several >@=831BA target areas identified. /0:3 /<2 B63 53<3@/: 0CA7<3AA ;=23:A /<2 0/:/<13 A633B A3< C3 B= B63 6756 @7A9 7<D=:D32 E7B6 53= />>@=/16 B= >@=>3@ /AA3AA;3:=@/B7=< 0/<9A 2= <=B >@= However, the Company said itB6/B has now to cease further 7<AB7BCB7=<A exploration on the property for the time being in light of the CA34C: B= 723<B74G 0/@@73@A /@3 elected ,67:3 47</<17/: 1/@3 D723 4C<27<5 B6@=C56 :=/<A C<B7: B63 :/B3@ cost of such drilling and the ongoing discussions with the 23D3:=>3@ Government?C/:7471/B7=< over the Privatization Management Officeâ&#x20AC;&#x2122;s claim to the >@3D3<B7<5 B63 C>B/93 =4 ' >@=831BA 4C::G 3D/:C/B3 AB/53A 7< B63 23D3:=>;3@=13AA property. =@3;=AB =4 B63A3 /@3 0/@@73@A E6716 /<2 B@/19 @31=@2 037<5 / ;/8=@ /<2 C@7<5 B63 1@7B71/: @3A=C@13 723< @3:/B3 B= B63 :=E :3D3: =4 /E/@3<3AA E3:: 9<=E< 23D3:=>3@ 7A <=B @3?C7@32 B7471/B7=< >6/A3 B63 23D3:=>3@ /7;A The Company said it has continued its vigorous defense of its rights to the property on the opinions of two/A leading C<23@AB/<27<5 /<2 /BB3<B7=< /44=@232 031/CA3 47</<173@A @31=5<7H3 7<D3AB based B= =0B/7< /A legal ;C16 7<4=@;/B7=< >=A Philippine law firms, while the Privatization Management Office has maintained what A70:3 the Company and its legal counsel E67:3 believe B= B63 1=;>:3F /@@/G =4 >=:71G @35C:/ ;3>=@BC<7B73A 6/D7<5 1=<A723@/0:3 /0=CB >=B3<B7/: @3A=C@13A to beB316<71/: a legally unsubstantiated to the3F>3@73<13 property. 7< 23D3:=>7<5 3<3@5G >@=8 7<D3AB=@ 1=ABA /@3 :=E >@=D727<5 B63 B=@G 47</<17<5 /<2 claim =@5/<7 H/B7=</: 4/1B=@A /4431B7<5 ' >@=831BA 31BA 0G >@=D727<5 3?C7BG =E3D3@ <3E 23D3:=>3@ E7B6 / AB@=<53@ 4=C<2/B7=< Whilst an application for renewal the Basay exploration permit/@3 has@3?C7@32 been made, 3=B63@;/: >@=831B 47</<17<5 7A of<=B 53=B63@;/: 23D3:=>3@A B= there is a possibility that the permit, which Continued on page 32 > expires on 10=7:3@>:/B3 December 2012, may not be renewed. â&#x2013; B63 BG>71/: A163;3 E7B6 23;=<AB@/B3 B637@ 1=;>3B3<1G 0G A3

Basay Project Future

T C

Brunel loc FP

46 Philippine Resources

Philippine Resources 31

Renewable Resources Mineral Resources - January 2012 2012 November 2011 -2012 January February - April

