April 9th: Philex Mining named one of PH’s best in CSR advocacy.
MANILA —Philex Mining Corp. has been named as one of the Philippines’ top companies for its social and environmental projects, garnering the ninth place in the Best Corporate Social Responsibility (CSR) category in a latest poll conducted by the Hong Kong-based FinanceAsiamagazine.
“This honor will continue to inspire our employees to keep on doing what is right in the right way for the right reasons,” Eulalio Austin, Jr., president and CEO of Philex Mining, said. “This is also a validation of the company’s CSR advocacy as echoed in the environmental and social projects it undertakes.”
The latest award is the second time that the country’s biggest gold-and-copper producer was cited by FinanceAsia for its excellence in CSR. In 2012, Philex Mining clinched the fifth and ninth places in the Best CSR and Best Corporate Governance categories, respectively. These awards underscore the company’s commitment to responsible mining, which focuses on operational excellence, environmental stewardship, and social responsibility, according to a statement from Philex.
The FinanceAsia magazine poll, conducted on hundreds of investors and analysts across Asia for over a month from February, also ranked Napoleon Nazareno, president and CEO of the Philippine Long Distance Telephone (PLDT) Co., as the country’s Best CEO. Mr. Nazareno has led the growth of PLDT, a Philex Mining sister-company, since 2004.
PLDT also ranked No. 1 in the categories of Best Investor Relations and Most Committed to a Strong Dividend Policy in the FinanceAsia’s Best Companies in Asia Poll, now on its 14th year, bagging the same awards for the sixth year in a row.
“This recognition affirms how committed we are in consistently adding value to the investments of our shareholders,” Manuel V. Pangilinan, chairman of PLDT and Philex Mining, said in a statement. “As an example, PLDT has maintained a policy of declaring 100 percent of its core income as cash dividends for shareholders, with cumulative payout reaching P310 billion for the past 10 years.”
Philex Mining has tied with another sister-company, Metro Pacific Investments Corp. (MPIC), in its latest award, as well as with the multinational fast-food chain Jollibee Foods Corp., Semirara Mining Corp., and SM Prime, the parent company of the SM Group’s shopping malls. Another sister-company, the Manila Electric Co. (Meralco), was co-listed as fourth-placer in the Best CSR category while MPIC was also cited in the Best Managed Companies category at No. 10.
The CSR advocacy of Philex Mining is embodied in its Social Development and Management Program (SDMP) and Community Development Program (CDP), which are geared toward the development of the host and neighboring communities where it is permitted to explore and operate. The SDMP is implemented in areas there Philex Mining has operations while the CDP is applied where the company has exploration activities.
For this year, Philex Mining’s Padcal Mines, in Benguet, has P86.5 million for its SDMP, P20.1 million for the Information, Education, and Communication (IEC) campaign, and P11.1 million for research activities dubbed the Development of Mining Technology and Geosciences Program (DMTG). In 2013, Padcal spent a total of P58.2 million out of the P74.04-million budget set aside for its SDMP, IEC, and DMTG.
PLDT was also ranked second in the Best Corporate Governance, advancing two steps up from its last year’s ranking of fourth, Best Managed Company (from No. 7 last year), and Best CSR categories. This is the first time that PLDT was cited for its CSR efforts, particularly on disaster relief and rehabilitation, and on education, poverty alleviation, and social entrepreneurship.
April 9th: Gov’t eyes P2B from sale of assets.
MANILA, Philippines - The government is hoping to raise P2 billion this year from the sale of land and mining assets.
Newly-appointed Finance Undersecretary Jose Emmanuel Reverente said the Aquino administration is embarking on an aggressive privatization program with at least nine government assets already identified for disposal until 2016.
He refused to name these assets but said these could include military camps.
Reverente said the Department of Finance is consulting with the Armed Forces of the Philippines and the Bases Conversion Development Authority regarding the possible sale of military bases.
“I’m working with the Privatization Management Office to dispose off more government assets this year. We want to support the government’s revenue efforts. We plan to raise P2 billion a year up to the end of President Aquino’s term in 2016,” Reverente said.
Reverente said the nine assets have yet be valued so it could proceed with the government’s planned divestment program.
“Some of the assets, if not all, have outdated valuations. So that’s why we’re working with transaction advisers to determine the value of those assets. And that’s the first step, so this is like the PPP center doing a project feasibility,” Reverente said.
“So once we have proper valuations we can tell the market now have what we call a reserve price. Our goal is to have the valuation exercise completed at the end of the year,” he added.
The BCDA late last year said it was developing a master plan for the partial privatization of the 150-hectare Camp Aguinaldo and other military camps.
