MAC: Mines and Communities

Philippines Update

Published by MAC on 2006-05-26

Philippines Update

26th May 2006

The controversy over Lafayette's closed Rapu Rapu mine continues, after Bishop Bastes' Commission releases a highly critical report. Not surprisingly he, the Commission, and the report have come in for heavy criticism from the government, the companies, the Chamber of Mines and ambassadors representing countries whose companies are involved, including Canada. Journalists often fail to recognise that TVI holds a 20% stake in Rapu Rapu, and must therefore share some responsibility for the disaster.

The government is expected to issue its response to the report next week but, from stories planted in the press, its decision already appears to have been made. This week we also highlight the incredibly poor environmental record of the Philippine government, noting that vested interests are at the root. In response to the relentless government pressure for more mining, there are more warnings of violence ahead. Following the Muslim MILF's statemnt last week, it is now the turn of the communist New Peoples Army (NPA).

Finally, we carry reports of resistance to Crew in Mindoro and the continuing struggle against TVI in Zamboanga del Norte.

Philippines' mining down in the dumps

By David L Llorito, Asia Times online

26th May 2006

MANILA - These should be boom times for the Philippines' mining industry, given that the country has some of the world's biggest under-exploited deposits of copper, gold and to a lesser degree nickel, and commodity prices are at historic highs. Instead, a toxic spill at an Australian-run mine has the entire industry in turmoil, with powerful political interest groups calling for a total ban on mining activities.

Mining opponents, including the Catholic Church, nationalistic politicians and non-governmental organizations (NGOs), have recently taken hard aim at a tailings spill on Rapu-Rapu Island, where seepage of toxic metals allegedly polluted fishing waters. An independent commission submitted a 169-page report to the government last Friday urging it to stop all mining in the area, revoke Australian mining concern Lafayette's Environmental Compliance Certificate (ECC), and force the company to pay damages.

Philippine President Gloria Macapagal-Arroyo on Saturday declined the commission's request to ban all mining activities, though she has promised to study carefully the report's various other recommendations, including a review of the 1995 Mining Act's provisions for foreign participation and management. Lafayette has dismissed the commission's findings as "unscientific and flawed", while other Philippines-based mining executives have questioned the ad hoc body's independence. The whole affair has greatly undermined investor confidence in the Philippine mining-policy regime. Hundreds of millions of dollars' worth of proposed new mining projects have recently stalled because of foreign investor and bank reservations about the legal status of their established and planned investments.

Liberal on paper, restricted in practice

On paper, the Philippines has some of the region's more liberal mining codes, including the Mining Act, which allows for 100% foreign-equity participation through so-called financial and technical assistance agreements with local miners. Challenged by nationalist politicians, the Supreme Court upheld the Mining Act as recently as December 2004.

However, the lingering memories of the 1996 Marcopper mining disaster on Marinduque Island, where toxic pollution spoiled fishing waters and caused health problems among local villagers, still casts a long shadow over the entire industry. So does the government's poor record of handling and distinguishing between minor and major environmental incidents.

Manila has nonetheless actively sought new foreign mining investments, offering a wide raft of tax and non-tax incentives to potential investors and creating the Mineral Development Council to help foreign investors cut through red tape and quickly begin digging. The government has said it expects mining to generate between US$5 billion and $7 billion annually in foreign exchange and to create as many as a quarter of a million jobs over the next six years.

It doesn't always work that way on the ground, however. Strident, widespread opposition from local-level activists and the Catholic Church are undermining the government's efforts to attract more foreign mining-oriented investment. When local mining companies backed by Canadian, Australian and Japanese investors recently started probing around local communities for undiscovered deposits of precious metals, they were frequently confronted by environmentalists, civil-society groups, and the politically influential Catholic bishops, who together represent a formidable political force against miners.

The outspoken Bishop Dinualdo Gutierrez of South Cotabato recently accused the Tampakan Gold and Copper Project invested by Australia's Indophil Resources of "environmental degradation" and "displacement" of indigenous peoples - even though the project was still in the exploration stage. (According to a study by Peter Walpole, an academician-priest who has studied the social impact of mining in the Philippines, to date there have never been any documented cases of people being displaced to make way for mining sites.)

Similar unsubstantiated complaints have recently been leveled against, and complicated the workings of, the Didipio Gold/Copper Project operated by Australian Philippines Mining Inc, the Teresa Gold Project operated by Lepanto Consolidated Mining in Mankayan, Benguet, and the Canatuan Gold Project in Siocon, Zamboanga del Norte, backed by Canada's TVI.

