THE PHiliPPinE mining indusTry's wEEkly nEwsPaPEr

Mining6 6 Week6

Senate winners: How they are likely to vote on mining issues

Greenstone Siana Mines permit questioned

Nickel wars: Shuley Mine vows to keep the fight

xFEATURED COMPANY

uIN FOCUS

Carrascal Nickel Corporation:

Mining for the future

See back page

xGOVERNANCE

xCOMMUNITIES

xINSIGHT & COMMENTARY

No-go-zone map on mining ready by June 1, says Dir. Jasareno

VOLUME 1 NO. 1 JUNE 3-9, 2013 P20 www.phminingjournal.com

OPERATIONS SUSPENDED

CRUCIAL MINING LAW OVERHAUL LOOMS IN NEXT CONGRESS

Higher mining taxes to finance basic services

cou

rtesy of n

oto

min

ing

inpalaw

an.co

m

President Aquino cited two major justifications when his administration issued eO 79 last July: to improve en-

vironmental standards in mining and opti-mize government revenues.

the latter, which is concerned about in-creasing government share in mining rev-enues, requires legislative action. With the

elections over and team Pnoy’s impressive finish in the senatorial race, the President is in the best position to advance key legis-lations to fulfill his vision for the country’s minerals sector.

But how will the new set of senators-elect vote on mining-related legislations? Will they toe the party line? FULL STORY INSIDE

Manuel Pangilinan:How can mining work for thePhilippines?

Gerard Brimo:Correcting lies and disinformation

AlreAdy beset with mine flooding and underground fire problems, now a group is questioning the permit of Greenstone resources Cor-poration’s (GrC) siana Mines in tubod town, surigao del norte. Greenstone, a sub-sidiary of Australian-based miner red5 ltd., has already suspended its operations after its own geotechnical consultants concluded that there is an unquantifiable risk in returning the tailings dam to operating status.

FULL STORY ON PAGE 6

the country has witnessed at least two (2) major mining disasters in the last 12 months, namely the August 2012 mine spill at Philex Mining Corporation’s Benguet mine site and in February this year, when a landslide oc-cured at the coal mine of semirara Mining Corp in Antique, killing five (5) people.

What led to these disasters? What did the involved companies do to contain the dam-age and assure regulatory agencies as well as the public?

Mining Week takes a look at these unfortu-nate events again to hopefully gain insight and relive the lessons learned from these tragedies. FULL STORY ON PAGE 7

nOnOC nickel miner shuley Mine inc. (sMi) said it will continue to press its rights amid the cease and desist order issued against it by the Mines and Geosciences Bureau (MGB), arguing the agency violated an existing court injunc-tion.

the nonoc dispute is a complex govern-ment and corporate clash, which pitted sMi

against its former partner, Pacific nickel, with MGB and department of Finance (doF) seeking to stop mining in the island be-cause it is supposedly onerous to the gov-

ernment.it has already alarmed

local officials, wary about the massive job loss in the island where some 2,000 residents in three baran-gays are employed.

Meet the country’s newestlady mining engineers

Barricade forces Surigao nickel miner to shut downmining operations

ANNUS HORRIBILIS?A look at recentmining disasters

grace poe LoreN LegarDa cHIZ eScUDero

aLaN caYeTaN0 NaNcY BINaY SoNNY aNgara

BaM aQUINo KoKo pIMeNTeL aNToNIo TrILLaNeS

cYNTHIa vILLar jv ejercITo grINgo HoNaSaN

More power for LGUs to decide on mining projects

Mining exacerbates effects of climate change

Mining is essential for country’s progress

No public stand on mining...yet

Bigger mining share for Local governments

At Pres. Aquino’s beck and call?

Mining is country’s economic driver

Review Mining Actof 1995

Family has mining interests in Kingking

A ‘responsible mining’ skeptic

Pro-responsible mining, with ‘reservations’

FULL STORY ON PAGE 6

June 3-9, 2013

| Governance MainStory

2

grace Poe

Early in his presidency, President Benigno Simeon aqui-no III made it clear that his administration will undertake wide-ranging reforms on the country’s minerals sector

to “strengthen environmental protection, promote respon-sible mining and provide a more equitable revenue-sharing scheme.”

The first of these reforms is embodied in EO 79, whose Irr raised not a few hackles within the industry when it came out in Septemer 2012. EO 70 seeks to specify areas that would be closed to mining applications—the no-go-zones.

Embedded in EO 79 is a caveat: no new mineral agreements will be issued pending the passage of a law that will increase the government’s share in mining profits. Mining permit ap-plications resumed in March after a two-year moratorium, but these will have to wait for the much talked-about legislation that will pave way for a new mining tax regime.

There has never been an opportune moment for Mala-cañang to push for the President’s pet legislation than in the next opening of Congress, where administration allies are ex-pected to dominate both chambers.

at the Senate, Team PNoy captured nine (9) of the 12 seats—an overwhelming majority that could help deliver the administration the needed votes to advance key legislations to reform the mining industry. and that’s as far as it gets.

In a country where each senator is often regarded as an in-dependent institution unto himself/herself, Malacañang may find it difficult—through not entirely impossible—to make the Upper House dance to its tune. Every senator has his/her own advocacies and pet legislations, and Senate members have been known to oppose, even criticize, Malacañang—even if its chief occupant belongs to their own party.

Then there is the national factor.Unlike lower House lawmakers who generally focus on

parochial matters and can stay under the radar through their sheer number, each senator is heavily scrutinized according to his/her stand or vote on almost all hot-button issues that af-fect the country’s 94 million Filipinos.

all told, a review by Mining Week on voting records, authored laws, advocacies, political and professional backgrounds and even policy declarations of the 12 winning senators reveal a confluence of factors that are likely to influence their vote on mining-related issues: personal belief or ideology, business and political interests and party decision.

To put everything in perspective, the tax regime overhaul proposed by President aquino is not the only mining-related legislation on the table. The alternative Minerals Manage-ment Bill (aMMB)—described by the Chamber of Mines of the Philippines as destructive—is pending in both houses. at the House, aMMB is being advanced by a united front of progres-sive partylists—one of which, akbayan, is a key Malacañang ally, and a potential supporter of Mar roxas’ presidential bid in 2016. at the Senate, Sen. Serge Osmeña’s version of the bill is pending before the Natural resources Committee, chaired at present by reelectionist Sen. Chiz Escudero.

Where does each of these 12 new senators stand on min-ing issues? How do they view mining and what have they said about it in the past? mining week investigates.

a newcomer but defi-nitely not a green-horn, the daughter of

then presidential contender Fernando Poe Jr. will prove to be a credible voice in the Senate, having garnered the top spot in the May 13 elections. although large-ly inexperienced in public office, her view on mining is well-developed, and she proved this during her cam-paign sorties where she sufficiently expressed her views about the industry.

On mining taxationSenator-elect Poe will

certainly be a reliable ally of local government units (lGUs) who clamor for a big-ger pie in mining revenues.

“I will push for higher share for lGUs to fund ba-sic services. We all know that the Philippines is rich in minerals, but we can observe that where these precious resources are be-ing mined, there is wide-spread poverty and misery,” Ms. Poe told mining week during one of her sorties in

Surigao del Norte in april.asked to specify figures,

Ms. Poe asked to be given time to make a thorough review on the matter. It is believed that she will main-ly rely on the wisdom of Malacañang when it comes to the nitty-gritty part—as long as her demand for big-ger lGU share is satisfied.

On AMMBMs. Poe has not yet de-

clared any position on the controversial aMMB, though some elements of the bill hew slightly hew

with her mining stance, namely increased tax take for lGUs and the national government. aMMB pro-poses the following:

• At least 10% share from the gross revenues for the national government

• Share of LGUs from net revenues

• Share of at least 10% of gross revenues on mineral operations within ancestral domains/lands for Indige-nous Peoples (IPs)

She also bats for the devel-opment of the minerals sec-tor’s downstream industry “so that there would be no need for local manufactur-ers to import the processed mineral.” Such nationalistic outlook will certainly make Ms. Poe an important pros-pect for aMMB advocates as they seek crucial support in the Upper House.

Overall mining standBalanced, with particular

concern for strict environ-mental compliance, as well as better living standards for impact communities.

Chiz Escudero

I aM not against mining per se.”

ask reelected Sen. Chiz Escudero and you’ll get the automatic answer. In fact, majority—if not all—of his colleagues will respond the same way. The real deal is in the details.

Touted as a potential presidential contender in 2016, Mr. Escudero is ex-pected to handle mining issues at the Senate in the shrewdest way possible. He will make sure he doesn’t get the ire of the industry and the hundreds of thou-sands who directly and indi-rectly benefit from it. On the flip side, he’d be careful not to make enemies of green and leftist groups, many of whom count President aquino as their ally, and just as important should he de-cide to enter the presiden-tial or vice race.

