MAC/20: Mines and Communities

Don't bank on this project! - Philippine groups

Published by MAC on 2008-09-11

The people of Nueva Vizcaya are asking your support for their resistance

against the Didipio Gold-Copper Mining Project in Nueva Vizcaya province, Philippines. Part of their campaign is to pressure the financial supporters of the transnational mining company OceanaGold Corporation (which owns the mining project) to withdraw their involvement in the project.

Below is their petition urging ANZ and HSBC to withdraw their financial support for the project. To give support, please visit the link http://www.kalikasan.org/kalikasan-cms-new/ where you can find the online petition. Please do circulate this letter to your friends and network. Thank you very much.

For the people and the environment,

Defend Patrimony Didipio Earth Savers Movement (DESAMA) Kasibu Inter-Tribal (KIRED) (RULANAS) Save the Valley, Serve the People Alliance for the Environment (SVSP-Nueva Vizcaya)


PETITION urging international banks, ANZ and HSBC, to WITHDRAW FINANCIAL SUPPORT from the DIDIPIO GOLD-COPPER MINING PROJECT, in NUEVA VIZCAYA, PHILIPPINES

We, the residents of mining-affected communities in Nueva Vizcaya, along with Defend Patrimony!, Didipio Earth Savers Movement (DESAMA), Kasibu Inter-Tribal Response for Ecological Development (KIRED), Runruno Landowners Association (RULANAS), and Save the Valley, Serve the People Alliance for the Environment (SVSP), indigenous peoples (IPs), peasants, Church people, local government officials, professionals, the academe, the youth and other concerned organizations and citizens, both in the Philippines and the international community, hereby call upon the financiers of Didipio Gold-Copper Mining Project to immediately withdraw their support from the project.

We urge the Australian New Zealand Bank (ANZ), the fourth largest bank in Australia, and HSBC, one of the largest banking and financial services organisations in the world, to withdraw financial support for the Didipio gold-copper mining project in Kasibu municipality, Nueva Vizcaya province, Philippines. The project is owned by OceanaGold Corporation, a mining company listed in the Canadian, Australian, and New Zealand stock exchanges under the symbol "OGC".

ANZ and HSBC have provided financial loans amounting to millions of dollars for the development of OGC's mining project in Didipio. Both banks also hold the nominee accounts as among OGC's major stockholders. The two banks have adopted policies and guidelines, such as the Equator Principles, and therefore claim that they adhere to socially and environmentally-responsible banking norms. However, their continuing support for the OGC mining project is in clear violation of these aspirations, seriously putting into question the sincerity of the banks' commitments.

OGC has caused widespread community displacement, human rights violations, economic dislocation, environmental devastation and social disputes in the indigenous people (IP) communities in Kasibu, Nueva Vizcaya as illustrated by the following violations of economic, social, cultural, and human rights:

1. Community displacement

• Since December 2007, ancestral and agricultural lands have been cleared and residential properties located within the company's proposed 425-hectare primary mining impact area have been demolished. This area is home to IPs who have historically migrated to Nueva Vizcaya from other mining-affected areas in Northern Philippines and have long established their way of life and subsistence in the region.

• To date, OGC has demolished a total of 200 houses in the area belonging to the resident IPs. This destruction of their homes was done without the consent of some homeowners, who refused the money offered by OGC as compensation. An example of this is Romeo Guimbangan, a long-time resident of Kasibu, whose own house was torn down by OGC's demolition team despite the fact that he refused to accept the money offered by OGC.

• Residents' access to public roads and water supplies has been also blocked by OGC. The local people are not allowed to use the road constructed by the company without their permission. A portion of the community dam in the affected area has also been barricaded by OGC, thus limiting the people's access to the community's water supply.

• Free, Prior and Informed Consent (FPIC) from the IP communities residing in the affected areas was not obtained. OGC asserts that they have no responsibility to obtain FPIC from these communities.