Those complaints, regardless of their scientific or technical veracity, can bring mining operations in the Philippines to a screeching halt. In 2001, protests led by NGOs, left-leaning groups and Catholic priests forced then-environment secretary Heherson Alvarez to cancel the mining rights of the Mindoro Nickel Project financed by Crew Minerals, a Norwegian company. President Arroyo has only recently reinstated Crew's mining rights, after more than five years of lost revenues.

Another project, the Kalaya-an Gold Project, commissioned to the Manila Mining Corp, was stymied after a vigorous campaign led by local community organizations and militant leftist groups against feared environmental degradation.

The situation for foreign miners has become all the more precarious since January, when the politically influential Catholic Bishops Conference of the Philippines (CBCP) issued a pastoral statement denouncing mining as a "destroyer of life", and called for the repeal of the 1995 Mining Act and the closure of big mining operations across the country.

In their statement, the bishops echoed the sentiments of militant environmental groups, claiming that mining operations often displace indigenous peoples, gives away control of lands to foreigners, and destroy the environment. "The adverse social impacts on the affected communities far outweigh the gains promised by [transnational mining] corporations," the public statement said.

The Ghost of Marcopper

The opposition movement draws heavily on one tragic mining accident to push its agenda. In 1996, the plug in the Tapian pit drainage tunnel operated by the Marcopper Mining Corp on Marinduque Island failed, unleashing 1.6 million cubic meters of toxic mining slurries and tailings into the Makulapnit and Boac rivers. The spillage caused health problems among local residents and devastated the island's ecosystems.

Ten years later, the national government still has not decided on how best to clean up the social and environmental mess, even after the commissioning and availability of extensive scientific and technical studies of the incident. The executives of Canada's Placer Dome, which then controlled the Marcopper Mining Corp, have packed their bags and returned home unscathed.

The lack of foreign-company accountability has not gone down well with the Philippines' active and vocal civil-society, environmental and faith-based groups. Now, the controversy over the tailings spill at the Rapu-Rapu mine operated by Lafayette Philippines and Lafayette Mining of Australia has, rightly or wrongly, conjured up the bitter memories of Marinduque.

Mining-industry sources say their current headaches started last October, when a pump at the Rapu-Rapu mines failed, causing the overflow of cyanide-laden tailings into nearby creeks, killing about 2 kilograms of fish. About three weeks later, a heavy six-hour rain caused the tailings pond to overflow into the nearby Ungay and Hollowstone creeks, this time killing 15kg of fish."It was really a minor incident, a drop in the ocean," said Benjamin Philip Romualdez, president of the Philippines' Chamber of Mines.

A Mines and Geosciences Bureau (MGB) source said, "The total volume of the tailings released in the two incidents is just about 20 cubic meters. It's just about a truckload. It's nowhere near the scale of the Marcopper mine tailings spill."

Regardless, the government has contended that Lafayette Philippines has violated some of the conditions of its original ECC. On January 6, the Pollution Adjudication Board (PAB) slapped the company with a P10.7 million ($210,000) fine for three different ECC violations.

To resume operations, PAB said Lafayette Philippines must submit an environmental-management system or ISO 14001 certification, implement a comprehensive pollution-control program, put up a surety bond equivalent to 25% of the total cost of the pollution-control program, and hire a full-time pollution-control officer.

The Rapu-Rapu incident occurred in October, notably at the same time the government and Chamber of Mines were actively pursuing new foreign mining investments as part of a state-led job-creation scheme. Arroyo at first tried to ignore the Rapu-Rapu controversy, but as the protests and media coverage became more widespread, Arroyo finally acquiesced to the political pressure.

On March 10, Arroyo announced the creation of an allegedly "independent commission" to investigate the health and environmental impacts of the twin tailings spills. The commission was to be headed by Bishop Arturo M Bastes, a well-known opponent of the mining industry. In a surprising move, Arroyo, politically embattled over allegations she had attempted to rig national elections, also announced a congressional review of the Mining Act, a statement that immediately sent shock waves through the foreign investment community.

"It's not good news for the Philippines as there is a perception now that policy is going the other way," Ted Leschke, mining analyst with Shaw Stockbroking based in Sydney, was quoted as saying in the Malaya newspaper. "From a geological standpoint, the Philippines is A-1. But if they keep changing things, miners will go to Mongolia or somewhere else."

Sean Georget, executive director of the Canadian Chamber of Commerce of the Philippines, told Asia Times Online that the Philippine Mining Act compares favorably with similar mining legislation in Canada, Australia and the United States. "What is there to review? If you say you are going to review the law, you are putting uncertainty into the policy landscape."