On mining taxationMr. Escudero said he will

back President aquino’s ef-fort to overhaul the tax re-gime for the mining sector.

loren legarda

IN the 24-member Senate none has a claim on having helped plant over two (2)

million standing trees other than reelected Sen. loren legarda. In fact, legarda’s over-a-decade lawmaking career is largely identifiable with environmental issues. Sheltered in green accents, her website (www.lorenle-garda.com.ph) describes her as a “passionate environ-mentalist and “environmen-tal champion. Owing to her environmental advocacies, Ms. legarda is one of the few senators who has attained a fully developed view on mining. This requires her to play the role of an astute politician in tackling each bill, weighing every measure in relation to her advocacies rather decide based on a set of doctrinaire beliefs.

On mining taxationMs. legarda’s support

in raising the government take in mining revenues is certainly assured, though it is not farfetched that she would push for higher rates than the five (5) to seven (7) percent range—as what the government is expected to

propose, sources told mi-ning week.

as chair of Senate Com-mittee on Cultural Commu-nities (which would be likely handed to her again in the next Congress), Ms. legar-da has championed several measures protecting the rights of IPs. She has voiced support on increasing the mining royalty share of the IPs, as well as host commu-nities, and is likely to favor the 10 percent increase es-poused by aMMB.

On AMMBWhen EO 79 came out,

Ms. legarda wasted no time in describing President aquino’s mining policy as “written by mining com-panies themselves.” This might seem unfair because the mining industry itself, through the Chamber of

Mines of the Philippines (COMP), branded EO 79’s Irr as “illegal.” Nevertheless, the senator’s “unfriendly” words on EO 79 offer a glimpse on how most of her advocacies have found their voice in aMMB.

Though she has no pub-lic stand yet on aMMB, Sen. legarda is likely to embrace provisions in aMMB which find commonality in her views as regard to the envi-ronment, IP rights and Cli-mate Change—a key advo-cacy where she has gained international prestige. aM-MB advocates will not find Sen. legarda difficult to sway into their fold.

Overall mining standleans more with restric-

tive regulation of mining industry, especially on envi-ronmental side and IP rights.

He is in the best position to do so as he is expected to return as chairman of the Natural resources Commit-tee.

“I think it’s time that we get more share from min-ing profits, and plow the

revenues back to lGUs and affected communities,” he told mining week during one of his campaign sorties. He said he will have to wait for a definitive proposal from Malacañang regarding specific rates before he can come up with his own.

On AMMBWhen asked on the posi-

tion of local officials in his native Sorsogon not to al-low commercial mining in the province, the senator responded: “It will be the decision of each province to allow mining.”

Mr. Escudero is thus seen to favor at least two features of aMMB, namely more lGU powers over large-scale miners and an increase in revenue sharing in favor of local governments.

Overall mining standBalanced. Tends to take

popular position on mining.

No-go-zone map ready by June 1: Dir. Jasareno

THE technical work group (TWG) of the Mining Indus-try Coordinating Council (MICC) is ready to issue a final no-go-zone map, which specify areas open or closed to minerals exploitation, by June 1.

This was according to Mines and Geosciences Bureau Director leo l. Jasareno, who added that by early June, MICC would have also completed its final draft on min-ing revenue-sharing legislation.

“MICC has already wrapped up its consultation. We may have a final no-go-zone map as early as May 30,” Di-rector Jasareno told mining week in an interview.

Jasareno said the no-mining zone map is expected to be implemented by early June.

“The map is an integrated map, and it contains the additional areas closed to mining as provided by EO 79, such as small island ecosystems, agricultural lands, tour-ism and key biodiversity sites, among others,” the MGB chief said.

Earlier, Jasareno admitted that MICC had struggled to define the no-go-zone areas, specifically on the scope of island ecosystems.

If he can have it his way, Jasareno said he would ban mining on “small islands that are rich in biodiversity and mineral deposits,” such as Sibuyan Island in romblon, which has nickel deposits. mw

TEXT By DaNIlO V. aDOraDOr III, Editor

Industry leaders. Policymakers. Important stakeholders.

Get noticed at the leading industry source for news, insight and commentary.

6

THE PHiliPPinE mining indusTry's wEEkly nEwsPaPEr.

Contact us now.

| Telefax 086.826.1302| Email phminingjournal@gmail.com| Mobile 0926 628 5939 Look for Ms. Jocelyn 0921 770 8888 Look for Danni 0919 696 6435 Look for Roel

June 3-9, 2013 3

alan Cayetano

a New york-based think tank lists reelected Sen. alan Cayeta-

no as a viable presidential contender from the admin-istration party, along with Interior Secretary Mar roxas, Senators Francis Escudero and senatorial race top-notcher Grace Poe. among the four—in fact among his Senate peers—there is not a shred of doubt that Mr. Cay-etano is one of mining in-dustry’s friendliest politician.

The boyish senator ac-knowledged the mining in-dustry’s contribution to na-tional progress, and praises its efforts to uplift the living standards of impact com-munities. During a gather-ing of mining engineers last year, he issued a challenge for those who describe themselves as “anti-mining”:

“Prove to me that real-ly you’re anti-mining. Stop using products that are brought about by mining. Do we have computers, cell-phones and microphones if we don’t have mining?”

On mining taxationMr. Cayetano is expect-

ed to toe the party line on a new tax regime, as long as it is within the threshold the industry players can al-low. He will likely bat for a set of “win-win” rates or tax schemes—something Presi-dent aquino and the mining sector can live with. Unlike newly-minted Sen. Cynthia Villar, Mr. Cayetano has no known pecuniary interests in mining, and this makes

him an ideal go-between as Malacañang seeks to get the industry on board its pro-posed tax measures.

On AMMBlike most senators, Mr.

Cayetano has not publicly declared his stand on aMMB, which is understandable because the measures had not been tackled extensive-ly and remains pending in the Upper House. Based on his present stand on min-ing, however, it is believed that he will reject restrictive measures contained in the aMMB, preferring instead to support President aquino’s current reform efforts than overhauling the Mining act of 1995 altogether.

Overall mining standFor responsible mining.

likely to reject any measure deemed to inhibit growth in the industry, but prefers that mining sector allocate its so-cial development resources to education.

nancy Binay

NEWly-ElECTED Sen. Nancy Binay’s vaunted 20-year OJT (on-the-

job training) has not pro-duced any intelligible view on mining, so we’ll leave it at that. like Bam aquino, she’s a complete tabula rasa, though that doesn’t imply she won’t ever have a say when min-ing-related measures reach the Senate. Because of her relative inexperience, Ms. Binay’s view on mining—at least in earliest period of her career—will be influenced heavily by her own party and that of his father and chief tutor, Vice President Jejomar Binay. This entails a review of the vice president’s views on mining.

On mining taxationSen. Binay will likely view

President aquino’s proposed tax regime from her own fa-ther’s prism.

Vice President Binay pre-fers consensus on thorny

industry issues rather than having the government act-ing it out alone. He has pub-licly supported EO 79 and President aquino’s other reform efforts in the mining sector. His current views on mining indicate he favors moderate increases in taxes, something that would not be too seen as prohibitive by industry players. like Sen. Escudero and other poten-

tial 2016 presidential candi-dates, the vice president will place his bet where it is saf-est, politically speaking. His daughter will make sure not to ruin that.

On AMMBVice President Binay has

described mining as a “social justice” issue, and that the future of Philippine mining should be anchored on that guiding principle. Curiously, aMMB proponents also cite social and economic justice in advancing the measure.

Where Binay and aMMB advocates diverge, however, is the scope of reforms need-ed to make the industry more responsive to environment and the economy. Where-as aMMB supporters favor a more drastic approach to reform the mining sector—such as barring foreigners from engaging in mining and minerals processing—the vice president prefers slight,

incremental changes, those that do not upset the status quo and harm the country’s investment image.

Vice President Binay spoke of a “multipartite approach” to mining to “help redefine the industry.” This participa-tory method highlights his inclination for a balanced, consensus-based response to mining issues. For him, any changes to the current min-ing law would have to be a product of consent by all par-ties—something the aMMB proponents may find hard to agree.

Considering all factors involved, Sen. Nancy Binay, again, will find it difficult not to agree with his father’s views.

Overall mining standWill most likely follow his

father’s mining stance, with tendencies to approach mining issues according to popular views.

2 miner partylists fail to get seataNG Minero and the alli-

ance of advocates in Mining advancement for National Progress (aaMa) have failed to get the number votes needed to capture any of the 58 partylist seats in the lower House.

ang Minero, headed by Engr. louie Sarmiento, got 50,242 votes; aaMa ob-tained 32,937 votes. The figures are based on the Comelec transparency serv-

er, with 76 percent of the votes counted.

aaMa represents the “marginalized mine work-ers, underrepresented small scale mining entrepreneurs and mining advocates.” It started to participate in elections in 2010.

ang Minero, meanwhile, aims to give miners a strong voice in Congress, push for much needed reforms in the mining industry, pro-

mote responsible mining and mine safety, and ensure that miners get what they deserve in terms of equal distribution of wealth, ac-cording to Engr. Sarmiento, who also head the Philip-pine Mine Safety and Envi-ronment association (PM-SEa).

