MAC: Mines and Communities

Philippines: Payments to the military unveiled by Tampakan enquiry

Published by MAC on 2013-03-05
Source: Statements, Mindanews, Reuters, Philippine Star

As noted in our last update (Philippines: one mine disaster after another), after Presidential pressure the Department of the Environment has issued a conditional Environmental Compliance Certificate (ECC) to Xstrata's Tampakan mine.

How this will work in practice is open for question, but in the meantime the provincial government has reiterated its opposition (which surely means little has changed).

In a congressional enquiry into on-going violence around the mine (that has most recently seen a 'pro-mining' leader shot at), it was confirmed that the mining company is indeed paying up to 1 million Philippine pesos for army and paramilitary protection.

The Office of the President has finally intervened to force the Department of the Environment to issue the Environmental Compliance Certificate (ECC) to Xstrata's Tampakan mine. - See more at: Office of the President has finally intervened to force the Department of the Environment to issue the Environmental Compliance Certificate (ECC) to Xstrata's Tampakan mine. - See more at: one mine disaster after another), after Presidential pressure the Department of the Environment has issued a conditional Environmental Compliance Certificate (ECC) to Xstrata's Tampakan mine. How this will work in practice is open for question, but in the meantime the provincial government has reiterated its opposition (which surely means little has changed). In a congressional enquiry into the on-going violence around the mine (that has most recently seen a 'pro-mining' leader shot at), it was confirmed that the mining company is indeed paying up to 1 million Philippine pesos for army and paramilitary protection.Also as flagged up in our last posting, Philex Mining has been given permission to restart mining at its Padcal mining. Alledgedly the reason is that it is part of the remediation work after their waste spill.

Also - as flagged up in our last posting - Philex Mining has been given permission to restart mining at its Padcal project, allegedly because this is part of the remediation work caused by their waste spill.

At other troubledsites, OceanaGold - which had started to operate their controversial Didipio mine - has now stopped shipments while a tax dispute is settled (see: Philippine activists pressure human rights body over Oceana Gold mine).

The President has also ordered an inquiry into the deadly coal mining disaster, reported in the last update. Local people echo that cal,l but want the inquiry to look more widely at the dangers and impacts of the mining operations on Semirara island.

Kiblawan mayor confirms Sagittarius Mines link to escalating militarization in Tampakan

Joint Press Release

24 February 2013

Kiblawan mayor confirms Sagittarius Mines link to escalating militarization in Tampakan
Says military receives subsidy for allowance and operations

Koronadal City - Kiblawan Mayor Marivic Diamante disclosed that Sagittarius Mines, Inc. (SMI) is actually providing funds for the allowance and operations of the military and paramilitary groups within the towns of Kiblawan, Tampacan, Columbio, all covered by the SMI mining permit.

Diamante, in her testimony to the recently-held congressional hearing of the National Cultural Communities Committee, explained that a memorandum of agreement was signed in July 2006 by the local governments of Kiblawan, Tampakan and Colombio with SMI. This MOA was the basis of the deployment of 120 Civilian Armed Force Geographical Unit (CAFGU) men in the areas, and the creation of the military led Task Force KITACO. Task Force KITACO has been implicated in killings of B'laan leaders and anti-mining activists in the provinces.

The congressional hearing held in the provincial gym of Koronadal City was initiated by the Committee Chair Congressman Teddy Baguilat, Jr, to look into the intensifying militarization in the provinces and the series of killings of indigenous peoples within mining areas, with particular focus on the massacre of Juvy Capion and her two children in October 2012. The family of Capion is known to be leading the struggle for the B'laans ancestral domain, and against SMI.

SMI community-based security plan

The mayor's report corroborated the testimony of the Col. Norman Marcos Flores, new commander of the 1002nd Brigade, who confirmed that the Philippine Army is providing security to the KITACO growth area and to implement SMI's community-based security plan in Tampakan and Kiblawan.

The Philippine Army identified 128 incidents of security threat against SMI from 2007-2012, and they find this as a valid reason for their presence in the area to offer protection for the mining company. In exchange for this, SMI provides monthly allocation for the operations, for gasoline, and allowance for CAFGUs directly deployed in Kitaco areas. SMI has doubled the monthly allowance of each CAFGU from the government budget of Php2,700/month to Php5,400.

