MAC/20: Mines and Communities

Philippines update

Published by MAC on 2007-06-01


Philippines update

1st June 2007

Sandwiched between slowly evolving election plans and the forthcoming Asia-Pacific Mining Conference in Manila (with some relish thrown im, following the President's recent visits to Japan, New Zealand and Australia), it has been a busy time recently for government mining propaganda. The executive's line that mining will bring prosperity for all is saturating the Philippine press, and only a few journalists are questioning the actual rate of growth (or lack of it) in foreign invesment in the domestic mining industry.

Nonetheless, in response to this barrage of press releases and reports, an equally vociferous range of critics still pursues its agenda, especially over the deals being done by the travelling President.

There have been further requests for an investigation of local peoples' claims of a spillage at the troubled Rapu Rapu mine (and the share price of its owner. Lafayette, appears to be taking a heavy drubbing).

Atlas Consolidated has continued to its expand its horizons, bouyed up by a loan secured via Deutsche Bank. All this links to recent coverge of Canada's Roundtable process (see related article posted on the MAc site this week) as well as the launch of the Human Rights Impact Assessment. Also noted here is the request of Philippine Bishops for support in critiquing the activies of Canadian mining company, TVI.


DENR transfers disposition of cancelled mining permits to new gov't corporation

By EDU LOPEZ, Manila Bulletin

30th May 2007

The Philippine Mining Development Corp. (PMDC) will administer the disposition of all cancelled mining permits that is expected to generate more revenue for the government.

The transfer of the function to dispose cancelled mining permits to PMDC from the Department of Environment and Natural Resources (DENR) is another major step in revitalizing the local mining industry, according to DENR Sec. Angelo T. Reyes.

The move would open up some 68,625 hectares of mineral lands that have been idle for many years by uncommitted investors. The order covers all mining permits cancelled by the DENR under memorandum orders No. 2005-3 and No. 2005-13, which included 65 non-performing permits in various areas in the country.

"This will enable the entry of more serious investors, thus further spurring development and economic activity in the mining sector. At the same time, this will result in higher revenues from government mining assets," Reyes said. Reyes, who is also the chairman of the PMDC, said that transferring the management of these permits to a governmentowned corporation would allow government greater flexibility and leverage in developing these mines.

The transfer would put the task of disposing vacated mineral lands to PMDC, formerly known as the Natural Resources Mining development Corp., through public bidding.

However, PDMC also has the option to develop and operate these mines by itself or in joint venture with a qualified private party or contractor.

The Mines and Geosciences Bureau (MGB) would coordinate with PMDC on the orderly and appropriate transfer of all relevant documents and information as soon as possible.

It may be recalled that then DENR Secretary Michael T. Defensor issued DMO No. 2005-03 on February 1, 2005 canceling 93 non-performing mining permits.

He later issued DMO No. 2005-13 declaring as final and executory the cancellation of 65 of 93 idle permits, while the remaining 28 permits were subjected to further review in view of the motions for reconsideration filed by their owners.

A moratorium, however, was imposed for the filing of mining applications on the 65 idle mineral lands until such time that the appropriate policy is issued by the DENR.

The 65 permits were cancelled in view of certain violations of the provisions of the Mining Act of 1995, its implementing rules and regulations and or terms and conditions of their respective mining permits.

The main criterion for the cancellation was the failure of the mining contractors to undertake mining activities on the ground over a long period of time.


Mining investments coming only in trickles

Only a few mines have started actual operations - PCCI

By DEXTER A. SEE

http://www.mb.com.ph/archive_pages.php?url=http://www.mb.com.ph/issues/2007/05/15/PROV2007051593940

15th May 2007

BAGUIO CITY - Mining investments in the country have been coming only in trickles since the passage of the controversial Mining Act of 1994 that was initially thought to make a difference in reducing mass poverty in rural communities.

This was disclosed in a study commissioned by the Philippine Chamber of Commerce and Industry (PCCI) to determine the readiness of the country's mining industry in absorbing trade liberalization.

The report concluded that the "ghost of irresponsible mining" continues to haunt one of the most competitive segments of the economy, citing man-made tragedies caused by negligent operators, like Marcopper, whose solid and liquid wastes wreaked havoc in the communities that hosted them.

The Philippine Export News and Features stated the gold curse seem to have haunted the country since the most of the people remained dirt poor even when the mining boom was at its height in the 1980s when gold hit an all-time high price of 0 [sic] per ounce.

The PNF noted that the study stated that the country remains one of the richest in the world not only with precious metal reserves like gold, silver, nickel and copper but also with non-metallic raw materials such as silica for glass manufacturing and limestone for cement making.

However, only a few gold, copper and nickel mines have started actual mining operations since the collapse of the industries when all companies, except Philex and Lepanto mines, closed shop.

The study also stated that locally produced cement is costlier in the country than anywhere in the Asian region due to a cartel that fixes high prices while only some glass factories are in place. These include Asahi Glass, a subsidiary of San Miguel Corp.

The study stated that if fully tapped, mining should make the difference in the country's poverty reduction program in the rural communities by generating tens of thousands of jobs and by boosting downstream industries such as fine jewellery trade.

It was claimed that the problem does not lie with the policy on environment because the country's mining laws are considered superior to those of the United States and Canada in environment safety nets and ensuring social responsibility.

The new mining law requires mining companies nationwide to segregate a portion of their capital for the so-called social development programs in the communities where they operate. With this proviso, displaced residents and other beneficiaries have the chance to have their own sources of livelihood while improving vital infrastructures to link them with other parts of the region.


