MAC: Mines and Communities

Philippines: The people of Mindanao speak out against mining

Published by MAC on 2014-12-24
Source: Statement, Inquirer, Bulatlat, Manila Standard

Protesters travelled in a peoples' caravan from Mindanao to Manila at the end of November & early December. While there, they demonstrated at the Makati offices of mining corporations responsible for environmental destruction and human rights violations, including TVI Pacific. Indigenous women used the opportunity to highlight the violence they are subjected to, raising issues around the Makilala Mining Company in Kalinga province.

Otherwise the battle over mining between the national and local governments continues. The Province of South Cotabato in Mindanao has refused to review its environment code that bans open-pit mining, despite pressure from the national government, and Glencore over its Tampakan project. Yet at the same time small-scale mining - especially that controlled by the indigenous peoples - is being encouraged, and mineral reserves are being promoted in nearby Sarangani.

South Cotabato is joined by an increasing number of local govnerments issuing moratoria on mining. Yet the opposite has happened with black sand mining, where after a number of scandals, the Philippine government has imposed a national moratorium and a review of permits issued by the local governments.

Despite local community concerns, negotiators for the proposed 'Bangsamoro' Muslim homeland in Mindanao have been keen to reassure mining companies that their taxes will not increase.

The recent typhoon has raised concerns over the perilous state of the abandoned mine dams at the former Marcopper Mining Corporation on Marinduque.

A staff member at B2Gold's Masbate mine has been shot dead by a security guard.

Despite all this bad news at the local level, mining continues to be seen by Philippine politicians and businessmen as a sure money-maker. The export of unprocessed nickel ore has boomed this year after Indonesia banned such exports, in order to promote beneficiation in their own country. With the Indonesian ore export ban in place, the Philippines is now the main supplier of nickel ore to China’s nickel pig iron industry. It is no surprise that Filipino traditional politicians are making money from this bonanza, with ex-environment secretary, Mike Defensor, particularly boasting of his financial success this year. Manuel Pangilinan, continues to argue for lower taxes for miners, as his company, Philex, is talking about reducing production because of falling gold prices.

Mindanao folks troop to Makati to warn mining companies

‘Get out of Mindanao now’

Kalikasan PNE press release

25 November 2014

Anti-mining activists, environmental advocates and indigenous peoples from Mindanao held protest actions in front of the Makati offices of mining corporations responsible for environmental destruction and rampant human rights violations in the country’s southern region, namely the Filipino-Malaysia-owned Apex Mining, Canada-owned Toronto Venutres Inc (TVI), and Swiss-owned Glencore.

“This is a warning to these companies: get out now. The people of Mindanao are raging and our resistance grows stronger every day. Leave now, or face the people’s resistance,” said Panalipdan Mindanao secretary general Dulphing Ogan.

Most of the 330,000 hectares of land leased to mining companies are agricultural lands and upland areas being tilled by farmers and Lumads, an indigenous peoples group in Mindanao. Eighty (80) percent of the 131 mining agreements and permits in Mindanao are located in Lumad areas.

“Mindanao, a paradise guarded by the indigenous peoples, has been ravaged by the continuing large-scale mining operations. Mining-affected areas like Compostela Valley, the Surigao provinces, and Zamboanga del Norte bear the scars of destructive mining. If this destruction goes unabated, the people are sure to suffer famine, flashfloods and other disasters,” said Clemente Bautista, national coordinator of environmental group Kalikasan Peoples Network for the Environment.

The incursion of large-scale mining into agricultural lands and watershed areas affects food production and threatens food security in the region. Considered as the Philippines’ “food basket,” Mindanao grows most of the Philippines’ major crops, accounting for over 40 percent of the country’s food requirements.

“Studies show that massive destruction of the environment and plunder of natural resources by large-scale mining increase vulnerability to disaster and poverty incidence among Mindanaons. The areas hardest hit by typhoons Sendong and Pablo were mining-affected areas, which were also home to the poorest of peasant communities, ” said JM Ayuste of scientist activist group AGHAM.

“We have come to the National Capital Region to warn foreign and private mining corporations. The people will continue to resist until our last breath to defend our lands and resources. We will not allow you to destroy and plunder our forests, rivers and mountains. More and more Lumads and peasants will declare more pangayaws against destructive large-scale mining in Mindanao,” Ogan said.

Pangayaw is the tribal war or armed defense of Lumads and is part of the tradional practice to defend territories and communities against foreign invasion. Indigenous peoples like the Talaingod Manobos in Davao del Norte and B’laan in South Cotabato have ongoing pangayaws against ALSONS and Glencore corporations, respectively.

Clemente Bautista 0922.844.9787, Dulphing Ogan 0906.607.4182 JM Ayuste 0906.807.2964

Protesters from Mindanao storm mining company in Makati

25 November 2014

MANILA, Philippines—About 50 environmental advocates from Mindanao stormed the headquarters of a mining company in Makati City on Tuesday to protest the alleged killings and displacement of indigenous peoples in their communities.

Dulping Ogan, secretary general of Panalipdan Mindanao, a network of environmental advocates, said the operations of TVI Resources Development Philippines Inc. had affected the livelihood of about 3,500 small-scale miners in Bayog town, Zamboanga del Sur province.

Members of indigenous tribes also hit the environmental destruction of their communities.

“Ang masaklap sa nangyari doon (Bayog, Zamboanga del Sur) ay inagaw ng TVI ‘yung claim ng mga small-scale miners na around 3,500 workers at may kasamang dependents, so ine-evict sila. Bukod sa eviction, nangyayari ang grabeng patayan. Ilang mga katutubong Lumad na small-scale miners ay pinatay,” Ogan said.

(TVI evicted around 3,500 small-scale miners. Aside from the eviction, some members of indigenous groups who are also small-scale miners had been killed.)

Ogan also slammed TVI and other mining companies for allegedly acquiring ancestral lands through a sham Free Prior and Informed Consent (FPIC) from indigenous peoples living in the area.

For its part, an executive of TVI, who held a dialogue with the protesters, said the company had dutifully followed government guidelines in order to operate in the area.

Kaycee Crisostomo, director of corporate communications of TVI, said the company secured the FPIC from the Subanen tribe living in Bayog, Zamboanga del Sur.

“This is a process which does not only follow the law but is also witnessed by the National Commission on Indigenous Peoples. So as far as we’re concerned, we have followed the process of the law, we have secured the necessary social license not only from the indigenous Subanen tribe but also from the individual barangays (villages) in Bayog and also from the provincial government,” Crisostomo said.

Crisostomo discredited the claims of the protesters that small-scale miners had been evicted in the area.

“TVI did not force or evict anyone from the area. What they are pertaining to is the dismantling of illegal mining operations in the area led by the provincial government and its allied agencies,” Crisostomo said.

The TVI executive also denied that the mining company was involved in the alleged human rights violations committed in the area.

“Human rights violations is something we do not tolerate,” Crisostomo said.

The protest action is part of the Manilakbayan ng Mindanao, a campaign which seeks to shed light on the land, environment, and human rights situation in Mindanao.

#16days - Indigenous women stand against all forms of VAW

“With the continuous mining in our communities, the indigenous women and the whole community continue to fight.”

By Anne Marxze D. Umil

1 December 2014

MANILA – Indigenous women led by Bai Indigenous Women Network (BAI) protested at the Chino Roces Bridge (former Mendiola Bridge) on Thursday, Nov. 27 condemning rights violations committed by state security forces.

Wearing their traditional clothes, the Indigenous women of Dumagat, Igorot, Tumanduk, Ayta, and Lumad marched through Mendiola despite the rain.

They called for justice for those who were killed and victims of human rights violations as they protect their ancestral land. The women also supported the call for the ouster of President Benigno S. Aquino III who they described as a disaster to the indigenous people for permitting big foreign companies to plunder on the country’s natural resources.

The protest action is part of the 16 Days of Activism Against Gender-Based Violence, an international campaign in connection with the International Day for the Elimination of Violence against Women (IDEVAW). It started on Nov. 25 and ends on Dec. 10, International Human Rights Day.