“Miners have to stand up and be counted. This is just not a fight for the large-scale investors or small-scale

mining operators. But we are battling for the rights of all mine workers. These include hundreds of thou-sands of Filipinos from host and neighboring commu-nities who will benefit from employment, livelihood and basic social services as well as Filipinos from other prov-inces who will benefit from development projects fund-ed by mining taxes and rev-enues,” said Sarmiento. mw

QUICK FACTS

Gold and copper were the first metals to be discovered by man, around 5000BC, and together with silver these three elements are found in a metallic state in the earth’s crust. Gold and copper are the only two non-white colored metals.

| Governance MainStory

June 3-9, 2013 4

sonny angara

THE angaras are known in aurora province—their bailiwick—for their

anti-mining stance. all politics being local, it’s no surprise that when he was congress-man, Juan Edgardo angara staunchly supported his aunt, Bellaflor angara-Castillo, in the latter’s decision to keep mining companies out of au-rora.

But the story about the freshman senator’s stand on mining doesn’t end in local politics.

along with newcomer Sen. Cynthia Villar, angara was tar-geted by anti-mining groups during the May elections be-cause he was deemed to be pro-mining. Jaybee Gargane-ra of alyansa Tigil Mina said they see angara as someone who would push the mining sector’s agenda in the Sen-ate. This seems to be an un-fair characterization because during his stint in the lower House, Sonny angara ad-opted a middle-of-the-road approach on mining that is aligned with mainstream viewpoints—very much like his father, incumbent Sen. Ed-gardo angara.

On mining taxationangara described EO 79

as “a step in the right direc-tion.” He is seen to support the Malacañang-backed overhaul of the mining current tax regime. He has voiced support for bigger lGU share in mining profits.

On AMMBangara has advocated

“order” in the mining sec-tor, which entails synchro-nizing local and national laws to avoid conflict and specifying which areas are closed for mining. The latter is already being ad-dressed with the upcoming no-go-zone map as man-dated by EO 79, although the synchronization of na-tional and provincial laws

is a difficult task. For one, even the national govern-ment’s directive to lGUs to respect the superiority of national law is largely ignored, as shown in the Tampakan case.

aside from the tax re-gime, Sen. angara is like-ly to advocate limited amendments in the coun-try’s mining law and would likely adopt a moderate version of some provisions contained in aMMB, specif-ically on matters that deal with natural resource gov-ernance.

“We need stricter legisla-tion that would ensure that all contractors for mineral permits and agreement shall provide information, such as methods and processes of mining, environmental and social risks to the Mines and Geosciences Bureau (MGB) and affected indigenous peoples, local communities and local government units,” he said recently.

Overall mining stand Balanced. Prefers a more

streamlined governance of the country’s minerals sector that may necessarily entails amendment to the current mining law.

Bam aquino

ONE of the frequent questions that Bam aquino had to face

during the campaign season concerned about his being a presidential cousin. Will he be at President aquino’s beck and call? No, he was ready to oppose his cousin, Bam re-sponded. That remains to be seen because as the lone lib-eral Party winner in the sen-ate (other Team PNoy mem-bers belong to other parties), he is expected to toe the line. This is partly because Bam has not yet developed his views on mining, and Presi-dent aquino is likely to play the part of a good mentor.

On mining taxationSen. aquino is expect-

ed to follow the Mala-cañang-sponsored tax re-gime.

On AMMBMalacañang is silent on

aMMB despite intense lob-bying from allied progres-sive groups. Senator aquino is expected to follow the same track, at least in the early part of his term.

Overall mining standSame as President aqui-

no’s, at least in the early stage of his lawmaking career.

koko Pimentel

rEElECTED Sen. Koko Pi-mentel’s father, aquilino III, authored the People’s

Small-Scale Mining act, the law that allows small-scale miners to lawfully engage in mining activities. It is not far-fetched that the son will also make his mark on the coun-try’s mining sector, an area where the young senator has been vocal about as he reg-ularly criticizes irresponsible mining companies. all things considered, however, the younger Pimentel believes that sustainable mining prac-tices can be done in the Phil-ippines.

On mining taxationSenator Pimentel has ex-

pressed support for a new mining tax regime, saying mining ventures “must bene-fit the entire country and not the foreign investors alone.”

On AMMBSenator Pimentel has at

times expressed skepticism

kung hindi natin maayos…” Pimentel was a co-petitioner in a Tepo (Temporary envi-ronmental protection order) against a magnetite mining firm in Ilocos.

In September of the same year, however, he said: “Min-ing may be allowed in the country provided that the best practices that foreign investors follow in their own land are also observed here.” Foreign mining companies, he added, “should be respon-sible, able to protect the en-vironment, assure us of fair returns, and pay reasonable taxes to the government.”

This maverick attitude suggests that Pimentel may favor the more rigid provi-sions of aMMB, namely the prohibition of total foreign ownership in mining shares and their participation in minerals processing.

Overall mining standFor responsible mining,

with deep reservations.

that the country’s operating mines can practice honest to goodness, responsible mining. In an interview in July last year, he said he was leaning on imposing a mora-torium on large-scale mining in the country—especially by multinationals—because “maraming reklamo, like the care and concern of the mining company is not there kasi hit-and-run. No mining

sonny Trillanes

PEOPlE in the mining cir-cle would probably re-member Senator anto-

nio Trillanes as the man who almost got MVP (Philex’s boss Manuel V. Pangilinan) to pack up and leave the Philip-pines, following a public spat involving the West Philippine Sea dispute (Philex has been awarded the right to explore the reed Bank energy bloc). His colleagues (and indeed former Pres. Gloria arroyo) know him for his rebellious streak, and environmental-ists may add that he’s a rebel with a cause, being the main proponent of the National Environmental Protection agency (NEPa).

Senator Trillanes has ad-vocated for stricter enforce-ment of environmental laws. He is expected to continue pushing for the creation of NEPa, an environmental ‘superbody’ tasked to craft

the current sharing scheme between national and local governments.

On AMMBThe senator has not pub-

licly voiced position on aMMB, but has expressed support in amending repub-lic act 7942, or the Philippine Mining act. During his cam-paigns sorties, Trillanes has called for the review of the country’s mining law specif-ically the provision on the granting of benefits to areas where mining exploration exists. He commented that the current mining law con-tains “loopholes” and that “corrective measures should be instituted.”

Overall mining standFor responsible mining,

and is likely to support strict-er regulatory regime in his second term.

policies on enforcement of environmental laws, in his second term.

On mining taxationSenator Trillanes is expect-

ed to support Pres. aquino’s proposed mining tax regime, particularly components that increase the lGU share. He has described as “unfair”

CONGRATULATIONS!

on your maiden issue.

At a time when the industry is facing unfair criticisms and trying to correct misplaced fears and

fighting bad perceptions, may your brand of responsible journalism shed light on the

minerals sector’s vital role in national development.

‘

~ Dulmar M. RaagasPresident

Chamber of Mines-Caraga, Inc.

Communities | Environment

June 3-9, 2013 5

QUICK FACTSCopper does not corrode, rust or damage easily. Archeologists have unearthed copper drainpipes from as far back as 3,500 BC, that are still in good condition.

Cynthia Villar

aS president of Villar Foundation, sen-ator-elect Cynthia

Villar has advocated for “green social enterprises,” or livelihood projects out of wastes and garbage such as water hyacinths and co-conut husks from her river rehabilitation program. She has also staunchly opposed the planned 635.14-hect-are Manila Bay reclamation project because, in her view, it will affect the las Piñas-Parañaque Critical Habitat and Ecotourism area (lP-PCHEa). She even filed a pe-tition for Writ of Kalikasan against the project, which the Supreme Court granted on april 10 last year.

But will she ever file a Writ of Kalikasan or a Tepo against a mining company if her environmental advo-cacies necessitate it? That may seem a trick question but as anti-mining groups will point out, Mrs. Villar will have to walk a fine, delicate thread on mining issues, her family being the owner of

mining, but these will have to be within the range of industry figures. That means she will resist rates or schemes that would be deemed prohibitive by the mining sector itself.

On AMMBThe mining sector gen-

erally considers aMMB a threat to its very existence. If aMMB goes full steam in the next congress—the mea-sure already having a Senate version of its own—it would be wise for Sen. Villar to sup-port alternative proposals that Pres. aquino will push in his last three years in office. With all her connections to the industry—coupled by her husband’s ambitions—she will be careful not to be seen as its number one fan, identifying herself instead with middle-of-the-road po-sitions on mining.

Overall mining standFor responsible mining,

generally with a more favor-able view of the industry.

Queensberry Mining—one of the major shareholders in the King-king copper-gold project in Compostela Val-ley. On the other end of the spectrum, she will carefully consider all mining-related measures according to pop-ular sentiment, her husband being a potential 2016 pres-idential contender.

On mining taxationMrs. Villar will likely sup-

port new tax measures on

JV Ejercito

aMONG the 12 win-ning senators, Joseph Victor Ejercito has

more extensive lGU back-ground and is expected to view mining from the an-gle of local governance. He has called for a mining ban in agricultural and tourism areas, as well as clearer defi-nition of no-go-zones. He has consistently expressed views in line with responsi-ble mining, but has recently said he has become a “skep-tic” whether the country’s miners are really sincere about responsible mining practices.