RP's rich mineral deposits ticket to economic development -- Reyes

http://denr.gov.ph/article/articleprint/4345/-1/254/

21st May 2007

The Philippines is a logical choice for many prospective mining investors because of the country's highly potential mineral wealth, and the country should take advantage of this interest to generate funds needed for economic development.

Environment and Natural Resources Secretary Angelo T. Reyes gave this assessment in a speech before members of the Philippine business community during the JP Morgan Philippines Corporate Access Days forum held yesterday in Makati City.

"The Philippines, being situated along that well-defined belt of volcanoes called the 'circum-pacific rim of fire' that extends from the tip of South America to North America, East Asia and Oceania, is rich in these mineral deposits," Reyes said. He named some of these minerals as gold, copper, iron, chromite, nickel, cobalt and platinum.

Reyes said that the belt is an extended zone where tectonic plates collide. The collision of the plates and volcanic activities have resulted in the formation of the metallic minerals.

"It is not surprising, therefore, that our country may rank as one of the most mineral-endowed in the world," he said.

Among the areas identified by the DENR chief as having high mineral potential include Baguio and Mankayan districts area, for copper and gold; Surigao-Davao districts area, for gold, chromite and nickel; and Palawan, also for nickel. Among the mining companies operating in these areas are Lepanto Consolidated Mining Co. and Philex Mining, for gold in the Baguio-Mankayan area; Berong Nickel Mining Co. and Celestial Nickel Mining, for nickel in Palawan; and JLB Enterprise in Surigao del Norte, Ventura Timber Corp. in Surigao del Sur, Carac-an Development Corp. in Surigao del Sur and Nationwide Development Corp. in Davao del Norte.

Reyes disclosed that a total of US$694 million in investments have been placed in the country's mining industry during the past two and a half years of the government's mining revitalization program. He said the investments are still expected to rise in the coming years with significant inflow next year up.

For this year, Reyes said local mining investment is expected to reach US$348 million. This will result from the expansion of the HPAL facility of Coral in Palawan expected to bring in about $154 million; $23 million from the construction of the base metal plant of TVI in Zamboanga del Norte, $21 million from the development of the Didipio copper-gold project in Nueva Vizcaya; $36 million from the Masbate gold project in Masbate island; and $97 million from the continuing rehabilitation of the Carmen copper project in Cebu.

Reyes also said that since the start of the government's mining revitalization program in 2004, some 6,500 new jobs have been created by the industry and that an additional of more than 30,000 jobs are still projected to be generated between 2008 and 2010.

Reyes also said that aside from gold, copper, and nickel, magnetite- and chromite-bearing sands also abound in the country's offshore area.

He said that the Philippines has around 2.2 square kilometres of offshore and exclusive economic zone area that can be explored for such resources.

"The country's rich mineral wealth cannot just be left untapped on the ground but has to be developed and exploited in order to generate the capital wealth needed for the development of our communities and country," Reyes said. DENR 2006 mining industry statistics showed that mining gross production value reached PhP68.4 billion; mining's contribution to gross domestic product (for 2005) also reached PhP14.8 billion; and taxes, fees and royalties from mining amounted to PhP3.1 billion.


Killings haunt GMA in New Zealand

By MARVIN SY The Philippine Star,

http://www.abs-cbnnews.com/storypage.aspx?StoryId=78799

29th May 2007

WELLINGTON (via PLDT) - Protesters greeted President Arroyo and human rights was one of the main issues she discussed with New Zealand Prime Minister Helen Clark during their meetings here Monday.

After a bilateral meeting between the two leaders at the Prime Minister's Office at the Parliament House, Clark informed the media that the respective human rights commissions of the two countries "have started a dialogue and are exploring ways in which New Zealand might share its experience and support the work with its counterpart."

The Philippines was called a "disaster area for human rights" by New Zealand parliamentarians and human rights activists, which said hundreds of trade unionists, priests, journalists and human rights advocates had been systematically murdered since Mrs. Arroyo took office in 2001.

"An initial area of cooperation is likely to be in support of human rights-based training for the Philippine police and defense forces," Clark said.

The issue was extensively discussed by the two leaders during the Prime Minister's visit to the Philippines in March 2006 and January this year. Clark explained that the idea is for the respective human rights commissions of the two countries to work with each other and "go out and scope what could be done and then to follow through with some support from development assistance budget for helping make this work."

Human rights has also become an issue with the local media here as a group of protesters lined up before Parliament House to call for the release of Anakpawis party-list Rep. Crispin Beltran from jail.

Arroyo defended her record on human rights, as a lone activist in a steel cage outside Parliament called her the "worst dictator" in the troubled nation's history.

Around 25 individuals held up picket signs and banners bearing "Free Ka Bel" on the steps of Parliament House while the President was meeting inside with the Prime Minister.

Lone protester Dennis Maga said from his steel cage on Parliament's lawn that he was protesting the "extrajudicial killings in our country and the political persecution of progressive labor representatives."

"We have had 14 presidents ... and Mrs. Arroyo so far is the worst of them all for being a dictator and totalitarian ruler," said Maga, who said he was protesting the arrest of Beltran on sedition charges.

Mrs. Arroyo said the arrest of Beltran was done with due process and in accordance with Philippine laws.

She allayed concerns raised that Beltran's rights were being violated with his detention because of his case of rebellion.

"Others in the same situation as him have been able to get bail, going through due process. Let me assure you that all his civil rights and human rights are protected by our laws and the administration of those laws," the President said.

The President assured Prime Minister Clark that the Philippine government is doing everything to address the human rights issues, including the unexplained killings of militant activists and members of the media.