Government-SMI collaboration against mining-affected communities, indigenous peoples

Rene Pamplona, of Social Action Center (SAC-Marbel) said, "Instead of the military defending the people-it defends and protects foreign investments and kills community members The government is killing its own people because of this mining problem. Depite the killings, and the violence in SMI mining areas, the government still issued the environmental compliance certificate (ECC). "

SAC-Marbel is helping indigenous peoples in dealing with the killings and other human rights violations due to the militarization of their ancestral lands.

Alyansa Tigil Mina (ATM) sites of struggle officer Daniel Arias said: "SMI can no longer deny that these killings are rooted in the presence of its mining project and this was confirmed by the testimony of Mayor Diamante and the military. Truly, the blood of Juvy, and her children, Kitari, and all others who were killed are in their hands!"

"The situation painted by the testimonies of the military, the police, Mayor Diamante and the B'laans is very clear - the military is paid by SMI to protect its investment at all cost, even at the cost of the lives of the B'laans who are fighting for their land. And the Aquino government? It just issued the ECC to SMI. So the bias is clear. And it's tragic," Judy A. Pasimio of LILAK (Purple Action for Indigenous Women's Rights) added.

Philippine Miserior Parnerships Inc Anti Mining Campaign Advocacy Officer Atty. Macki Maderazon who was also present during the said hearing further said: "This deadly deal between the LGUs of Kiblawan, Tampakan, Columbio and SMI puts the human rights of the mining-affected communities especially those who oppose it at greater risk of being violated further.

"This is not in accord with the duty of the government to protect the human rights of the people against corporate abuses and with the responsibility of corporations to respect human rights under the UN Framework and Guiding Principle on Business and Human Rights to which our government is one of the signatories. Policy on greater accountability of mining corporations and affording remedies to victims of corporate abuses should now be considered in Congress. The current mining law and even the new E.O. 79 failed to consider this."

Meanwhile Rep. Baguilat in his closing message said that it is wrong to identify indigenous peoples who are opposing mining as bandits. He added, as an indigenous person himself that for them land is life and it is their right to defend their ancestral lands.

Baguilat concluded: "Kung anu ang desisyon ng pamayanang katutubo, yun ang dapat sundin at i-respeto."

Mayor Diamante last year posted a reward of Php300-thousand for the capture of Daguil Capion immediately after the killing of Capion's wife Juvy and two children. (Read: She added in her testimony that she did this so that community members will be motivated to point out where Capion can be found, as he is considered a bandit.

During the public hearing, a survivor (minor, not to be named) and witnesses to the Capion massacre last October 19 were interviewed by Congs. Nancy Catamco, Neri Colmenares, Luz Ilagan, and Manny Pacquiao. Thereafter, the representatives found serious flaws in the way the case was handled by the military and the police.

Sagittarius Mines Inc (SMI) is the local partner of Swiss Xstrata and Indophil for the Tampakan Copper-Gold Project. It has been awarded a mining permit over ancestral domains of the B'laans.

Tampakan Forum is a technical working group on the Tampakan mining issue.

For more information:
Atty. Macki Maderazo, PMP-AMC Advocacy Coordinator, 0922-8501873
Jaybee Garganera, ATM National Coordinator,  0927-7617602

Farah Sevilla, Policy Research and Advocacy Officer, 0915-3313361

SMI-Xstrata Mining Company funds paramilitary groups

by judy a. pasimio, LILAK (Purple Action for Indigenous Women's Rights)

24 February 2013

It is appalling to hear the confirmation of Kiblawan Mayor Marivic Diamante and military officers that Sagittarius Mines, Inc. (SMI) is providing funds for Civilian Armed Forces Geographical Unit or CAFGUs and military operations in the areas of its operations.

While this has always been the suspicion, given the scary and deadly enthusiasm of the military in eliminating opposition against SMI, the brazen admission of Mayor Diamante of the regular funds the local government has been receiving for Task Force Kitaco and the CAFGUs seems so callous of the plight of the B'laans under the hands of the military. Task Force Kitaco (Kiblawan, Tampakan, Columbio), according to the military, was created to provide peace and order in these areas.