Foreign banks exposed to the industry, including NM Rothschild & Sons (Australia), ABN AMRO Bank NV (Australia), Australia and New Zealand Banking Group Ltd, Investec Bank (Mauritius) Ltd, and Standard Chartered First Bank Korea Ltd, have also reportedly been shaken by the possibility of a policy flip-flop.

The growing uncertainty surrounding Philippine mining comes as the industry was clearly re-emerging from the Marcopper Marinduque Island debacle. A total of 17 metal mines were operating across the country in 1997, but because of the fallout of the Marcopper incident, that number was down to seven by 2002, according to statistics provided by the Philippine Embassy in Washington.

Since then, however, mining investments have steadily increased, reaching $345 million and employing 7,000 workers by the end of 2005. Romualdez said that as of this month, total "on the ground" investments have reached about $500 million, and that another $2 billion in so-called "announced investments" are in the pipeline.

The Chamber of Mines also said in a recent statement that by continuing to allow foreign investments in mining, the industry would in the coming years ensure the inflow of $10 billion into the economy through the expansion of existing projects and the operation of new ones. However, with a pending congressional review of the Mining Law, many of those promised projects have stalled or have failed to secure the necessary foreign financing needed to commence operations, according to MGB officials.

Political mine shaft

Last Friday, Bastes presented his report to Arroyo at a closed-door meeting in the presidential palace. Sources inside the Bastes Commission said the final report echoed the PAB's findings against Lafayette and, in an extreme measure, called for the cancellation of Lafayette's ECC. The report also reiterated calls for a congressional review of the Mining Act, especially the provisions allowing for greater foreign-equity participation.

Cancellation of Lafayette's ECC would mean that the company could not resume operations and would be forced to close shop - an outcome that industry sources contend would scare off resident and potential new foreign investors.

"It's really up to the Department of Environment and Natural Resources [DENR] now. But how could 17kg of dead fish force the closure of a multimillion-dollar project that is benefiting more than a thousand workers and the community in terms of social development projects?" asked one mining executive. "All [the fact-finding commission] had in the report are pure allegations. They haven't built a case against the company."

Indeed, in a statement this week Lafayette challenged the scientific accuracy of the Bastes Commission's allegations that the company caused mercury contamination of coastal water areas, saying that, in fact, the company does not use any mercury in its production processes.

Still, the threat of closure compounds the company's daily losses suffered by their padlocked operations. The firm claims it has already hired an independent group of mining and engineering experts to help it comply with the requirements of the PAB.

Since early this month, Lafayette's managers have repeatedly asked the government to allow it to conduct test runs and eventually resume normal operations. The DENR, however, did not act on the company's request because at the time it was still waiting for the results of the Bastes Commission's investigation. It's still altogether unclear what the department will do next now that the report is in hand.

"If the restart of the project is subjected to further delays, despite having completed all the required remedial measures, [it] may be forced to close," said Lafayette's Manny Agcaoili. He claims that the company is bleeding about $2.7 million each month in overhead costs and about $13 million in forgone revenue."Investment losses would amount to $259 million in terms of bank loans, shareholder advances, and bank hedging exposures. Loss of employment ... would be approximately $1,000 ... Now the company fears that its creditors might foreclose on their dormant operating assets." Not exactly the sort of financial result that Lafayette had in mind when it signed up, at the government's invitation, to tap the Philippines' rich bounty of natural resources.

David Llorito is a researcher at the BusinessMirror, a Manila-based daily newspaper. He has more than a decade of experience in socioeconomic research, policy analysis, and business-economy journalism in the Philippines.

Pamalakaya hits Neda chief for 'condoning' Lafayette spill

The Nation

21st May 2006

A group of anti-mining activists yesterday denounced Economic Planning Secretary Romulo Neri over his pro-mining pronouncements, which they said was timed to counter the report of the commission created by Malacañang to look into the effects of the twin mine spills that occurred off Rapu-Rapu Island in Albay last year.

"That is blasphemous, immoral and incorrigible. The President (Arroyo) and her men are playing dirty politics and sheer syndicate games to offset the report of the fact-finding mission led by Sorsogon Bishop Arturo Bastes that recommends to Mrs. Arroyo the permanent closure of Lafayette's mining operations. This is a national foul play, with the good bishop as the victim of this rabid pro-mining clique in Malacañang," the militant group Pambansang Lakas ng Kilusang Mamamalakaya (Pamalakaya) said in a statement.

"They want to embarrass and even ridicule Bishop Bastes and counter his anti-mining report. That is the purpose of Neri coming out from nowhere and openly endorsing mining activities," Pamalakaya national chairman Fernando Hicap said.

The militant leader defended Bishop Bastes and the commission's report recommending the permanent closure of Lafayette Philippines Inc. which was accused of dumping toxic substances off Rapu-Rapu waters last year that caused environmental destruction, health hazards and death of marine life.