The BCDA is mandated to transform former military bases into alternative productive civilian use.
Aside from these, Reverente said the government may also sell shares in some mining companies which include Semirara Mining Corp. and the Nonoc Nickel Mine in Surigao City.
“We have not made a determination whether we will sell it or not. We have about 0.2 percent, it’s not a market mover,” he said.
By Zinnia B. Dela Peña (The Philippine Star)
April 8th: 2013 metals output slightly up.
THE PHILIPPINES’ total metals output last year rose slightly in value terms, despite lower prices, mainly on the back of better gold production, the Mines and Geosciences Bureau (MGB) said on Monday.
In an e-mail to reporters, MGB Director Leo L. Jasareno said that metals output value reached P99.33 billion in 2013, up from the previous year’s P99.04 billion.
Broken down, nickel direct shipping ore and sulfides contributed P41.04 billion to last year’s output, or 41.31% of total. This level was, however, lower than the P45.03 billion recorded in 2012.
Meanwhile, gold output last year was valued at P32.44 billion, or 32.66% of the total. This total was likewise lower than the previous year’s P32.72 billion.
Copper contributed P22.36 billion to the output to comprise 22.51% of the total production value, up from P15.55 billion in 2012.
Lastly, silver, zinc, chromite and iron ore jointly made up the remaining P3.5 billion of last year’s output.
“The main difficulty in 2013 was the downtrend of the metal prices. The precious metals gold and silver, and the base metals copper and nickel all recorded negative movements during the year,” Mr. Jasareno said.
“The average price of gold went down by 15.19%, from $1,669.71 per troy ounce in 2012 to $1,416.10 per troy ounce in 2013. Nickel prices likewise declined by 15.2% from $7.99 per pound to $6.78 per pound,” he noted.
Hence, the total metals output value of the country was pulled down despite production increases in volume terms recorded among several metals, said the MGB chief.
Production of gold, for one, went up 18% to 17,248 kilograms (kg) last year from 14,596 kg the year before, the data showed.
“The improved standing of the yellow metal was due to the entry of the Didipio copper-gold project of Oceanagold Philippines, Inc. in Nueva Vizcaya to the production stream in 2013,” the MGB chief explained.
“Its reported output was 2,069 kilograms with an estimated value of P3.83 billion,” said Mr. Jasareno.
Oceanagold is the first financial or technical assistance agreement (FTAA) holder in the country to commence commercial production.
“The return of the Teresa Gold Project of Lepanto Consolidated Mining Corp. in Benguet Province to the production stream on March 2013 also enhanced the overall gold output,” Mr. Jasareno added.
“Total production volume of the project grew by 18% from 14,596 kilograms in 2012 to 17,248 kilograms year-on-year,” he said.
Production of copper concentrate last year also went up 40% to 376,106 dry metric tons from 268,046 DMT in 2012.
Nickel sulfide ore output also stood firm in 2013, Mr. Jasareno noted, increasing by 10% year on year to 45,624 DMT.
The official partly attributed the rise to the entry of the new hydrometallurgical processing plant of Taganito Mining Corp. (TMC) in October 2013 in its Surigao del Norte mine project.
Declines in output volume were however recorded in other metal products. Notably, iron ore production dropped by 31% annually to 793,130 DMT last year from 1.148 million DMT in 2012.
Chromite production also went down by 29% annually to 26,164 DMT in 2013, just as silver output declined by 19% year-on-year to 40,043 kg from the 49,211 kg recorded in 2012.
By Bettina Faye V. Roc, Business World.
April 9th: JFC to govt: Reconsider proposed tax policy on mining.
THE Joint Foreign Chambers of the Philippines (JFC) is opposing reported proposals on a new fiscal policy for minerals development, which mandates a higher government share on mining revenues and ensures a take on mining revenue regardless of profitability, and is urging the administration to reconsider.
“The Joint Foreign Chambers of the Philippines would like to express its concern over statements appearing in the media, over the past few months, concerning the administration’s proposed new fiscal regime for minerals development. The media articles quote key members of the Minerals Industry Coordinating Council indicating that the Council has approved a concept which would levy either a 10-percent royalty on gross receipts, or 50 percent of adjusted net mining revenue, whichever is greater, plus either a windfall profits tax or surcharge on any residual profits…and we urge the administration to reconsider its proposals in this light as this will have an extremely negative impact on future investments in the mineral sector,” read the JFC statement.
The foreign chamber cites a survey by the Fraser Institute of global minerals industry leaders stating that the Philippines’s tax regime for minerals is the third most negative in the world.
The JFC noted another study by the International Monetary Fund stating that the Philippines’s fiscal regime “already captures a 60 percent [+] Average Effective Tax Rate,” in other words, it already takes in excess of 60 percent of the net discounted cash flow of a mining operation over its life.