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government and est program are /0A07:;809? ,> >3:=?0= ;=:50.? ;0=4:/> sector. Philex Mining’s <private Continued from page 32 B:@7/ =0/@.0 @9.0=?,49?D 1:= ;:74.D ,9/ In other Padcal opera:9 , 14C0/ awards for>.30/@70 2011, B4?3 ;0=1:=8,9.0 8,=60? /D9,84.> B309 8:/07492 0.: tions in the me2@,=,9?00> ,9/ 74<@4/,?0/ /,8,20> 1:= 9:84. =0?@=9> safest mine tallic category, ?30 1,47@=0 :1 ,..0;?,9.0 ?0>?> ,9/ ?480 0:?30=8,7 ;=:50.?> ,=0 .3,=,.?0= awards went to Holcim La Union 7D .:884>>4:9492 4E0/ -D >429414.,9? @;1=:9? .,;4?,7 49A0>? TVI Resource plant in the non D e v#=:50.? e l o p m 149,9.0 e n t s 4> ,7>: 34237D /0 809? 1:= 0C;7:=,?4:9 B077 /=477492 ,9/ ?30 metallic catego;09/09? :9 ?30 ;:B0= ;@=.3,>0 ,2=00 49>?,77,?4:9 :1 ;7,9? ,9/ 0<@4;809? @? for surface opry, MRL Gold’s 809? ## 0C0.@?0/ -0?B009 ?30 /0A07 :9.0 ?30 20:?30=8,7 ;=:50.?> ,=0 ;7,.0/ eration, RepubSurigao-Agusan :;0= ,9/ ;@=.3,>492 09/ @>0= ?D;4.,77D 49 .:880=.4,7 :;0=,?4:9 ?30 1@07 >:@=.0 lic Cement Buprojects in the ,9 070.?=4.,7 @?474?D &30 ## ;=:A4/0> 4> >0.@=0 1:= ?30 /0.,/0> :1 0C;0.?0/ 7410 lacan for cement exploration cat1:= ?30 >,70 :1 .,;,.4?D ,9/ 090=2D ,? ,9 ?480 B4?3 , >?0,/D =0A09@0 >?=0,8 plant operaegory, with speResource Development, represented by 9:?0 its president Eugene Mateo (second from ,2=00/ ;=4.0 ;=4.0 >?=@.?@=0 ,9/ >;0.4 ? 4> 2::/ ?: ?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 140/ ?480 ;0=4:/ 9 ,//4?4:9 ?30 149,9 49>@=,9.0 ;=:/@.?> ,=0 9:B -0.:8492 and Quarry for operation as well as safest Apex Mining mine awards for surface operation and mineral processing categories). They received the awards from PMSEA president Louie .4,7 49>?4?@?4:9 B477 (concentrator 49.7@/0 , .,=01@7 8:=0 ,A,47,-70 ?: ?30 $ 49/@>?=D B3470 quarry operaand Rio Tuba Sarmiento (far left) and Mines and Geosciences Bureau director Leo Jasareno (second ,9,7D>4> ?30 49?0=.:990.?4:9 >?@/40> 149,9.4,7 =4>6 Lita 8,9,20809? tion, FCF:1 MinerNickel Mining from left), with awards 90B committee member Lee (center)49>?=@ of Rapid City Realty and ,9/ ?=,9>84>>4:9 ,2=00809?> =:8 ?30 809?> ,=0 0A:7A492 !0A0=?3070>> ?30=0 als for explora- Development Corporation. for best nursery =4>6 ;0=>;0.?4A0 3:B0A0= 4? 4> ;=010=,-70 4> , 900/ 1:= .@>?:84E,?4:9 :1 .:A0= tion (category and best reha?3,? 0.:9:84.> ,9/ /08,9/ 1:= ;:B0= A), MRL Gold Surigao-Agusan for ,20 ,9/ 74960/ ;=:/@.?> ?3,? ;=:A4/0 , Mining Service for mineral process- bilitation strategy respectively. /=4A0 ;=:50.?> =,?30= ?3,9 .:9?=,.? ;=: >:7@?4:9 1:= ?30 category). =4>6> 4930=09? 49 exploration (category B), Repub- ?:?,7 ing (crushing plant PMSEA’s Pasasalamat Award was A4>4:9> 7>: .:9?=,.?> 902:?4,?0/ B4?3 lic Cement Norzagaray for mineral 20:?30=8,7 Carmen/0A07:;809? Copper was )3470 cited 20: for conferred upon former Mines and 04?30= >4/0 -0492 ,? , /4>,/A,9?,20 ,=0 , 090=2D B477 .:9?49@0 ?: 1,.0 Geosciences Bureau director and Deprocessing (cement category), TVI ?30=8,7 safest combined operation, Northern .,@>0 :1 .:9.0=9 1:= 709/0=> Resource Development for mineral :->?,.70> ?: 2,49 49A0>?809? 8,=60? ,. Cement for most improved safety per- Fernando partment“Ronnie” of Environment Natural Penarroyoand is the partner at Puno and Penarroyo processing !00/70>> ?: >,D >?=0,8749492 ?30 .0;?,9.0 ,9/ ,;;74.,?4:9 ?30=0 4> =::8 (concentrator category), formance and TVI Resource Develop- managing Resources undersecretary Jerry DoLaw Offices (www.punopenalaw.com). He ;0=84? ;=:.0>> for -D mineral 2:A0=9809? =02@7, 1:= :;?484>8 ,> mining ?30 @>0 operation. :1 ?34> 090=2D specializes Apex Mining processing ment for safest lino for his contributions to uplifting in energy and resources law, ?:=> B477 3,A0 ,9 48;,.? :9 20:?30=8,7 (extraction category) and Philippine >:@=.0 4> :97D -02499492 ■ Awardees for the best mining for- project the Philippine mining industry. ■ finance and business development.

Focus on ... SEAPEX

Brunel Ovs FP

47 Philippine Resources 33 25

MIneral Resources November - January 2012

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David Brown Industries Opens Subic Bay Service Centre

avid Brown Gear Industries has announced the opening of a Gear Service Center Facility in Subic Bay plus extended three (3) year warranty on new gears, gear boxes and gearbox refurbishment. Recognizing the needs of the local mining industry for high quality gear and gearbox supply and refurbishment services, David Brown Gears has recently established a Gear Service Facility within Subic Bay to provide rapid response and ready access to high quality gear services. The service centre is operated under the hands-on supervision and management of specialist David Brown gear service engineers out of Australia, Singapore and the UK, complemented by skilled DBGI trained local engineers. The company works in close coordination with clientâ&#x20AC;&#x2122;s engineering & technical staff, working as a team.