"The Gospel of Bishop Bastes against Rapu-Rapu is well accepted by the people, morally, scientifically and politically speaking. But the government wants to downplay this pro-people crusade by allowing Neri to wage a Palace battle in favor of transnational mining clients," Hicap added.

He noted while the Rapu-Rapu Fact Finding Commission (RRFFC) presented its report recommending the permanent cancellation of the permit granted to Lafayette, Neri issued his own statement to counter the commission's report and assure the Arroyo administration's support to mining.

The National Economic Development Authority (Neda) chief said the government expects between $5 billion to $7 billion from mining annually or total revenues of between $17 to 23 billion over the next six years. Neri added the mining industry could produce 240,000 jobs for the said period.

"Neri wants to downplay the impact of the Rapu-Rapu commission on Lafayette by issuing this propaganda sanctioned by Mrs. Arroyo and the top mining clients of Malacañang," Pamalakaya said.

"The bishops have no choice but to use their powerful pulpit to counter this pro-mining propaganda offensive of Malacañang," Pamalakaya said.Malacañang, for its part, yesterday expressed assurance that the report and recommendations of the Rapu-Rapu Fact Finding Commission on the mining operations of Lafayette Philippines Inc. will be reviewed and considered. At the same time, Press Secretary and presidential spokesman Ignacio Bunye reiterated the government's commitment to support responsible mining operations as a means of propelling the country's economic growth.

"We thank the Rapu-Rapu Fact Finding Commission for its work and assure the public that its report will be carefully reviewed and considered," Bunye said in a statement.

He stressed "mining remains a priority area for development" of the Arroyo administration. "Our country is blessed as one of the most highly-mineralized countries in the world. It would be a disservice to our people if our mineral potential is not realized as this is clearly a source of employment and development," he said.
The commission was created by Mrs. Arroyo last March under Executive Order 145 to "investigate the effects of the mining operations of Lafayette Philippines Inc. on people's health and environmental safety" in Rapu-Rapu.

The commission, headed by Bastes, submitted its report to the President on Friday.

Among other recommendations, the commission called for a moratorium on mining and suspension of Minerals Production Sharing Agreement (MPSA) on Rapu-Rapu Island "pending scientific and experts' favorable resolution of the issue of ecological conservation."

The report also recommended a review of the Mining Act of 1995 or Republic Act 7942, particularly the provisions on "the ownership and management of mining firms and operations."

In reiterating Malacañang's support for responsible mining, Bunye said "a ban on mining is not the answer but the standards and safeguards already in place and existing laws must be strictly enforced."

Earlier, Socio-economic Planning Secretary and Neda director general Romulo Neri said the government could derive huge benefits from the lucrative mining sector, particularly in terms of more foreign investments, additional jobs and poverty reduction in rural areas where there are mining operations.

Jun P. Yap with PNA

Foreign miners want gov't by their side

Philippine Daily Inquirer

26th May 2006

CANATUAN-Foreign miners are hoping the Philippine government will stand by them and their investments here in any face-off with the hugely powerful Roman Catholic Church which opposes mining.

The stakes are potentially crucial for the country, impoverished and burdened by a fast growing population, with officials estimating the industry could generate export earnings of $5.0 to $7.0 billion annually and create thousands of desperately needed jobs.

"There's a little bit of a pause because of the uncertainty but ultimately the government, we hope, will do the right thing," said John Ridsdel, corporate advisor to TVI Pacific of Canada at a ceremony here to top off a tailings dam.The company, anxious to ensure that all the powers are mollified, called on the services of a local tribal priest to sacrifice a squealing pig to sanctify the operation on this Philippine mountain.

The bishops in this Southeast Asian Roman Catholic nation earlier this year demanded in a pastoral letter that President Macapagal-Arroyo impose a nationwide mining ban, claiming it was socially divisive and environmentally disastrous.

The government stressed that repealing the 1995 Mining Law, recently cleared by the Supreme Court, was a non-starter due to its potential economic fallout.The trouble is that no one in the industry is convinced that they have heard the last on the issue due to the influence the Church wields in the world's third most populous Catholic nation.

With metal prices running at record levels, the drive to mine is powerful in the Philippines, which boasts one of the world's most generous mineral endowments. Mining firms are trying to borrow hundreds of millions of dollars from banks and other sources for some two dozen major projects.

TVI, which mills 600 tons of gold and silver ore each day two years into its operations, has had the smoothest sailing so far among the eight projects that have reached the production stage. Others have run into serious trouble.

Australia's Lafayette Mining has been forced to halt operations on Rapu-Rapu Island, having been hit with fines after a waste spillage in October was blamed by residents and Church officials for fish kills.