According to industry studies, the country’s fiscal regime is already uncompetitive with other developing-country jurisdictions such as Peru, Chile, South Africa, Indonesia and Papua New Guinea, the statement read.
The joint foreign chamber further urge increased consultation of the Mining Industry Coordinating Council with the private sector.
Head of Mining and Geosciences Bureau Leo Jasareno, in a radio interview late in March, said the draft bill lays out a 10 percent of gross sales or 50 percent to 55 percent from the net revenue profit scheme.
The latter would bring the percentage sharing at 55:45 with mining companies, Jasareno said in the radio interview. The windfall profit could be defined as exceeding 60 percent of the revenue target, and 50 percent of the 60 percent excess would go to the government.
By Catherine N. Pillas, Business Mirror.
April 9th: OceanaGold’s Didipio Mine hits production milestone.
KASIBU, Nueva Vizcaya—During the recent inspection tour at the Didipio Mine in this mineral-rich upland town, OceanaGold (Philippines) Senior Vice President for Communications and External Affairs Ramoncito “Chito” Gozar informed the BusinessMirror about the project’s production milestone of 100,000 dry metric tons (MT) of copper shipped to international destinations since the commencement of the mine’s operation last year.
“The 18th shipment to international destinations through Poro Point in La Union has registered the first 100,000 MT tons of copper concentrate exported,” Gozar said. The Didipio operations have produced 66,277 ounces of gold along with 23,059 MT of copper, which exceeded the guidance range of 18,000 to 20,000 MT. In 2013 the operation milled the planned 2.5 million metric tons of ore and achieved the target recovery rates.
“I am very pleased with our performance last year, a transformative year for OceanaGold where we brought on line our newest asset Didipio, which continues to perform well. The company closed the year with record gold production, strong copper production and record revenue even despite a significantly lower average gold price received than in previous years,” said OceanaGold Managing Director and CEO Mick Wilkes.
For the whole year of 2013, the Australian mining firm reported gold production of 325,732 ounces slightly exceeding its 2013 gold production guidance range of 285,000 to 325,000 ounces. On a co-product basis, the company produced 447,858 gold equivalent ounces. The reported revenue of $553.6 million was a result of higher gold sales and copper sales from Didipio’s first nine months of commercial production.
“OceanaGold has transformed itself into a multinational gold producer with a solid mineral endowment. We will continue to develop new reserves and resources at our existing mines from in-pit and near mine exploration. We will focus on satellite projects located within the current tenements and pursue selective resource development opportunities that are complementary and add low cost gold reserves to the business,” Wilkes added.
Looking ahead to 2014, OceanaGold plans to mill 3 million tons of ore and expects to increase throughput rates to 3.5 MT per annum and is implementing initiatives to increase productivity and drive efficiencies at the operation to further reduce costs.
“OceanaGold will continue to further strengthen the balance sheet and position the company for new value-added opportunities while working closely with all its stakeholders to deliver positive results in a safe and sustainable manner,” Gozar said.
Written by Leonardo Perante II / Correspondent, Business Mirror.
April 4th: Still no rehab plan set for abandoned mine site in Rapu-Rapu, Albay
LEGAZPI CITY—Almost a year after a South Korean-Malaysian mining firm abandoned its gold-and-copper mining operation in the island town of Rapu-Rapu in Albay, the mining operators still have not submitted their rehabilitation plans to the Philippine government in compliance with Republic Act (RA) 7942, or the Philippine Mining Act of 1995.
This developed even as a former Rapu-Rapu councilman and a former official of the Rapu-Rapu Minerals Inc. (RRMI) and Rapu-Rapu Polymetallic Project (RRPP) backed by the Integrated Bar of the Philippines Albay chapter sued the mining firms in January for P116 million in damages. The case also implicated five top officials of the Department of Environment and Natural Resources (DENR), headed by Secretary Ramon J.P. Paje, to order RRMI-RRPP to pursue their obligations to their host community.
Mines and Geosciences Bureau (MGB) Regional Technical Director Theodore Rommel Pestano said until now, the Rapu-Rapu mining operators have yet to submit the Final Mine Rehabilitation Decommissioning Plan (FMRDP), which would serve as a guide on how to rehabilitate mined-out areas after the mining operators ceased operation in August last year.
The first FMRDP proposed by RRMI in 2010 with a $4-million fund had been rejected by the DENR secretary as insufficient, while the revised second FMRDP submitted in August last year with a proposed upgraded budget to $8 million had also been rejected for “miserably failing to meet the projected rehabilitation performance based on the DENR’s Administrative Order 2005-07 which would address rehabilitation and include strategies to address a long-term stability, sustainability and time frames for the assessment of rehabilitation activities, said the MGB official.