The disclosure was made in the Congressional hearing of the National Cultural Communities Committee chaired by Cong. Teddy Baguilat, Jr. held in Koronadal City.

The funds, which are supposed to be used for the implementation of SMI's community-based peace and security plan, are given to the local government units. How much exactly is being received by the LGU from SMI, this was not disclosed by Mayor Diamante. But from the testimony of the military, it was revealed that there is a monthly allocation of P9,000 for operations, P11,000 for gasoline, and P5,000 allowance for each CAFGU. There are currently 60 CAFGUs deployed in the municipalities of Kiblawan, Tampakan and Columbio. Imagine how much is being given to the LGU monthly. And we need not imagine how rabidly Mayor Diamante and the military defend SMI, even in the face of the clear involvement of the military in the B'laan killings - Juvy Capion and her two sons; and lately, Kitari, the brother of Daguil Capion. Daguil Capion is one of the B'laan leaders who have been defending their ancestral domains, and fighting the SMI. Daguil is the husband of Juvy and the father of the Jordan and John. Mayor Diamante also admitted that she had to put up a bounty of P300,000.00 on the head of Daguil as incentive for the B'laans to turn over Daguil.

So it is SMI's hand which feeds the military and paramilitary operations in the B'laan territories. And it is SMI's hand which breeds violence.

But it is the Office of the President, through Exec. Secretary Paquito Ochoa, Jr. which hurried the DENR to issue the environmental compliance certificate (ECC) to SMI. And it is the DENR, through Secretary Ramon Paje, who finally issued the ECC. This, despite the recent killings of B'laans in SMI's mining areas, the volatility of the peace and order situation in these areas.

Go figure.

(Note: I attended the Congressional Hearing of the National Cultural Communities Committee chaired by Cong. Teddy Baguilat in Koronadal, Feb. 21, 2013)

SMI giving P1M monthly funding for CAFGUs, Bayan Muna rep says

By Edwin Espejo

Asian Correspondent

23 February 2013

Rep. Neri Colmenares was shocked when an Army colonel admitted to receiving P150,000 a month from a mining company in allowances for government militiamen deployed in and around the mining site while a town mayor also disclosed that Sagittarius Mines Inc (SMI) is likewise shelling out P850,000 for another 12 Citizen Armed Forces Geographical Unit (CAFGU) members.

"Now the cat is out of the bag. This explains why the Army and its CAFGUs are so obsessed with eliminating opposition to mining because they will lose millions if SMI-Xstrata operations stop," Colmenares said in a press statement.

The Bayan Muna party list representative said Col. Marcos Flores, commanding officer of the 1002nd Brigade, admitted that 60 CAFGU members are receiving "P2,500 each or P150,000 every month and regular gasoline allowance from a SMI-Xstrata.

"Mayor (Marivic) Diamante, who is rabidly supporting SMI mining without realizing the dire implications of her admission, revealed that SMI actually allocates P7,500 each to 12 CAFGUs for a total of P850,000 every month," Colmenares further revealed.

Diamante is the town mayor of Kiblawan in Davao del Sur where SMI has relocated its main base camp following the burning down of its previous site in main site in village of Tablu in Tampakan, South Cotabato, by the New People's Army in January 2008.

Colmenares said the information surfaced during the congressional hearing presided by Rep. Teddy Baguilat, chair of the House Committee on Cultural Communities, in Koronadal City on Thursday (Febuarry 21) in connection with the killing of Juvy Capion and her two sons last October 18, 2012.

Juvy was wife of fugitive Blaan tribal leader Daguil Capion who, along with several supporters, has taken up arms to protest alleged encroachment of their ancestral lands by SMI.

In the face of the allegations, Colmenares said "SMI-Xstrata... is essentially a conspirator in the killing of Capion."

During the congressional hearing, Lt. Col. Shalimar Imperial also admitted that a certain Dan Balandra is under the employ of SMI.

Balandra is resigned Army officer who reportedly graduated from the Philippine Military Academy. He was said to have met Daguil Capion for three consecutive days prior to the killing of Juvy and her sons during an early morning military raid in their house in Kimlawis, Kiblawan.