With feet red with paint, the indigenous women performed a war dance on an illustration of Aquino. The group said the red footprints symbolized the blood of indigenous women martyrs and the continuing resistance against the killings and the violations of human rights of indigenous peoples committed by the Aquino government and the Armed Forces of the Philippines (AFP).

“On this day, indigenous women rise for justice. We face the militarization of our communities and suffer from human rights abuses. We are impoverished and made landless because of the plunder of our ancestral lands. These are biggest forms of violence against indigenous women that should be put to an end,” Kakay Tolentino, a member of the Dumagat tribe and the national coordinator of BAI said.

Violator of indigenous women’s rights

It is the government who is the gross violator of human rights, said Tolentino. She said the Aquino government’s economic policies such as the Public-Private Partnership Program, especially in mining, energy, and other extractive industries, worsen the situation of indigenous women and their families in rural areas.

“Big businesses in our lands, most often large-scale mining, disrupt and upset the economic situation in indigenous communities. Because feeding and caring for the family fall on the shoulders of indigenous women, they are the first to be burdened by the loss of their land and livelihood,” Tolentino.

Jocelyn Agdahan, secretary general of the Tribal Indigenous Oppressed Group Association (Tindoga) said their land is where they get their food, medicines and “hardware” or construction supplies. But the government prefers to have big foreign companies plunder the natural resources in Mindanao, leaving the people poor as big companies have taken away their livelihood. Many were displaced from their communities, and worse, some have been killed for fighting for their right to ancestral lands.

“Aquino is a disaster. He should be ousted!” Agdahan said during the protest action.
Meanwhile, in the Northern part of the Philippines, Mila Singson, chairwoman of Innabuyog Gabriela, said women and children too have suffered due to the heavy militarization of communities.

Singson said in Abra province, communities in the towns of Lacub and Malibcong were bombed by the military. “With the bombings, their routines were ruined. They cannot go to their farms because they are afraid if the soldiers will see them, they will be bombed again,” Singson told

Some soldiers also court women leaders to make them stop opposing mining companies from entering their communities. “They know that the women leaders are staunch fighters of their right to land. Some leaders who are in the forefront of the struggle are being wooed by the soldiers.”

Singson, who is from the Guinaang tribe in Kalinga province, also experienced harassment from state security forces in April for actively opposing mining in her community.

“We opposed the entry of Makilala Mining Company in our company. They used the paramilitary forces and the intelligence units of the military against me. They vilified me in the community. They threatened to bomb us – me and my relatives — if we are not going to let the mining company enter our community.”

The indigenous women have filed cases before the National Commission on Indigenous People (NCIP) and submitted their case in the United Nations Special Rapporteur on the Rights of the Indigenous Peoples (UNSRRIP).

“On the commemoration of International Day against the Elimination of Violence Against Women (IDEVAW), we demand that any form of violence against women be stopped. Just recently Engineer Fidela Salvador was brutally killed in Lacub, Abra. She was killed for helping the peasant and the indigenous people in Lacub, Abra. We have to seek justice and we will continue to seek it for this senseless killing,” said Singson.

‘Unite and fight’

“With the continuous mining in our communities, the indigenous women and the whole community continue to fight. Those who are fighting are being killed just like Juvy Capion and her family in 2012. This is the basis why we should unite and fight for our rights,” said Anelfa Hamilo, spokesperson of Kaluhamin-Socksargen.

Capion, and her two sons were massacred allegedly by the 26th Infantry Battalion in October 2012 in Tampakan, South Cotabato.

The women’s group said that under the Aquino administration, 50 indigenous people have been killed by suspected AFP and paramilitary groups.

“Of this number six are indigenous women while seven are indigenous children.”

BAI also expressed concern over the 55 combat battalions reportedly deployed in Mindano, amounting to 46,000 to 50,000 troops. Just this Oct. 30, the group said 446 families or 2,184 individuals from 14 communities in Diatagon, Lianga, Surigao del Sur fled from their homes due to military operations.

“The militarization of Mindanao will only bring about more killings and violations of human rights among indigenous peoples and other vulnerable sectors. The Aquino administration has turned the island into a warzone, rather than pursue long-lasting peace in Mindanao,” Tolentino said. (

3-day Philippines march unites across provinces to defend ancestral land

by Katrina Pestaño and Jill Mangaliman

Seattle Globalist

22 December 2014

People’s voices carry through the streets in the Soccsksargen region of Southern Mindanao, Philippines chanting “Defend ancestral land!” and “Glencore-Xstrata-SMI out now!” during a three-day march Seattle activists joined earlier this month.

The mobilization, “Lakbayan,” meaning “People’s Journey,” stretched across approximately 100 miles from Dec. 8 through Dec. 10 in timing with International Human Rights Day — one of many recent demonstrations uniting Philippine people across provinces and advocates around the world in a decades-long struggle to keep multinational mining corporations out of Soccsksargen.

This struggle revolves around a $5.9 billion Tampakan Copper-Gold Project, named after the Mindanao town where the operational base is located. The project is largely controlled by newly merged multinational mining corporation Glencore-Xstrata, which has deep incentive to keep building a behemoth opencast mining pit estimated to destroy nearly 40 square miles of farming land and rainforest inhabited by the indigenous B’laan people.

Just the Tampakan mine alone could obtain 1.1 billion metric tons of gold and copper in 20 years, making it the largest mining operation in Southeast Asia, according to the AECOM Capitol. The Philippines’ National Statistical Coordination Board estimates the amount of gold, copper, nickel, chromite, manganese, silver and iron ore deposits within the scope of the project to total $840 billion in value.

In response to local mining opposition from local governments and advocates that have delayed project operations, Philippine President Benigno Aquino created a counter-insurgency program, Oplan Bayanihan, in 2011, under which 55 battalions were built in Mindanao in high concentration — also where strong mining opposition and indigenous leadership are high.

“[This policy] is actually [meant] to protect the interests of transnational corporations and silence vocal leaders in the community,” explained Pastor Sadrach Sabella of Karapatan, a Philippines-based human rights organization.

Opposition against President Aquino’s policies have also been raised recently as he comes closer to adopting a charter change to the Philippine’s constitution that would allow 100 percent ownership of the nation’s land by multinational corporations. This comes soon after the Enhanced Defense Cooperation Agreement (EDCA) between the Philippines and the United States was passed last spring, allowing the U.S. more military access to the Philippines.

In the meantime, two years after the Mindanao military massacre of indigenous leader Juvy Capion and her two sons in 2012 as well as least 20 confirmed murders inflicted by army members that year, have not been brought to justice. The human rights violations have only escalated as more indigenous and peasant leaders have been targeted and killed by Philippine armed forces present as a result of President Aquino’s militarization policies. In August 2013, the Freay family was massacred by the 77th Infantry for speaking out against large-scale mining. Their 16-year-old son, Victor, was killed so brutally that a local fact-finding mission found him surrounded by shells on the ground, his intestines ruptured.

On Oct. 27 in Surigao del Sur (located in the Caraga region of Mindanao), 378 indigenous families and 1,783 individuals were evacuated from their homes when military groups nearby began to indiscriminately shoot.

Lorna Mora is a B’laan leader and anti-mining advocate from Kaluhhamin, an organization led by farmers and “Lumads,” indigenous people.

“The Philippine Armed Forces are harassing and killing Lumad people and trying to take the ancestral lands. Lumads are fighting back, some taking up arms to defend our land,” she said at the march.

“The government needs to resume peace talks with the National Democratic Front, which sets the basis for the addressing the root issues of the armed struggle.”

The march began in the city of Surallah on Dec. 8, where local farmers met with a group caravanning from Tampakan, with 60 relatives of both the Capion and Freay families brought by organizers of Lakbayan.

Over the next three days, “Lakbayanis,” which roughly translates to “traveling heroes,” marched through the main cities in Soccsksargen and took part in actions in several towns, including stops at the main military bases of the region.

On the last day, Dec. 10, International Human Rights Day, the Lakbayanis confronted those at the Glencore-Xstrata headquarters in General Santos City, with fiery speeches, paint bombs and spray-painted messages, making it clear that Glencore-Xstrata was not welcome and demanding they leave.