Former RRMI Vice President Cecilia A. Calleja assailed the delay on their filed cases against RRMI-RRPP, saying until now the Regional Trial Court has not scheduled any hearing yet nor issued the sought Ex-Parte Temporary Environmental Protection Order and Ex-Parte Preliminary Attachment over properties of the mining firms.
She expressed fear that the delay may one day find the host town left behind without the rehabilitation as experienced by other mined provinces leaving the environment of the host communities damaged and ruined with no choice but for the host communities to clean up the mess left behind.
Albay Gov. Joey Sarte Salceda said in an e-mail that as chief executive of the province that the DENR never informed him of its plan or action taken regarding the closure of the Rapu-Rapu mining site and the proposed rehabilitation plans.
Salceda was reacting to a published report that two groups in Albay including his political adviser former Guinobatan Mayor Christopher Flores was among the cause of the delay in the rehabilitation of the Rapu-Rapu mined-site as the two groups reportedly are fighting over the rehabilitation control involving P700 million.
A known environmentalist who led protest rallies while a congressman during the early days of the Rapu-Rapu mining operation in 2005, Salceda warned that the FMRDP should conform with the standard set by the province.
The operation was started and operated by the Australian-owned Lafayette Mining.
During the first year of Lafayette’s mining operation, a mine-tailing spill occurred tseparately on October 11, and 31, 2005, when a high content of cyanide was discovered resulting in the fishkill that cost the livelihood of small fishermen in Albay and nearby Sorsogon province. Consumers in the two provinces refrained from buying fish for food for almost a month.
The toxic mine-tailing disaster forced then-President Gloria Macapagal-Arroyo to create the Bastes Commission to investigate the minetailing spill, headed by Sorsogon Bishop Arturo Bastes. The commission had recommended the closure of the Rapu-Rapu mining site which Malacañang ignored, however, with a minor sanction from MGB, which merely suspended the operation of the Lafayette Mining Co. for a few months, forcing the Australian investors later to sell out to the South Korean-Malaysian investors.
The documents said the Rapu-Rapu mining was started in 2005 for an eight-year operations to end in 2013 involving gold, copper, silver and zinc. It said, however, that the present funds in the FMRDP is only P158 million, very much behind the P700 million estimated for the full rehabilitation of the site.
In August 22, 2013, Paje reportedly visited Albay where he rejected for the second time the FMRDP presented by RRMI-RRPI as allegedly grossly insufficient and labeled it as tantamount to abandonment of the 180-hectare mined-site and open pit.
Paje has strongly recommended the conversion of the Rapu-Rapu mine site as an ecotourism project instead of restoring it as the original agricultural land.
The decommissioning of the Rapu-Rapu mine operation took effect on August 30, 2013, reportedly with an income of P65 billion generated during its seven-year operation that ended in 2012.
Written by Manly M. Ugalde / Correspondent, Business Mirror.
April 4th: Red Mountain Mining submits Batangas gold mine development permits.
Red Mountain Mining (ASX:RMX) has submitted its Batangas gold mining project feasibility application to the Philippines Government for approval, thus moving once step closer to production and cash flow.
The permitting applications include the Declaration of Mining Project Feasibility report, Exploration Report and the Environmental Impact Statement that form the submission for the grant of an Environmental Compliance Certificate.
An expanded 10 year mining operation is sought, which will initially focus on mining and processing inventory from the South West Breccia mineral resource, on the Lobo Mineral Production Sharing Agreement.
Following this, mining and transporting to Lobo, and processing of the Kay Tanda West mineral inventory would take place.
It is anticipated that additional resources from Kay Tanda, then lower grade stockpiles will be mined, transported and processed out to year 10 of the operation.
Red Mountain has a dedicated Project Team focused on detailed mining design and project funding, as well as resource definition.
Red Mountain Mining Managing Director Jon Dugdale commented:
“The submission of these very important permit applications is another key milestone for the Company. The aim is to continue feasibility studies and complete detailed design at the same time as progressing the project to final permitting so that financing and development can commence immediately after they are both achieved.
“Meanwhile we’ll continue our drilling campaign that is testing high grade targets at the Lobo prospect, and elsewhere, with the objective of increasing resources and upgrading the mining inventory available for the Batangas Gold Project.”
The total resource at Batangas hosts 5.78 million tonnes at 2.2 g/t gold, for 408,000 ounces – for a $10 million company with significant exploration upside.
The recent Scoping Study established Batangas as a low capital cost project with attractive early cash flow generation and a quick return on capital.