She reiterated that the work of the Melo Commission, an independent body that was tasked to investigate the killings and submit recommendations to the President, has resulted in the establishment of special courts for prosecution, the allocation of more money for the investigators of these crimes and the introduction of new laws to protect witnesses.

"On human rights, we share the values of democracy, social justice and human rights with New Zealand and other democracies. The Philippines is in a fight to turn around its economy, to lift up the poor, and winning it. Slowly but surely, we're investing in our people and creating a new hope and opportunity for our people," the President said in her statement, which she read at the joint press conference.

"Similarly we're in a fight to turn around our history of political violence and retribution. Like our economic turnaround, we are slowly, surely and steadily breaking down the cycle of violence. And I welcome our friends in the international community like New Zealand to work with us to erase this legacy of violence and violations forever," the President added.

The Prime Minister also noted that the officials of New Zealand's human rights commission have met with their counterparts in the Philippines in Geneva, Switzerland to discuss the human rights situation the Philippines.

"We will be having a New Zealand human rights commission official go to the Philippines in the not too distant future. We're looking to develop some cooperation where New Zealand in its small way, with its small development assistance program, might play a role in supporting human rights education training for Philippine institutions like the police and military," Clark said.

'Disaster area'

Green Party foreign affairs spokesman Keith Locke said last year Amnesty International condemned Arroyo's failure both to investigate this wave of unexplained killings or to prosecute the perpetrators – and it accused her of perpetuating a cycle of human rights violations.

"The Philippines is a disaster area for human rights. It would be helpful if Prime Minister Helen Clark could direct some of the concern she currently reserves for Fiji and Zimbabwe to the Philippine situation," he added. Mrs. Arroyo is attending the Asia-Pacific Interfaith Religious Dialogue from May 29 to 30 at Waitangi, where she also met with Clark.

"By attending an interfaith dialogue at Waitangi, Arroyo cannot duck responsibility for the atrocious human rights record in the Philippines, which extends to members of her House of Representatives," Locke said.

"She would have a lot more credibility if she tried practicing similar tolerance at home," Locke said.

He cited the case of Anakpawis' Beltran who has been in jail for over a year on rebellion charges.

"All of the members of parliament from three left wing parties in the (Philippine) Congress have either been subjected to imprisonment, or threatened with prosecution," Locke added.

At the same time, he scored the Arroyo government's failure to protect the safety and rights of Filipino journalists.

Locke urged New Zealand journalists to take the lead from Canadian journalism organizations, which have rallied this month to the defense of their colleagues in the Philippine media who have become deadly targets.

"Thirty-one journalists have been murdered since Arroyo took office, and the President's husband has only this month stopped a campaign he has waged since 2003 of mounting 43 separate criminal lawsuits against journalists he doesn't like," Locke said.

More rallies

From New Zealand, Mrs. Arroyo will proceed to Australia for a two-day state visit on the invitation of Australian Prime Minister John Howard, starting May 30.

Various Filipino and Australian groups will hold a peaceful rally in Sydney and Melbourne during the Australian visit of the President to highlight the unexplained killings of human rights activists, farmers, students, lawyers, journalists, and church workers in the Philippines.

The rallies will be held in the two major cities of Sydney and Melbourne. The Sydney rally will be held Tuesday from 12:30-1:30 p.m. in front of the Philippine Consulate at 27 Wentworth Avenue , Sydney organized by Action for Peace and Development in the Philippines (APDP), Migrante Philippines–Australia and the Philippine-Australia Union Links (PAUL).

On the other hand, the Melbourne rally will be held Thursday in front of the Grand Hyatt at 123 Collins Street , Melbourne, organized by Philippine Australia Solidarity Association, Migrante-Melbourne and the Australia Asia Worker Links.

The rally will be attended by members of the Filipino-Australian community, parliamentarians, unions, churches and rights groups concerned about the worsening human rights violations in the Philippines.

Maori welcome

Mrs. Arroyo was greeted upon her arrival in New Zealand Monday with full military honors and a ceremonial Maori welcome at the Government House.

The President was greeted with the Powhiri or the Maori traditional welcome and the Haka or dance by male members of the Maori Cultural Group.

Foreign Affairs Secretary Alberto Romulo, who was beside the President during the ceremony, was given the task to pick up a rakau tapu or dart laid down by the Maori warrior.

Afterwards Mrs. Arroyo inspected the Royal Guard of Honor with the band playing the contemporary song "On A Clear Day" and a shot from canons.

The entire ceremony went without a hitch except for the last part where the President was supposed to do the "hongi" or the traditional touching of noses. Three school children went up to the President for the hongi but she missed touching the nose of one of them.

No more mining

Philippine-based environmental groups are warning the President, who is heading for Australia, not to seal another multi-million mining deal there because it portends bigger environmental disasters for the country.

"She is courting more danger by trying to seal a multi-billion dollar deal with BHP Billiton, the world's largest mining company whose main headquarters is located in Melbourne," said Clemente Bautista, national coordinator of the environmental group Kalikasan Peoples Network for the Environment (Kalikasan PNE).

"We fear that GMA's trip to Australia combined with the government's refusal to uphold a moratorium on mining in the environmentally-critical island of Rapu-Rapu (in Albay) in deference to Lafayette's wishes will only encourage more mining firms to flock into the Philippines and engage in wanton, plunderous and irresponsible mining operations," Bautista said.

The Philippine government is vigorously wooing BHP Billiton, which according to Bautista, continues to evade responsibility for the environmental disaster it caused in the island of Papua New Guinea.