The journey ended in Digos City, where the crowd of about 1,200 people created a human blockade on a major highway for more than an hour. People had no choice but get out of their cars and witness the rousing speeches by mass leaders, condemning open-pit mining and calling for justice for victims of human rights abuses.

The march was organized by Soccsksargends Agenda, a broad coalition of anti-mining and human rights advocates led by BAYAN, a global alliance of progressive organizations.

With their minds on movements at home, BAYAN USA representatives marched with signs saying, “Philippines in solidarity with Ferguson; Stop the killing; End impunity; #BlackLivesMatter” to recognize that U.S. could be just as capable of killing its own citizens and just as quick to use military-like force to quell people’s dissent.

Many locals asked us Americans questions about the state of the people’s movement in the U.S., the history of state repression and of discrimination and violence against Black Americans.

“Over there, it’s called racism,” I heard one Filipino youth explaining to another youth.

The people of Soccsksargen have experienced arduous struggle and still have a long battle ahead. But their determination to win this battle still runs high when their lives and those of future generations are still at stake.

This story has been updated since its original publication.



Strong rains raise fear of Marinduque mine dams collapse

Delfin T. Mallari Jr.

Inquirer Southern Luzon

7 December 2014

LUCENA CITY, Philippines–The provincial disaster coordinator of Marinduque expressed fears that the abandoned mine dams of the former Marcopper Mining Corporation might collapse under the onslaught of approaching Typhoon Ruby (Hagupit).

“We’re closely monitoring the condition of Tapian pit, Makulapnit and Maguila-guila dams,” Eleuterio Raza, acting provincial disaster risk reduction management council officer, said in a phone interview Sunday morning.

He said the people were afraid that strong rains from Ruby could trigger the abandoned dams to collapse as it could no longer hold more water.

“The weather forecast predicts strong rains along Ruby’s path. Marinduque will be surely hit,” Raza said.

He recalled that a strong typhoon in 1993 caused heavy flooding to the towns of Boac and Mogpog.

Raza said several rescue teams from PDRRMC were now ready to attend and respond to emergencies.

“We already have evacuated 1,500 residents in low lying areas particularly along riverbanks and coastlines since Saturday. Most of them have voluntarily evacuated,” he said.

The evacuation of residents in dangerous areas is ongoing, he added.

Raza expressed fear that once the dam breaks, it would cause catastrophic flooding to the towns of Mogpog and Boac.

Makulapnit and Maguila-guila are among the dams of Marcopper identified to be in “imminent danger of collapsing” by the United States Geological Services as early as 1996 or after the spill occurred.

Makulapnit dam was built to supply water for the operations of Marcopper and for household use by residents within the vicinity, while Maguila-guila dam served as the mining company’s siltation dam.

The inactive dams were abandoned when Marcopper stopped its operation after the spill in 1996. Both dams have deteriorated.

Raza also cited studies that the east wall portion of Tapian pit of Marcopper was weakening and in danger of collapse that could cause flooding to several villages along the banks of the 27-kilometer Boac River.

The Tapian pit is a 130-ha wide and 320-m deep hole that was created in the process of mining copper near the summit of Mount Tapian.

Raza said Boac River poses serious dangers to residents should the typhoon pours heavy rains.

“The river is heavily silted with mine tailings deposit which can easily cause floods,” Raza said.

In 1996, the plug of the Tapian pit gave way and unleashed approximately 200 million tons of toxic mine tailings into the Boac river.

Almost two decades after the disaster, the damaged areas have yet to be fully rehabilitated.

South Cotabato won’t review mining code

Inquirer Mindanao

25 November 2014

KORONADAL CITY—South Cotabato has shut the door on a possible review of the 2010 provincial environment code that bans open-pit mining and other mining practices.

Governor Daisy Fuentes made the pronouncement on Saturday shortly after the Mines and Geosciences Bureau of the Department of Environment and Natural Resources (DENR) endorsed for further review and evaluation a project feasibility study undertaken by Sagittarius Mines Inc. (SMI)

Fuentes said the provincial government was standing firm on the ban on open-pit mining, which SMI wants to use in its $5.9-billion project to extract copper and gold in Tampakan town. She said she would not tinker with the local environment code just to accommodate SMI.

The feasibility study, covering South Cotabato, Sultan Kudarat and Davao del Sur provinces, mainly focused on the economic, social and environmental viability of the planned large-scale mining project.

SMI is exploring gold and copper deposits at the boundaries of the three provinces. The Tampakan mine is considered one of Southeast Asia’s largest untapped resources, with an estimated yield of 11.6 million tons of copper and 14.6 million ounces of gold.

“The firm spends huge amount of money to operate its business but it was not spending to mitigate the effects. If not for the water issues, we might have allowed them and I myself would have the courage to lift the ban,” Fuentes told the Inquirer.

She said that while the provincial government wanted to help SMI realize its business, it could not allow farmers to suffer.

“I got the documents from the DENR, including a study they commissioned. It confirms that anything, whether on the ground or below ground, that flows to Lake Buluan will be affected,” Fuentes said.

She said President Aquino had also asked her about the provincial government’s stand on a review of the environment code. “I told him it’s impossible to reverse,” she said.

Fuentes said SMI had been insisting that its operation would not affect the province’s watershed. “But if you look at the map, they are going to dig from the top. How can you say it will not affect the [water sources]?” she asked.

She said she would not mind facing a legal battle over the ban.“I will not feel bad if they bring to court the matter once and for all to determine if we have a stand on this issue,” she said.

South Cotabato Mining Ban Lifted By Filipino Government

22 November 2014

The T’boli project has deposits of 2.4 million tons, containing 420,000oz of gold and 1.6 million ounces of silver, reports.

The closed gold mining tunnels include 21ha that the T’boli Minahang Bayan multipurpose cooperative and the native Maguan clan were in dispute over, the news service said.

The land forms part of an 85ha site, known as the T’boli project, previously awarded to Tribal Mining by the government.

The ban had been in place for nine months and affected about 150 gold mining tunnels in cone crusher for sale philippines 2 T’boli, South Cotabato, reports.

The mining ban stamp mill manufacturer in china on small-scale miners operating in the South Cotabato province in The Philippines has been lifted by the regional Mines and Geosciences Bureau.

Prior to the closure, the Maguan clan applied for permission to mine in the site known to contain rich gold mineralisation, stating that it was part of their ancestral domain claim.

MGB 12 proposes mineral reservation project in Sarangani towns

9 December 2014

KORONADAL CITY, South Cotabato, Dec. 9 (PIA) -- The Mines and Geosciences Bureau (MGB) 12 is pushing a mineral reservation project in the municipalities of Kiamba and Maitum in Sarangani.

Just recently, Engr. Hernani G. Abdon, OIC chief of the Mine Management Division (MMD) of MGB 12, presented the project proposal to members of the Sangguniang Bayan of both municipalities in separate occasions.

In these meetings, Engr. Abdon, emphasized that MGB 12 has identified a total area of 11,163.6340 hectares in the area to have a known strategic mineral reserve that can be available for mineral resources development.

A mineral resources development project in these municipalities could be beneficial to the local governments since this could result in additional revenues generation, citing further increase in the payment of occupation fees and the five percent royalty share for the LGU.

Abdon explained further that this proposal could address the problem of illegal small scale mining in Kiamba and Maitum areas with as much as 25 percent of the area that can be allotted as “Minahang Bayan.”

Illegal small scale miners can apply for a contract and license to the province to legitimize their operations, he elaborated.

In this way, he added, small scale mining will be contained and the local government can collect the appropriate revenue on small scale mining operation.

MGB 12 expects both Sangguniang Bayan to hold public hearings on the proposal after the presentation, especially involving indigenous peoples living in the area, non-government organizations, and people’s organizations.

Public consultations are done at least 30 days after the notice of the proposed project is published in the local newspaper. (DEDoguiles-PIA 12 with report from MGB 12)

IN THE KNOW: Small-scale mining

Philippine Daily Inquirer

8 December 2014

Republic Act No. 7076 defines “small-scale mining” as mineral exploration that employs manual labor with simple implements and methods and not explosives or heavy equipment.