On mining taxationSen. Ejercito’s views and

background tend to favor higher mining taxes in favor of lGUs. He is expected to champion similar proposals in the Senate.

tions until a comprehensive, wide-ranging review of all op-erating companies are done, he said.

What made him change his mind? Ejercito said passing by the Novienta or Kilometer 90 road, which connects Surigao del Norte to neighboring Su-rigao del Sur, he witnessed how the mining companies in the area “caused the appalling siltation” of water bodies.

“It made me question the beliefs I held about mining. Can responsible mining be done in this country? I don’t think so at the moment,” he told Mining Week.

aMMB supporters can count Sen. Ejercito as a po-tential supporter if his mind doesn’t change once more.

Overall mining viewSkeptic about responsible

mining.

On AMMBresponding to a question

during a campaign sortie in Surigao City, Sen. Ejercito said he was inclined to drop his responsible mining stance in favor of a more restrictive reg-ulatory environment. This calls for a halt in all mining opera-

gingo Honasan

rEElECTED Sen. Gringo Honasan has acknowl-edged the dual reali-

ties of mining: “We cannot lose the employment po-tential, the productivity for harnessing our God-given natural resources, but we can’t disregard the impact of mining in our communi-ties and environment”. The senator has called on Pres. aquino to “provide a clearer direction on mining”—an indication that he will be a reliable supporter of the President’s legislative agen-da on mining.

On mining taxationIn line with his views, Sen-

ator Honasan is expected to support the administra-

called for a balanced ap-proach to governing the country’s minerals sector. He said this was not possi-ble under the current min-ing law, and that an amend-ment would have to be made. Specifically, he wants more regulation to address environmental concerns. He will certainly find favor in some of the more rigid environmental provisions of aMMB, but would likely be discouraged by other salient features of the bill considered by many as in-dustry-killer.

Overall mining standFor responsible mining,

with preference for more environmental regulations.

tion’s effort to reform the current mining incentives scheme.

On AMMBSenator Honasan has

SMMCI, or Silangan Mindanao Mining Co., Inc., partners with Surigao Runners’ Club for Surigao City’s first half-marathon event, May 5. CONTRIBUTED PHOTO

SUrIGaO CITy—at least 150 employees of Silangan Mindanao Mining Co., Inc. (SMMCI) participated in a fun run held recently in this southern Philippine city, in or-der to raise awareness on the need to save Surigao river from environmental ruin.

They joined some 2,000 participants in the 21-, 10-, five-, and three-kilometer run dubbed “Silangan Surigao Marathon 2013: run for Su-rigao river” held on May 5 through a partnership be-tween SMMCI, a part of Philex Mining Corp., and Surigao runners’ Club (SrC).

“We were overwhelmed

Silangan joins historic run to save Surigao Riverby the support of the run-ners here in Surigao and even those coming from as far as Butuan and Manila,” Jay Gonzales, race director, said. “Their participation contrib-uted to the success of our first half-marathon event.”

as the event’s major spon-sor, SMMCI was one with Surigao City and the entire province of Surigao del Norte in raising awareness on the current state of Surigao river and the need to bring it back to its former glory.

“This is the biggest achievement for this event—having made people aware of the current state of Surigao

river,” said Gonzales, who re-vealed that SrC will use part of the proceeds to conduct tree-planting activities along the river before the rainy sea-son starts next month.

SMMCI’s Clarence alipao, a community relations officer, clocked 0:16:45 to clinch the third place at the 3-km run together with Johanna Piao in the female category.

Surigao river, also known as Kinabutan river, mean-ders Surigao Valley, emptying to the Surigao tidal basin. It used to boast a vast man-grove swamp that had been overtaken by the city’s rapid expansion. Pr

MORE POWER & CONGRATULATIONS!

~ Dir. Roger A. De DiosMines and Geosciences Bureau-13

Responsible journalism goes hand in hand with responsible mining. May your reports and

commentary highlight the potentials of the mining industry as a catalyst for economic growth.

‘

News Environment | Communities | Mines&Money

June 3-9, 2013 6

Siana Mines permit questionedaN international expert

wants to know why the Mines and Geosciences Bureau (MGB) approved the reopen-ing of the old Siana Mines—including the use of its old tailings dam—without reha-bilitating first the decades-old facilities.

Dr. robert Goodland, a social and environmental assessment specialist and member of the london Work-ing Group in the country, said MGB must answer why it is-sued a permit to Greenstone resources Corporation (GrC) without first ensuring that all safety assessments are prop-erly conducted.

suspendedGreenstone, a subsidiary

of australian miner red5 ltd., said millings operations have been suspended for over a month now, but clarified that “there has been no spill and therefore no consequential environmental damage.”

“activity on site currently comprises mitigation to mini-mize any spill, should it occur,” Greenstone Managing Direc-tor Steve Norregaard said in a May 13 disclosure to the aus-tralian Stock Exchange (aSX).

The company made the decision following indepen-dent advice from at least three geotechnical consul-tants, who all concluded that “there is an unquantifiable risk in returning the tailings dam to operating status,” said Norregaard.

Greenstone is said to be

facing a shutdown of up to 12 months, as it seeks alterna-tive funding options to cover the construction of a new tailings dam. It said, however, that mining activities, “includ-ing the stockpiling of ore, will continue in the interim, as the Company considers its finan-cial position.”

unstableWhile not directly pointing

the blame on Greenstone, Goodland and the anti-min-ing alyansa Tigil Mina (aTM) group have trained their guns on the MGB for issuing permit for the “unstable old mines.”

“The group is also wary of the silence of the government agency pertaining to recent reports of land instability in mines since april,” aTM said in a press statement, pointing out that the Siana Mines are replete with “historical reports of mine flooding and under-ground fire.”

Jaybee Garganera, national coordinator of aTM, said the case of Siana Mines demon-strates that MGB was being “very careless in its issuances to mining companies.”

The Siana Mines, located in Tubod town, Surigal del Norte, have previously been owned and operated by Surigao Consolidated Mining Co., Inc. It began commercial opera-tions in the early 40’s, only to close during World War II and re-opened in 1946, produc-ing 4,800 kilograms of gold and 8,000 kilograms of silver. Persistent occurrence of mine flooding and underground fire forced it to close down again in the succeeding years.

actrion planIn 2002, red5 secured a

mining permit and was grant-

ed an Environmental Compli-ance Certificate (ECC) in april 2009, despite a prior sched-uled Final Mine rehabilitation and Decommissioning Plan expected in late May of 2009.

“MGB should know better than that before permitting the reopening without reha-bilitating the old facilities,” Dr. robert Goodland comment-ed, adding that a transparent emergency action plan was essential.

“There must be an im-mediate halt in all milling operations, an immediate alert on local authorities and downstream communities of the big risks and encour-age them to get out of the way of any breach that looks likely to happen at any time, and immediately get MGB to conduct an onsite safety/risk assessment to prevent dam-age and reduce risks to some semblance of acceptability,” Goodland said.

Dr. Goodland and aTM said the environmental bureau should:

• “Immediately alert local authorities and downstream communities of the big risks and encourage them to get out of the way of any breach that looks likely to happen at any time;

• Immediately get MGB to conduct an onsite safety/risk assessment to prevent dam-age and reduce risks to some semblance of acceptability.

The Siana gold project, as originally designed, delivers a minimum 849,000 ounces of gold production at a cash cost of sub US$400 per ounce over a ten year life, according the red5 website. Commercial production started on april last year. mw

co

ur

te

sy

of r

ed

lim

ite

d.c

om

BRIEFLYMining output down The value of metal production in

the country dropped by nearly a fifth in 2012, data on metallic mineral pro-duction from the Mines and Geosci-ences Bureau (MGB) showed.

The total output value plunged 18.04 percent to P100.8 billion in 2012 from P122.98 billion in 2011.

Atlas profits upAtlas Consolidated Mining and

Development Corp. has reported a 48% rise in 2012 earnings owing to higher production of its copper mine in Cebu.

In a statement, Atlas Mining said its net income rose to P3.44 billion in 2012 from P2.33 billion in 2011 as revenues jumped 21% to P15.54 billion from P12.83 billion.

Fixed mining taxThe Mining Industry Coordinating

Council (MICC) has agreed on a fixed government-private sector revenue share on gross and net profit, said Trade and Industry Secretary Gregory L. Domingo.

A member of the MICC, Sec. Do-mingo said that MICC has agreed on a “certain percentage of gross and participation of the bottomline.”

He disclosed that under new the proposals, mining companies are no longer entitled to income tax holidays.

Nac record outputNickel Asia said its total volume of

nickel ore sold and delivered from its 4 operating mines reached 11.7 million wet metric tonnes, a 12.5%

increase from the previous year and a record high.

But lower prices dragged total val-ue of the shipments. Estimated value of nickel ore shipments reach only P11.2 billion in 2012, a 7.4% drop.

The company operates four oper-ating mines: Rio Tuba in Palawan, Ta-ganito in Surigao del Norte, Hinatuan in Surigao del Sur, and Cagdianao in the Dinagat Island.$1B mining investments

Te $1 billion projected investments in the mining sector is “achievable” this year, said Mines and Geosciences Bureau (MGB) chief Leo Jasareno.

