MAC: Mines and Communities

Lake Sebu coal project royalty only P1 per ton

Published by MAC on 2006-10-30
Source: Sun Star ()

Lake Sebu coal project royalty only P1 per ton

30th October 2006

Sun Star General Santos - http://www.sunstar.com.ph/static/gen/2006/10/30/bus/lake.sebu.coal.project.royalty.only.p1.per.ton.html

KORONADAL CITY -- "Too small an amount in exchange for so mammoth an income."

This is how a local official in Lake Sebu, South Cotabato described the share Barangay Ned landowners would get from a coal mining company.

Municipal Agrarian Reform Officer Celso Caro said there is a need to review the government rules on the sharing scheme in mining coal deposits which he described as disadvantageous to villagers.

"It (Presidential Decree 1174) is outdated and should be updated," he said.

Showing documents he obtained from Daguma Agro Minerals Inc., Caro pointed out that the firm will only pay a very meager amount to landowners.

"Daguma is to pay a royalty based on the provisions of PD 1174. It shall pay the amount of at least one peso for every ton of coal extracted from titled lands and fifty centavos for every ton extracted from untitled lands," he read from the documents.

PD 1174 is an amendment to PD 972, or the Coal Development Act of the Philippines.

PD 972 provides for the active and systematic exploration, exploitation, development, disposition and utilization of Philippine coal resources. This decree introduced the Philippine coal service contract system and established the appropriate guidelines for coal operations.

PD 1174, as amendment to PD 972, awards additional incentives to coal operators through the reimbursement of all operating expenses not exceeding ninety percent (90 percent) of the gross income after deducing all operating expenses, likewise the granting of timber and water rights within the coal contract area and access to government reserved lands subject to applicable laws and guidelines by the concerned agencies.

The Daguma coal project covers 2,000 hectares under Coal Operation Contract 126. It consists of Coal Blocks 380 and 381.

The operation contract was awarded a conversion from exploration phase to a development/production phase by the Department of Energy only last February.

The South Cotabato coalfield, particularly the Daguma Agro area, is a recent discovery. It is believed to be hosting the largest coal deposits in the country, according to a comparative report by the energy department.

Edilberto Navarro, a geologist for Crew Gold Corp. (not Daguma Agro as reported earlier), earlier said the Ned project has coal deposits of at least 27 million metric tons.

"Studies suggest the coal deposits would be extracted using the strip mining method," he said.

Crew Gold Corp has an option to acquire 95 percent of Daguma Agro.

Benjamin Guingona, Daguma Agro head, was not immediately available when contacted at his Manila office for comment Wednesday about the royalty issue and other matters involving the company.

The Daguma coal project is being opposed by members of the T'boli tribe and some Christian settlers in Ned, who insisted that the venture went on without their consent.

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