The estimated capital cost of just $16.7 million is modest, while the IRR of 70% presents a very worthwhile investment.
This is highlighted by the Red Mountain’s decision to proceed with a Definitive Feasibility Study; construction is targeted for early 2015.
In addition, the company’s exploration drilling campaign, testing high grade targets at the Lobo prospect, could further boost the project’s economics.
The submission of mine development permits is another important step in the path to production and profits, which, in a testament to management, is progressing remarkably smoothly.
by Proactive Investors, Australia.
April 3rd: Responsible mining is not an oxymoron.
It is hard to assign a time or date to it, but at a certain point in the last half of the 20th century, mining acquired a highly negative reputation in this country.
Prior to that point, the mining industry was a well-regarded industry in this country, with companies like Benguet Consolidated Mining Co., Lepanto Consolidated Mining Co., Atlas Consolidated Mining and Development Corp. and Philex Mining Corp. enjoying the respect of the nation at large and the shares of the stocks of such establishments were labeled blue-chip shares by the investment and financial communities. Because the names of John Hausserman, Col. Andres Soriano and Henry Brimo were associated with those companies, the mining industry was regarded with respect and treated with dignity.
No longer. Mining is a six-letter word, but today, for some influential sectors of Philippine society, it might as well be a four-letter one. The attitude toward the mining industry in those sectors has become so negative that the mining industry might as well be deleted entirely from this country’s scheme of things. In perhaps the unkindest cut of all, responsible mining in the Philippines is said to be an oxymoron.
For an economist who accepts that environmental protection is part and parcel of economic development, this turn of events is truly lamentable. The mining industry should be regarded by economic planners and development administrators as a significant —if not a major—element of a minerals-rich country’s economic profile. Consider the things to which a mining industry gives rise. Employment, income, taxes, export revenues, raw materials supply for downstream industries and, last but not least, social benefits for the host local communities.
It goes without saying that these economic benefits, if not realized, will have to be made up for somehow. Economic development should be a plus-plus game.
The other major sectors of an economy—agriculture and manufacturing in particular—also have to grapple with the problem posed by the E word: effluent. All sorts of agricultural chemicals intended to raise output run off fields into streams, creeks and, eventually, rivers. One-half of this country’s largest inland body of water, Laguna de Bay, has been practically destroyed by the effluents flowing from the manufacturing establishments of Metro Manila and Rizal’s and Laguna’s cities and municipalities. As for the Pasig River and its numerous tributaries, ask Gina Lopez and former First Lady Amelia Ramos.
Are the government and the citizenry demanding that Philippine agriculture and Philippine manufacturing be phased out or, at least, prohibited from expanding? Do we hear them saying that responsible agriculture and responsible manufacturing are oxymorons?
Of course we don’t, and the reason is that every basket of eggs occasionally has a bad one. Filipinos breakfasts would be very sad events if entire baskets of eggs had to be thrown away because of the presence of badly laid ones.
Without a doubt, the worst of the bad eggs that the Philippine mining industry has thrown up is the Marinduque copper operation of Marccopper Corp., the Philippine subsidiary of a Canadian mining giant. The flow of Marccopper’s effluents into Marinduque’s rivers was so damaging to the island’s agriculture and environment that the dyed-in-the-wool opponents of mining believed thereafter that every other mining company was an actual or potential Marccopper replica.
Since the huge outcry over the Marccopper environmental debacle, the government—specifically the Department of Environmental and Natural Resources—has been very sensitive to mining-license applicants’ potential for causing damage to the environment. And, of course, there are Gina Lopez, my friend Christian Monsod and their colleagues—God bless them all—to raise red flags every time the need arises.
Is responsible mining an oxymoron? I don’t think so. Would the great mining industries of Canada, Australia, South Africa, Zambia, Chile and Peru – to name just a few countries—be there if their governments thought that there was no such thing as responsible mining?
The seemingly endless debate about the Philippine mining industry can be resolved and should be resolved. Future damage to this county’s environment is capable of being prevented within the context of enhancement of the mining industry’s contribution to this middle-income country’s economic development.
By Rudy Romero, Manila Standard Today.
April 2nd: ECR Minerals to start gold and silver drilling in Philippines next week.
ECR Minerals (LON:ECR) told investors that drilling will begin next week on the Itogon precious metals project in the Philippines, after a contractor has been signed up.
The company has hired Quest Exploration Drilling for a programme of up to 24 holes, with a mixture diamond and reverse circulation drilling totalling 3,850 metres.
ECR said the first phase of RC drilling is expected to start on April 7, and is scheduled to run until the end of the month. This first phase is expected to comprise just over 1,000 metres, and assay results are expected in May.