Jasareno said MGB will expedite the processing of applications and act on them within six months of filing, following the lifting of the moratorium on accepting applications for mining permits in March.

Sagc announcementSt. Augustine Gold and Copper

Limited has announced on May 31 that it has closed its previously announced private placement with Queensberry Mining and Develop-ment Corp. for 55,000,000 shares at a subscription price of US$0.20 per share for a total investment of US$11 million.

The funds received will be used for working capital and to further ad-vance the King-king Project.

The shares issued pursuant to this private placement will be subject to trading restrictions until October 1, 2013. PR

nOnOC nickel miner shu-ley Mine inc. (sMi) said it will continue to press its rights amid the cease and desist order issued against it by the Mines and Geosciences Bu-reau (MGB), arguing the agen-cy violated an existing court injunction.

the nonoc dispute is a complex govern-ment and corporate clash, which pitted sMi against its former partner, Pacific nickel, with MGB and depart-ment of Finance (doF) seeking to stop min-ing in the island because it is supposedly onerous to the government.

it has already alarmed lo-cal officials, wary about the massive job loss in the island where some 2,000 residents in three barangays are em-ployed.

Mayor ernesto t. Matugas has called on the MGB and other relevant government agencies to ensure that the mining operations in the is-land remain uninterrupted, noting that the locals’ liveli-hood was of paramount con-cern for the city government.

the region’s 21 operating mines, meanwhile, are in pan-ic because the nonoc legal row has caused the transfer of ore shipping permit pro-cessing to the bureau’s central office.

the latest conflict emerged when MGB director leo l. Jasareno issued a stoppage order against sMi on May 10, despite a 2011 temporary re-straining Order (trO) barring the agency from impeding sMi’s mining and shipping operations.

MGB-Caraga director rog-er A. de dios admitted the nonoc dispute has cost him his job, following his decision to respect the court decision for fear of being cited in con-tempt.

dir. Jasareno relieved de dios on May 15 for allowing sMi to ship nickel ores since the latter assumed office in October last year, “despite the bureau’s order to the contrary.”

Jasareno said MGB was merely following doF secre-tary Caesar Purisima’s order to stop mining activities in nonoc.

dOF, through the Privat-ization Management Office which controls the nonoc mines, has demanded pay-ment of some Us$263 million dollars from Philnico, the orig-

Shuley Mine vows to exhaust legal means

inal holder of the 23,000-hect-are Mineral sharing and Pro-duction Agreement (MPsA) in nonoc.

Philnico has since trans-ferred its rights over the MPsA to Pacific nickel, which has an existing Mines Operating Agreement (MOA) with sMi to haul, ship and market low-

grade nickel ores.While Pacific nickel earli-

er joined sMi in questioning MGB’s 2011 stoppage order, it also now wants to boot out sMi from the latter’s 1,400-hectare mine, as it has a pending joint venture with diversified conglomerate gi-ant san Miguel Corporation to develop the nonoc nickel mines, which has an estimat-ed ore deposits of 1.44 million metric tons.

in April, Pacific nickel tried to expel sMi from the mine site, but was thwarted when a surigao court issued an in-junction against it. the case is still being heard.

sMi’s Jacob l. Arroyo de-fended their continued oper-ations in nonoc, noting that it is covered by two court injunctions. he appealed for MGB and Pacific nickel to “re-spect the status quo and ob-serve existing court orders.”

“Without prior investiga-tion and legal basis, MGB can’t just stop an operating mine just because the doF and PMO said so,” Arroyo argued, pointing out that MGB itself was the one that approved it’s four-year Mines Operating Agreement with Pacific nick-el.

Arroyo said sMi is “suffi-ciently prepared and more than willing to defend its rights” over its nonoc conces-sion.

“When you are on the right side, the only thing you can do is to soldier on and press your case. We believe that what we are fighting for is just and proper, and we are not about to turn our backs on our employees,” he added.

he also highlighted the plight of their personnel, ma-jority of whom, he disclosed, “can’t enroll their children in June because they are being deprived of their main source of income.” MW

Communities | Health&Safety | Mines&Movers

June 3-9, 2013 7

Musarapa Insiang (left) from Datu Paglas, Maguindanao and Haiza Pigkaulan from Columbio, Sultan Kudarat are the coun-try’s first Muslim female mining engineers from Mindanao. USAID-GEM PHOTO

Take your message to the right audience.

THE PHiliPPinE mining indusTry's wEEkly nEwsPaPEr.

| Telefax 086.826.1302| Email phminingjournal@gmail.com| Mobile 0926 628 5939 Look for Ms. Jocelyn 0921 770 8888 Look for Danni 0919 696 6435 Look for Roel

Entrust it to the right medium.

HaIza Pigkaulan and Musarapa Insiang, both 23, could have been teachers, or nurses. But they took the path less taken and en-rolled in mining engineering course—a largely unknown academic field in the coun-try—and became trailblazers after becoming Mindanao’s first licensed Muslim female mining engineers.

Pigkaulan and Insiang were among the 13 mining scholars who passed the board exam for mining en-gineers last year with the support of US agency for International Development’s (USaID) Investments in Voca-tional, Elementary, Secondary and Tertiary Studies (INVESTS) project, which is being im-plemented by Growth with Equity in Mindanao (GEM) program.

The two lady mining engi-neers joined 57 new licensed mining engineers in 2012, with Pigkaulan ranking third.

according to USaID, there are only few colleges in the country that offer mining engineering and geology courses. It noted that the Phil-

Meet the country’s first Muslim female mining engineersippines only produce about three dozens of licensed mining engineers annually while the expanding industry requires at least 100 per year.

In 2011, 32 graduates passed the national board examination for mining engi-neers; 22 passed in 2010.

Pigkaulan and Insiang completed their degrees at the Palawan State University in Puerto Princesa City. The women also finished a course on environmental science and mining law in addition

to technical engineering sub-jects.

Pigkaulan, is a native of Columbio, a remote Mus-lim-Christian community in Sultan Kudarat, while Insiang is a resident of Datu Paglas, Maguindanao.

as full-fledged mining en-gineers, Insiang and Pigkau-lan now look forward to help-ing develop the industry in their home region and work-ing in socially and environ-mentally responsible mining companies. mw/usaid

4 At a median range of P55,638 per month, mining and metallur-gical engineers jobs are the coun-try’s fourth highest paid, according to Dole.

4Philippines only has around 4,000 registered mining engineers since the 1950s, and only about half of them are believed to be active, according to Ceasar Lao-as, president of the Asia Pacific Energy Resources Ven-

QUICK FACTS

tures Inc. 4Republic Act 4274, otherwise known as the “Mining Engineering Law of the Philippines,” is the law that regulates mining engineering profession in the Philippines.

4Only about 800 from the coun-try’s 3,000 mining engineers are working with the local mining in-dustry and most of these are either in their twilight years or working abroad, according to MGB-13

aT least two major and one minor mine accidents have occured in the last 12 months. While the damage done in each of these accidents is undeniable, it is worth noting that companies involved—all publicly traded companies—have positively responded to their obligations.

‘Biggest mining disaster’With some 20 million met-

ric tons of sediments finding their way into nearby water channels, the Philex mine spill in Benguet last august is easily the “biggest min-ing disaster” in the Philippines in terms of vol-ume, according to environ-ment officials

The staggering figure is 10 times more than the volume of mine tailings that spilled out of the Marcopper mine in 1996 in Marinduque, which dumped some two (2) million metric tons of waste into the Boac river.

Philex was quick to add that while the spill of it s tail-ings pond in Itogon is the big-gest in terms of volume, the Marcopper incident remains the Philippines’ worst mining disaster in terms of toxicity.

While the company ini-tially insisted that “forces of nature cannot be prevented 100 percent,” it nevertheless paid the P1.034 billion fines imposed by the Department of Environment and Natural resources (MGB-DENr).

Tailings Pond 3—Philex’s only operating tailings pond at the time of the incident—is the largest in the country at 80 hectares, and can hold up to 160 million metric tons of wastewater and sediments from the mining operations. Philex said that torrential monsoon rains caused the breach, which spilled waste into nearby water channels, particularly Balog Creek, which flows into the agno river.

amid all this, the company has expressed its humility in admitting that leak weighs heavily on the public’s per-ception of mining operations in the country.

“ang face ng mining will be at stake [dito]. ayaw din namin na i-fail,” said Philex spokesperson atty. Eduardo aratas. “Hindi lang Philex kasi ito. We are carrying the bur-den of proving that mining is really responsible.”

as expected, the spill took a toll on the 57-year-old com-pany’s bottom line. Philex, the country’s largest listed min-ing firm, saw its net income

in the first quarter of 2013 plunge 68% from a year ago due to the suspension of its Padcal mine operations.

Since the resumption of its operations, some 611,801 tons of minerals were milled from the mine: 7,610 ounc-es of gold and 2.434 million pounds of copper.

Meanwhile, the company’s clean-up operations contin-ue.