The public relations disaster has cost Lafayette's Philippines managers their jobs. With no cash flow and with overhead costs piling up, its creditors are also circling.

RP ranks 125th in int'l environmental protection index

By Blanche S. Rivera, Daily Inqurier

25th May 2006

THE PHILIPPINES ranks 125th among 146 countries rated by the 2005 Yale Environmental Sustainability Index (ESI), indicating the country's poor ability to ensure sustainable development of its natural resources. The Philippines, one of the 17 megadiverse countries in the world which together account for up to 80 percent of Earth's biodiversity, only ranked higher than countries like Haiti, Pakistan, Iran, Sudan, Iraq and North Korea.

Bukidnon Representative Nereus Acosta cited the 2005 ESI during a forum on climate change and renewable energy yesterday as he urged better coordination among government agencies to ensure sustainability.

"It confirms that we are still largely incapacitated when it comes to protecting our environment, averting hazards, reforesting, etc.," Acosta said in an interview after his presentation.

The ESI evaluates countries based on 21 indicators, including natural resources, pollution levels, and environmental management efforts that characterize and influence environmental sustainability on a national scale.

Scandinavian countries such as Finland, Norway and Sweden topped the ESI last year, placing first, second and fourth, respectively.

The ESI is done annually by the Yale Center for Environmental Law and Policy, along with invited experts from all over the world. The results are presented every year to the World Economic Forum.

"This is evidence that things are not transparent, that people are not being held accountable," said Lorenzo Tan, president of World Wildlife Fund-Philippines.

Tan cited the cases of mining explorations and logging that are being done even in protected areas like the Northern Sierra Madre National Park in Isabela province.

Acosta, a former member of the panel of experts invited by Yale to do the ESI, said the Philippines' ranking was dragged down by its very low performance on social and institutional governance.

Governance, along with environmental systems, vulnerability to stress and disasters, impacts on human health and global stewardship were the major criteria for the ESI.

"What really brought us down was governance. We have rich biodiversity but we don't get our act together, we don't put our money where our mouth is," Acosta said.

He said the Departments of Environment and Natural Resources, Finance, Energy, Transportation and Communication needed to coordinate their initiatives for an ecology-dependent economy.

Acosta said the government's poor investment in science and technology -- only 0.2 percent of the gross domestic product -- was considered an indicator of institutional support.

The Philippines has only around 150 scientists per one million people, a fact that the ESI also noted, he said.

Acosta called for an environmental accounting of the country's natural resources amid the government's aggressive promotion of mining as the economic growth propeller.

He said the development picture would not be complete if the government considered only the revenues and direct benefits of mining without a valuation of the biodiversity and its other possible benefits that would be lost due to extractive activities.

Environmental group CEC slams government and Lafayette - Philippines' proposal for test run of operations

Press Release Defend Patrimony

23rd May2006

"There is no point in allowing Lafayette Philippines to do a test run to show that their operation has improved. The sub-aqueous deposition technology of Lafayette to control acid mine drainage AMD in the mine site is indeed not appropriate in a hilly terrain as in Rapu-rapu island. To prove or disprove this in Rapu-rapu Island through their test run is tantamount to putting the island and its people in a greater risk of another disaster," slams Frances Quimpo, Executive Director of the Center for Environmental Concerns-Philippines (CEC).

"The mining technology of Lafayette will enhance the production and leaching of acid products. With the situation in Rapu-rapu, being a small island ecosystem and where heavy precipitation is a normal occurrence, acid and toxic metal contamination of the water systems within and around the island would be a definite outcome," explains Januar Ong, Research Coordinator of CEC.

Quimpo asserts, "The time to prove Lafayette's sincerity and capacity to address the environmental and social problems that their operations will engender is already over. The Bastes Commission has shown how they have willfully violated environmental laws, understated their revenues and taxes and deceived the people of the real situation."

"Until now, they even brand as unscientific the findings of the Bastes Commission when this has obviously studied and consulted the local folks, NGOs, scientists and even government and company officials. They hold on to the study of the UP Natural Science and Research Institute, when even the NSRI admits that their findings were inconclusive and need further studies," she added.

The CEC supports the recommendation of the Bastes Commission to close down Lafayette and for a moratorium of mining in the island on the basis of the "precautionary principle." The Rapu-rapu and Albay folks should not be made victims again of faulty and careless operation of a mining company that clearly is only concerned of profit.

President Arroyo’s Decision Not To Ban Mining: A Poor Bet to RP’s Economic Growth

For Immediate Release - Legal Rights and Natural Resources Center –Kasama sa Kalikasan-Friends of the Earth-Philippines (LRC-KsK-FoE).