Due to the high quality of goods and services provided by David Brown Gear, they also now offer a three year warranty on new gears and gear boxes, as well as on gearbox refurbishment. This provides customers the assurance they need that they can rely on the goods and services for their mission critical components. David Brown Gear is the largest and oldest specialist gear manufacturer in the world, and are global leaders in the field of gear and gearbox design, gear and gearbox manufacture, gear supply to OEM and aftermarket industrial customers, major gear repair/rebuild/refurbishment and gear and gearbox repair services (all brands of gears and gearboxes). With the company philosophy that there is no room for compromise on performance or reliability in a world reliant on mined commodities, and gear system failure is not an option, David Brown globally provide tailored gear products and systems, strategic maintenance and gear management systems and engineered solutions across the whole mining process, including exploration, extraction, processing, and transportation. For high quality gear and gearbox design and new product supply, gear audit and inspection/reporting programs, repair, maintenance and overhaul, the worldâ&#x20AC;&#x2122;s leading Mining Companies and OEM suppliers traditionally turn to David Brown.

David Brown Gear is the largest and oldest specialist gear manufacturer in the world. 48 Philippine Resources

Philippine Mining Industry clients can take advantage of over 150 years of global experience in the design, manufacture and servicing/repair

of mill drive systems, girth gears, agitator/thickener drives, conveyor drives, stacker reclaimer, shovel and dragline components and drives, crusher and grizzly gear drives etc. In the Philippines, David Brown Gear Industries service the requirements of all major and emerging mining companies, and provide the full range of new products, and maintenance services required to keep critical units in optimal operational condition. This includes comprehensive gear and gearbox condition audit/inspections, with detailed reporting and recommendations for future required maintenance services. This information is essential for management to be able maintain critical units in optimal operational condition so that targeted production levels can be reliably maintained. It also allows for cost efficient budget planning and management, as well as procurement planning and scheduling of maintenance, repairs, refurbishment and replacement programs for critical gearboxes. DBGI undertake gear and gearbox repair work as appropriate, either in situ at the minesite, or at the David Brown Gear Service Centre in Subic Bay. David Brown Gear Industries have been active in the very precise and specialized field of gear engineering in the Philippines for over 30 years, primarily in the Mining, Power, Cement, Sugar, General Industrial, Construction and associated industries. The company have specialist engineers in the Philippines at most times to manage their major projects here in conjunction with David Brown trained Philippine gear service engineers, and are experienced and well qualified to provide world best practice solutions, and complete projects to the full satisfaction of Philippine Mining Industry clients. â&#x2013;

Mineral Resources November - January 2012

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PMSEA To Reaffirm Commitment To Responsible Mining At Annual Conference With significant activities being put in place to ensure a meaningful 59th Annual National Mine Safety and Environment Conference (ANMSEC) on November 13-16, 2012 in Baguio City, the Philippine Mine Safety and Environment Association (PMSEA) has moved to reaffirm its commitment to responsible mining. “The conduct of the 2012 ANMSEC is a very timely event as the Philippine minerals industry is presently confronted with various challenges,” PMSEA President Louie Sarmiento pointed out. According to Sarmiento, the week-long conference will give PMSEA the opportunity to present the efforts of its member-companies in providing genuine progress for all Filipinos, especially the poor and underprivileged. “As the best practices of its members in the fields of occupational safety and health, sound environmental management and social responsibility will be duly recognized, PMSEA firms up its commitment to responsible mining and sustainable development,” Sarmiento said.

At the same time, Sarmiento added that through its Pusong Minero initiative, PMSEA remains at the forefront in addressing the crises the sector faces.

“This is our way of ‘giving back’ the fruits of Mother Nature who has been providing us with bountiful blessings,” Sarmiento explained.

Sarmiento said that in line with this year’s ANMSEC theme, Responsible Mining: Our Advocacy…Our Commitment…, the first day (November 13) will begin with a tree planting activity at 9:00am in Barangay Twin Peaks, Tuba, Benguet.

The inaugural rites will be immediately followed by a press conference at the same venue before the welcome cocktails at the Ballroom of the Baguio Country Club at 6:00pm.

This environmental undertaking dubbed as a “Commitment To A Greener Earth”, is an initiative of PMSEA member-company Monark Equipment to mark their 25th anniversary. The aim is to plant 25,000 Kalinga Orange trees within the 25 months since January of 2012. At 2:00pm of the same day, PMSEA’s showcase of endemic plants and trees inside the summer capital’s Botanical Garden will be inaugurated. This is a project under a memorandum of agreement signed in 2010 with the city government of Baguio where PMSEA adopted a 1000-square meter area to develop and nurture for five years.

A CLARIFICATION FOR OUR VALUED CLIENTS

T has come to our attention that a former self employed sales rep of this publication is considering working on a new start up magazine and has been contacting a number of our valued clients.