2. Human rights violations

• Harassments and human rights violations are being committed by military and private security forces which were tasked to secure the mining activities of OGC.

On March 23 2008, local leaders Kagawad Edwardo Ananayo and Ramires Dayawon, upon returning from the barricade that was put up by the residents as a protest to the mining company, were stopped by a police officer, SPO4 Noel Valdez. The latter threatened and slapped Ananayo for no apparent reason, after the latter introduced himself as a village councilor and was identified by the police officer as a participant of the anti-mining protest.

• On March 24 2008, during a confrontation between the demolition team of the company and the residents, Emilio Pumihic was shot in the arm by one of the company's security guards. The encounter occurred in the course of the community's active resistance against the attempts by company employees to enter their village and demolish their properties. Pumihic, fortunately, survived the injury.

• OGC's entry in Didipio has rendered its communities unsafe and has caused disunity and discord among the people. Already, Didipio village chief Paul Baguilat was murdered on May 30 2008, during a dispute believed to be related to the mining conflict.

3. Economic dislocation

• The residents of Didipio are largely dependent on local agriculture for both sustenance and livelihood. However, critical crop yields have been steadily declining due to the decreasing fertility of soil brought about by acid contamination from the mining operations. Arable and agricultural lands reserved for citrus and other vegetation have also been destroyed because of bulldozing and excavation in the area. This is contributing to the incidence of poverty and hunger in the region.

4. Environmental devastation

• The mining project site is located within a watershed area. Hundreds of hectares of forestlands have been cleared and denuded and fertile agricultural lands have been converted into mining areas, causing massive environmental damage in nearby communities. Mining operations have contributed to deforestation, biodiversity loss, and watershed degradation in this context.

• Water bodies, particularly the Cagayan River, the longest river in the Philippines, will be contaminated with heavy metals once the commercial mining operations start and reach their full capacity. An Environmental Impact Study (EIS) noted that the water supply and quality of Diduyon River, Camgat River and Addalam River watersheds in the area will be affected by the mining operation.

5. Lack of social acceptability

• The project, which is being promoted by the national government, faces opposition from local government units. In August 2005, the municipal council of Kasibu resolved not to endorse the Didipio Gold-Copper Mining Project which was then owned by Climax Arimco Mining Corporation. The officials of Kasibu then elevated their petition to the Supreme Court of the Philippines seeking a temporary restraining order (TRO) to suspend the dismantling of shelters in the area.

• In May 2008, a barricade was put up to stop the mining operations. This was led by Nueva Vizcaya Governor, other local officials and villagers as a form of dissent against OGC's false and failed economic promises. OGC refused to pay the local taxes and fees required by the municipal and provincial governments, saying that they were not required by the national government to do so.

• More local government officials are responding to the call of their colleagues and their constituent communities for the project's closure. In June 2008, the provincial government of Nueva Vizcaya finally passed a resolution formally withdrawing its support for the OGC Didipio mining project.

This litany of grievances and valid issues raised against OGC have been brought to the attention of more sectors within Philippine society, including government agencies such as the Commission on Human Rights and the National Commission on Indigenous Peoples; major religious formations such as the Catholic Bishops Conference of the Philippines; and policy-makers such as individual solons from the House of Representatives. However, the Department of Environment and Natural Resources (DENR) under the present administration of Secretary Lito Atienza has continued to turn a blind eye to the overwhelming clamor for the stoppage of the Didipio Gold-Copper mining project.

Considering the circumstances stated above, the international banks ANZ and HSBC have the responsibility to take actions on the above issues and do their part to ensure that OGC respects the rights of local communities and the protection of the environment.

Based on the experiences in Didipio, OGC has failed to practice socially responsible and sound environmental practices. As such, the banks should immediately call for the suspension of mining activities of OGC in the area and stop supporting the Didipio Gold-Copper Mining Project until the above issues have been resolved. Continuing their financial backing of OGC would translate to the banks' endorsement and toleration of OGC's offenses against the indigenous people's communities in Kasibu, Nueva Vizcaya.