23rd May 2006

Short-term gains resulting in long-term and irreparable damages. This will be the outcome of Malacanang’s decision not to ban large-scale mining operations in the country despite proofs of its ecological unsustainability and lack of economic viability, according to the Legal Rights and Natural Resources Center –Kasama sa Kalikasan-Friends of the Earth-Philippines (LRC-KsK-FoE). “Once again, President Arroyo has turned her promise up-side-down by putting profit before the interest of the people and the environment. This despite the glaring evidence of environmental disasters exemplified by the tailings spills in Rapu-Rapu, Albay and the Marcopper incident in Boac, Marinduque,” said Jo Villanueva, LRC-KsK executive director.

Last March 15, in her speech before volunteer rescue workers of the Leyte landslide, President Arroyo promised that the government will never prefer profits over sound environment. Last March 10, President Arroyo created the Rapu-Rapu Fact-Finding Commission thru Administrative Order No. 145 to probe the mine spill that affected fishing in the waters around Rapu-Rapu island. The President has also agreed to the request of Catholic bishops to review the Mining Act of 1995.

“All these pro-people and pro-environment stance and initiatives made by the President have all become lip service. President Arroyo herself is doing further disservice to her already tarnished credibility. Her decision to allow large-scale mining operations in the country will mean profit for a few and poverty for the majority of the poor and marginalized Filipinos” said Villanueva.

Poor bet LRC claimed that the interest for profit that President Arroyo now protects will benefit not the Filipino people but foreign mining companies who have caused irreparable damage to the country’s environment and the massive displacement of indigenous peoples, farmers and fisher folk.

Mining, according to Villanueva “is a poor bet to the country’s economic growth”. Under the Mining Act of 1995, Villanueva said that gains from mining operations will not ensure real contributions to the country’s economic growth because the law does not provide clear provisions on how the Philippine government, as the owner in trust of the country’s mineral resources, will benefit from its contracts with mining operators.

“The Filipino people, represented by the state, are the owners of the country’s mineral deposits. Since the state does not have the financial and technical capabilities to extract its mineral deposits, it enters into agreements with mining contractors to help extract its own wealth. The question now is who should receive the larger share of the profit from the mining operations, is it the owner of the mineral deposits or the mining contractor? ” said Villanueva. Huge profit A 2003 report from the Chamber of Mines of the Philippines titled “Philippine Mining Investment Opportunities” showed that the Philippines would only receive a very small share from the huge profit that would be raked in by large-scale mining operators.

For instance, in the 4,663-hectare Rapu-Rapu polymetallic project in Rapu-Rapu, Albay operated by the Rapu-Rapu Minerals Inc. and Ungay-Malobago Mines, Inc. in partnership with Lafayette NL of Australia, LG Collins and KORES of South Korea ,the report showed that the potential annual gross sales would be US$ 41 million.

The mine life of the said project, based on the report, is seven years thus total estimated gross sales would be US$ 287 million. Minus the mining contractor’s US$ 42 million potential total investment, total potential sales would be US$ 245 million.

Of the US$ 245 million potential sales, only 19 percent or US$ 45.5 million would be paid to the Philippine government in the form of excise tax and income tax without incentives. Thus, the mining contractor will be left of a total potential net sale of US$ 199.5 million or 81 percent of the total potential sales.

In the 21, 465-hectare Didipio Copper Project in Kasibu, Nueva Vizcaya, operated by the Climax-Arimco Mining Corp. the report noted that annual potential gross sales would be US$ 49 million. With a mine life of 14 years, total potential gross sales would be US$ 686 million.

Minus the mining contractor’s total potential investment of US$ 63 million, total potential sales would be US$ 623 million.

Of the US$ 623 million potential sales, only 17 percent or US$ 108.92 million would be paid to the government in the form of excise tax and income tax without incentives. Thus, the mining contractor would enjoy a potential net profit of US$ 514 million or 83 percent of the total potential sales.

“The Chamber of Mines report only goes to show that the Philippines would be at a losing end on its business deals with large-scale foreign mining operators. Since the mining contractors enjoy incentives such as corporate tax incentives and duty holidays and are given privilege to fully recover their pre-operating and property expenses before they give the government its revenue share, the profit sharing becomes more inequitable,” explained Villanueva.

“This losing bet would further turn into an economic disaster, when large-scale foreign mining contractors cause irreparable damage to the environment and the lives of displaced communities,” concluded Villanueva.