Small-scale miners must form cooperatives to be duly licensed by the Department of Environment and Natural Resources (DENR).

The DENR’s Mines and Geosciences Bureau (MGB) estimates the number of small-scale miners in the country at 3,000.

RA 7076, or the Act Creating People’s Small-Scale Mining Program, allows the creation of People’s Small-Scale Mining Areas.

Under the law, small-scale mining operations are overseen by the Provincial Mining Regulatory Board composed of the MGB director as chair and the provincial governor as vice chair.

Its members should come from small-scale and large-scale mining interests and a nongovernment environmental organization.

In 2012, President Aquino signed Executive Order No. 79 to institutionalize and implement reforms in the mining sector. Section 11 of the law restricts small-scale miners to “Minahang Bayan” zones and prohibits large-scale mining in these areas.

There are currently three Minahang Bayan sites—one in the province of Quezon, another in Dinagat Island and another in Agusan del Norte province.

EO 79 also restricts small-scale mining to the extraction of gold, silver and chromite, but not any other metallic minerals. It prohibits the use of mercury.

According to the Bangko Sentral ng Pilipinas, small-scale gold mining contributed P300 million in gross production value in mining in 2013. Inquirer Research

Sources: MGB, Inquirer Archives

A template for small-scale mines

Germelina Lacorte

Inquirer Mindanao

7 December 2014

T’BOLI, South Cotabato–Except for a few mine workers carrying bags of ore out of the dark, muddy tunnel, the mouth of the Minahang Bayan in Barangay Kematu looks deserted and empty late morning of a weekday. But village chair Mansueto de la Peña says it is only because close to 200 workers are already beneath the portal in a nebulous network of tunnels.

“Toward sunset, this whole place teems with people,” De la Peña says of the 21-hectare Minahang Bayan in T’boli, one of the gold-rich towns in South Cotabato province. “That’s the time when the mine workers go out.”

Now, the Minahang Bayan, which curiously sits inside the 84-tenement claim of Canadian-owned Tribal Mining Corp., is the only small-scale mining site in the country fully monitored and regulated by the local government.

“While other provinces in the country are clearing their area of small-scale miners to allow large-scale miners to come in, we are helping small-scale miners develop because we recognize them as the main drivers of the economy,” says Seigfred Flaviano, designated head of the provincial environment and management office.

First-class town

“Small-scale mining has turned T’boli into a first-class municipality,” Flaviano says. The status means an annual income of at least P55 million. Based on the 2010 census, the town has a population of 79,175.

In the Philippines, small-scale mining is not recognized formally and is still considered an informal sector. “But in South Cotabato, we are trying to formalize it, to develop the capacity of small-scale mining operators because we believe in their contribution to the economy,” Flaviano says.

Discovered in the late 1980s, Kematu’s mining area forms a large part of T’boli’s gold rush site that had once attracted droves of eager prospectors. Exploration estimates of South Cotabato’s gold and copper ore reserves reach 2.5 million tons in one municipality alone.

In 2010, the provincial government passed the Environment Code, banning open-pit mining and effectively barring big companies, such as Sagittarius Mines Inc., from developing their projects.

Gov. Daisy Avance-Fuentes issued Executive Order No. 37 in 2013, intensifying small-scale mining permitting and safety regulations. Under that directive, people who want to work in the mines must secure identification cards in a system that helps eliminate the entry of minors. But they can only secure their IDs after going through a series of training on mine safety, environment protection and disaster preparedness.

‘Bayanihan’ spirit

Tapping the Filipino spirit of “bayanihan,” the provincial government pooled resources from government and nongovernment organizations together to help improve the capacity of small-scale miners, giving them access to training, technology and, hopefully, credit in the future.

The switch to regulated mining activities did not come easy, Flaviano says. In 2010, the provincial government closed down all extracting operations within the Minahang Bayan site following mining accidents and other problems.

But people desperate for a source of income petitioned the local government to be allowed to operate again. “It was their main source of livelihood, so the provincial government called for a series of dialogues,” Flaviano says.

The following year, the government relented but set terms that operators pay their taxes, take steps to protect the environment and to assume other social responsibilities to the host communities, and stop the illegal practice of “banlas” (hydraulic mining), which is deemed destructive.

Flaviano says regulated small-scale mining has worked two ways for the province and the miners: While they contribute to the local government coffers through taxes, the government helps ensure safety in the mining area and promote scientific technology to sustain industry income.

Job opportunities

The government earns only a measly amount from large-scale mining operations, Flaviano says. Small-scale mining, however, has opened chances for some indigenous peoples to earn a living.

“We are not getting that much from large-scale mining, which will only turn our people into mine workers,” he says.

Small-scale miners pay as much as P1,000 in taxes per ton of gold ores. As a result, the mining revenue of the province doubled from only P4.8 million in 2010 to P9.75 million in 2011, doubling again to P15.79 million in 2012.

South Cotabato has individualized the issuance of small-mining contracts, increasing compliance to environment laws to as much as 90 percent among operators.

The new system has allowed each contract holder to take responsibility of his actions, De la Peña says. “Unlike before when a violation by one of the members of the cooperative would cause the whole cooperative to suffer.”

From only six mining contracts and five processing permits registered by the province in 2010, there are now 159 mining contractors and 105 gold processors.

(part 2) In South Cotabato, a template for small-scale mining

Germelina Lacorte

Inquirer Mindanao

8 December 2014

T’BOLi, South Cotabato—Regulated small-scale mining has worked two ways for South Cotabato province and the miners: While they contribute to the local government coffers through taxes, the government helps ensure safety in the mining area and promote scientific technology to sustain industry income, says Seigfred Flaviano, designated head of the provincial environment and management office.

Implementing the ID system helped lower the number of child laborers and mining accidents, Flaviano says.

The Department of Labor and Employment in the region has promoted Barangay Kematu’s ranking to Level 3 in the way it deals with child labor issues.

This means that the village has already been addressing the problem by forging partnerships with local institutions for child rights advocacy and protection.

To ensure safety in the mines, the provincial government has made good use of the geohazard map produced by the Mines and Geosciences Bureau in identifying areas prone to landslides and heavy flooding in the site.

“At first, they did not understand why they had to be kept away from danger zones, but with continuous dialogue, they eventually relented,” Flaviano says.

Tunnel operators are required to submit a map of their mining area when applying for a permit, he says. “We then plot their coordinates on the geohazard map, so, they can see whether their tunnel falls within the safe areas.”

De la Peña says at least 10 operators, whose tunnels are within the landslide-prone areas, have moved on to another site or have stopped operating outright.

“What makes South Cotabato unique, aside from the ban on destructive open-pit mining, is we regulate our small-scale mining and that we see to the welfare of our miners,” Flaviano says, “We want them to professionalize their operations by allowing them access to technology and credit in the future. At present, we are seeing to it that they’re safe.”

Soon, a Minahang Bayan Center will be set up to serve as a one-stop shop for permit processing, training and other assistance to miners. “That way, all processing of permits and all training for miners will already be done right at the mining site,” Flaviano says.

The P1-million building is scheduled to be finished in the first quarter next year.

Even if South Cotabato’s gold and copper reserves run out, Governor Fuentes says, she wants the local community to have something to fall back on by developing jewelry-making skills among its artisans.

Through the system it is putting in place, Flaviano says, the provincial government wants to ensure that it works hand in hand to develop the capacity of small-scale miners.

MBG bans black sand operations nationwide

By Anna Leah G. Estrada

Manila Standard

20 November 2014

BAGUIO CITY, Benguet --- The government has imposed a moratorium on black sand mining and the Mines and Geosciences Bureau (MGB) has ordered a review of existing magnetite operations in the country, a senior official said.

MGB director Leo Jasareno said applications for mineral ore export permits (MOEP) for magnetite operations has been suspended and the Mining Industry Coordinating Council (MICC) has ordered a review of permits issued by the local governments.