This will be followed by a second phase comprising 1,800 metres of RC and 1,000 metres of diamond drilling.
Chief executive Stephen Clayson said: “The first phase of our 3,850m 2014 drilling programme for the Itogon project is about to commence following an intensive period of preparatory work, which has included negotiations with relevant surface claimants, community relations activities and extensive road and access improvements.
“Assay results from this first phase of drilling will be a very important indicator as to the potential of the Itogon project, particularly as all historical drilling is reported to have been completed vertically and therefore does not provide a proper test of the steeply dipping veins identified at Itogon.”
By Jamie Ashcroft, Proactive Investors UK.
April 2nd: Sumitomo Metal to boost mineral output amid solid demand.
TOKYO — Sumitomo Metal Mining Company Ltd. — Japan’s second biggest copper producer — plans to increase its production of electrolytic copper in the financial year starting on Tuesday by 3.1% amid solid domestic demand.
The company said it aims to produce 436,000 tons of electrolytic copper in the year that started on April 1, up from output estimated at 423,000 tons for the year just ended.
“Domestic copper demand is solid, especially for electric wires used in infrastructure and solar power generators,” Masanori Ohyama, general manager of copper and precious metals sales department at Sumitomo Metal, told Reuters on Tuesday.
“We’ve practically sold out our refined copper for calendar 2014 through the long-term contracts,” he said.
The plans to boost output also came after rival companies won higher term contract treatment and refining charges (TC/RCs) — or processing fees — and premiums.
Pan Pacific Copper, Japan’s biggest smelter, said late last year that it won its highest copper processing fees in eight years in a deal with US miner Freeport-McMoRan Copper & Gold, Inc. for 2014, reflecting an anticipated growth in mine supply.
Pan Pacific Copper, a unit of JX Holdings, Inc. also said last year that it set its 2014 copper premiums for Chinese buyers mostly at $123, up 45% from this year.
Sumitomo Metal does not disclose details on its TC/RCs.
Sumitomo Metal also said it plans to produce less ferro-nickel in the fiscal year just begun due to maintenance at its Hyuga Smelting in Kyushu, southwestern Japan, as well as low quality of raw materials.
It targets production at 21,400 tons of ferro-nickel this year, down 4.4% from the previous year.
After Indonesia banned unprocessed exports of nickel earlier this year, Sumitomo Metal, like other Japanese nickel smelters, turned to nickel ore from the Philippines and New Caledonia as a replacement.
Ferro-nickel is an alloy made from iron and nickel and is used as a raw material to make stainless steel.
“The reduction is not because of shortage of raw materials,” the spokesman said.
“But since nickel content of Philippines ore is about 10% lower than Indonesian ore, our metal output will be slightly trimmed.”
Japan, home to some of the world’s biggest stainless steel producers, is facing higher costs and a scramble to find new nickel supply after Indonesia enforced an export ban on the raw material.
April 2nd: Reviving abandoned mines.
During the hearings of the House of Representatives’ Committee on Natural Resources heard last week, lawyer Ronald Recidoro, vice president for policy of the Chamber of Mines of the Philippines, proposed that funding for rehabilitation efforts of the country’s abandoned mines need not come from public coffers.
How it should be done. Philex Mining Corp.’s Bulawan Project, in Sipalay, Negros Occidental is a model rehabilitation project. The 33-hectare Tailings Pond No. 2 is now on a care-and-maintenance phase after its rehabilitation period from June 2002, when mine production was stopped due to lower metal prices. Wild ducks have also made the Bulawan’s 8-hectare TP1 as their sanctuary, following its decommissioning around 1998. TP2 is now also home to various fish species, while its surrounding areas have been reforested with endemic and exotic trees.
“The private sector is more than willing to take on the challenge of rehabilitating abandoned mines. Government just needs to allow it to be a viable business proposition” Recidoro said.
Before going on recess, the House of Representatives’ Committee on Natural Resources deliberated on House Resolution Nos. 397 and 627, both calling for an inquiry into the status of abandoned, inactive, and closed mines in the Philippines with the end in view of finding suitable remedial actions to finally rehabilitate these mines and bring them back for other productive uses.
From the 1960s up to and until the early 1990s, some thirty-one (31) large-scale mines have shut down prematurely due largely to poor metals prices.
Mines Bureau Director Leo Jasareno told the committee that his office had identified these 31 mine sites and already begun scoping studies in most of them. Of the 31 sites, 16 are under initial assessment. Only one site, the old Bagacay Mines in Samar, is undergoing actual rehabilitation at this time.
Jasareno also said that the MGB has already spent close to P150 million in rehabilitating the Bagacay mine site. One-third of this amount came from a loan from the Australian government. The rest was funded through appropriations.