All 13 government soldiers belonging to the 27th Infantry Battalion who were involved in the killings are now facing court martial proceedings.

The Xstrata-controlled SMI owns the Tampakan Copper and Gold Project which reportedly contains 375,000 metric tons of copper and 360,000 ounces of gold ore deposits.

SMI has announced it will pour in US$5.9 billion in investment to mine the deposits.

Colmenares said they will look into the possibility of violation of the Anti-Graft and Corrupt Practices Act in the face of the said revelation.

"The first issue is whether SMI funding of the Army is legal or constitutes a form of bribery on public officials," the congressman said.

He likewise warned that "local LGUs should not receive any monetary consideration from SMI considering that it has a hand in the granting of the permit or approval of SMI's mining operations."

In a text message, SMI spokesman John Arnaldo however said the "CAFGUs are funded through the community peace and security program instigated and run by the municipality of Tampakan and Kiblawan."

SMI has repeatedly said that company policies strictly prohibit any of its officials and employees from committing bribery.

Armed men ambush vehicle of tribal chieftain supportive of mining

By Bong S. Sarmiento


28 February 2013

KORONADAL CITY - Unidentified armed men ambushed the vehicle supposedly owned by a tribal chieftain supportive of the mining venture of foreign-backed Sagittarius Mines, Inc. (SMI).

Neraldo "Dot" Capion, tribal chieftain of Bong Mal, said two men armed with Garand and M-14 rifles fired at the vehicle carrying his wife Madelyn, 34, two other women, a child and the driver around 3 p.m. Tuesday at Barangay Kimlawis in Kiblawan, Davao del Sur.

Fortunately, no one suffered serious injuries in the incident, he told a local radio station here.

The group was going home from Digos City in Davao del Sur when ambushed in Barangay Kimlawis, some 14 kilometers away from their home in Bong Mal, Capion said.

Kimlawis is part of the mines development site of SMI.

Capion, who did not go with the group, said that at least eight shots were fired, some hitting the car.

The tribal chieftain believed "he was the main target of the attack and that he knows who could have been behind the ambush." He did not give a name or identify the group, however.

Manolo Labor, SMI external communications and media relation superintendent, separately confirmed the attack.

Capt. William Rodriguez, spokesman of the 1002nd Infantry Brigade that has jurisdiction over the area, did not respond to calls and text message for more details of the attack.

The military, through the Task Force Kitaco, is providing security in the area.

The attack came less than a month after Kitari Capion died in an alleged encounter with government forces within the mines development site of SMI. Kitari died in a hospital hours after he suffered a bullet wound during the alleged encounter with soldiers last January 30.

Back then, Rodriguez said that the group of Kitari allegedly fired first at the patrolling soldiers, resulting to a gunfight.

Kitari was the younger brother of Daguel Capion, leader of the B'laan armed men opposing SMI's Tampakan project.

Daguel Capion and Neraldo "Dot" Capion are cousins.

The military has considered Daguel Capion's group as "bandits."

Last month, the military deployed additional soldiers to the mines development site of SMI. They were deployed nighttime on board five military trucks.

Earlier, Marbel Bishop Dinualdo Gutierrez warned that a tribal war might erupt within the tenement of SMI as there are tribal members both for and against the mining project.

Gutierrez had blamed the presence of the mining company for the atrocities that erupted in the area.

Xstrata Copper, the world's fourth largest copper producer, controls SMI, with Australian firm Indophil Resources NL as the junior partner.

The Tampakan project, potentially the biggest single foreign direct investment in the country with a capital requirement of $5.9 billion, is touted as the largest known undeveloped copper-gold reserve in Southeast Asia.

The Department of Environment and Natural Resources recently issued an environmental compliance certificate to SMI, after rejecting it twice last year due to the open-pit mining ban imposed by the South Cotabato government.

SMI announced that open-pit method will be used to extract the massive deposits. (Bong S. Sarmiento / MindaNews)

SouthCot board stays firm on open-pit mining ban; critics hit approval of SMI's ECC

By Bong S. Sarmiento


20 February 2013

KORONADAL CITY - The Sangguniang Panlalawigan of South Cotabato rallied behind the provincial environment code that bans open pit mining method as the local Catholic Church urged the public to intensify the opposition to the Tampakan copper-gold project now that it has obtained an environmental compliance certificate (ECC).