“MGB issued a moratorium circular last month, stopping the approval of MOEP for magnetite operations while we are reviewing the permitting process,” Jasareno told reporters during the 61st Annual National Mine Safety and Environment conference here.

Black sand mining involves extracting mineral deposits from the seabed or river bed. These deposits include iron, magnetite, placer, monazite, zircon, rutile and ilmenite.

MICC, composed of different government agencies, issued Resolution No. 4, prescribing the “adoption of immediate measures to address black sand mining operations in the country.” The resolution was signed by Finance Secretary Cesar Purisima and Environment Secretary Ramon Paje.

Jasareno said that 15 black sand operations in Cagayan, Ilocos and Zambales have been suspended “because they are using their industrial, sand and gravel permits for black sand mining operations.”

One employee shot dead at B2Gold Masbate project in the Philippines

Cecilia Jamasmie

24 December 2014

Canadian gold miner B2Gold Corp. said one of its security guards, a long-time employee at the Masbate gold project in the Philippines, has been shot dead by a colleague following an argument between the two.

In a quarterly update released late Tuesday, the company unveiled that the shooting took place on Saturday, Dec. 20 and that the unnamed perpetrator was arrested by the Philippine National Police at Aroroy.

B2Gold acquired the mining and milling operation on the island of Masbate through a merger with CGA Mining Ltd., which was completed early last year.

The company also has operations in Namibia and Nicaragua, and holds assets in Mali, Burkina Faso and Colombia.

Fourth Quarter Update at B2Gold Corp.'s Masbate Gold Mine

23 December 2014

VANCOUVER, BRITISH COLUMBIA - B2Gold Corp. ("B2Gold" or the "Company"), provides a fourth quarter interim update for its Masbate Gold Project Operations.

The Masbate Gold Project operations remain on track to deliver to the updated guidance for 2014 of approximately 180,000 ounces of gold and the SAG mill continues to perform well as the Masbate Gold Project completes a strong quarter.

Throughput for October was 613,400 tonnes at an average grade of 1.29 g/t and November was 601,164 tonnes at 1.38 g/t. October monthly adjusted gold production was 21,177 ounces and, for the month of November, 22,429 ounces were produced. December production remains as strong as well.

Fatality Incident at Masbate

B2Gold regrets to announce the shooting death of a Masbate Gold Project (Philippine Gold Processing & Refining Corp, ("PGPRC")) employee following an altercation with a KKSS (Kublai Khan Security Services) employee, at the Mine Site on Saturday December 20, 2014.

The shooting victim is a long term employee, Jessie Villegas. The security guard is in the custody of the Philippine National Police at Aroroy and the incident is under investigation by the police.

Mr. Villegas is survived by his wife, Antonieta Marcial Villegas, and eleven children. We extend our condolences to the family and friends of Jessie Villegas.

A Masbate Gold Project review of the incident and related procedures is ongoing, and counselling has been made available to the employees.


Clive T. Johnson, President and Chief Executive Officer

No losses from mining revenues in Bangsamoro, companies assured

Business World online

9 December 2014

COMPANIES need not worry about losing their share of revenues from mineral extraction in areas covered by the proposed Bangsamoro political entity, the state’s chief peace process negotiator said on Tuesday.

The Bangsamoro Basic Law (BBL), currently being deliberated by the Congress for approval early next year, would adhere to laws on government’s share of revenues from mining and energy sectors, said Miriam Coronel-Ferrer, chairperson of the government’s negotiating panel.

Provisions for the entity’s revenue generation would only redistribute the government’s share of income from natural resources and not cut into that of the private sector, she said.

“[For] private companies, it doesn’t matter. The same share still applies,” Ms. Ferrer said in a Tuesday conference by the Geological Society of the Philippines. “It’s really the government’s share that’s being reallocated.”

The proposed Bangsamoro entity will keep 100% of state revenues from non-metallic minerals and 75% of those from metallic minerals. The currently existing Autonomous Region in Muslim Mindanao (ARMM), which would be replaced, only provided for a 50-50 share on “strategic minerals” and a 60-40 share on “non-strategic minerals.”

Ms. Ferrer also noted that the share for local government units under the Bangsamoro entity would have to be refined.

Likewise, the power to approve mineral exploration projects under the Financial or Technical Assistance Agreement (FTAA) would not be devolved since the President’s signature in these contracts are still required. Small-scale mining would also remain within the jurisdiction of local government units.

Besides an automatically appropriated annual “block grant” for the region, the Bangsamoro would be supported not only by revenues on natural resources, but also by “other national taxes collected in the region,” such as income taxes, value-added taxes and other excise taxes. A 75-25 sharing scheme would be implemented.

“Problem is, most of these companies [operating in the region] are based outside of Bangsamoro,” said Ms. Ferrer, who added that incentives may be used “for the companies to actually register... within the region.”

Ms. Ferrer also said that the bill provided for the Bangsamoro to exercise “jurisdiction” over natural resources in its territory without claiming “ownership.” She clarified that the state would still own the land in accordance with the Constitution, save for areas claimed by indigenous peoples as their ancestral domain (the use of which developers pay separate royalties for).

Addressing the question of whether the Bangsamoro wielded too much power over resources in its territory, Ms. Ferrer said: “It’s part of the State. It’s not a different State.” -- Vince Alvic Alexis F. Nonato

Black sand mining in the Philippines

AS A MATTER OF FACT By Sara Soliven De Guzman

The Philippine Star

8 December 2014

Cagayan is said to be Enrile country. People say that nothing happens in Cagayan without Enrile’s blessing. Like Cagayan, there are other baluartes around the country that are identified with politicians. I’m sure you can name those provinces and match them with families who have sort of owned their provinces or towns. This has got to change!

Amidst all the innuendos about Enrile’s involvement in certain projects and other allegations of anomalous practices in Cagayan, Enrile has kept his cool and remained brazen about everything, even daring the DOJ at one point to go ahead and investigate.

Who is the mastermind behind Port Irene? My guess is as good as yours. It’s a tricky arrangement. I hope the government is getting most of the pie instead of certain individuals benefitting from it. Many people in Cagayan talk about corruption done by a group who is highly supported by big people. How can they get away with this under the supposedly watchful eyes of our current president?

What about the controversial CEZA breakwater project to protect Port Irene that cost extremely high? In my further research about the issue, I got hold of an estimate from Philippine Port Authority that shows that at a 3-meter elevation the breakwater project would cost around P614,341.00 per linear meter while a 6-meter elevation will cost around P1,070,087.00 per linear meter. What is strange and dumbfounding is that the CEZA construction of the breakwater project cost P5.1 billion for a 1,000-linear meter (1kilometer) breakwater. This is equivalent to P5 million per linear meter (a far cry from the PPA estimate of P614,341.00). Sanamagan! This 1-kilometer breakwater project is the price of 7 Iloilo Convention Centers and no one has pursued questioning it? How come?

COA records do not show any irregularities in this breakwater project. From day one, it seems that everything is in order and no overpricing was seen. So, whose role is it in government to check ‘overpricing’ costs of projects? Why doesn’t anyone in government question any overpricing? Why does the questioning happen after a project is done? Susmariosep!

Did the Sta. Elena Construction and Development Corporation go through some scrutiny before the project was awarded to them? Were there other construction companies that bid for this project? What is Sta. Elena’s track record? The breakwater project is a superstructure which usually requires a AAA (Triple A) contractor with a stockholders equity of P90 M and an inventory of heavy equipment amounting to around P90 M (leased or owned) according to the Philippine Contractors Accreditation Board. Is Sta. Elena an AAA construction company?

Local folk in Cagayan Valley often talk about black sand smuggling. This has become a very lucrative business with Chinese and Koreans as the major investors. Not unless, Filipino partners hide behind their shadows. Why is the local government allowing this? What has DENR got to say about this?

Studies by environmental groups in areas with black sand mining showed that black sand mining operations contributed to the depletion of fisheries, erosion of land and severe flooding in coastal and riverside communities. Town folk cannot sleep because of the noisy operation going-on.

