Mineweb: Philippines' mining campaign hasn't won hearts

Philippines' mining campaign hasn't won hearts
By: Dorothy Kosich
Posted: '07-FEB-05 05:19' GMT © Mineweb 1997-2004

RENO--(Mineweb.com) As the administration of President Arroyo embraces foreign mining investment as a solution to the socio-economic woes which plague the Philippines, the welcome mat isn't out in a number of areas.

As foreign mining companies from several nations line up to bid, the specter of the Marcopper tailings spill disaster still gives the Filipinos pause in a nation known for its lethal combination of corruption and terrorism.

Renewed investor interest in the mining sector has been recently sparked by the decision of the Supreme Court of the Philippines to reverse its landmark ruling against the 1995 Mining Law and, now to allow majority foreign ownership of domestic mining enterprises. The High Court last month closed the door to any further challenges to the law.

President Arroyo has made revival of the mining industry one of the cornerstones in her plan to achieve sustainable economic growth in the country. During a recent International Mining Conference hosted by the Chamber of Mines in Malacanang Palace, Arroyo said, "in a nutshell, our mining policy is minimum environmental and social effect, maximum contribution to the war on poverty." She asserts that the Philippines has the potential to be the fifth-largest mineral producer in the world with the third-largest gold reserves, and the four-largest copper reserves. During the conference, five companies based in Australia, Canada, China and the U.S. confirmed they had invested more than $3 billion in the Philippines.

Arroyo has appointed a special government envoy, Delia Albert, Presidential Advisory for Mineral Development, to cut processing time of mining application permits from one year to five months, and of mineral agreements from one to two years to seven months. In her speech, Arroyo also pledged to "fight for legislation compelling mining companies to pay directly to the local government units in the mining areas their share in the 2% tax on minerals. We are also prepared to propose legislation for the payment of the proper royalties to the indigenous peoples. Indigenous peoples need not fear that your lands are being taken away."

But, indigenous peoples are definitely fearful of foreign mining investment as the flames of protest are fanned by the Catholic Church, communist rebel groups, and villagers who were displaced during earlier mining projects.

The good news for foreign mining investment is that old projects are coming back to life. Atlas Consolidated Mining and Development has announced it will resume production at the copper project in Toledo City, Cebu. Atlas officials are negotiating with six foreign mining companies, three are Chinese, two Korean, and one Japanese firm. Atlas estimated that it needs $171 million to restart the Cebu copper project, which was closed in 1994 due to low copper prices.

The Toledo mine is estimated to have mineral resource of 873 million tons with a grade of 0.41 percent copper.

Businessman Felipe Yap, who controls Lepanto Consolidated Mining and Manila Mining, said talks are ongoing with a number of companies based in Australia, Canada, China, Great Britain and the United States concerning potential investments. Among these companies are Phelps Dodge, according to Yap, who also indicated that Ivanhoe Mines is interested in acquiring a stake in Lepanto.

Meanwhile, the former Presidential Assistant for Mindanao Paul G. Dominguez has just assumed the presidency of Sagittarius Mines, which owns a copper and gold project in Tampakan, South Citabato.

Nonetheless, not all is blissful in the new mining promised land of the Philippines.

THE RADICAL AND FED-UP OPPOSITION

Department of Environment and Natural Resources Secretary Mike Defensor had a strong pro-mining record as a senator. Nevertheless, he is about to issue a demand letter insisting that Marcopper Philippines release its $12 million rehabilitation fund to repair mine structures before another environmental disaster takes place.

In 1996, mine tailings from the Marcopper facility in the Boac, Marinduque province, caused an environmental nightmare as tailings found their way into a local river and several of its tributaries. Marcopper's then-minority partner put up a substantial portion of the $12-million rehabilitation fund, which somehow wound up transferred to the holding of the current majority shareholder of Marcopper businessman Teodoro Bernardino. Nine years after the disaster, Marcopper has yet to undertaken an extensive clean-up of the area.

Meanwhile a U.S. Geological Survey task force has warned that four mine tailings dams at Marcopper all appear to have structural flaws. It is feared that a strong typhoon or heavy rains could actually cause these dams to collapse, releasing more mine wastes into communities which already sustained damage from the 1996 spill.

A split has developed among members of the Catholic Bishops Conference of the Philippines as at least one prominent bishop warned that allowing foreign mining investment will create "a new menu for discontent. This will create unrest among the indigenous peoples."

Davao Archbishop Fernando Capalla, president of the conference, said he favors mining exploration provided that the country's natural resources aren't abused or misused. However, even Capalla urged the government to "reconsider the ecological and social costs accompanying the economic bonanza from mining."

Some of his bishops strongly oppose implementation of the Mining Act. Dipolog Bishop Jose Manguiran has insisted that opening up the natural resources of the country to foreign miners will not alleviate poverty. Capalla and other bishops are demanding that the mining sector demonstrate their goodwill by cleaning up mine tailings and rehabilitating open pits.

These bishops have demanded that mining companies supply them with concrete figures detailing the amounts that the government expects to get from each mining operations and how much of this will be repatriated to the home country of each foreign mining company. The clergy have also asked that mining companies to legally mandated to declare which of their operations will relocated populations and to submit comprehensive and viable plans for relocation.

Some groups won't even consider foreign mining investment and have warned of violence on mining companies which enter the ancestral lands of indigenous peoples. The Cordillera Peoples Alliance threatened protests, mass demonstrations, and resistance. "The country will become a battleground against the plunder of the people's resources," threatened Joan Carling, chair of the alliance.

Communist rebels operating in the Cordillera said they will attack if the government sends soldier to impacted villages. A spokesman for the Cordillera People's Democratic Front said they are closely monitoring Mankayan town in Benguet province and areas in the provinces of Abra, Mt. Province and Kalinga.

Meanwhile, nearly 130 Ifugao families in the Barangay Didipio have urged President Arroyo to spare their community from mining activity by Climax-Arimco, an Australian company, which plans to mine gold and silver in Didipio. The chair of the community recently told the Manila Times that a rich agriculture industry has been developed in the area. However, the Ifugao families are facing displacement for the second time when they were forced from their original homes in the Cordilleras in the 1960s.

"It's so revolting that after we painstakingly labored for decades to develop Didipio as our homeland, we're again being displaced by this mining project," the elder declared.