The mine was allowed to temporarily operate on March 8 to fill the void in its tailings pond, a necessary procedure to prevent the pond from collapsing again.

Philex said it was using the time to complete a P2-billion “beaching process meant to fortify” the portion of the mine damaged by heavy rains when the accident oc-curred.

Philex senior vice president for corporate affairs Mike To-ledo said that while the ac-cident was a force majeure as “it was a result of the ele-ments of nature…But even as we were not at fault, we share the concern of the gov-ernment for the environment, thus we are paying the fee, as set by regulators, to cover the costs of remediation and re-habilitation activities.”

as it stands, the Pollution adjudication Board (PaB on Thursday, May 23, that Philex must first complete its min-ing rehabilitation program by July, the deadline BaC gave, before it can be given the green light to operate again.

“While there is still trace of pollution, the PaB will not allow them to operate again,” Environment Undersecretary Demetrio Ignacio, who also acts as PaB presiding officer.

“right now, if you will go to the river, most of the tail-ings are still there. The saving grace here is that the tail-ings do not contain harm-ful chemicals,” he said. “The cleanup is still not substantial as of this time,” Ignacio said.

The state pollution body has fined Philex P200,000 per day until the pollution is completely cleared from the waterways. as of May 23, Philex faces a penalty of P180 million. The mining firm has filed a motion before the board two months ago, ques-tioning the “parameters of computation of the fine.”

semirara landslideFive miners were instant-

ly killed when a section of the wall of Semirara Mining Corp.’s Panian mine caved in at 11:55 p.m. on February 13.

Semirara Mining Corp.— the country’s biggest coal

producer—said it “stopped mine operations to ensure the safety of its personnel.” It added its management is still trying to determine the cause of the accident “in coordina-tion with relevant govern-ment authori-ties.”

The com-pany’s shares i m m e d i a t e -ly plunged the next day. It posted a 42-percent decline in its net income after tax to P1.01 bil-lion in the first quarter in 2013 from P1.73 billion in the same period last year.

Semirara has assured the victims’ families of compen-sation, as well educational packages for the children of the deceased workers.

Citinickel spillThree months after the

Padcal incident, silt spilled from the Toronto mine of Citinickel Mines and Devel-opment Corp. (CMDC) in Nar-ra, Palawan. The waste flowed into a river and irrigation ca-nals affecting farms and a fish pond.

CMDC immediately em-barked on a clean-up on ar-eas affected by the silt spill from its mines’ silt ponds, and installed environmental mit-igating structures in the sur-rounding areas the day after the spill was discovered on Nov. 25, 2012.

CMDC suspended all min-ing operation from Nov. 26 to Dec. 9, 2012 to concentrate its manpower on the clean-up of the river and the farms. The company stressed that the spill could not do permanent damage on affected farm-lands because it does not have a processing plant and as such, does not use chemi-cals in its operations.

according to Ferdinand Pallera, CMDC president, re-mediation measures in the affected areas included vac-uuming of sediments, man-ually and me-c h a n i c a l l y dredging silted water, and reg-ularly testing of the quality of water in the affected areas until the de-sired results were achieved.

He said the company’s im-mediate clean-up action is ev-ident on the removal of some 50 percent of the silt overflow into the Pinagduguan river five days after the spill. He added that within 15 days, the affected farms and portion of the Pinagduguan river were restored to their former con-dition, “in an even better con-dition actually.” mw

A look at recent mining disasters

Insight&Commentary

June 3-9, 2013 8

GeRARD BRIMO,Guest Columnist

i presented at the Mining Forum to correct lies (yes, lies!), disin-formation, and also ignorance (i left that out in the title).

if you think that the mining industry in our country can af-fect food security, biodiversity, Palawan, and if you think that nothing good can come out of it, read on!

the attack by the save Palawan Movement that was started by Gina lopez and allied organizations is on the large-scale me-tallic industry. there is never any mention of small scale-scale mining.

this is the face of it.

i do not begrudge small-scale miners. they are driven by poverty, the same kind of poverty that drives people to do dy-namite fishing or ‘slash and burn’ farming which is rampant all over the country.

nevertheless, it is destructive to the environment and can seriously affect the safety and health of the small-scale miners. in fact, mercury is still being used by this sector. Why is there no mention of this in Gina’s presentation? is she not concerned about the environment?

it is a big “industry.” in 2010, P42.9-B in gold was sold to the Bangko sentral ng Pilipinas on a “no-names” basis, much larger than the gold output of the large-scale sector.

this is counted as output from the minerals sector, but since there are no taxes being paid on this portion, it distorts the ra-tio of taxes paid by the industry vis-à-vis its total output.

On to large-scale mining, the map on the left hand side of the slide is from the Mines and Geosciences Bureau (MGB), and the yellow dots indicate applications for exploration permits all over the country.

this has been badly misinterpreted by Gina and others to mean that the country will be mined out! Who can blame them, though, for that is what the map indicates at first glance, but is it enough to stop at first glance and not get to the bot-tom of things?

When one files for an exploration permit, no matter where the application lies, the application gets plotted on a ‘control’ map. that is why there are so many dots.

later on the MGB will process the application, determine if it is in an area that is open to exploration (and mining) and if so, approve. if not, the application is disapproved and the dot is taken out of the map. Many of the yellow dots in the map will not be approved.

the red dots in the map on the right shows the large-scale metallic mines, occupying only 60,000 hectares or 0.2% of the country’s entire landmass. that’s all.

6Why so many exploration permit applications and only

so few operating large-scale metallic mines? Because the odds of finding a commercially viable mineral deposit are very low. see the global statistics on mining on the left of the slide below.

the odds might be better in the Philippines, which is well mineralized, but even if we assume a doubling of the large-scale mines, it would occupy only 0.4% of the country’s entire land-mass.

One need not be a scien-tist to figure out that such small area of the total coun-try’s landmass cannot pos-sibly affect food security, and one would indeed be correct!

this is apart from the fact that mineralized lands are simply not conducive to agriculture. Mining and agriculture are not mutual-ly exclusive. it’s never been the case and any attempt to link the two is simply tanta-mount to scare tactics, to

make you believe that if mining were to grow in the coun-try, we would run out of food! that is preposterous!

Well, let’s not mince words. it is a lie!the same mistake was made in the case of Palawan. the

map on the left shows the many applications for explora-tion permits, many of them in protected or no-go areas for mining, and they will not be approved.

Again, the map has been badly misinterpreted to mean that Palawan will be mined out!

the map above shows that there are only 3 large-scale nickel mines in Palawan, all in the southern portion of the province, far from the Underground river and the UnesCO heritage sites.

right in the middle of the map is a large protected area under the national integrated Protected Areas systems (niPAs), a no-go zone for mining or even agriculture. so what is the fuss all about?

if the fear that Palawan would be all mined-out was based on the left hand map, that fear was unfounded and was a serious mistake!

there are in fact many areas closed to mining, as the il-lustration below indicates.

it is interesting to note that Palawan has its own environ-mental law that specifies no-go zones for mining or other activities.

so there you have it. three laws “protect” Palawan – the Mining Act itself, the strategic environmental Plan for Pala-wan and the niPAs. so what is the fuss all about?

these pictures below show the mining areas in rio tuba in Bataraza, Palawan.

Correcting lies and disinformation

Insight&Commentary Feedback: phminingjournal@gmail.com

June 3-9, 2013 9

MORE NEWS

Tribal barricade forces MMDC to shutdown operations in Cantilan

CarraSCal, Surigao del Sur–Besieged by tribal dis-content and a strong Catholic Church-backed anti-mining opposition, Marcventures Mining and Development Corp. (MMDC) finally decided to temporarily shutdown its operation in Barangay Caban-gahan in Cantilan town, Su-rigao del Sur.

Jegie Pereda, MMDC vice president for operations, con-firmed Wednesday the com-pany closed its Cabangahan operations but did not say for how long the suspension will last.

“We cannot enter the area because of the barricade. It is temporary (closure). as of now, we are operating at an-other area not affected by the barricade,” the official said.

Members of the Manobo tribe have been barricading the road in Barangay Caban-gahan leading to the mining operations of MMDC in the past several weeks.

Pereda did not disclose where the new mining opera-tion is but anti-mining groups claimed the company is oper-ating in Sitio Pili at Barangay Panikian in Carrascal. The min-ing executive did not confirm or deny this.

This town’s Mayor Vicente “Baby Boy” Pimentel separate-ly confirmed that the mining firm shutdown its Cabangah-an operations and has pulled out its equipment allegedly due to threats from lumads to burn them.

Pimentel said the closure presents a “great loss” for the people of Cantilan to lose the investment of MMDC, ac-cusing anti-mining groups, including the Cantilan local government unit, of depriving its people of the economic benefits of mining.

The mayor, known for crit-

icizing anti-mining groups, blamed Manobo tribal chief-tain and evangelical pastor Jimmy “Datu Dagsaan” Bat-ao as the “troublemaker” that led MMDC to suspend its opera-tion in Cantilan.

Pimentel alleged that Bat-ao and his clan asked a very “unreasonable demand” of P50 million outside the one percent royalty fee mining firms are mandated to give to indigenous peoples.