While we always welcome the possible start-up of a new business in the Philippines, we just want to clarify any misconceptions caused by the creation of a magazine with a very similar title to this publication. We want to advise that this former self employed sales rep has no ties with the publication you are reading. We at Philippine Resources thank you for your ongoing support. ■ 50 Philippine Resources

Early morning on the second day (November 14), at 6:00am, the golf, bowling and lawn tennis tournaments will formally and simultaneously kick off at the Baguio Country Club, Baguio Center Mall and Baguio Tennis Club respectively where winners will be awarded during the Mining Night at 6:30pm in Camp John Hay’s Ampitheater. On the third day (November 15), 8:30am, a two-day Mining Exhibit will be opened at the Garden Wing of CAP-John Hay Trade and Cultural Center. A day long Minerals Industry Symposium by the Philippine Society of Mining Engineers (PSEM) will run from 9:00am to 5:00pm, at the A and B Halls of the same center. The last day (November 16) of the 59th ANMSEC will be highlighted with a Minerals Industry Parade at 6:30am starting from SM Baguio before the much anticipated Mine Safety Field Demonstration and Field Competition at Melvin Jones where victors will be honored at exhibit area, 3:00pm. The conference will be culminate at 6:30pm with a Testimonial Dinner and Annual Awards Night at the same venue where the symposium was held. This annual tradition of the Philippine minerals industry dates back to 1938. On November 17 1967, by virtue of Presidential Proclamation No. 115-A, the month of November was declared as Mine Safety and Accident Prevention Month. ■

Mineral Resources November - January 2012

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Understanding Carbonates- The Complexities of Rock Typing C

of borehole-scale evaluations play significant roles in larger scale field development, simulation and management efforts.

arbonate reservoir evaluation has been a high priority for researchers and oil and gas producers for decades, but the challenges presented by these highly heterogeneous rocks seem to be neverending. From initial exploration through mature stages of production, geoscientists, petrophysicists and engineers work together to extract as much information as possible from subsurface data to produce maximum reserves (Figure 1).

Carbonate sedimentary rocks differ from siliciclastic sedimentary rocks in several ways. Siliciclastic rocks form as sediments are transported, deposited and lithified, or compacted and cemented into solid rock. Most carbonate rocks develop from biogenic sediments formed by biological activity, which includes reef building and accumulation of the remains of organisms on the seafloor.

Carbonate reservoirs present a picture of extremes. Reservoirs can be colossal, though their pores can be microscopic. Matrix permeability can be immeasurably low, while fluids flow like rivers

Other types form as water evaporates from shallow onshore basins or as precipitates from seawater. The carbonates that form most of the reservoirs in the Philippines (Williams 1997) are mostly: Figure 2. A) Locality map of reprocessed Multiclient 2D Seismic from East Palawan and Sulu Sea PECR4 Blocks B) Cross-Section Orientated WSW to ENE illustrating the subsurface carbonate build-ups and other petroleum traps observed in the offshore Philippines (courtesy of Dept of Energy, Western Geco and Multiclient Geophysical Pte, Ltd).

1) Pinnacle reefs developed on Nido carbonate platforms (e.g. Nido, Matinloc, Cadlao); 2) A seaward horst block reef fairway with large pinnacle reefs (MalampayaCamago trend).

through fractures. Evaluation techniques that succeed in sandstones sometimes fail in carbonates.

Figure 1: Complex workflows are needed to fully understand fractured carbonate reservoirs. Abbreviations: ELAN = ELemental Analysis; CMR = Combinable Magnetic Resonance; FMI = Formation MicroImager; ECS = elemental Capture Spectroscopy; PLT = Production Logging Tool; TCP = Transimission Control Protocol; WL = Wireline; MDT = Modular Formation Dynamics Tester; DST = Drill Stem Testing; XRD = X-ray Defraction; Super Kâ&#x20AC;&#x2122;s = High Permeable Steaks. 52 Philippine Resources

These variations complicate both reservoir evaluation and hydrocarbon recovery. However, researchers are working to overcome these problems because of the economic significance of oil production from carbonate reservoirs, especially giant and supergiant fields in the Middle East. The potential rewards are great: about 60% of the worldâ&#x20AC;&#x2122;s oil reserves lie in carbonate reservoirs, with huge potential for additional gas reserves. The results

Figure 3. Remote sensing images of A) Aitutaki and B) Maupiti Atolls, South Pacific and C, D) interpreted geomorphic belts. Although sizes of the atolls differ, both have similar zontations. Parts A &B are copyright DigitalGlobe.Com (Rankey et al, 2011).

November - January 2012

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Newly reprocessed Multiclient 2D seismic data over the 4th Philippine Energy Contracting Round (PECR4 Area10, 11, 13 and 14) indicate carbonate build-ups and associated synrift clastic reservoirs in East Palawan and the Sulu Sea (Figure 2). These trapping configurations form potential targets for future reservoirs and preliminary investigations show that the key elements of prospective plays are present in these blocks. Amplitude and AVO (Amplitude Variation with Offset) anomalies observed on the seismic data are thought to be related to Hydrocarbon presence. One modern day example of pinnacle reefs are the Aitutaki and Maupiti Atolls, Cook Islands, South Pacific (Figure 3). These reefs exhibit large lateral and vertical variations in reefal habitats, from reef escarpments, carbonate shoals with coral mounds, and quiescent lagoons to talus beaches. All of these unique environments are juxtaposed and stack vertically or successively during burial to create a complex textural play. The fragments that make up most carbonate rocks typically have undergone much less transport than most siliciclastic sediments.