"The SP of South Cotabato will maintain its stand that the open pit ban provided for in its environment code will remain until a competent court declares it ultra vires (beyond one's legal power or authority)," Vice Gov. Elmo Tolosa, the provincial board's presiding officer, told MindaNews Wednesday.

Tolosa added that the board was not surprised that the Department of Environment and Natural Resources (DENR) eventually granted the ECC permit of foreign-backed Sagittarius Mines, Inc. (SMI) because they were in favor of the project all along.

Asked if the mining firm will seek the endorsement of the provincial board, Tolosa said: "The environment code provision will stand in the way of any SP endorsement unless the ban on open pit mining is repealed by the SP itself or declared invalid by a court of law."

Environment Secretary Ramon Paje announced Tuesday that the agency has approved SMI's ECC, which is one of the requirements before the firm can go on commercial production.

The decision of the DENR, which previously trashed twice the firm's ECC application, drew uproars among critics of the Tampakan project.

Marbel Bishop Dinualdo Gutierrez also on Wednesday rallied the public to strengthen the opposition against the Tampakan copper-gold project.

Gutierrez assailed President Benigno Simeon Aquino III for the issuance by the DENR of the ECC to SMI, which is controlled by Xstrata Copper, the world's fourth largest copper producer.

"PNoy (Aquino) is no longer believable. He had said that ‘Kayo ang Boss Ko'... it turns out now that's just a slogan," the bishop told a local radio station in Ilonggo.

Gutierrez pointed out that last year, the dioceses of Marbel, Kidapawan and Digos submitted 106,000 signatures to the Office of the President to persuade Aquino to thrash the Tampakan project.

The Tampakan project, which straddles the towns of Tampakan in South Cotabato, Kiblawan in Davao del Sur, and Columbio in Sultan Kudarat, is under the jurisdiction of the three dioceses.

If the people are his bosses, Aquino should heed that petition, Gutierrez said.

The cutting of trees in 4,000 hectares, the mining project lying in four major earthquake faults, the dislocation of the indigenous peoples and the disposal of mining wastes were the major reasons the religious leader cited in urging the people to continue opposing the Tampakan project.

Gutierrez also stressed that South Cotabato has an existing ordinance that bans open-pit mining, the method SMI will use in extracting the vast deposits.

Lawyer Mario Maderazo, advocacy and legal officer of the Philippine-Misereor Partnership, Inc., warned that the ECC issuance to SMI would be the start of the "portent of things to come."

"This clearance is the beginning of wanton environmental destruction and human rights violations in Tampakan," he said in a statement.

Maderazo cited the disasters in Padcal and Semirara, which have both been given ECCs.

Philex Mining Corp. was fined a billion pesos recently for polluting the Balog Creek in Benguet and the Agno River in Pangasinan August last year, while five workers of Semirara Mining Corp. in Antique were recently killed and another five remained missing after a portion of its open-pit mine collapsed.

"In our view, the project in Tampakan is even more dangerous than those two sites. First, even before the operations begin, human rights violations are already rampant in the area highlighted by a massacre of a mother and her two children October last year," Maderazo said.

As of 1:25 p.m. Wednesday, SMI has yet to issue a written media statement on its ECC approval. In the past, the mining firm said it will "employ responsible mining practices" to minimize the impact of the project to the environment. (Bong S. Sarmiento / MindaNews)

ECC no guarantee for SMI to mine - MGB exec

By Allen V. Estabillo


20 February 2013

GENERAL SANTOS CITY - The issuance of a conditional environmental compliance certificate (ECC) to foreign-backed Sagittarius Mines Inc. (SMI) does not guarantee that the company would eventually be allowed to mine the vast copper and gold resources in the tri-boundaries of South Cotabato, Sultan Kudarat and Davao del Sur provinces, a regional environment official said.

Constancio Paye Jr., regional director of the Department of Environment and Natural Resources' Mines and Geosciences Bureau (MGB)-Region 12, said Wednesday SMI will need to comply with a number of vital requirements and undergo several evaluation and assessment processes before the DENR would decide on whether the firm could pursue or not with its planned large-scale mining operations in the area.