The mayor disclosed that MMDC will transfer its mining operation in his town, which could further boost the mu-nicipality’s income to an es-timated P220 million in 2014 from P185 million in 2012.

demandsPereda declined to com-

ment on the alleged P50 million demand, saying he is “not aware of those figures because I am not part of the negotiating team.”

“Of course, the company will not agree to unreason-able demands,” he said, not-ing the barricade is illegal and that the company intends to file charges against the pro-test leaders.

The Bat-ao and Hunanhu-nan clans of Barangay Caban-gahan are claimants to areas covered by MMDC’s mining operation.

Earlier, Bat-ao said they want MMDC out of their an-cestral lands and to pay them damages amounting to P150 million for the desecration of their burial grounds and oth-er sacred places and the de-struction of their main water source.

He denied the P50 million demand, as alleged by Pimen-tel, as well as demanding a royalty fee and a 10 percent share solely for their family.

The scholarships offered by MMDC also benefited a hand-ful of youth only, Bat-ao said.

BY VANESSA L. ALMEDA

Members of the Manobo Tribe hold a barricade on a road being used by local nickel miner MMDC as an important access road to its mine site in Brgy. Caban-gahan in Cantilan town, Surigao del Sur. CONTRIBUTED PHOTO

that is a 1970s photo that shows the surface of the lateritic nickel deposit as it looked like before mine development start-ed.

laterite is a type of soil full of iron (beyond 40% in some cas-es) and, in the case of the Philippines, some nickel.

it is not an agricultural area (you can’t grow rice there!), much less bio-diverse.

the picture in the middle shows Berong nickel, also in Pala-wan, tertiary grown with stunted trees because of the lateritic condition of the soil.

On its right, an aerial photo of the mountains in surigao norte, within the surigao Mineral reservation. the laterite here goes all the way to the surface – scratch the surface and you get red-looking soil, iron oxide.

no forest, no agriculture within the lateritic area and prone to erosion and siltation when the rains come, discoloring coast-al waters quite visibly because of the color of the soil.

the next photos below show Philex Mining in Benguet prov-ince and, on the right, tampakan area in south Cotabato.

Philex Mining in Benguet has steep terrain, logged out in the 1950s and no agriculture.

tampakan area in south Cotabato was logged out for the most part or subject to “slash and burn” farming as what the photo (right, above) shows. there is still a small primary forest in the area that won’t be touched (by law it cannot be) should mine development proceed.

Are these areas bio-diverse or agricultural areas? i think by now you know the answer.

the pictures above show the lateritic nickel mine operation of rio tuba in Bataraza, Palawan.

Again, it is not an agricultural area and the vegetation is mostly shrubs and stunted trees.

there are 4 things to note here.First, this is an industrial area, not an area suitable for picnics

eco-tourism. there are other areas for that.second, minerals are God-given and we can’t live without

them. i should have told Gina that God willing, her arteries would remain clean and she would not need a cardiovascu-lar or coronary stent. it is partially made of nickel due to its non-corrosive properties.

if she did, it is nickel, possibly from rio tuba or the other nick-el mines in the Philippines, which would save her life! What a supreme irony!

third, lateritic nickel mines are shallow, no more than 20 me-ters deep on the average, and therefore not difficult to reha-bilitate.

Fourth, mine rehabilitation is a requirement of the 1995 Min-ing Act and we all have to set aside funds for this.

Any discussion on un-rehabilitated mines of the past, the so-called legacy mines, is irrelevant to the discussion on mining today. it’s that simple.

Because rio tuba has been going on for some time now, there are mined out areas that have already been rehabilitat-ed. it’s what is called progressive rehabilitation. here’s how one such area looks like.

rio tuba has rehabilitat-ed about a fourth of its total mining area, planting over half a million trees (hardwood species) in the process. in one year (2011), it spent close to P60 million in environmental expenses, including rehabili-tation.

And here’s what it looks like inside a rehabilitated mine area.

We’ve created a forest where none existed before. those are hardwood trees grown in the rio tuba nursery, interspersed with some fruit trees to encourage wildlife to populate the area.

i could have shown slide after slide of the wildlife that is eventually found in the rehabilitated areas since we track each and every one of them, but i only had 15 minutes to present.

talking about wildlife, i showed this slide.

Mr. Brimo is President and CEO of Nickel Asia and a director of the Chamber of Mines of the Philippines. Reprinted with permis-sion, this article originally formed part of Mr. Brimo’s presentation during a mining forum held last year.

Read this article’s conclusion in the next issue.

Insight&Commentary

June 3-9, 2013 10

MANUeL V.PANGILINAN,

Guest ColumnistHow can mining work for the Philippines

WhO of you does not have a cellphone? do you know that an average cellphone contains about 24 mgs of gold, 250 mgs of silver, 3,800 mgs of cobalt, and 9 mgs

of palladium?As with cellphones, mining touches most aspects of our daily

life – when you build your home, use your laptops, take your car to work, or even protest against mining.

Clearly, we cannot live without mining.

Why invest in miningyou may ask – why did we invest in mining? the answer is

simple.rapid economic development in emerging markets has led

to rising demand for resources – fuel, food, minerals, even water.According to McKinsey, we have never before seen growth in

income of such speed and magnitude: China and india are dou-bling their per capita income at about 10 times the pace which england achieved during the industrial revolution.

Both countries are adding floor space every year at 3.5x the entire residential and commercial square footage of Chicago. And in the coming decades, up to 3 billion people – and their spending power – will be added to the global middle class.

the world is indeed entering an era of sustained resource de-mand, and high resource prices.

so the questions for us must be – does the Philippines have the capacity to supply some of these resources? is it reasonable to stop developing our resources, knowing the world and the country need them?

the answer to the first question is, yes, we do. the Philippines is the 5th most mineralized country in the world and, in terms of defined resource, 2nd in gold and 3rd in copper. We have the potential to develop world-class mines.

On the second question – if we choose not to participate in the global supply chain for minerals – either by outright ban or a moratorium - our need for mining products will not stop.

Our only recourse would be to import. We would then pay for the foreign exporter’s cost of production and profit – and the cost of protecting his environment.

this is not common sense. Why should we pay somebody else to do the job we ought to be doing?

Alternatives to miningWhat are the alternatives to the use of mineral land? tourism

is certainly an option to consider. however, most mining sites are not ideal for tourism. Our mines in Padcal and surigao are hardly suitable for tourism simply because they don’t have the features of an attractive tourist site.

And even if tourism were possible, we must ask: Are the ex-pected returns from tourism comparable to the benefits which mining can provide?

Another suggested land use is agriculture. i’m a believer in the potential and need for agriculture in this country. i consider the imperative of feeding ourselves as an urgent national priority.

But again, most mines are situated in areas that are inhospi-table to agriculture.

the land is often too steep, too arid or too mineralized for ag-riculture to prosper.

related to this, there’s an attempt to introduce the new con-cept of “total economic value” or teV in assessing mining oppor-tunities. the thrust of teV is to measure environmental hazards and social costs in calculating gains and losses from mining projects. the goal is commendable.

But the calculus of the value is intangible, elusive, and ex-tremely subjective. how does one quantify and test the value attached to the beauty of a sunset, the feel of early morning mist, or the music of water rippling through a stream?

Please don’t get me wrong. i value the beauty of nature as much as you do. All i ask is for some objective and tangible stan-dard by which any proposed economic activity in a locality – be it tourism, agriculture, or mining – can be evaluated. For mining, that standard is already in place.

Mining projects require an environmental compliance certif-icate (eCC) and a feasibility study – which together quantify the potential benefits to all stakeholders, especially the community and the government, along with the environment impact.

Addressing the problems of miningOur country has enough laws to address concerns in most ar-

eas of our lives. this is true insofar as environmental protection and social welfare in the mining industry are concerned.

the problem has always been enforcement and implemen-tation of such laws.

i admit that our industry is not perfect, and could benefit from improvements.

Unfortunate accidents have happened, even to large mines, which lead to a perception that mining is dangerous and de-structive.

But the mistakes of a few should not be construed that the whole is wrong – anymore than one car accident or one oil spill should shutdown an entire industry.

let me briefly discuss some of our thoughts:

First, health-related and safety concerns, exploita-tion of women and child workers, the absence of live-lihood plans and post-min-ing rehabilitation are issues brought about, in large part, by small-scale and illegal miners.

these miners operate freely and thrive without be-ing subjected to the regula-tion and sanctions imposed on large-scale mining.

the solution is to subject small-scale miners to the same regulations and sanc-tions for large-scale mining.

Correlatively, national and local policies on mining need to be harmonized, and the coop-eration of lGUs in their enforcement must be procured.

second, the capacity and competence of our regulators must be improved, particularly in regard to equipment and quantity and quality of regulatory staff.

For example, in surigao del norte, there are only 9 mining en-gineers and one geologist to oversee mining activities – which include 3 major mining projects, several exploration projects, 18 approved small scale mining permits and more than a thou-sand illegal small-scale miners.

the private sector should help government raise its supervi-sory capabilities through funding of scholarships and training here and abroad, procurement of equipment, and hiring of requisite personnel. Part of the funding could come by way of a fee on mining companies, akin to the supervisory and regu-latory fee payable by telecoms companies to the ntC (national telecommunications Commission).