The local office of Mines and Geosciences Bureau (MGB) in the province said that they have ongoing operations to stop magnetite mining. However, further investigation showed that the ones impacting people’s livelihoods and safety are the legal mining companies.

Last April, an illegal black sand mining deal that went awry was cited by authorities as a factor in the killing of Gonzaga town Mayor Carlito Pentecostes Jr., a modern-day Robin Hood known for his alleged role in black sand mining operations in several coastal barangays in the municipality.

In June of this year three towns of Cagayan – Aparri, Buguey and Lallo were treated to the good news that the MGB national office suspended the Minerals Processing and Sharing Agreement (MPSA) of mining companies which had been extracting black sand minerals in the area. If this were true, then indeed it will be good for the people of these municipalities. I just hope that it really means the end of illegal black sand mining operations in this part of the country. But I also wouldn’t be surprised if the so-called “midnight contracts” or the misleading “dredging permits” issued by local government units may resurface after a few months.

The Mines and Geosciences Bureau Region 02 (MGB R02) through MGB Regional Director Mario Ancheta affirmed the end of black sand mining along the shorelines of Cagayan province. He made an assurance that black sand mining in Cagayan is already stopped with the issuance of corresponding orders. Rehabilitation efforts in mining areas have also been ordered.

Ancheta said that by the end of 2014, MGB hopes to see no traces of black sand mining operations in Cagayan referring to 10 China based mining firms whose permits were canceled last September.

There are many black sand mining operations going on around the country. In Zambales, the mining operation involves the extraction of magnetite iron ores from lahar sands found at the base of Mt. Pinatubo. The Aetas have abandoned their traditional farming as they are lured by the easy money offered by the mining operators. They gather black sand by the use of a magnet block and the operators would buy the black sand they have collected at a measly amount of 40 centavos per 50kg sack. The Aetas are forced to produce 800 kg to 1 ton of black sand per day.

Last year, Advocates for Community Health conducted a medical mission in one of the areas affected by the black sand mining operations. The group found a growing number of cases of skin and lung diseases attributed to the black sand mining and noted other related diseases such as severe eye irritation and hernia. What is even more disturbing are reports that parents are bringing their children to the mining area.

The island of Camiguin in the Babuyan Channel, the site of the singing humpback whales has also been threatened by alleged black sand mining. This will surely have harmful effects on the marine biodiversity in the area. Residents say that black sand mining operations have been going on since June of last year.

In 2012 Public officials and concerned citizens filed with the Supreme Court a petition for the Writ of Kalikasan against President Aquino, other government officials, and Altamina Exploration and Resources, Inc. in connection with “large-scale mining operations” of magnetite ore in the Ilocos-Pangasinan coastline.

They fear danger to the lives and property of residents, massive residential displacement, saltwater flooding, landslides, weakening or destruction of the natural defenses and barriers of coastal communities, and the loss of fishing livelihood rights due to the exploration and mining operations.

By the way, why do government officials seem to be the very first ones to encourage the destruction, exploitation and abuse of our natural environment? In a “midnight mining deal” a few years ago, Arroyo’s Executive Secretary Leandro Mendoza and Altamina Exploration and Resources, Inc. signed a Financial or Technical Assistance Agreement (FTAA) on June 29, 2010, for black sand mining covering an area of over 9,588 hectares in the coastal and offshore areas of Ilocos Norte, Ilocos Sur and Pangasinan.

Shouldn’t it be the role of our local and national government to protect the environment from those exploiting our natural resources? I urge the senators to create a law to completely stop black sand mining in the Philippines so that all these culprits can be incarcerated.

Nickel Shortage Propels Philippines Mining Boom: Southeast Asia

By Ian Sayson


22 December 2014

Michael Defensor is racing to mine and ship nickel from projects across the Philippines to plug the gap in global supplies left by Indonesia’s ore-export curbs.

“Indonesia’s ban affected us positively,” said Defensor, chairman of Pax Libera Mining Inc. and the nation’s environment secretary from 2004 to 2006. He’s preparing four new sites for next year after opening two in the past two years. “We will maximize this window and ship as much as we can.”

The Indonesian curbs, designed to promote local processing, started in January and were upheld in court this month. The ban initially drove prices to a two-year high in May, before larger-than expected Philippine exports and slowing Chinese growth reversed the rally. Citigroup Inc. says it’s still bullish on nickel because the country won’t be able to expand supply much more and a global shortage will emerge.

Futures on the London Metal Exchange, the global benchmark for the metal used to make stainless steel, traded at $15,653 a metric ton today, from this year’s high of $21,625 in May. The price is still 13 percent higher for the year, making nickel the best performing industrial metal on the LME.

“Everyone will try to max out their permit,” said Ramon Adviento, a mining analyst at Maybank ATR Kim Eng Securities in Manila. “The low-hanging fruit has already been harvested even before the ban, so there is probability that the Philippines won’t meet the gap” left by Indonesia, he said.

Nickel Content

While ore exports from the Philippines to China rose 24 percent to 31.2 million tons in the first 10 months, some of that came from stockpiles, Citigroup analysts wrote in a Dec. 1 report. Volumes probably won’t expand much in 2015 even with more mining, they said. Ore from the Philippines typically has less nickel content than from Indonesia, which was the world’s largest mined producer before the ban.

The global market will swing to a deficit of 62,400 tons in 2015 from a 25,100-ton surplus in 2014, according to Citigroup, which expects prices to average $21,625 next year and $25,250 in 2016. Goldman Sachs Group Inc. has a 2015 forecast of $17,500, rising to $20,000 in 2016, and Morgan Stanley listed nickel this month as its top metals pick for 2015.

The forecasts for supply shortages contrast with gains in global inventories. Those tracked by the LME surged to a record this year, expanding 55 percent to 406,812 tons by Dec. 19.

Economic growth in China, the biggest buyer of ore from Southeast Asia and the largest nickel user, is slowing to the weakest since 1990.

Bullish Outlook

The Philippines undermined the bullish outlook for nickel, shipping more ore than expected, Credit Suisse Group AG analysts said in a Dec. 15 report. They cut their 2015 forecast by 21 percent to $17,625, citing in part the “mighty influx” of metal into LME-monitored warehouses.

Nickel Asia Corp. (NIKL), the Philippines’s biggest producer, is among those gaining from the ban. Ore sales rose 38 percent in the first nine months, boosting profit more than fourfold to a record. Shares of the company have tripled this year as the Philippine Stock Exchange Index climbed 21 percent.

More companies are seeking permits, said Leo Jasareno, director of the Manila-based Mines & Geosciences Bureau. The office authorized two more nickel mines this year, including one for TVI Pacific Inc. pending for about 15 years, he said.

“If Indonesia’s ban goes on we’ll see more new mines in five years,” Jasareno said. “Nickel will be the darling of mining in the next 10 years.”

Each of the four new mines may produce about 2 million tons of ore a year, Defensor said. Its Tawi Tawi project in the Mindanao region may provide as much as 3 million tons, he said. It can operate year-round, whereas mines in some other areas have to halt for months during the annual rainy season.

“Ore is in demand and there are many aggressive buyers,” said Defensor. “We’ll keep the machine efficient, so when the ban ends and prices correct, we can still operate.”

MVP pushes mining reforms

By Czeriza Valencia

The Philippine Star

17 November 2014

MANILA, Philippines - Businessman Manuel V. Pangilinan, who controls one of the largest gold mines in the country, is urging the government to implement reforms in the extractive industry so mining firms can cope with the difficult business climate.

During the closing ceremonies of the 61st Annual National Mine Safety and Environment Conference in Baguio City last Friday, Pangilinan said the tax increase proposed by the Mining Industry Coordinating Council (MICC) discourages miners from maximizing the benefits from resources.

“We should endorse a revised taxation scheme which can provide government with a more appropriate share of the benefits derived from the resources it owns… A business like ours is risky – no influence on the price we sell our minerals, and little say on the yield we extract from our ore. Taxing revenues alters the risk/reward balance in mining,” he said.

The MICC is proposing either a 10- percent tax on gross revenue or a tax of 55 percent on adjusted mining revenues plus a percentage of windfall profit, whichever would give higher revenues to the government.