Mrs. Arroyo is meeting with executives of BHP Billiton and other mining executives from the Australia-New Zealand Chamber of Commerce (ANZCham) this week.

The meeting, Bautista claimed, "is a grave cause for alarm because BHP Billiton is a giant mining firm which has been facing a $4-billion class suit filed this January 2007 by the Ninerum people of Papua New Guinea for the Ok Tedi environmental disaster it caused."

Bautista said, "GMA in effect is actually wooing a giant mining firm that killed a river system in another Asia-Pacific country. And now she is practically begging these same mining firms to operate in the Philippines."

With Aurea Calica, Artemio Dumlao, AP, AFP


GMA wooing grave trouble with Australian mining deals, Philippine environmental activists say

KALIKASAN-PNE NEWS RELEASE

28th May 2007

Pres. Gloria Arroyo stubbornly refuses to heed the grim warnings left by the environmental disaster caused by Australian-owned Lafayette Mining in Rapu-Rapu island, Albay and is even courting more danger by trying to seal a multi-billion dollar deal with BHP Billiton, the world's largest mining company whose main headquarters is located in Melbourne, decried environmental activist organization Kalikasan Peoples Network for the Environment (Kalikasan PNE).

"We fear that GMA's trip to Australia - combined with the government's refusal to uphold a moratorium on mining in the environmentally-critical island of Rapu-Rapu in deference to Lafayette's wishes - will only encourage more mining firms to flock into the Philippines and engage in wanton, plunderous and irresponsible mining operations," Kalikasan PNE National Coordinator Clemente Bautista said.

Among the giant mining firms that GMA is wooing is BHP Billiton, which continues to evade responsibility for the environmental disaster it caused in the island of Papua New Guinea, Bautista said.

"GMA is set to formally meet up with executives of BHP Billiton and other mining executives from the Australia-New Zealand Chamber of Commerce (ANZCham) in the course of her visit to Australia. This alone is a grave cause for alarm because

BHP Billiton is a giant mining firm which has been facing a $4 billion class suit filed this January 2007 by the Ninerum people of Papua New Guinea for the Ok Tedi environmental disaster it caused," Bautista said.

"For two decades, BHP Billiton dumped 80,000 tons of rock mine tailings filled with toxic heavy metals such as copper, zinc, cadmium, and lead directly into the Fly and Ok Tedi rivers in Papua New Guinea. This has ruined the livelihoods of hundreds of thousands of farmers, poisoned some 2,000 square kilometers of forests, and contaminated two of Papua New Guinea's largest river systems. The damage is expected to continue for decades, possibly even centuries," he explained.

BHP Billiton is now eyeing a multi-million dollar nickel project in Pujada Peninsula, Davao Oriental province in partnership with local mining firms Hallmark Mining Corp. and AustraAsia Link Mining Corp, Bautista noted.

"In effect, GMA is actually wooing a giant mining firm that killed a river system in another Asia-Pacific country. And now she is practically begging these same mining fims to operate in the Philippines," Bautista said.

"GMA's Australia trip is downright unpatriotic and dangerous to the Filipino people and our patrimony. The President is literally asking for more foreign military troops and giant foreign mining operations in the Philippines without heed to their long-term implications," Bautista said.

Reference: Clemente Bautista, Kalikasan PNE National Coordinator 0922-844-9787 KALIKASAN -PEOPLES NETWORK FOR THE ENVIRONMENT 26 Matulungin St. Central District, Quezon City, Metro Manila, Philippines Tel./Fax; +63 (2) 924-8756


GMA back from Tokyo with $1b in investments

Manila Standard

May 2007

PRESIDENT Gloria Macapagal Arroyo returned from a four-day official visit to Japan yesterday, bringing with her more than $1 billion in new investments, including a deal with Sumitomo Corp. for nickel mining in Surigao del Norte.

Describing the visit as one of the President's most fruitful missions, Trade Secretary Peter Favila said Mrs. Arroyo was able to drive home her message to Japanese businessmen that the Philippines had "finally arrived as a premier investment destination in Asia."

Mining, power and information technology were investment areas that the Japanese should consider, the President said.

During her visit, Marubeni and Tokyo Electric agreed to invest $500 million more in the power industry, following their $3.5-billion purchase of power plants last year.

The President thanked Tohru Tsuji, chairman of Marubeni, for his company's new investment at their meeting in Tokyo.

In her keynote address at the 13th Nikkei Conference on the Future of Asia, Mrs. Arroyo told delegates from various countries that the Philippines had achieved 25 successive quarters of economic growth.

From 2001 to 2007, the President said, the Philippines was enjoying an economic upturn while some of its neighbors were going through a recession.

"Today, exports and imports are booming even as the peso strengthens. We had our best year ever in foreign direct investments and with our stock market," she said.

In a meeting with executives at Toyota Motors, she thanked the car manufacturing giant for investing in a transmission plant in Laguna.

As a gesture of appreciation, Toyota executives informed the President that they would donate $3 million to reforest 3,500 hectares of denuded land in Cagayan. Executives of the Japan Bank for International Cooperation assured Mrs. Arroyo that they would continue to support projects in priority sectors in the Philippines. The bank has supported Marubeni's investments in power and Sumitomo's involvement in mining.

In a meeting with bank officials, the President also addressed pending issues regarding Japan's 27th yen loan package.