The committee chair, Rep. Francisco Matugas of Surigao del Norte requested Jasareno to provide the committee with copies of the Bureau’s rehabilitation program for abandoned mines. Nickel Asia’s annual environmental program provides for progressive rehabilitation of mined-out areas.
Nickel Asia’s annual environmental program provides for progressive rehabilitation of mined-out areas. This involves re-contouring of the ground, provision of adequate topsoil, and re-vegetation using native species that are grown in nurseries at each of their operations. With proper care and maintenance, survival rates have averaged over 85%. The nurseries at their four mine sites have the capacity to grow about 200,000 seedlings per year of native species suitable for mine rehabilitation. In 2010, the combined environmental expenditures of NAC’s four operating mines amounted to P88.7 million.
In 2010, NAC’s rehabilitation program started on 14 hectares (has.) of mined-out areas with re-contouring and planting of over 16,000 seedlings. This brings the total mined-out areas rehabilitated to-date to 238 has. with over 500,000 seedlings planted. Outside of the mining areas, 48 has. have been planted with over 19,000 seedlings. RTN also maintains a 6 has. mangrove plantation with over 16,000 propagules planted.
Today, modern large-scale mines operate in accordance with ‘best practices’ techniques, and government regulation has greatly improved in monitoring both exploration and large-scale mining activities, as well regulating the final stages of decommissioning and mine closure.
Philex Mining’s Tailings Pond No. 1 at Padcal Mine, in Benguet, has been rehabilitated and is now a thriving bamboo forest.
The abandoned mines of the past, brought about by inadequate legislation before the passage of the Mining Act of 1995, pose environmental, health, safety and socio-economic problems for impacted communities that have no choice but to deal with the problem. Left unrehabilitated, abandoned mine sites may degrade to form hazards to human and animal life in the form of accessible adits, shafts and pits, as well as associated pollution, such as acid drainage, from old workings and stockpiles. Visual degradation is an issue in some areas, even if the site is not actively eroding. In some places, ongoing erosion can affect land stability, as well as impact revegetation efforts and groundwater quality.
Due to the unplanned nature of their closure, primarily because of depressed commodity prices, these mines were effectively abandoned by their operators and left unrehabilitated. Unfortunately, government regulators at the time lacked the tools to enforce remediation measures. These regulations came only in 1996, when guidelines on mine rehabilitation and decommissioning were incorporated in the implementing rules and regulations of the Mining Act of 1995.
Today, many of the abandoned mines, like Bagacay, Batong Buhay Gold and CDC-Basay, are under the control of the Privatization and Management Office (PMO)–taken over when the private contractor defaulted and the banks called on the government’s guarantee. While the PMO has plans to reopen the mines under its control, progress has been slow—to the detriment of the government and the impacted communities.
MGB rehabilitation works at the Bagacay Mines site, abandoned 21 years ago, include reforestation, mitigation of acid drainage, soil stabilization, construction of laboratory buildings, and erosion control. Marinduque Mining and Industrial Corp. (MMIC) operated the mine from 1956 to 1985, primarily for copper minerals. In 1986, MMIC entered into an Agreement with the Philippine Phosphate Fertilizer Corp., which, with Philippine Pyrite Corporation (PPC), operated the mine from 1986 to 1992 for pyrite concentrates. PPC ceased operation in 1992 due to rising operating costs.
Bagacay still has mineable pyrite reserves (estimated at 4.4 Million MT with an average grade of 35.27% sulphur). Copper reserves are estimated at 1.6 Million MT at an average grade of 3.33% Cu and 1.40% Zn.
By Manila Standard Today.
April 2nd: Is the Philippine Mining Industry Doomed?
After years of neglect, procrastination, and inaction, the mining industry is now threatened by an unattractive tax regime—a tax of 50% of the gross income of the mining company that has a “financial-technical assistance agreement with the government.”