Indigenous peoples and environmental activists to ANZ Bank and HSBC: stop funding destructive mining project in Nueva Vizcaya *

Kalikasan-PNE Press Release

29th August 2008

Environmentalists, indigenous peoples, and Church people picketed the Australian New Zealand (ANZ) Bank office at Makati City demanding the bank to withdraw its financial funding from the controversial OceanaGold Corporation (OGC) Didipio Gold-Copper mining project in Kasibu, Nueva Vizcaya.

The protesters symbolically launched their international campaign against the said project by submitting to the bank a petition supported by various organizations from the Philippines, Australia and New Zealand.

"The petition is demanding for ANZ and HSBC, who are the major funders of OceanaGold, to pull out from the Didipio mining project. It would not be agreeable for ANZ and HSBC to be known as supporters of projects which have caused massive environmental degradation and human rights violations. These offenses run contrary to their claims of 'socially and environmentally responsible' banking norms," said Clemente Bautista, national coordinator of environmental activist group Kalikasan People's Network for the Environment.

The group said that they have already gathered 495 signatures in a week's time, mostly from the Philippines and Australia.

"We believe that the Didipio mining project of OGC is becoming more financially and economically unviable every day. Until now, there are no fresh investments and loans that are coming to the project. Based on its own financial report, OGC is consistently losing money since last year. This should serve as a warning to new investors not to risk their money in a project which is financially unstable, environmentally destructive and socially unacceptable," Bautista added.

Last June 24, Australian-New Zealand owned OceanaGold Philippines Inc. said the firm is suspending its $117-million gold-copper project due to the controversies hounding its operations and financial difficulties its facing. Based on the annual reports of OGC, it lost US$23.43 million and US$69.04 million in 2006 and 2007 respectively. This is in spite the company having raised additional capital of Canadian $90.00 million in its initial public offering in the Toronto Stock Exchange last July 2007.

In addition to OGC's financial instability, the project is garnering much negative publicity because of the wrongs it has committed to the local and national minority residents. Even the provincial government of Nueva Vizcaya passed a resolution withdrawing their support for the project last June 25.

"Majority of the Ifugao and indigenous peoples in Nueva Vizcaya is strongly opposed to the OGC project in Kasibu, Nueva Vizcaya. OGC violated our rights as indigenous people when they entered our communities without our consent. They have demolished our houses and are now forcefully seizing our natural resources and lands where we get our food and subsistence," said Peter Duyapat, Ifugao leader of Didipio Earth Savers Movement (DESAMA). Bautista pointed out that the mining project is doomed to fail as it is inherently flawed. It has caused widespread community displacement, human rights violations, economic dislocation and environmental devastation since it set foot in Nueva Vizcaya.

"OceanaGold will suffer the same fate as the Australian-owned Lafayette Mining Philippines Inc. which went bankrupt last December 2007. The support given to Lafayette by the Arroyo government and international banks were not enough to salvage it from financial losses and wide national and international opposition. The OGC and Lafayette mining projects are both anti-people and anti-environment. These are the main reasons why OGC will not prosper and will fail," according to a statement of Defend Patrimony! Alliance, a national multi-sectoral alliance opposing the government's mining policy and programs.

Reference: Clemente Bautista 09228449787, National Coordinator, KPNE

Peter Duyapat Sr. 09057119685, leader DESAMA

KALIKASAN-PNE KALIKASAN-- PEOPLES NETWORK FOR THE ENVIRONMENT 26 Matulungin St. Central District, Quezon City, Metro Manila, Philippines Tel./Fax; +63 (2) 924-8756; E-mail: kalikasan.pne@gmail.com url: www.kalikasan.org


OceanaGold to invest $29 million in Didipio copper/gold project*

OceanaGold will invest $29 million in Philippine copper and gold project Didipio in the next six months, but the firm is also in talks to arrange a merger or a joint venture to further finance the project.