Before returning to Manila, the President met with members of the Filipino community in Japan and urged them to invest in real estate, the stock market, government bonds and Treasury bills, and small- and medium-scale enterprises to help sustain the country's economic growth. Fel V. Maragay


Atlas unit secures govt guarantee for rehab loan

By Darwin G. Amojelar, Manila Times

29th May 2007

CARMEN Copper Corp., the subsidiary of listed Atlas Consolidated Mining and Development Corp. has secured a loan from Deustche Bank for the rehabilitation of its mine in Toledo City in Cebu province.

In a disclosure to the Philippine Stock Exchange, Atlas Mining said Carmen Copper has signed a $100-million term loan facility agreement with Deutsche Bank that shall be guaranteed by state-run Philippine Export-lmport Credit Agency (Philexim).

Carmen Copper expects closing requirements to be completed and the loan drawn down within the next thirty days.

Recently, the company completed a three-month pre-rehabilitation program which included structural repairs on key facilities at the Carmen mine site such as the 42,000 tons per day copper concentrator plant, as well as the purchase of a new fleet of open-pit mining equipment composed of trucks, excavators and bulldozers.

"Production of copper concentrates is expected within 11 months from the start of full rehabilitation, building up to an average annual production of 47,000 tons of copper in concentrate, 41,000 ounces of gold, 135,000 tons of pyrite concentrate and 419,000 tons of magnetite iron ore concentrate," the company said.

The Carmen mine has remaining copper ore resources of 874 million tons as well as an estimated 1.2 billion tons of ore previously classified as waste. >From 1955 to 1994, Atlas mined 667 million tons of copper ore from which it produced 5.6 million tons of copper, 1.96 million ounces of gold and 7.2 million ounces of silver in high quality concentrate.

The Carmen mine forms part of Atlas Mining's larger mineral property protect portfolio covering 48,305 hectares within the Philippines.


Atlas acquires Amosite for P57M

By Amy R. Remo, Business Inquirer

23rd May 2007

ATLAS CONSOLIDATED MINING AND Development Corp. has acquired from Anscor Property Holdings Inc. its entire stake in Amosite Holdings Inc. for P57.2 million.

In a disclosure to the Philippine Stock Exchange, Atlas said it would now have all the rights over and interest in Amosite.

Atlas also said Amosite's shares were composed of 75,000 common shares with a par value of P100 a share. These constitute 99.99 percent of Amosite's total issued and outstanding shares.

Amosite owns parcels of land, with aggregate size 1,313 hectares, in the cities of Toledo and Cebu.

As of March 2007, Amosite's total assets amounted to P62.5 million, P60 million of which represents investment in properties.

Registered in October last year, Amosite was classified by the Securities and Exchange Com­mission as "a domestic corporation established for the purpose of acquiring and developing re­al and personal properties of any kind."

With this acquisition, Atlas has gained the right to use the property owned by Amosite, which is deemed valuable to "the development of the Toledo Mining Project.

Atlas' acquisition of Amosite was undertaken in view of Atlas obligation under its various agreements with Crescent Asian Special Opportunities Portfolio to obtain rights over all proper­ties necessary for the operation of the Toledo Mining Project.

Established through the merger of assets and equities of three pre-war mines Atlas is engaged in mineral and metallic mining and ex­ploration that primarily produces copper con­centrates and gold with silver and pyrites as major by-products.

The company's copper mining operations, which started commercial operations in 1955, are centred in Toledo City, Cebu, where two open pit mines, two underground mines and milling complexes (concentrators) are located.

The Cebu copper mine ceased operations in 1994. Activi­ties after the shutdown have been limited to safeguarding and maintaining the property, plant and equip­ment at the minesite.

The Masbate gold mine, meanwhile, was sold to Base Metal Minerals Resources Corp. in 1996.


Canada's Mining Companies: It's the Government's Turn

Embassy Magazine, editorial

23rd May 2007 (see note* below)

An investment newsletter offers the advice that there are still vast profits to be made from extraction investment in the Toronto Stock Exchange "because more and more mining companies are heading to Canada."

Five Roman Catholic bishops from dioceses in the Philippines have also noticed that mining has become the doyen of Canada's international businesses. But the bishops are not as interested in an investor's ability to turn a quick profit on the TSX. They are more concerned with the lives of the people who live in their dioceses.

In virtually every instance, the people who live close to mining operations are poor. And the social argument for the industry is that the trickle-down rewards from the mine's profits will bring some economic relief to the people who live nearby. No one doubts this can be true. The trouble is there are still too many cases where local people suffer the effects of environmental degradation and strong-armed mining operation security, accompanied only by the rapid exodus of profits out of the country. In short, the poor of a mining region can often end up still poor but living in a destroyed environment.

In this case, the Philippine bishops are hoping to find support in Canada because a large-scale mining operation in Mindanao, Philippines, involving a Canadian company, the Calgary-based Toronto Ventures Inc., hasn't convinced them that it will bring their parishioners anything but trouble. The mine in question is a gold mine.

The bishops say the company's operations "are wrecking havoc upon our land and people." They do not believe the company's promises of local economic development and they ask that Canadians reconsider investing in Canadian mining companies operating in their country.

Typically, the response to the bishops and other like clerics who have sounded the alarm over Canadian mining activities has been that these church people are for the most part "luddites." That word, by the way, is a direct quote this newspaper was once told by a former ranking Canadian diplomat posted to a country where a large Canadian-owned gold mine was attracting a lot of criticism.

But more recently there has been an attempt by the Canadian extraction industry and NGOs to reach guidelines that create a framework for corporate responsibility in their activities outside of Canada. We've been told that several federal departments-and the government itself-were actually surprised that a consensus could be reached on this contentious issue. But it should come as no surprise that the remote foreign operations of major corporations no longer take place in obscurity. Global scrutiny has grown up beside globalism like a conscience whose voice, while growing louder, is also making some very practical appeals. And national governments, when they are inclined to some kind of progress, are also making a difference.