Security & Crisis Management

Figure 4. Carbonate classification scheme. Carbonate rocks are differentiated by depositional texture, grain types, rock fabric or other factors. The Dunham classification, published in 1962, is widely used to categorize carbonate rocks according to the amount of grains and mud. The classification by Embry and Klovan follows the Dunham scheme, but adds categories of rocks formed by organisms that grew together, such as colonies of oysters. Describing pore types further refines rock description: Luciaâ&#x20AC;&#x2122;s classification is widely accepted (from Oilfield Review Winter 2000/2001).]

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Siliciclastic rocks are predominantly sandstones and shales that contain a wide variety of minerals and particles, including quartz, feldspar, clay minerals, fragments of preexisting rocks and remnants of plants or animals. Carbonate rocks consist of a more limited group of minerals—predominantly calcite and dolomite. Other minerals less commonly present in

carbonate rocks are phosphate and glauconite; secondary minerals include anhydrite, chert, quartz, clay minerals, pyrite, ankerite and siderite. These differences result in entirely different classification systems for clastic and carbonate rocks, with clastic rocks distinguished by grain composition and size, and carbonate rocks differentiated by such factors as depositional texture, grain or pore types, rock fabric and diagenesis. One classic classification scheme by Dunham (1962), which defines the carbonate according to the percentage of mud and skeletal fragments and how these skeletal fragments are bound together (Figure 4).

Figure 5. Idealized carbonate porosity types, modified from Choquette and Pray, 1970.

A Flow unit is a connected body of rock with similar pore geometry. Differentiating present-day flow units from original depositional units is becoming more important than other aspects of classification because optimal well placement depends on understanding present-day

flow units. Once deposited, sediments undergo diagenesis, the postdepositional chemical and physical changes that transform the sediment into solid rock. Carbonate diagenesis can significantly modify pore space and permeability. Carbonate rocks are highly susceptible to dissolution; grains can be dissolved to form new pore space, and dissolution along fractures and bedding planes can produce large vugs and caves. Clastic diagenesis normally does not involve a change in mineralogy. Carbonate diagenesis, however, commonly involves replacing the original calcite and aragonite with the mineral dolomite, a process called dolomitization, which can improve the hydrocarbon-producing characteristics. While both clastic and carbonate rocks are usually buried, compacted and cemented, carbonate sediments contain significant amounts of the metastable

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minerals aragonite and magnesium cal- tween the grains, and they are uniformly their susceptibility to dissolution. At the cite; calcite 43&70 itself is readily dissolved and distributed throughout the rock 9-* 841* &9*75.11&7 89&'1.8-*) .3 9-* matrix. +4:3)& surface, water and carbon dioxide form reprecipitated by percolating pore fluids. .8 Intergranular pores are also present in carbonic-* acid. )*&1*7 .3 9-* -.1.55.3*8 9.43 -&8 *;41;*) +742 /:89 574;.).3, 7:3*1 ,74:5 -&8 9*&2*) :5 rocks. porosity94 .3(7*&8.3, .98 8:55479 (&5&'.1 carbonate 9*(-3.(.&38 +47 Intragranular 43&70 6:.52*39 <.9- 9-* :897&1.& '&8*) (425&3> Carbonate rocks are, therefore, more may be common within carbonate grains Dissolution carbonic acid can&11.&3(* lead .9> +47 9-* 2.3.3, 8*(947 <.9- 9-* *89&' 574;.).3, 9*(-3.(.&38 94 .98 14(&1 .3):8 .9* by $4708 .3 & 897&9*,.( likely to undergo dissolution, mineral- as97> a primary pore type, or may develop impressive karst topography, includ1.8-2*39 4+ & 2.3.3, ':8.3*88 :3.9 !-* 5&793*78 B .3(1:).3, 4<*7 4<*7 to!-* 5&.7 <.11 )*1.;*7 (4251.&3(* *):(&9.43 ogical and recrystallization. grains, such as shell fragments, sinkholes, caves and intricate drain3*< replacement :3.9 .8 -*&)*) '> 11&3 $&7) when 8.& &1*4 6:.52*39 &3) *9&18 ing ! &3) !7&)* 88*882*39 +47 9-* These vary according to temperadissolved. Moldic porosity age patterns.&3) Inactive karst systems, &3) effects *3(425&88*8 89&++ .3 8&1*8 &3) are partially 9 8&>8 9-* 5&793*78-.58 <.9- 9-*8* :897&1.&3 .39*73&9.43&1 2&70*98 or&8 ture, pore-fluid chemistry and pressure. preserves the -&;* shapes of dissolved shell 574):(9 8:55479 (425&3.*8 574;.)*) /4' 45547 <*11 &8 97&)* :5 80.11.3, &3) ! Carbonate diagenesis commonly begins fragments constituents. Carbon-&8 94 .39*73&9.43&1 (*79.+.(&9.43 +47 9-* -.1.5 43&70 8&>8 9-* 24;* :3)*71.3*8 .98 9:3.9.*8 or 94 other