Our industry must learn to accept that proper regulatory at-tention will provide the comfort to all stakeholders – and critics – that responsible mining is possible in our country – as it has been, and still is, in other countries like Australia, south Africa, Canada, sweden, and even indonesia.

third, creating an independent environmental commission responsible for supervising and enforcing environmental con-cerns. At present, both the eMB (environmental Management Bureau) and MGB (Mines and Geosciences Bureau) are agen-cies under the denr (department of environment and natural resources).

MGB is charged with the promotion, development, and su-pervision of mining. eMB’s mandate is to enforce environmen-tal laws.

these apparently conflicting goals can, at times, place the

denr in a policy dilemma. Our suggestion therefore is to spin off the eMB into a separate and independent body, similar to the environmental protection agency in the U.s.

Profit-sharing schemeFourth, the private sector should be open to a profit-sharing

scheme, which will assure the government of a more appro-priate share in the benefits derived from the resources it owns.

Frankly, i’m not suggesting something new. Profit sharing is standard in the oil and gas industry in most parts of the world, as indeed it exists in our FtAA (Financial or technical Assistance Agreement) regime.

in the case of Philex, despite operating under an MPsA, we paid P2.3 billion in national and local taxes, representing 37% of our pre-tax income for 2011.

Finally, the mining benefits between host lGUs and the na-tional government should be shared more equitably.

Further, the national government must ensure the timely re-mittance of taxes due lgu’s. After all, mining is location-specific, and i sympathize with lGUs’ desire to realize the fruits of the resources situated in their communities.

Economies of scaleif we continue to stifle mining, the criticism that it promises

much and delivers little could be self-fulfilling.yet when we look elsewhere, mining has been a driver

of economic development. Mining in Australia contributes Us$142 billion each year; in Canada, $37.5 billion; in the Us, $1.9 trillion, and in Brazil, $24 billion.

the challenge is precisely to grow mining so that it creates more value-added for all of us. Only a larger and healthier industry can enable us to achieve forward linkages in down-stream processing plants.

We can’t have more refineries and smelters simply because there are no economies of scale to make them commercially feasible.

Only an operation as large as tampakan or Far southeast or silangan can generate the volume which could justify pro-cessing in the Philippines. i understand tampakan will cost $6 billion to develop.

in our (Philex) case, silangan will require an investment of more than $1 billion.

Conclusionlet me close by saying that mining is not the enemy. Pov-

erty is.the lack of means, the lack of the most basic necessities,

the lack of opportunities, the lack of choices – for far too long, in far too many places – these pernicious inadequacies have plagued our people.

yet the supreme irony is that, in the midst of all this poverty, lie some of the world’s richest natural resources, a gift of provi-dence for our people to make use of – not abuse.

it really is as simple as this – where poverty persists, small scale mining continues.

Poverty for us is not just some utopian notion. its stark im-peratives go beyond the poetry of blue skies and tangerine sunsets. you and i in this hall are not ordinary folks who worry about the next meal, the next rent, the next Meralco or Pldt bill – who do not have a 2nd home somewhere in the foothills of Mount Makiling.

this isn’t a contest between those of us who would protect the environment and those who would favor development.

We should be neither one nor the other.in the end, it all comes down to a very basic choice that

we have to make for our future. Other peoples – Australians, indonesians, Canadians, Brazilians – have already made their choice. if they can do it and succeed, so can we.

We have a choice between fear and faith, between hardship and hope, between division and unity.

Our task is to find the common ground of reason, through patient dialogue and constructive suggestions – and from there, move forward to the more prosperous future our people deserve.

‘Our task is to find the com-mon ground of reason, through patient dialogue and constructive suggestions...’

Mr. Manuel V. Pangilinan delivered this speech during a mining forum last year. Pangilinan heads the country’s largest gold producer, Philex Mining Corp. Reprinted with permission.

Stuffbox

June 3-9, 2013 111

CROSSWORD PUZZLEACRoSS2. Use of a hose to direct a powerful stream of water at a hillside with buried gold deposits4. Method of mining that left deep holes and tunnels in the ground5. A 12-foot wooden trough with riffles nailedalong the bottom to catch the gold7. Method that uses a large pan with slanted sides to wash gold from gravel8. Precious metal valued for its rarity10. Series of riffle boxes that water continuously flows down11. Discovery of a vein or large deposit ofgold 12. A wooden box used for washing gold, also called a cradle13. An area where gold has been deposit-ed in streambeds

DowN1. Wooden slide that carries water from higher mountain streams to the diggings3. Placer mining area that lacks abundantwater6. A 120-mile long vein bearing vast deposits of gold located in the foothills

MINING wEEK AT GREENSToNE. Mining Week Staffers Danni Adorador (extreme right), Vanessa Almeda (second to left) and Jojo Ferol visited Greenstone Resources Corporation’s Siana Mines early this year, and they are graciously welcomed by its new managing director, Steve Nor-regaard. PHOTO BY VANESSA L. ALMEDA

of thenorthern Sierra Nevada9. A dug-out or tunneled area that leads to mineral deposits

SILANGAN CARES FoR SCHooLCHILDREN. Employees of Silangan Mindanao Mining Company, Inc. conduct tree planning in the school grounds of Dakung Patag Elementary School, in Sison, Surigao delNorte. CONTRIBUTED PHOTO

mining week aims to highlight in this page the important work that Community relations officers do in their respective companies. Through pictures and simple words, this corner will give color to community events, company activities and other happenings in mining communities that best demonstrate the fun and colorful side of mining. Contribute now! It’s free!

Getting to know the Mining Week StaffTHESE journalists represent the core staff of mining week. We will feature more of our staff members from

around the country on this page in the succeeding issues.

DANILO V. ADORADOR III

n Regional Correspondent for Caraga Re-gion, Philippine Daily Inquirer (Present)

n Editor in chief, The Agusan-Surigao Enquirer (Present) n Editor in chief, Sun.Star Cagayan de

Oro (2008-2010)n Assistant Team Leader, Louis Berger

Group, Tampakan Copper-Gold Project Resettlement Documentation Team (2011)

JOCELYN B. FEROL

n Program Director, RMN-dxKS (Present)n As marketing services head, Ms. Ferol will leverage

her years of reportageof the mining industry as a veteran broadcaster to clients to ensure that every communication collateral (advertisements, advertorials, sponsored content) is of quality optics, in touch with their intended publics and in synch with current trends and industry policies.

VANESSA L. ALMEDA

n Correspondent: BusinessWorld (2011-Present) Interaksyon.com (2012-Present) Mindanews.com (2002-Present) Vera Files (2012-Present)

n Tenements assistant, Wallaby Mining (2011)n Editor in chief, Sun.Star Cagayan de Oro (2003)

n Editor in chief, Sun.Star Cagayan de Oro (2001-2002)n Asst. Business Editor The Freeman, Cebu City (1999 to 2000)n Managing Editor Caraga Today (1995)n Secretary to RMM, Taganito Mining Corporation 1995

ROEL N. CATOTO

n Correspondent:Mindanews.com (2008-Present)Vera Files (2012) n Managing Editor, The Agusan-Surigao Enquirer (2007-Present)n Reporter, The Freeman Cebu

(2008)n Philippine media representative,

2012 US Elections, US State Department International Visitors Program (2012)

FEATURED COMPANY

>

Mining for the FutureCOMPANY PROFILE

Carrascal Nickel Corporation is a com-pany focused on operating, acquiring, ex-ploring and developing nickel properties in the Philippines. Our mine site is located in Carrascal, Surigao del Sur. Our main clients are from China, where we export low to high grade nickel. With the expected future in-crease in ore production, the company will target other export markets such as India and South Korea.

Carrascal Nickel Corporation mine nickel ores from Laterite, Limonite, Saprolite, which are originally formed from the deep weath-ering of bedrock in tropical and subtropi-cal regions. The company’s current mining operations are all conducted above ground using bench mining techniques.

VisionMining that Makes a Difference

MissionTo be an active participant in the develop-

ment of the Philippine Mining Industry; for the Philippines to reach the same level of technology and value as with other advanced mining countries;

To value the rich natural resources of the country by extracting maximum value and minimizing waste and pollution;

To be a conscientious link in the World Nickel Supply Chain;

To be unique mining company in that its existence is intricately linked to Corporate Social Responsibility. We will make a dif-ference to our partner communities, through sustainable programs that add value.

Our ObjectivesThe efficient and economic extraction and

export of nickel ore consistent with world standards of excellence on Health, Environ-ment, Safety, and the Community.

The use of the world’s best practices on mining and social/ environmental manage-ment.

The balanced and sustainable development of the host and surrounding communities.

AWARDS

AWARD-WINNING MINING PRACTICES. Left, certificate of com-mendation from the Mines and Geosciences Bureau for having achieved 1 million man-hours with no lost time accident. Right, and endorsement from MGB-Caraga for the 2011 Presidential Mineral Industry and Environmental Award.

Want your company featured on this page? Contact us.