Adjusted mining revenue is defined as the difference between gross sales and direct cost (direct mining cost and administrative expenses).

The new revenue sharing scheme would apply to metallic mining projects holding a mineral production sharing agreement (MPSA) and Financial Technical Assistance Agreement. (FTAA). The draft revenue sharing bill is still being reviewed by the Office of the President.

Pangilinan is more amenable to taxing pre-tax income rather than taxing revenues.

“I submit that taxing our pre-tax income is the more sensible and fair arrangement,” he said.

“These higher taxes must be placed in the context of an industry facing more difficult times ahead— declining metal prices; lower demand due to faltering economies in China and India, Europe and Latin America; continuing anti-mining sentiment. Our industry must be resilient to stay in shape or keep afloat,” he said.

Pangilinan is also proposing the separation of the regulatory functions of the Department of Environment and Natural Resources (DENR) and the industry management and promotion function of the Mines and Geosciences Bureau (MGB).

“We should encourage the government to separate the function of regulation under the DENR, from the function of promotion under MGB. At this moment, this lack of delineation puts us in some regulatory uncertainty and finds no advocate for us within government,” he said.

Sought for comment, Mines bureau director Leo Jasareno said the regulatory functions of the DENR and the MGB are structured to harmonize industry regulations with industry interests.

“Some sectors in the industry view the inclusion of the mines bureau in the DENR as something that restricts the growth of the industry. That’s why there have been calls for the separation of the MGB from the DENR so it can function as a promotion body for the industry” he said.

Jasareno noted, however, that the MGB does not purely function as enforcer of environmental laws but rather as a manager of the country’s resources.

“The mandate of the MGB under the Mining Act is to manage and administer mineral lands and mineral resources. It is not an agency that purely exercises enforcement,” he said.

Philex Mining may review operations if gold prices keep falling

8 December 2014

MANILA, Philippines - Philex Mining said the company will review operations if gold prices in the global market will continue to drop, denying an official's statement it is considering a shutdown.

Philex president Eulalio Austin says the company will do a review if gold prices fall below the company's "break-even" point, which depends partly on the quality of its shipments and operating costs.

"If the prices of both copper and gold will fall below our breakeven point, then we will have to review our position. The breakeven point is determined by the quality of ore and our operating cost," Austin said.

He said the "break-even" price is around $1,055/oz. for gold and $2.55/lb. for copper.

Philex mines gold and copper in Padcal, Benguet province.

It has three other projects, but none are operational yet.

Another company official had said layoffs were possible.

Gold prices are dropping due to several reasons. Many investors shift to gold when the dollar is falling or inflation is rising.

But the dollar is strengthening, as the Fed ended its dollar-printing program. Inflation is slowing as oil prices fall, bringing down transport, energy and manufacturing costs. - With reports from Coco Alcuaz, ANC and Diane Rivera, ABS-CBN News

3 mining firms bag 7 coal exploration deals offered by DOE

Riza T. Olchondra

Philippine Daily Inquirer

19 December 2014

MANILA, Philippines–Three mining companies won the seven coal exploration and development sites offered during the first phase of the Department of Energy’s auction of energy contracts.

During the awarding of the coal segment of the 5th Philippine Energy Contracting Round (PECR5) on Thursday in Taguig City, Energy Secretary Carlos Jericho L. Petilla identified the three firms as CoalBlack Mining Corp., Philsaga Mining Corp. and Sahi Mining Corp.

In a message at the awarding ceremony, DOE Undersecretary Zenaida Y. Monsada said the private sector’s participation in indigenous energy resource development would boost the government’s efforts to wean the country away from imported fuel.

“We cannot always rely on others, we must strive and grow on our own,” Monsada said.

She said the PECR was envisioned to provide stability and sustainability to the energy sector.

“The department will continue to advocate indigenous energy explorations as we gear toward the growth and development of the energy industry and country,” she said.

As for the oil and gas segment of the PECR, which is set to be completed next year, six foreign firms have expressed interest in bidding for oil exploration contracts.

Petilla said six firms bought data packages for PECR5, indicating interest in the bidding set for late May to early June 2015.

Sources said that besides US-based Chevron Corp., ConocoPhillips Co., and ExxonMobil, other firms that obtained data on oil sites under PECR 5 were Repsol S.A. of Spain, TOTAL S.A. of France, and Mitra Energy Limited of Malaysia.

The DOE regularly holds the PECR to encourage investors to develop the country’s indigenous oil and gas resources.

Through this, the government aims to curb the local economy’s dependence on fuel imports and create new revenue streams.

Wooing investors, the DOE is again extending the deadline for oil exploration site auction to mid-2015 (late May to early June) from March 31 in an effort to attract more investors to the Philippine upstream oil industry.

This would be the second extension. It may be recalled that when DOE launched PECR5 in May this year, it originally set the deadline for submission of bids for petroleum exploration areas on Feb. 27, 2015. This was later extended to March 31 and now to mid-2015.

Petilla said the extensions should give investors more time to study the areas on offer.

The government has allowed a third-party company to make initial surveys on PECR5 oil blocks at no cost to the state and to offer such data to interested private investors.

PECR5, including five blocks in the West Philippine Sea, is expected to generate at least P7.23 billion in petroleum exploration investments and at least P150 million in coal exploration investments.

Mine reserves untapped

By Dexter A. See

Manila Standard

17 November 2014

BAGUIO CITY, Benguet—The Philippines has more than nine million hectares of mining reserves that remain untapped but the contribution of the mining industry to the gross domestic product has stagnated at around one percent, a mining industry leader said before the weekend.

Manuel Pangilinan, Philex Mining Corp. chairman, said mining companies have exploited only 140,000 hectares or 1.5 percent of the reserves located in different parts of the archipelago and Filipinos wallowed in poverty despite the country’s rich natural resources.

“Mining is not the enemy. Poverty is. The lack of the most basic necessities, the lack of opportunities, the lack of choices, these pernicious deficits have plagued our people for far too long and in far too many places,” Pangilinan said.

“Yet, the supreme irony is that, in the midst of all this poverty, lie one of the world’s richest natural resources, a gift of providence endowed to our people,” he said.

Pangilinan was the key speaker at the closing ceremonies last Friday of the week-long Mine Safety and Environment Conference at the CAP Convention Center in Camp John Hay. The conference was attended by 30 mining companies and representatives of government and civil society groups.

The conference also tackled anti-mining issues and agreed to implement responsible mining programs such as environment protection and support for indigenous peoples affected by mining operations.

Pangilinan said the contribution of the mining industry to the gross domestic product has stagnated at around one percent and the challenge to government and mining sector was how to make it grow and “create more value and benefits to the people.”

“We are not blind to other potential uses of our land such as tourism and agriculture. I’m all for developing tourism and I believe in the future of agriculture, in feeding our people first,” he said

But mining was a significant driver of economic development and said mining contributed $142 billion each year in Australia; $37.5 billion in Canada; $1.9 trillion in the United States; $24 billion in Brazil, Pangilinan said.

He said the mines in the country were too small to make downstream smelters and refineries commercially feasible and he suggested that the government should improve its regulation capacity and competence.

“We should support government raise its supervisory capabilities through funding of scholarships and training here and abroad and the hiring of requisite personnel. We should encourage government to separate the function of promotion under the MGB (Mines and Geosciences Bureau),” Pangilinan said.

He said taxes on mining should be reviewed so the host government and the national government will have equitable share of the taxes and the benefits accruing to the local government should be remitted directly to them.

Yearender: Gov’t, mining sector remain at odds over revenue issue

By Czeriza Valencia

The Philippine Star

26 December 2014

MANILA, Philippines - Two years after the issuance of the new mining policy, the state and the extractive industry are still striving to find compromise on a number of changes in the country’s mining regime, chief among which is the new taxation scheme.

To recall, the government wants to increase its share of revenues from the mining industry, but the business community deems the latest revenue-sharing proposal by the Mining Industry Coordinating Council (MICC) to be detrimental to attracting investments.

