MAC/20: Mines and Communities

Big Chinese Mining Firms Set Eyes On Mindanao

Published by MAC on 2006-07-26

Big Chinese Mining Firms Set Eyes on Mindanao

By Germelina A. Lacorte, -

26th July 2006

DAVAO CITY - Three big mining companies in China, including the largest state-owned JinChuan Group Ltd., are now aggressively pursuing talks with Philippine-based companies for possible investments in the country's mining industry. Li Jinjun, ambassador to the Philippines of the People's Republic of China (PROC), said Tuesday that the JinChuan Group is seriously pursuing talks with Philnico Industrial Corporation, which used to operate the shuttered Nonoc plant in Surigao while ZTE Corporation, which is based in Shenzhen, China, is talking with members of the Filipino-Chinese community for the possibility of joint-venture arrangements in mining.

Another Chinese company, CITIC Resources, is also talking with local partners, according to Li after an investment briefing on Mindanao and the East Asean Growth Area, the growth polygon composed of Brunei, Indonesia, Malaysia and the Philippines (BIMP), at the Mindanao Economic Development Council (MEDCO) office here.

"We have already established a strong presence in Thailand, Malaysia and Singapore. We plan to increase our presence in the Philippines," said Li. "Even in Indonesia, where the situation is not so good, we're putting much of our interests there." Chinese investments in the Philippines, he said, is still relatively low compared to other areas in the Asean but China wanted to increase its share, particularly in the areas of agribusiness, mining, tourism, fisheries and infrastructures.

"There's not much information about how it is to invest in the Philippines and Chinese investors are also a bit wary of the peace situation," Li told reporters. "That's why it's my duty to tell my own people about the real situation in Mindanao and encourage more companies to come."

Various environment groups, like Panalipdan and Church-based peoples' organizations, are strongly opposing mining in Mindanao, which, they claim, will displace indigenous communities and rob the people of their livelihood, derived mainly from farming.

Jinchuan Group, which operates from northwest China's Jinchang, Gansu Province, produces roughly 90 percent of China's domestic nickel output, said Li. It is currently China's largest producer of nickel, cobalt and precious metals, he said.

"The group is China's biggest state-owned nickel firm with huge expertise and experience on environment protection," said Li. He added that the company will take care of a number of social welfare projects, including medical and health care for affected communities, once they put up their investments here.

In her visit to Compostela Valley last month, President Gloria Macapagal-Arroyo announced that prospective Chinese investors will pour in an estimated US$4 billion as investments in mining in the country, particularly in the Nonoc nickel mines in Surigao and another one in Maco, Compostela Valley.

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