"An ECC is not a permit to mine the area. It's a document that details a set of conditionalities for the company to comply with before it could proceed with the processing of the project's other environmental requirements," he said in a radio interview.

The official said SMI will need to further accomplish the formulation and submission of a declaration of mining project feasibility, the project's environmental protection and enhancement program, final mine rehabilitation and decommissioning plan and free prior and informed consent, among others.

He said the company is also required to engage with the area's local government units, especially with the provincial government of South Cotabato, for the other permitting requirements.

On Tuesday, Environment Secretary Ramon Paje issued a conditional ECC to the company's US$5.9-billion Tampakan copper-gold project despite a standing ban on open-pit mining implemented by the provincial government of South Cotabato.

Among the conditions cited in the ECC were the settlement of the question on social acceptability, protection of the rights of indigenous people, land access under the Department of Agrarian Reform and the willingness to assume continuing liability over any environmental damage.

The open-pit ban, which was embodied in the province's environment code, was the main reason for the DENR's denial in January last year of SMI's application for ECC.

SMI, which is controlled by the world's fourth largest copper producer, Xstrata Copper, had disclosed that it would employ the controversial open-pit mining method for its operations, a move vehemently opposed by local environmental groups and the Roman Catholic Church.

"SMI will also have to hurdle that (open-pit ban) before it could eventually proceed to the construction and development stage," Paye said.

MGB-12 and other mining proponents in the region have pending petitions before the South Cotabato provincial board for a review and revision of the open-pit ban mining provision of the provincial environment code.

Paye did say how the company should deal with the issue on the open-pit ban but noted that the agency will continue with its appeal and engagements on the matter with the provincial government.

Meantime, with the issuance of the conditional ECC, the official said the agency will soon work on the convening of the project's mine rehab fund committee.

He said the committee will be composed of representatives from local stakeholders, concerned government agencies and non-government organizations.

"It will be tasked to implement and review the environmental plans of the company as well as deputize a multipartite team that will monitor its compliance to the provisions of the environmental protection and enhancement program on the ground," he said.

Paye said the establishment of the committee were among the safeguards set by the DENR to ensure the company's compliance with environmental standards in all of its pre-mining activities.

SMI's conditional ECC covers the project located in Tampakan, South Cotabato; Malungon, Sarangani; Columbio in Sultan Kudarat; and Kiblawan in Davao del Sur.

The 9,605-hectare Tampakan project is expected to produce an average annual yield of 375,000 metric tons of copper and 360,000 ounces of gold. (Allen V. Estabillo / MindaNews)

Philex reopening subjects communities to more disasters

Kalikasan PNE Press release

27 February 2013

Environmental activist Kalikasan PNE rebukes the Mines and Geosciences Bureau (MGB) for allowing the Philex Mining Corp to start their operations and use the company's damaged Tailings Storage Facility No. 3 (TSF3).

"We condemn the decision of the MGB to allow the resumption of operations of Philex Mining Corp in Padcal, Benguet. MGB and even the DENR have failed to conduct any scientific study on how to best remediate TSF3 and decommission it. Instead of cancelling the ECC of Philex because for causing Philippines' biggest mine disaster, the MGB still has the gall to give the green light for their operations," Kalikasan PNE national coordinator Clemente Bautista exclaimed.

MGB has given Philex four months to operate in order to remove the water inside the damaged TSF3. MGB said the removal of the water is necessary for the rehabilitation of the said tailings dam. A total of 3.5 million metric tons (MMT) is needed to fill up the dam and remove the water.

"We cannot comprehend how supposedly an environmental bureau sees it safe to operate a compromised mining structure and trust Philex which has a long record of mining disasters and environmental violations. MGB's excuse that the operation of Philex is needed to rehabilitate the tailing dam is pure hogwash. There are actual experiences and technologies available that demonstrate how Philex can decommission the tailing dam without resuming its mining operations. This decision is a precursor for the full operation of Philex using TSF3 which will eventually subject our communities and environment to great disasters."