Reuters

20th August 2008

Australia-based gold miner OceanaGold (OGC.TO) (OGC.AX) will invest a further $29 million in the next six months in its Philippine copper and gold venture while it seeks a partner for the project, a company official said on Wednesday. The company was in talks with different groups on a possible joint venture or merger arrangement to partly fund an additional $185 million needed for the Didipio copper and gold project to take off, Darren Klinck, company vice president for corporate and investor relations, told reporters. "One of the areas that we think will probably be most likely at this point is a partner for the project," Klinck said. "And that would be on a joint venture arrangement of some sort."

Klinck said the company was evaluating a number of prospective partners globally which he did not identify. Last month, he said the group was in talks with 5 to 10 different firms interested in the Didipio project and in OceanaGold. Oceanagold is also considering borrowings to fund part of the Didipio project, but the amount would depend on how much a prospective partner would be ready to sink into the venture.

"There are debt options that have been presented to us, and those debt options are under a variety of terms. But they would not cover the full quantum of the amount required," Klinck said. The search for a partner would delay the start of production at the mine to the second half of 2009 from an earlier guidance of the first-half next year.

Start-up operations at Didipio were partially suspended earlier this year due to rising development costs. The Didipio project in Nueva Vizcaya province north of Manila is only the second mining venture to be operated by a foreign firm in the Philippines.

Manila wants to boost investor interest in the country's mining sector, one of the world's biggest and most profitable in the 1970s, with investments expected to reach about $10 billion in the next three years from only around $1 billion now. The Didipio project cost was raised to $320 million in May from an original cost of $155 million in 2006 due to higher raw material costs and after Oceanagold altered the project to include the building of a $33-$34 million, 18-megawatt power facility to ensure steady power supply at the mine site.

"We have seen a significant inflationary environment, everything from steel, to concrete, to labour," Klinck said. The Didipio mine is expected to produce around 120,000 ounces of gold and around 15,000 tonnes of copper concentrate annually in the first 10 years of production. The mine has a minimum life of 15 years. (Reporting by Rosemarie Francisco; Editing by Kim Coghill)


Australia's Gold Fields, Sino Gold eye Didipio

By Othel V. Campos, Manila Standard

21st August 2008

OceanaGold Corp. is finalizing a financing scheme for its Didipio mining project in Nueva Vizcaya province.

"We are working on a solution that will allow the project to be built and commissioned in the shortest possible timeframe and in a manner that maximizes the value for all our stakeholders," said company vice president for communications and investor relations Darren Klinck.

Klinck flew in Sunday for a series of meetings with its local subsidiary in the Philippines.

He told a press briefing yesterday the company was in talks with a number of companies for traditional financing facilities, including debt, joint venture and merger opportunities.

"The funding we're looking for right now is probably $185 million additional, over and above what we have spent and will be spending for the year. We are currently involved in a process with strategic advisers, evaluating a number of opportunities globally to fully fund the project. At this point, it might be a strategic partner and that would be a joint arrangement of some sort," Klinck said.

He said several companies had expressed interest, like Australia's Gold Fields and Sino Gold of China.

The company recently decided to change the scope of the project due to inflationary considerations.

The firmwill now put up a 18-megawatt power supply system project to guarantee stable supply of electricity at the site and additional water supply for the mines.

OceanaGold is set to infuse $29 million within the next few months into its Didipio gold-copper porphyry project.

Work at the site includes road maintenance activities, construction of the permanent accommodation camp, site administration and storage infrastructure facilities, an exploration drilling program as well as community relations, health and safety and environmental works.

Toronto-listed Oceana assumed the financial and technical assistance agreement of Canberra-based Climax Arimco Mining Corp. with Australasian Philippines Mining Inc. as partner

Company vice president for corporate communications Chito Gozar said the company had temporarily suspended operations at its gold mine site in Didipio in Nueva Vizcaya after upgrading its capital expenditure to $320 million.

Didipio is one of the highest grade gold-copper porphyries being developed in the world today.

 

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