+4:3)&9.43 8(-41&78 with marine cementation and boring by ate<*11 rocks have a far2&354<*7 wider range7* 5.3* )42*89.( 2&70*9 7*(4,3.9.43 4+ ;*7> ':11.8- 57485*(98 +47 &8 typically '4489.3, 9-*.7 organisms at the sediment-water inter- of6:.7*2*398 .3 9-* +.*1) 4+ -*&;> *6:.5 grain shapes than most siliciclastic 2.3.3, &2.)89 +&;47&'1* 2*9&1 57.(*8 &3) .9* $4708 <.11 :9.1.?* .98 1&70 ):(& face prior to burial. It continues through rocks. Clearly, several types of porosA& ;*7> -.,- .39*7*89 .3 .3;*892*398 .3 9-* 2*39 2&.39*3&3(* 9.43 .9> (&25:8 .3 1&70 3479- 4+ &3.1& shallow burial with cementation, dis- ity may$.9- .98 A!*(-3.(.&3 +47 9-* $471) coexist in a carbonate reservoir, 2.3.3, .3):897> C .3 57*5&7&9.43 +47 A*= 94 )*;*145 & <471) (1&88 *):(&9.43 (:7 solution and recrystallization, and then ranging from!-* +4:3)&9.43 574):(*8 7.(:1:2 )*8.,3*) 94 85*(.+.( (1.*39 7*6:.7* 543*39.&1 ,74<9- .3 9-* 2.3.3, 8*(947 C 74/*(9 C deeper burial where dissolution process !-* (425&3> 8**8 9-* :3.9 &8 A& 43* 9*(-3.(.&38 +47 43&70 6:.52*39 &3) 2*398 +47 9-* 438-47* &3) 4++8-47* 4.1 &3) es8945 known as pressure solution may form cave-sized, which 8-45 )*9*72.3*) 94 574;.)* 14>&1 microscopic 49-*7 ! to)*&1*78 &74:3) 9-* makes <471) ,&8 2.3.3, &3) *3*7,> 8*(9478 features as stylolites, which are pressure- porosity and &9*75.11&7 permeability estimation 8:55479 <.9- 9-* 4'/*(9.;* 4+ *89&'1.8-.3, 9 :8*8 9-* &557*39.(* 8*7 !-* 7:3*1 ,74:5 *3(425&88*8 solution seams. calculation of reserves extremely dif& )**5*7 7*1&9.438-.5 '*9<**3 43&70 and ;.(* 9*(-3.(.&38 97&.3.3, 574,7&2 &3) 7:3*1 !*(-3.(&1 *7;.(*8 -.1.55.3*8 ficult. Idealized carbonate porosity types &3) .98 2.3.3, (:8942*78 C &551.*8 &9*75.11&7 &88*882*39 94418 <-.(- .8 1.(*38*) +47 9-* *=5479 4+ When confronted with core samples summarized by Choquette and Pray !-* &9*75.11&7 )*&1*7 .8 or &184 are &3) 1*&73.3, 89&3)&7)8 94 *38:7* 9-&9 .1.5.34 5*78433*1 &3) 7:3*1 !*(-3.(&1 image logs from.98 carbonate later modified by Lucia (1995) 897*3,9-*3.3, &(9.;.9.*8 rocks, .3 89&++ even 97&.3 (1970), ,7&):&9*8 4+ 9-* 574,7&2 -&;* to 9-* *7;.(*8 &354<*7 <-.(- .8 & (42 Borehole+47 resistivity images, &3) ilcasual observers notice the tremendous quantify interparticle pore space (Figure Figure .3, <.9- .98 43&70 4:3)&9.43 389.9:9* 7*6:.7*) 80.118 94 '*(42* &9*75.11&7 51.&39 6.(425&3> 9-* *2514>2*39 the different types of fracvariety of pore types and sizes, and the 5).9*(-3.(.&38 94 8:55479 2.3.3, .3):8 lustrating <-.(- 4++*78 >4:3, .1.5.348 /4' 45547 43 -.7.3, 4+ .1.5.34 5*78433*1 43 '*-&1+ identified from the image (left) and irregular of9-*2 pores.<.9- Pores in 9:3.9.*8 distribution '> 574;.).3, 034<1 97> ,74<9- 349 431> .3 9-* -.1.55.3*8 tures 4+ (1.*398 &8 <*11 &8 & +47*.,3 <470 5*72.9 in 3D inTechlog (right). clastic rocks occur predominantly be- Another feature of carbonate rocks is diplayed *),* 80.118 &3) ;&1:*8 ':9 &184 4;*78*&8 â&#x2013; 85438478-.5 5&>7411.3, &3) 7*14(&9.43 â&#x2013;