This is the case of Norway's admirable investment fund: companies that contribute to social evils (say, by producing nuclear weapons and cluster bombs or marketing goods created by child labour) will lose investment money, while those that are willing to place the common good beside the bottom line will prosper. In the case of Norway, this means that companies like General Dynamics, Northrop Grumman and Wal-Mart saw their shares dumped by the country's $309-billion investment fund.

Canada's mining industry is increasingly becoming one of the world's big extraction players. But to the credit of both the industry and its increasingly sophisticated watchdogs, it has reached a consensus on good mining practices.

Now is the time for Canada's government to step up to the table by formalizing the kind of mining guidelines that could make Canada's mining industry true world leaders. And, to answer the bishops' plea, to place those guidelines alongside the Canadian gold mine in Mindanao.

[* Note by MAC Editor Catherine Coumans of MiningWatch Canada: Unfortunately Embassy got TVI Pacific's name wrong (as many still do), and the editors do not mention that it was actually the testimony of local people before a parliamentary committee against TVI Pacific that ended up in the CSR Roundtables. Not to mention that the parliamentary committee in fact tasked the Canadian Government with investigating TVI Pacific and that the government side-stepped the issue.]


Possible water contamination and fish kill in Rapu-rapu, residents report

Kalikasan Press release

1st June 2007

Environmental activists and local residents of Rapu-rapu, Albay reported that there is a possible water contamination in the creeks and coastal waters surrounding the Lafayette mining area.

Mr. Antonio Casitas, a Rapurapu resident and leader of the Sagip Isla Sagip Kapwa, a local organization opposing the operation of Lafayette, reported that for two weeks now foul odor coming from creeks nearby the mining area in Brgy. Poblacion were observed by the residents.

"Umabot na ang baho na nagmumula sa ilog sa Poblacion, tingin naming posibleng may tumagas o pinakawalan tubig mula sa Lafayette," Mr. Casitas said. (The stench coming from the river in Poblacion has reached [us], we think that Lafayette spilled or released this foul water from their site).

The residents also reported that marine life such as small fish, star fish and shells were found floating or dead in the coastal areas.

"Maraming nagsilutang na patay na isda at starfish. Dulot na siguro ito noong polusyon na nanggaling sa mga creek," Casitas said. (Many dead fish and starfish were found floating in the water. This may be caused the pollution coming from the creek).

Kalikasan (People's Network for the Environment) immediately called on the government to investigate the reported incident. As of now, the Bicol Regional Mines and Geoscience Bureau (MGB) of the DENR has no report of the incident or explanation for the sudden death of marine species in the area.

"In the mine spills and water contamination done by Lafayette in October 2005, the incidents were reported not on time and Lafayette initially denied the incident. The government should first put the safety and welfare of the local residents and the environment in the island, they should stop the operation of Lafayette and launch a full investigation now before a tragedy happens again," Kalikasan PNE National Coordinator Clemente Bautista said.

Last week, Lafayette announced that it will temporarily halt its operation for eight days in early June to fix its mining equipment, particularly the semi-autogenous grinding (SAG) mill. Based on the report of Lafayette, the said SAG mill was bought second-hand from Colorado, USA.

"The DENR should also investigate and explain the real reason why Lafayette is stopping its operations this June. This could be related to the alleged contamination which may lead to the 'nervousness' of Lafayette stockholders which are now selling their shares from the company. Lafayette stock value is way below compared to its price before February this year. They may have smelled something wrong in Lafayette operation," Bautista said.

Since the end of April, Lafayette stock value decreased almost by 20% on the Australian Stock Exchange. The current price ($A0.0700) of Lafayette stock is almost 46% lower to its previous highest price ($A0.1300) this year.

Meanwhile, the Center for Environmental Concerns (CEC), an environmental research NGO, says that they will raise different social and environmental issues in their lobbying in Australia with stockholders and bank financiers of Lafayette.

"Since the operation of Lafayette in Rapu-rapu Island, the local people have not only experienced environmental woes but economic dislocation as well. Studies conducted by Ibon Foundation and government-sponsored Rapu-rapu Fact-Finding Commission revealed that among the major of the negative impacts of Lafayette operation is the drastic decrease of the productivity and income of fishermen and farmers in the island. Also, militarization and human rights violations are on the rise as a as a result of sudden increase of military and private security forces in the island as deployed and hired by the government and Lafayette, respectively," said. Frances Quimpo, Executive Director of CEC.

Ms. Quimpo and Mr. Casitas will do international lobbying in Australia starting next week to advocate and gain support for campaign to close of Lafayette mining project in the Philippines.

References:
Clemente Bautista, National Coordinator for Kalikasan PNE, 0922-844-9787
Frances Quimpo, Executive Director for the Center for Environmental Concerns,
0917-884-6325
Kalikasan-People's Network for the Environment (Kalikasan-PNE)
No.26 Matulungin St. Bgy, Central, Quezon City, Philippines 1100
Tel. No. +63-2-9248756 Fax No. +63-2-9209099


Rapu-Rapu Reopening A Go-Signal For More Damaging Mining Investments

MEDIA RELEASE IBON Foundation

31st May 2007

In the wake of the reopening of the controversial Rapu-Rapu polymetallic mine in Albay last February, the Department of Environment and Natural Resources recently announced that investments in the mining sector are expected to hit $348 million this year. But whatever benefits such investments supposedly bring would be cancelled out by the severe social and environmental costs of large-scale mining, according to independent think-tank IBON Foundation.