The Philex mining spill last year in Benguet is considered as the biggest mining disaster in the country releasing an estimated 20 MMT of toxic mining waste to the environment. Scientific study conducted by Kalikasan PNE and scientist organization AGHAM showed that the mining incident rendered the Balog River biologically dead. Concentration and contamination of heavy metals were determined in different parts of the Balog River.

"First it's the DENR that gave ECC to the most hated mining company Sagittarius Mines in South Cotabato and now MGB allowing the biggest polluter to resume operation, most likely Malacanang is sourcing some funds from the big mining companies for their election in exchange of allowing them to operate destructive mining. We are protesting and will legally challenge the MGB decision in court," Bautista said.


National Coordinator
Kalikasan People's Network for the Environment (Kalikasan-PNE)
No.26 Matulungin St. Bgy. Central, Diliman, Quezon City, Philippines 1100
Tel. No. +63-2-9248756 Fax No. +63-2-9209099

OceanaGold halts mine export from Philippines over tax issue


25 February 2013

Australia's OceanaGold Corp has temporarily stopped the first shipment of copper-gold concentrate from its Didipio mine in the northern Philippines following confusion over its tax treatment, the firm said on Monday.

The Didipio mine in Nueva Vizcaya province, now in the commissioning stage, is the first project to operate in the Philippines under the Financial and Technical Assistance Agreement, or FTAA, structure.

Under an FTAA, a permit issued by the state agency Mines and Geosciences Bureau to foreign investors owning 100 percent of a local venture, the project with a 25-year term is allowed a five-year tax holiday.

The Bureau of Internal Revenue (BIR) last week said miners with FTAAs were not exempt from paying the 2 percent excise tax even if their permits gave them a five-year period from the start of commercial operations within which to recover pre-operating expenses.

"Miners must pay the excise tax the moment they start producing ores," BIR Commissioner Kim Henares told Reuters.

OceanaGold said it was in talks with Philippine authorities on the interpretation of the tax exemptions linked to its FTAA.

"Due to these clarifications, some of the trucks used for transporting concentrate are being held by local government agencies and thus transport of copper-gold concentrate has been temporarily suspended," the miner said in a statement.

The issue is about when OceanaGold should start paying the excise tax, Nova Young, its investor relations officer, clarified.

"It's just the timing of when we have to pay it," she said by telephone from Melbourne. "We don't think it's a serious problem in terms of our operations. Our plant is still up and running."

Flip-flopping policies, particularly on mining tax issues, are among the concerns of foreign investors in the country. The development of an estimated $850 billion in Philippine mining reserves has been held up by reviews of policy, including the lack of consistency in national and local government rules.

OceanaGold has an offtake agreement with Geneva-based commodity trader Trafigura for all the copper and gold concentrate output of Didipio mine.

The offtake is for a minimum of five years. Didipio, with an expected 16-year mine life and a large open-pit operation, is estimated to produce an average 100,000 ounces of gold and 14,000 tonnes of copper each year.

OceanaGold has the right to seek a renewal for another term not exceeding 25 years for the project. (Reporting by Erik dela Cruz; Editing by Clarence Fernandez)

Aquino orders probe on Antique mining accident

The Philippine Star

14 February 2013

MANILA, Philippines (Xinhua) - President Benigno Aquino III today ordered the National Disaster Risk Reduction Management Council (NDRRMC) to determine the cause of Wednesday's mining accident in of Antique which has caused at least four dead and six missing.

The west wall of the open mine pit operated by Semirara Mining Corporation collapsed around 11:55 p.m. local time Wednesday after a landslide hit Antique. Latest report showed that out of the thirteen people trapped in the mine, four people were confirmed dead, three were rescued and six remain missing.

Presidential Spokesman Edwin Lacierda said today the president also instructed the NDRRMC to update him on the results of the investigations. Aquino also instructed he Department of Social Welfare and Development to extend immediate assistance to the victims and their families.

The three workers rescued are Marjun Catoto, Adrian Celmar and Leonardo Sojor, according to Rosario Cabrera, director for Western Visayas at the Office of Civil Defense. She added the bodies of four workers Leovigildo Porras, Abnir Lim, Efren Esquiza - have been already retrieved.