The MICC has approved the imposition of either a 10-percent tax on gross revenues or a tax of 55 percent on adjusted mining revenues, plus a percentage of windfall profit, whichever would give higher revenues to the government.

Adjusted mining revenues were defined as the difference between gross sales and direct cost (direct mining cost and administrative expenses).

The new revenue sharing scheme would apply to metallic mining projects holding a mineral production sharing agreement (MPSA) and Financial Technical Assistance Agreement (FTAA).

To date, the draft revenue- sharing bill is still being reviewed by the Office of the President. Pending the passage of the bill, no new mineral agreements may be signed with the government, although the Mines bureau continues to approve exploration permits.

Miners are also contesting a slew of other changes in the mining regime such as the mapping of the so-called no-go zone areas, or areas where mining activities would be restricted or prohibited.

The business sector is not pleased with the results, claiming it renders around 85 percent of the country’s total land area off limits to exploration.

Recently, miners were also a tad spooked by the bill filed by Sen. Paolo Benigno “Bam” Aquino in August seeking to stop the export of unprocessed mineral ores, similar to the export ban imposed by Indonesia to develop its mineral processing industry.

The bill seeks to attract more investments and generate more income from the extractive industry.

At the time of its filing, the bill spooked the international nickel market, leading to price spikes of the commodity. With the Indonesian ore export ban in place, the Philippines is now the main supplier of nickel ore to China’s nickel pig iron industry.

The business sector likewise met this with apprehension as the local mining industry is not considered large enough to attract investments in smelting plants.

Businessman Manuel V. Pangilinan, whose Philex Mining Corporation, processes copper ore into concentrate, said the government must first encourage growth in the mining industry to encourage investments in the downstream sector.

There are only two nickel processing facilities in the Philippines, both owned by Nickel Asia Corp. Most of the country’s nickel ore is shipped to Japanese and Chinese smelters. There are also two gold processing plants and one for copper processing.

Even the Mines and Geosciences Bureau (MGB) has some concerns about the provisions of the bill as the term mineral processing entails the production of various finished products.

Mines bureau director Leo Jasareno said the intention of the bill conforms to the provisions of the new mining policy for the development of strong downstream operations in the country, but it still has to be determined if the country has sufficient resources to support a robust mineral processing industry.

The new policy, indeed, is an ambitious overhaul of the country’s mining industry as it aims not only to increase government revenues from the production stream but also seeks to impose stricter environment protection for areas that may be adversely affected by mining operations.

Black sand mining

This year, still in line with the new policy, the MICC has ordered a review on the legality and safety of existing black sand operations to curb the proliferation of illegal mining activities.

The MGB has thus imposed, since October, a moratorium on the issuance of mineral ore export permits (MOEP) for magnetite operations.

It has been found out that many holders of dredging permits for flood control projects misuse their permits to extract magnetite. To stop this, the MICC appointed the Department of Public Works and Highways (DPWH) as the supervisor of river delta dredging activities.

Several black sand operations in Cagayan, Ilocos and Zambales have also been found using their industrial sand and gravel permits for black sand operations.

Black sand, or magnetite, is a component of steel production. Most black sand miners in the Philippines export to smelters in China. The Philippines exports an aggregate of about one million tons of magnetite to various buyers annually.

The MGB is also laying down the groundwork for the establishment of more Minahang Bayan sites or areas were small scale mining activities would be confined and practiced safely.

The revised implementing rules and regulations (IRR) for the Small- Scale Mining Act of 1991 has been completed and is awaiting approval of the Environment secretary.

The government is now pushing for the confinement of small scale mining activities to minimize environmental damage caused by its unsafe mining methods and use of chemicals that may pollute waterways.

While no new contract areas may be opened for extractive activities, operating mines are either ramping up their operations or are exploring the environs of their tenements for additional deposits.

Many metallic mines are now extracting high-grade ores to cope with weak metal prices.

The government is helping them sustain their operations and contributions to the economy by allowing them to expand their contract areas provided that these have viable reserves and the expansion are be made within the immediate vicinity of the contract area.

Through the recommendation of the MGB, the Department of Environment and Natural Resources has recently allowed the expansion of existing MPSA and FTAA areas upon validation by the MICC.

Most operating mines, to date, continue to perform well, with some degree of difficulty because of weak metal prices.

Philippine metal production rose 22 percent in the first half of the year in terms of value on strong copper and nickel production. The aggregate metal production for the period reached P57.27 billion from P46.84 billion registered in the same period last year.

Major copper ore projects in the country such as the Didipio copper-gold project in Nueva Ecija of Oceanagold Philippines, Inc. and the Padcal Copper-Gold Project of Philex Mining Corporation sustained high production volume during the first half.

Likewise, the nickel sector received a boost from the operations of the high pressure acid leach (HPAL) plant of Taganito Mining Corporation that joined the production stream in 2013.

The commencement of operations of the Taganito plant cushioned the effects of the closure of the Canatuan copper-zinc project of TVI Resource Development (Phils) Incorporated and the Rapu-Rapu Polymetallic project of Rapu-Rapu Minerals, Incorporated (RRMI).

The MGB has yet to release data on the volume of investments made in the mining sector for this year. In 2013, however, investments exceeded targets on continued capital expenditure of existing mining projects as well as potential big ticket projects that are still in the pre-development stage.

Investments totaled $1.311 billion, higher than projected investments of $812.49 million for 2013.



EITI-compliant miners, oil firms worth P35B in gov’t revenue

By Mikhail Franz E. Flores, Reporter

Business World Online

10 December 2014

COMPANIES in the extractive industries that have signed on to an international transparency standard accounted for at least P35 billion in government revenue in 2012, the organization promoting the standard said.

The Philippine-Extractive Industry Transparency Initiative (PH-EITI) said on Wednesday in a report that the total was generated by 30 mining companies and six oil and gas firms which submitted their tax and other information to the PH-EITI.

Broken down, mining companies contributed P6.3 billion in revenue while oil and gas companies paid P29.01 billion.

Finance Assistant Secretary and PH-EITI Chair Ma. Theresa S. Habitan said in a briefing that the disparity in payments made by the two classes of extractive companies was due to their being taxed in different ways.

“We have to consider that there are different regimes that guide companies in the framework of payment of taxes,” Ms. Habitan said.

“Some companies enjoy some income tax holidays. So therefore, corporate income taxes would be lower,” she added.

The report likewise noted differences between the reported tax payments of the companies as well as government agencies. PH-EITI cited three reasons for the discrepancies: differences in accounting frameworks, information gap particularly in the provinces, and limitations in the reporting system.

For the first PH-EITI report, the multi-stakeholder group (MSG) considered 18 revenue streams.

“That’s quite comprehensive,” lawyer Marie Gay Alessandra V. Ordenes, National Coordinator of the PH-EITI, said during the briefing.

Based on another measure, the reconciled amount between government agencies and reporting companies, collection and payments to six government offices and local government units reached P52.7 billion.

The bulk of the total consisted of payments made to the Department of Energy (P28.992 billion) and the Bureau of Internal Revenue (P21.36 billion).

Other offices include Bureau of Customs (P725 million), Philippine Ports Authority (P70.40 million), Mines and Geosciences Bureau (P964 million) and the National Commission on Indigenous Peoples (P280 million).

Local government units received P373 million.

Moving forward, PH-EITI recommended legislation to compel companies in the extractive industries to participate.

“A PH-EITI with compulsory processes and powers and a multi-sectoral perspective can do more vital work if it does not depend on voluntary commitments from government and business,” the report noted.

The report could likewise be improved in the future “for more in-depth study”.

The PH-EITI was formed through President Benigno S. C. Aquino’s Executive Order (EO) no. 147 signed on Nov. 26 last year. The EO created the PH-EITI multi-stakeholder group which is mandated to complete the country’s requirements to become a global member of the transparency initiative.

The Philippines’ candidacy was approved last May 2013 and it is required to start disclosing payments from its extractive sector and meet all the requirements under the standard to become EITI-compliant.

The completed report, composed of two volumes and reaching over 200 pages, will be submitted to the EITI International Board before the end of the year.

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