It should be recalled that DENR Secretary Angelo Reyes allowed the permanent re-opening of mining operations in Rapu-Rapu last year amid outcry from residents. Since then, Rapu-Rapu residents dependent on fishing for their livelihoods have complained of declining fish catch. Local farmers also said that blasting in the course of mining activities of Australian firm Lafayette, which operates the mine, has loosened the foundations of their lands, making them vulnerable to landslides.

Despite the many documented social and environmental costs of mining, the Arroyo government is apparently using Rapu-Rapu’s reopening as a “welcome mat” to investors. In her state visit to Australia, Arroyo is reportedly set to enter into formal talks with Melbourne-based BHP Billiton to push ahead with its planned multi-billion dollar-nickel project in Pujada Peninsula, Davao Oriental province.

Mining has a major role to contribute in national development but such activities must be done in the context of the welfare of local communities and other stakeholders. Such social considerations are not in the agenda of large foreign mining companies, which only care about exploiting resources for mega-profits. (end)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

IBON Foundation, Inc.,
IBON Center 114 Timog Ave., Quezon City, Philippines
Tel. (632) 927-7060 * Fax (632) 929-2496 * E-mail: media@ibon.org * www.ibon.org


Large-Scale Mining and Rapu-Rapu

ISLAND RESIDENTS FACE LOSS OF LIVELIHOOD, DAMAGED ENVIRONMENT

As we observe Earth Day, the country's leaders should be reminded of the damage that large-scale mining has done to the environment and livelihood of residents in mining communities such as Rapu-rapu.

By Glenis Balangue, IBON Features, 22 April 2007

For the nearly 50,000 residents of Rapu-Rapu, Albay and the adjoining municipality of Prieto Diaz, Sorsogon, fishing has been the primary livelihood for generations. The fish that they catch from Lagonoy Gulf and Albay Gulf is not just their staple food, it is also a main source of income for the communities, no matter how modest. Twelve out of thirteen barangays on Rapu-Rapu are fishing communities, while Prieto Diaz's people survive on marine, aquaculture and industrial production.

Rapu-Rapu and Prieto Diaz are also among the poorest municipalities in the country, and government services are generally hard to come by.

But their simple lives were abruptly disrupted when Australian mining firm Lafayette NL started its Rapu-Rapu Polymetallic Mining Project in mid-2005. Mining and quarrying had not been alien to Rapu-Rapu as the community had already hosted several mining operations over seven decades starting in the 1930s, though they had never become major industries. But it was the arrival of Lafayette that really brought to the fore the destructive effects of large-scale mining.

It also showed how eager the Arroyo administration is to open the country's natural resources to big mining transnational corporations.

A 'new, responsible' mining industry?

The Arroyo administration has been aggressively promoting mining as an area for foreign investments. The Rapu-Rapu Polymetallic Mining Project held much promise, for it represented for the government the flagship of a 'new, responsible' mining industry. Lafayette is one of the first foreign mining companies to invest in the Philippines following a Supreme Court decision upholding a provision in the 1995 Mining Act allowing 100% foreign ownership of mining projects in the country. The Project is expected to yield some 50,000 ounces of gold, 60,000 ounces of silver, 10,000 metric tons of copper concentrate and 14,000 metric tons of zinc concentrates a year.

Lafayette's mining claim in the municipality of Rapu-Rapu is 42 square kilometers or roughly 80% of the island's total land area. The current operation is focused on mining the "Ungay Malobago" deposit located in Barangays Malobago, Pagcolbon and Binosawan using the open pit method. The gold-rich ore is treated in a cyanide-in-leach plant adjacent to the 18-hectare pit while the rest of the ore, which yields copper and zinc, is treated in a separate floatation plant.

But there were alleged irregularities in the implementation of the mining project.

For example, the Office of the President issued Proclamation 625, which declared the mining area a special economic zone upon petition of Lafayette Philippines, Inc. Lafayette under this status was entitled to a six- to eight-year income tax holiday and exemption from paying value-added taxes because extracted metals are exported with minimal processing. However, it was later alleged that Lafayette country manager Roderick Watt, in a letter to President Arroyo, threatened to withhold $55 million in capital investments from Lafayette Ltd. and the LG Group of Korea if they were not granted special economic zone status.

There were also irregularities in acquiring the consent of local communities to the project. According to residents, although community organizers had arranged meetings at the three barangays nearest the mining site, only the benefits of the mine to the community were discussed. Villagers said they were never informed of the environmental effects of mining an ecologically sensitive island eco-system such as Rapu-Rapu. Tinopan residents even recall watching a film in which Lafayette organizers discussed "responsible" mining and promised them that the ores would not be processed on the island. A certain Engineer Palomaria also told the residents that their barangays could even become cities in the near future. To further bolster the acceptability of the project, residents were also promised free electricity and medical services.

But according to residents of Prieto Diaz, they were never consulted on the project despite being the nearest municipality from Rapu-Rapu and sharing a major fishing ground.

It was in Oct. 2005 when residents learned that there had been not one, but two, cyanide tailings spills from the mining site in Barangay Pagcolbon. Reports said that the first spill was due to a failed pump at the mine, causing an overflow of cyanide-laden spills into nearby creeks. Three weeks later, a heavy six-hour rain resulted in the tailings pond overflowing into the nearby Ungay and Hollowstone creeks. Both incidents resulted in fish kills.