For further details please contact Jo Villanueva – 0919-4111660 or 0915-5302993

Filipino community leaders call for halt to UK mining project

Frances Dodd, Independent Catholic News

24th May 2006

Two community representatives from Mindoro Island in the Philippines came to the United Kingdom recently to voice the opposition of communities to the activities of a UK-based company on their land. The company, Crew Development, is an international mining company with offices in Norway and Canada, with its headquarters in the UK.

It has plans to develop a nickel mine on the island of Mindoro, on a concession almost 100 square kilometres in area straddling the border between the provinces of Oriental and Occidental Mindoro. Production will involve strip mining the soil for nickel and cobalt, with reserves estimated to last for around 30 years. Contrary to the claims of Crew, the project has met with strong and sustained opposition throughout the island of Mindoro. The mine will be on the ancestral lands of the indigenous people of Mindoro, the Mangyans, who have expressed their antagonism to the project through resolutions. There are concerns of de-forestation, increased flooding from siltation of the rivers, the impact on endangered species, such as the tamaraw (wild water buffalo) or Mindoro crocodile, and also from how the mine waste will be disposed.

The Provincial Governor of Oriental Mindoro, Atty Arnan C. Panaligan, the two local congressmen and the province-wide Mayors League all oppose the mine. There are clear current statements and position papers from indigenous and civil society organisations rejecting the project and there have been numerous popular rallies, with 12,000 attending the most recent. However, with the support of the central Philippine government, which is currently promoting mining, often against the legitimate and legally supported wished of the people, Crew is pushing ahead with the project.

Ramil Baldo, a Mangyan indigenous leader from the affected area, and Father Edwin Gariguez, a priest who was, at one time, acting municipal secretary to the town of Victoria where the mine is located, and who is active in ALAMIN, the local alliance against the project came to the UK to highlight their opposition to the project. They have addressed a meeting at the Houses of Parliament and they have asked to meet with the company, which is based in Weybridge, but so far Crew says it does not have anyone available to meet with the visitors.

"We, the people of Mindoro, demand respect for the sovereign will of our people and the recognition of our right to chart our own direction of development. Therefore, we reiterate our demand that Crew stop the proposed mining operation of the Mindoro Nickel Project, " said Father Edwin Gariguez.

The visit is being organised by Indigenous Peoples Links (PIPLinks), which is a UK-based organisation active in support of indigenous peoples in the defence and promotion of their rights, and is sponsored by IWGIA in Denmark and Christian Aid in the United Kingdom.

Philippine communist rebels vow attacks on mines

By Manny Mogato, Reuters

22nd May 2006

MANILA - Philippine communist rebels vowed on Monday to step up attacks on mining firms and troops guarding them in the northern Kalinga mountains, raising a new threat to a sector that has been beset with environmental woes.

The Maoist-led New People's Army (NPA), fighting one of the world's oldest communist insurgencies, has attacked three mining companies since last month and has urged tribal communities to defend their ancestral land.

The rebels burnt the facilities and some equipment at an Australian-controlled copper and gold mining company in the north and raided two local firms, including Heritage Resources Development Corp., on the southern island of Mindanao.

With the Philippines having up to $1 trillion (533 billion pounds) in estimated mineral wealth, the government is trying to revive mining to bring in foreign investment, cut debt and reduce poverty.

But many foreign firms have been put off by political turmoil, graft, communist and Muslim insurgencies, and opposition from indigenous groups and influential Catholic bishops.

"The unhampered mining activities in Kalinga will destroy the environment and deprive the indigenous people of their resources through deception," Daniel Gibon, the NPA spokesman in the northern Cordillera region, said in a statement. On Friday, an independent fact-finding commission, which looked at two cyanide spills in October at the zinc and copper mine of Lafayette Mining Ltd., called for a review of the country's mining law which allowing 100 percent foreign control.

The committee also recommended the Australian firm's mine on Rapu-Rapu island, 350 km (220 miles) southeast of Manila, be shut down.

On Monday, the Australian embassy in Manila warned a blanket ban on mining on Rapu-Rapu island and other similar operations would deprive the country of jobs, economic growth and community development, huge tax revenues and foreign investor confidence.

Australia asked Manila to allow Lafayette -- which has stopped mine operations since October -- to test its mine as soon as possible, as the test would show whether or not the firm was ready to meet environmental standards and safeguards.

The government has rejected a ban on mining, adding it would seek a balance between developing mining resources and environmental protection.Press Secretary Ignacio Bunye said on Saturday the government was "for the full implementation of the Mining Act but always under strict implementation of environmental safeguards."

Among the targets in Kalinga that the NPA vowed to hit were mines run by Cordillera Exploration Inc., Wolfland Resources Inc. and Makikala Mining Co. Inc, which has projects in three towns.

The Philippines, Washington's closest security partner in Southeast Asia, has labelled the NPA as its top security threat, ahead of Muslim rebels in the south of the mainly Roman Catholic country.