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paleokarst, may form reservoirs dominated by angular rock fragments produced during cave collapse. For the oil industry, karst can be a mixed blessing— caves can cause catastrophic bit drops and fluid losses during drilling, but karst also can result in extremely high porosity and permeability (Trice, 2005). Given the heterogeneity of carbonate rocks, it is not surprising that hydrocarbon production from these formations often is heavily influenced by the presence of faults and fractures. A natural fracture is a surface or a planar discontinuity, in which a loss of cohesion has taken place due to tectonic movements, erosion or some other physical deformation. Normally the term fracture, contrary to fault, refers to the rupture with no noticeable displacement along its surface. Natural fractures can have positive, neutral or even negative effects on fluid flow through a reservoir depending on their nature, opening or other physical characteristics. All kinds of reservoirs can be subjected to the process of fracturing, and this process, at least at a localized and limited level, has been reported in almost all types of reservoir formations. Their positive or negative effects on the fluid flow mechanism significantly depend on whether they are open or closed as a result of diagenetic processes such as mineralization and compaction. In such a system fractures can act either in a positive role, increasing the total effective permeability and enhancing the

fluid flow from the matrix toward production wells, or in a negative role, in which they increase permeability anisotropy, or provide flow baffles (Van GolfRacht, 1982). In addition, open factures can provide the main storage capacity in reservoirs with low matrix porosity. To achieve an accurate description of a fracture system a proper geological model is required. It is necessary to review the tectonic history and geological deformation of reservoir units. However, developing a geological model for fractured reservoirs still remains more complicated than traditional sedimentary models, as the evaluation of petrophysical characteristics is highly variable and uncertain. Borehole images are the most accurate tool used to identify open or closed fractures, fracture orientation, density and aperture (Figure 6). Evaluation of carbonate rocks entails full petrophysical and stratigraphic analysis of well logs and seismic data (Figure 7). New technology and methods greatly enhance production by offering interpreters a better understanding of how reservoir heterogeneity affects performance and which zones contribute to flow. Perhaps the most significant contributions come from a combination of core, nuclear magnetic resonance (NMR), borehole images, Elemental Capture Spectroscopy and Production Logs, together with high resolution seismic data. Schlumberger is addressing carbonate issues more aggressively through their Schlumberger Dharan Carbonate Research Center (SDCR), Saudi Arabia. Innovative information-technology solutions for virtual teamwork will accelerate research progress and dissemination of successes worldwide. Key areas of activity for the SDRC include land seismicdata acquisition, NMR and Dielectric log interpretation, water management and well stimulation in carbonate reservoirs.

Choquette, P.W. and L.C. Pray, 1970. Geologic Nomenclature and Classification of Porosity in Sedimentary Carbonates. American Association of Petroleum Geologists Bulletin, V. 54, PP 207-250. Dunham, R.J. 1962.Classification of Carbonate rocks according to depositional texture. In ham, W.E. Classification of carbonate rocks. American Association of Petroleum Geologist memoir 1 pp 108-121 Embry A.F. and Klovan J.E., 1971. A Late Devonian Reef Tract on Northeastern Banks Island, N.W.T.,” Bulletin of Canadian Petroleum Geology 19, no. 4 (December 1971): 730-781. Ham W.E. (ed). Classification of Carbonate Rocks, American Association of Petroleum Geologists Memoir 1. Tulsa, Oklahoma, USA: AAPG, 1962. Lucia F.J. 1999. Carbonate Reservoir Characterization. New York, New York, USA: Springer Rankey, E. C., Reeder, S.L. & Garza-Perez , J.R., 2011. Controls on Links between Geomorphical and Surface Sedimentological Varaibility: Aitutaki and Maupiti Atolls, South Pacific Ocean. Journal of Sedimentary Research, 2011, V. 81, pp. 885-900 Trice, R. 2005; Challenges and Insights in Optimizing Oil Production from Middle east mega Karst Reservoirs. SPE 93679. Van Golf-Racht, T.D. 1982. Fundamentals of Fractured Reservoir Engineering. Amsterdam; New York: Elsevier. Williams, H.H. 1997. Play Concepts – northwest Palawan, Philippines. Journal of Asian Earth Sciences, Vol 15, Nos 2-3, PP251-273. Acknowledgements

References:

Figure 7: Correlations between borehole and outcrop features to seismic signals at micro-, meso- and macroscales. 56 Philippine Resources

Akbar, M et al. 2000. A Snapshot of Carbonate Reservoir Evaluation, pp 20-41 Oilfield Review, 12, no. 4, Winter 2000/2001.

I would like to thank Neil Hurly, Stacy Reeder and Fabian van der Werth for their figures and careful editing. ■

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Weir adds Linatex to range

eir Minerals has further expanded its product range with the addition of Linatex screening equipment to its portfolio.

Linatex, which has more than 50 years of screening technology and expertise, has tailored specific screening solutions for some of the world’s biggest mining companies, while Weir Minerals provides high-performance Linatex screen media to all sectors of the mining industry. After decades of development and field performance testing, Linatex have created tough, low maintenance and efficient screens and screen media. In the quest for higher throughput, modern minerals processing plants require equipment to be ever increasing in capacity. Weir Minerals is incorporating technology into screens and screen media to create lighter, energy-efficient and durable designs. “Our R&D focus has always been on delivering the highest-performance screens and screen media in the industry. New designs and materials to improve maintainability and increased longevity are always in the pipeline. In late 2012, Linatex will be releasing some exciting new screen media designs and polyurethane materials that will set a new standard in the industry,” says Chris Cable, Screen Media Manager for Weir Minerals. Chris Darwin, Screen Sales Manager for Weir Minerals Australia, says the company’s entire screening equipment range, including screen media, can be tailored to suit the individual needs of specific applications. “We have years of experience in mineral processing plants and our customers can be confident that the screening equipment we recommend will exceed their expectations and feed requirements.” With the benefits of high efficiency, high capacity, low headroom and low operating and maintenance costs, Linatex screens and screen media are ideally suited for heavy-duty applications in any mineral processing plants, including coal, hard rock, industrial sands and quarrying. Linatex vibrating screen range and features Dewatering screens Single and double deck banana screens Single and double deck horizontal screens. ■ Philippine Resources 57

