Tuesday, February 28, 2017

‘Miners doomed to fail as DENR’s audit biased’

By BusinessMirror -

TRADERS and scientists are clamoring for a re-audit of mineral resources and policy, as industry players and the government continue to lock horns on the future of the country’s mining sector after the release of the results of what was deemed as a “biased” audit.
The head of the National Institute of Geological Sciences (NIGS) on Monday called for a “proper audit” on the mining industry.
“A proper audit should be done, not only to determine the status of mining, but also to allow millions of Filipinos to continue working,” NIGS Director Marco Arcilla told reporters in a news conference.
Arcilla called the government’s audit as “bad”, as Environment Secretary Regina Paz L. Lopez “have included in her audit team people who are ideologically against mining.” “Basically, we don’t turn our backs to science and engineering,” he told reporters. “In the final analysis, who will clean and actually do the job are engineers and scientists.”
According to Arcilla, Lopez’s audit had been biased from the start because she included among them Alyansa Tigil Mina (alliance to stop mining) and former Mines and Geosciences Bureau (MGB) Director Leo L. Jazareno, whom Lopez appointed DENR consultant.
“The MGB could have done the audit as long as they are transparent from the start, but Jazareno worked under the previous administration of former President Benigno S. Aquino III before he was appointed by Lopez, which means he approved a lot of contracts that are now being questioned,” Arcilla told the Business Mirror.
On  February 2 the DENR announced the closure of 23 mining operations, saying many of them were operating in “functional watersheds”.
ON Monday the Silangan Mindanao Mining Co. Inc. (SMMCI) and Philex Gold Philippines Inc. (PGPI) filed separate letters in response to the show-cause orders (SCOs) the DENR issued on February 13.
The mining contracts of SMMCI and PGPI were among the 75 mineral production sharing agreements (MPSAs) threatened to be canceled as Lopez alleged their mining operations are situated within or near watersheds.
SMMCI and PGPI are both wholly owned subsidiaries of Philex Mining Corp., which operates the Padcal mine in Tuba and Itogon, Benguet.
Covered by the SCOs are the MPSA (149-99) of SMMCI for the Silangan Gold Project. The order for PGPI covers MPSAs for its following projects: Sibutad (063-97-IX), Vista Alegre (096-97-VI), Tambis (344-2010-XII) and Lascogon (148-99-XIII).
Prior to issuing the SCOs, Lopez earlier ordered the suspension or cancellation of 28 mining operations purportedly to protect watersheds from the adverse impact of mining to the environment.
More than a week later, the DENR chief came up with a decision canceling 75 mining contracts awarded to various mining companies—27 in Luzon, 11 in the Visayas and 37 in Mindanao.
In their letter responding to the SCOs, the SMMCI and PGMI said they were awarded the MPSAs after being subjected to the rigorous process prescribed by applicable law and regulations, which included obtaining the requisite regulatory clearances.
The two companies insisted that the areas covered by the MPSAs are open to mining, are valid and are legal.
“Mining is not prohibited in all watershed areas,” the company said. “Under Philippine law, only watersheds that are proclaimed, designated or set aside pursuant to law or presidential decrees, presidential proclamations or executive orders, as watershed forest reserves or as critical watersheds are closed to mining operations.”

Middle ground
WHILE thinking along the same line as Arcilla’s, some traders are offering a middle ground.
The Chamber of Commerce of the Philippine Islands (CCPI), the country’s oldest, is encouraging government to issue a regulation of the country’s mineral resources that is geared toward building up the local industrial supply chain, suggesting a review of the mining law.
CCPI President Jose Luis U. Yulo Jr. said the Chamber is espousing a “balanced view” of encourage more in-country manufacturing.
“We shouldn’t just get the ore and export it to other countries, and import the finished products,” Yulo told reporters. He explained that private companies “should commit to making these in the country and when they do so, they can have access to the mines”.
“In turn, when they build up the factories in these areas near the source, you need to take care of the area and this area will develop,” Yulo said. “But make sure you follow environmental rules.”
Enticing companies to build up the supply chain using mineral ores as raw materials—such as copper and nickel—will not just increase employment in the industrial sector but scale up human resource skills in the sector, according to Yulo.
Once the country builds enough capacity to be able to produce finished products, there can be a minimal allocation of the mineral ores to countries in need of the raw resources, he explained.
This proposal merits a review of the Philippine Mining Act of 1995, the Chamber president said.
“Anyone that is given a mining permit must consume the ore that he gets in manufacturing finished products,” Yulo said. “If there’s a surplus, then you can export.”

Political decision
ARCILLA said if the earnings are averaged for the entire country, “it would appear that the Philippines earns only 1 percent [from mining], but since mining is occurring in only 3 percent of the country, those 3 percent will lose a lot.”
He cited as example Palawan. Arcilla said in 2015 the province earned P23 billion from laterite mining while its tourism receipt was only P10 billion.
This meant “mines earn twice more than tourism,” he said.
Arcilla added the richest mining is in eastern Mindanao and the Caraga region for its rich chrome, copper and chromite deposit.
“The country will not lose much if these mines are closed but
pity the 1.2 million workers who would be affected, directly and indirectly,” Arcilla said.
He added that small-scale mining operations for gold in Davao represents 80 percent of the country’s total gold production, while 20 percent comes from all of the country’s biggest mines.
“These small miners are not taxed. If we allow the big mine operators to extract the gold, we will earn taxes from but would deprive 100,000 people of their jobs.”
“This is a political decision and President Duterte knew the big- time miners there,” Arcilla said. “He [Duterte] could solve the problem, provided that we solve the sharing scheme.”
Recto Mercene, Catherine N. Pillas and Jonathan L. Mayuga

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