Mining advocates such as the Philippine Chamber of Mines and the government Mines and Geosciences Bureau sought to downplay the spills, claiming that the amount of tailings released were relatively small and calling the incident "a drop in the ocean". But a government-convened Fact-Finding Commission on Rapu-Rapu assailed the gross negligence of Lafayette and even went so far as to call for a suspension of mining activities in the country, a call that President Arroyo rejected.

'Sino ang Nakahuli?'

Sixty percent of the households in both Rapu-Rapu and the neighboring Prieto Diaz depend on fishing as a primary livelihood. Majority of these families engage in small-scale and subsistence fishing. After the tailings spills, many fishermen told IBON Features that their catch declined. One resident even narrated that fishermen used to ask 'ilan ang nakahuli?' (How many were able to catch fish?), but now they ask 'sino ang nakahuli?' (Who was able to catch fish?).

Fishermen from Barangay Binosawan said that before the mining operation, their boat of three to four crew members used to catch around 70 pieces of blue marlins a year. Last 2005 and 2006, they averaged 20 pieces. In neighboring Barangay Brillante, fishermen said a boat used to average four pieces of fish per trip. Now they consider themselves fortunate if they go home with two pieces. There are even times when they can go for a week without catching a single fish.

These fishermen are now reducing the number of days they go out to sea. From six or seven days a week they now go out to fish for only three or four days. They explained that they would only waste money spent on fuel just to catch enough fish for a day's meal. Some fishermen have even opted to work as pedicab drivers, carpenters, and other odd jobs just to make ends meet. But even fish vendors found themselves indirectly affected by the tailings spills. A fish dealer from Barangay Tinopan said that her regular buyers in Legazpi started to become wary of buying fish caught near Rapu-Rapu. As a result, her buying price fell by as much as 60% while her selling price, by half.

Even those engaged in the small-scale agriculture were not exempt from the negative effects of the spills. Farmers noted a marked decrease in water supply after Lafayette started its operations, resulting in a mini-water war in Barangay Poblacion. It should be noted that Rapu-Rapu is a small island with a limited supply of freshwater, and this was further diverted to Lafayette's operations.

Water supply for domestic needs has also become scarce. Malobago residents said they have difficulty sourcing water for drinking and washing. They are also afraid of drinking the water that comes from the taps, fearing cyanide contamination. A community leader remarked, " Ang cyanide ba at iyong ibang kemikal nadadaan sa kulo?" (Can cyanide or other chemicals be removed by boiling?)

In Barangays Binosawan and Tinopan, coconut farmers said their trees have become stunted even if these were still young. The fruits have also become smaller and fewer, meaning decreased yields. The farmers said that this was the first time that this happened to their source of livelihood.

The farmers further told IBON that the blasting activities of Lafayette have weakened the rock foundation in the area, making it vulnerable to landslides. When typhoon Reming (international name Durian) struck the Bicol region, landslides occurred in Barangays Malobago and Tinopan, killing eleven people.

Residents stressed that stronger typhoons had visited Rapu-Rapu but no landslides happened until last year.

Stark contrast

In stark contrast to the poverty of the affected communities, wherein 60% of families are forced to live on less than P100 (US$2) a day, the Lafayette Group expects to earn US$350 million a year over the entire duration of the mine. But the local government in 2005 received only P2.1 million (US$42,857) in excise tax collections from Lafayette's gross revenues of P134.4 million. The national government also lost tax revenue from the many incentives the mining firm was granted, earning only US$8.68 million from a possible US$20.48 million.

Further, although Lafayette claimed to hire 900 residents as workers, in reality only some 300 were hired. Residents said that of this number, only 5% were regular workers (meaning that they would be employed for five years, although the projected span of the project is eight years) while the rest were hired on a contractual basis. There is no labor union and the workers are discouraged from negotiating for better pay and more benefits.

The aftermath of the spills saw an increasing number of locals opposing Lafayette's operations. Thus, more soldiers and policemen were deployed to the area, plus 150 militiamen in civilian clothes. Residents reported that these military forces roam the barangays in an apparent effort to intimidate them.

The basic services promised by the Australian mining firm to the communities also did not materialize. Malobago, Tinopan and Binosawan do not have health facilities and personnel except for one or two barangay health workers. Malobago residents, however, have occasional access to the mining company's health clinic, but only in case of emergencies.

Stop the plunder

On February 8, 2006 the government Department of Environment and Natural Resources (DENR) permanently lifted the cease-and-desist order it had earlier issued on Lafayette's operations on Rapu-Rapu in the wake of the spills. In doing so, it went against the wishes of the residents for a stop to mining operations on the island.

Although Lafayette's operations were supposedly turned over to Filipinos, it is clear that the company is exploiting loopholes in the Mining Act and the Philippines' corporate laws in order to avoid its accountability to the people of Rapu-Rapu and Prieto Diaz.

By 2013, Lafayette will have packed up and left after extracting all the minerals from Rapu-Rapu. All that will be left for the residents is a giant pit and a damaged eco-system, which can no longer provide for their needs. Residents and various environmental groups demand that government step in now to prevent irreversible damage to Rapu-Rapu's fishing waters and the residents' livelihoods, or should be held to accountable for it.

With reports from Joseph Yu. IBON Features

IBON Features is a media service of IBON Foundation, an independent economic policy and research institution.

When reprinting this feature, please credit IBON Features and give the byline when applicable.

IBON Foundation, Inc.,
IBON Center 114 Timog Ave., Quezon City, Philippines
Tel. (632) 927-7060 * Fax (632) 929-2496 * E-mail: media@ibon.org * www.ibon.org

 

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