Growth Rates, at constant 2000 prices
Industry Group 2011-2012 2012-2013 Annual
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011- 2012-
1. Copper mining 13.0 18.4 2.1 -13.9 2.0 40.3 62.2 34.4 7.9 20.6
2. Gold mining -68.2 -69.1 -14.7 -17.0 -20.3 7.1 19.0 14.3 -56.3 3.6
3. Chromium mining 85.8 -6.9 132.8 621.3 63.4 18.4 -44.0 -22.4 134.0 0.8
4. Nickel mining 106.1 61.7 8.5 -36.3 35.4 -6.3 -4.1 -37.0 38.4 4.1
5. Other metallic mining 53.7 60.1 40.7 13.9 -28.3 -2.5 -21.7 -10.0 33.7 -12.8
6. Crude oil, natural gas and condensage -3.0 -2.8 -19.4 4.4 -1.2 -7.3 2.0 -32.4 -4.6 -9.7
7. Stone quarrying, clay and sandpits 5.6 11.3 14.2 20.3 23.2 13.9 9.2 -1.2 12.9 10.7
8. Other non-metallic mining -16.1 13.2 5.7 24.8 -81.2 3.2 14.3 -0.4 4.3 -19.2
Gross value added in mining and quarrying -1.7 6.5 -1.2 2.8 -1.9 -2.7 4.7 -10.4 2.2 -2.5
Source: Philippine Statistics Authority
The industry already missed the golden opportunity when prices of precious metal soared to new heights as a result of the recent Great Recession. Now the price of gold and other metals have started to plummet.
Yet the Aquino III administration remains unperturbed. In its final days, it does not seem to care whether the mining industry prospers or dies.
The Philippines is one of the poorest performers in terms of total mineral product exports among its ASEAN-6 peers. The Philippines ranked second to the last, Vietnam being the last. Indonesia ranked first while Thailand ranked second.
The mining industry could play a key role in sustaining economic growth. It could be one of the new growth drivers, it could provide more decent jobs for the labor-surplus economy, and it could create new growth centers outside major cities since mining activities usually take place in remote areas.
The mining industry is important enough to deserve 32 out of 462 policy recommendations by the Joint Foreign Chambers of the Philippines.
MOST POLICY RECOMMENDATIONS IGNORED, ONLY TWO WERE COMPLETED
Of the 32 recommendations specific to the mining industry by the Arangkada Philippines Third Anniversary Assessment for the year 2013, only 2 have been completed. This is reflective of the Aquino III administration’s serious neglect of the mining industry. Predictably, these two are what one might call ‘low-lying fruit’:
? Recommendation 4: The Mines and Geosciences Bureau (MGB) should adopt the Philippine Mineral Ore Resources Reserve Reporting Code (PMORRC) patterned after Australia’s Joint Ore Reserve Committee (JORC) guidelines. The MGB and the SEC have adopted the Code.
? Recommendation 14: Complete the MGB review of regulations (DAO) to increase the allocation of direct mining and milling costs for community development from 1% to 1.5%. The DAO also permits the use of these funds for information, education and communication campaigns, and the development and mining and processing technology and geosciences. Operating mining companies are required to devote an amount equal to 1.5% of mining and milling costs to the Social Development and Management Plans (SDMP).
In addition, some 13 recommendations, mostly substantive ones, have been rated “Not Ongoing”, meaning no progress. Most have been rated ”Not Ongoing” as far back as 2011. Some examples:
? Recommendation 2: Establish regional level one-stop shops to process applications.
? Recommendation 3: Develop model best practice regions. Look for model regions to showcase best practices for LGUs working with the mining industry. Strengthen mining regulatory oversight in several key regions and encourage development therein of three to five world-class mines as showcase for best practices. Their success and economic growth should impress other regions.
? Recommendation 5: Seek to end LGU mining moratoriums. The private sector should request the Solicitor General to file a case against any LGU that declares mining moratorium. According to a DOJ order, LGUs cannot stop or go against a national policy.
KILLING THE MINING INDUSTRY SOFTLY
What’s killing the mining industry slowly are government inaction and policy uncertainty.
The potential contribution of mining to the Philippine economy is enormous. The country’s mining potential is ranked fifth in the world, covering an estimated 9 million hectares. To date, less than 2% of these have mining permits.
This sorry affair turned for the worse when President Aquino issued Executive Order 79 on July 2, 2012. Instead of making the hard decision, the president opted to declare a moratorium on new mining permits. Instead of forging ahead, he decided to stall.
Executive Order 79 provides that:
“No new mineral agreements shall be entered into until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect. The DENR may continue to grant and issue Exploration Permits under existing laws, rules, and guidelines.”
After almost two years, Department of Finance (DOF) Secretary Purisima has sprung a tax proposal: a tax of 50% of the gross income of mining company that has a “financial-technical assistance agreement with the government.” Is this a trial balloon or a serious administration proposal?
One can only assume that the proposal was a result of a comprehensive study on the appropriate taxing policy for the extractive industry and not simply a desire to raise more taxes. After all, there is more to taxation than raising revenues.
From the point of view of the mining industry, a concrete proposal, no matter how mindless, is better than no proposal at all. If the Aquino III administration is convinced that a tax of 50% of the gross income is fair, so be it. Let the investors in the mining industry vote with their feet. If they find the tax and sharing proposal reasonable, they will invest in the Philippines; if unreasonable, they will invest elsewhere.