Active in 69 of 79 provinces, the communists have been waging a protracted rebellion since the late 1960s that has killed more than 40,000 people and stunted investment and tourism.

Peace talks, brokered by Norway, stalled in 2004 when Manila refused the help persuade the United States and some Western European states to remove the NPA from terrorism blacklists.

Church Group Demands the Provincial Government Stop TVI Mining Operation

DCMI update

24th May 2006

Dipolog City, Zamboanga del Norte, Philippines – On 19th May the DIOPIM Committee on Mining Issues (DCMI), a regional church-based group, has called on the Provincial Governor Rolando Yebes to put a stop to TVI Pacific’s mining exploration in the town of Jose Dalman, because of lack of consent from local residents.

DCMI also asked the Governor to halt TVI’s open cut mining operation on the sacred ground of Mt. Canatuan, Siocon this province for the same problem. TVI has bought 486 hectares of a mining claim that was owned by the former Governor Roldan Dalman at Barangay Tamarok, in the town of Jose Dalman. The company’s website reported that it has paid to the former governor $US 5,000 as a signing bonus.

Julito Ango, a Barangay Councillor of Tamarok, said during the 19th May press conference that the mining operation, if ever finally permitted, would affect around 1,000, mostly Subanon, residents.

DCMI challenged the Governor, stating that “It’s time for Rolando Yebes to prove his slogan “Una sa tanan ang Katawhan” (first of all, the people). He must oppose and stop the exploration of TVI Resource Development Philippines in Barangay Tamarok and the full operation of the company in his province at Mt. Canatuan, Siocon”.

In a one page mining briefing distributed during the press conference, DCMI expressed support for the opposition to the operation by the people of Tamarok, and the Parish Pastoral Council (PPC) of Jose Dalman. On May 6, the PPC passed a resolution opposing the local mining activities of TVI.

Rev. Fr. Nemesio Sayon, the Parish Priest of St. Agustin in Jose Dalman, emotionally criticised the reported human rights violations, such as harassment and intimidations, employed by TVI against the Subanon communities.

Since 1997 several human rights violations by the company have been reported against the Subanon people in Mt. Canatuan, Siocon, and Subanon of Bayog, Zamboanga Del Sur.

DCMI predicts that the difficulties caused by TVI in the sacred ground of Mt. Canatuan is likely to reoccur in Jose Dalman and other parts of the Zamboanga Peninsula if TVI is permitted operate.

500 Barangay and Chapel Leaders Declare Against TVI's Entry

DCMI update

24th May 2006

Jose Dalman, Zamboanga Del Norte Philippines – Around 500 Barangay and Chapel leaders passed a resolution of united opposition to the entry of the mining company TVI Resource Development Philippines.

The company is facing various legal cases on behalf of local communities. One example is the case of the legal and legitimate ancestral domain holders in Mt. Canatuan, Siocon, who province who have a million pesos damage law suit for human rights violations, and the cancellation of its Mineral Production Sharing Agreement.

In a Parish General Assembly called for by the Parish Pastoral Council on May 18, 500 delegates overwhelmingly declared not to accept TVI Resource Development Philippines mining exploration and other mining related activities at the 486 hectares mining claim in Barangay Tamarok.

“We, the delegates of the General Parish Assembly, strongly continue our campaign against large-scale mining”. The desire of the assembly is to protect their local environment and avoid any effects from toxic wastes generated by mining activities as experienced by other places.

The PPC resolution said that the target mining site is currently declared as a watershed area by the Local Government Unit (LGU). It is a counterpart to the marine sanctuary, which was also declared by the LGU.

A few years ago, this municipality was a recipient of the One Town One Product (OTOP) award promoting Agar-Agar as the major product of the town. This would be threatened by the mining.

The company is now employing a local individual in Barangay Tamarok to convince opponents to accept their operations, according to Julito Ango, a Barangay Councilor of Tamarok.

TVI is already mining on the sacred ground of Mt. Canatuan, the ancestral domain of Subanon Indigenous People. The affected communities accused the company of dividing them and getting consent from illegitimate and illegal leaders.

As of the moment, DCMI records show that TVI Resource Development Philippines is the most aggressive mining firm in the Zamboanga Peninsula, as they are also exploring in Bayog and Dumingag Zamboanga del Sur. It has also applied for mining exploration licenses in the town of Sergio Osmenia, Bacungan and Sindangan, which are all in the province of Zamboanga del Norte.

Tito Natividad Fiel
Program Coordinator
DIOPIM Committee on Mining Issues
G/F, Diocesan Pastoral Center
Sicayab, Dipolog City

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