Cabrera said they're searching for the six persons namely Georgie Bragat, Jan Riel Planca, Randy Tamparong, Richard Padernilla, Anthony Siblet, and Junjie Gomez.

Antique folk urge probe on mine site tragedy

By Rhodina Villanueva

The Philippine Star

17 February 2013

MANILA, Philippines - Farmers and fisherfolk groups in Antique yesterday called on the government to conduct a full investigation into the landslide incident in a coal mining operation on Semirara Island.

The Sabang Farmers and Fisherfolk Organization (SAFAFO) and Isalba ang Caluya (ISACA) cited the impact of the landslide on open-pit coal mining on their community and environment.

The groups appealed to the government to conduct a full-scale investigation into the incident that claimed the lives of five miners. Three people were injured and five still missing in the landslide that struck the Panian mine pit of Semirara Mining Co. (SMC) last Thursday.

This developed as Energy Secretary Jericho Petilla went to Semirara and had a meeting with SMC officials yesterday.

Petilla said a team from the Department of Energy would investigate the incident.

SAFAFO president Bernardo Magdaug said the incident highlighted the danger of the mining operations in Semirara.

"For decades, the people of Semirara Island have suffered displacement as well as their main livelihood - that is sustainable seaweed farming. They had to bear the negative effects of pollution, while their mangrove ecosystems were destroyed," Magdaug said.

The group said the mining company was awarded the contract to mine under Presidential Decree 972 (later amended to PD 1174), which they claimed, was without due process and has expanded massively over the years, exploiting insecure land titles of the people and extending their operations two kilometers into the once pristine ocean and fishing grounds.

"There are presently landgrabbing and labor allegation cases pending against the company," the group said in a statement.

Magdaug said SMC's contract was to expire in 2012.

"However, in 2008 the Department of Energy (DOE) extended their contract until 2027 with no process of citizen consultation. On top of this, in 2009, the DOE granted SMC rights to explore for and develop mining for coal and other minerals on two other islands in the municipality, Caluya Island and Sibay Island. This too was granted without proper consultation process or notice to residents," he said.

Magdaug said the villagers were not aware that the island had been opened for exploration until two years later and there is now growing opposition to any mining expansion.

He said mining operations had become a threat to their main livelihood of cultivating seaweed. The seaweed production in Caluya municipality is estimated at over 11,000 tons per year, bringing, at a conservative estimate, at least P400 million of revenue into the area.

"We support the immediate shutdown of the mine and call for a full investigation into the landslide as well as assurance that the company will justly compensate the victims and their families. Further, the investigation should not just focus on the incident, but should also include a transparent review of SMC's operations and the illegitimacy of their contract," the group said.

Sen. Francis Escudero also joined the call for a full investigation.

Escudero, chairman of the Senate committee on environment and natural resources, said all efforts must be exerted to rescue and recover the miners still missing.

He said the probe must be conducted to determine the actual cause of the landslide.

"I call on the Mines and Geosciences Bureau and the Department of Environment and Natural Resources to investigate the unfortunate incident. We should find out its cause," he said.

Escudero said the probe should focus on the possible violations of environmental and safety regulations.

While the actual cause of the landslide has yet to be determined, Escudero said accidents in mining sites have been recurring and must be addressed.

Escudero said the safety of miners should be a paramount concern of the government and the mining companies.

"The Department of Environment and Natural Resources should immediately look into the incident particularly since Semirara's operations are considered large scale and should have all the safeguards installed in it to prevent any accident, primarily cave-ins," he said.

At the moment, rescuers are working against time to retrieve the five missing workers buried in the landslide.

Regional police director Chief Superintendent Agrimero Cruz Jr. said there was slim chance the five would be rescued under the rubble.

"According to the information I received, the members of the search and retrieval team have reached the area where the workers supposedly were when the landslide occurred. But there was no body or sign of life," he said.

Most likely, Cruz said, the victims were swept by the gush of 30 to 40-meter mud that slithered through the mine site.

Local authorities said they find it hard to get an update on the ongoing search and retrieval operations.

Broderick Train, chief of the Antique Provincial Disaster Risk Reduction and Management Office, said they have to rely on the competency of SMC to do the search and retrieval. - With Marvin Sy, Jennifer Rendon

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