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Sandvik’s DE811 Rig Ideally Suited For Philippine Work Amsterdam-based Swedish giant Sandvik employ 50,000 in 130 countries, and have a product range which covers mining, construction and materials. Sandvik’s most recent addition to their range of surface multipurpose exploration drill rigs, the DE811, features the next generation of innovative design, increasing both productivity and safety. The DE811 is the successor to the already proven DE810, and features that contribute to the DE810’s operational flexibility have been preserved and enhanced with the DE811. The DE811 handles reverse circulation drilling and core drilling with equal efficiency and can be used in surface applications such as exploration, directional, coal bed methane (CBM) and geotechnical drilling. Of particular interest is the positioning of the electronic control system and console on the boom. This allows the operator to operate using a range of positions, up to 3 m (10 ft) from current position. They can also adjust the height and position for better viewing angles, and enjoy user-friendly fault diagnostics. By combing operations combined on joysticks, drilling and rod handling operations are now easier and safer. The DE811 is also more powerful and features a new high torque rotation unit, a higher horsepower engine and improved hydraulic circuit. This combined with greater depth capacity helps the DE811 raise the bar in this product area. ■

58 Philippine Resources

3M provides mine safety respiratory protection By: Leah B. Evangelista Safety has long been an issue in the mining industry. Even though mining today is much safer than it was in the previous decades, accidents in mines have always been highly profiled. When one visits a mine site, standard personal protective equipment prior to entering is a hard hat, safety shoes, reflective vest, and safety eyewear. However, more often than not, we neglect the importance of respiratory protection in mine sites. Philippine statistics showed that in the year 2005, more than 20,000 Filipinos died of chronic lower respiratory diseases (Philippines in Figures 2010, National Statistics Office). Even though we have a natural body’s defense mechanism, constant exposure to respiratory hazards would trigger weakening of this defense, resulting to a more prone respiratory system. Respiratory protection in mine sites is mostly used in areas were chemicals are being handled, where in fact, almost all areas in a mine site should require the wearing of respirators. Sub-surface mining requires a good ventilation system to dilute airborne contaminants and to force air stream in the mining work area. Both surface and sub-surface mining activities need protection against dust particles. A significant development in the area of personal respiratory protection is 3M’ innovative Vflex system, which has design qualities suitable for the mining industry. ■

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Responsible Mining Discussion on the Agenda at Davao Delegation from Mindanao’s largest city give a positive message to joint chamber audience in Manila.

On October 17th at a Joint Manila Chambers lunch, Davao government and business representatives stressed the drive to expand business in outsourcing, agriculture, tourism and alternative energy, mindful of the sometimes acute power problems in the area.

Conspicuous by its absence was any mention of mining and resources. This was swiftly addressed by Julian Payne, President of the Canadian Chamber. He asked whether Davao was open for mining, or the support services to mining. The answer was clear and positive. Whilst a broad city guideline forbids mining, exceptions are allowed including a project by Holcim. Also support work for mining projects in the four surrounding provinces of Davao Del Sur, Davao Del Norte, Bukidnon and Cotabato is welcomed. In fact mining itself is viewed with increasingly less anxiety. Sebastian Angliongto, Honorary Life Chairman of the Davao Chamber said “the views are changing, and previously anti-mining governors and mayors are pro-mining”. This was reinforced by Jason Magnaye, Officer-In-Charge of the Davao City Investment Promotion Center: “what people are saying now is that they want responsible mining”. The benefits to Davao are obvious. It’s the major city in Mindanao, with a law and order thanks to strict governance under the Duterte family’s leadership. It has strong universities whose 15.000 graduates each year would rather stay back home that migrate to Manila or abroad. Mining could provide a local boost that keeps more locals local. Brian Lane, of Asian Tigers, posed the other crucial question: “how serious is the security threat?”. The ensuing discussion drew out some broad conclusions: (1) that the new peace plan with Muslim separatists was a positive move, (2) that Davao was a long way from the danger areas, (3) that Davao, under the recent mayorships of the Duterte father and daughter, was very safe and (4) that better PR to get this message over is important – as Brian Lane said “perception is everything”. There is no doubt that Davao provides a pleasant, low-cost base of operations for a wide range of companies. The clear determination of Davao’s business leaders to eradicate misperceptions and create opportunities means that the city is worth looking at, and any development of mining in Mindanao will naturally accelerate its rapid growth. All in all Davao seems to have an open mind about mining. The largest taxpayer in Davao is Holcim’s cement quarry and plant, and Tampakan mining company Sagittarius have been invited to speak at the 2nd Davao Investment Conference which runs from November 15-17th (see www.davaochamber.com). It’s worth a look…..? ■