Mining firms anticipate more government audits

Published May 24, 2019, 10:00 PM By Madelaine B. Miraflor

https://business.mb.com.ph/2019/05/24/mining-firms-anticipate-more-government-audits/

SURIGAO DEL NORTE — Mining companies in the Philippines will have to undergo more than three regulatory audits this year, and this will be the new normal from now on, a top mining official said.

Dante Bravo, president of Global Ferronickel Holdings Inc., the third largest nickel ore producer in the Philippines and the largest single lateritic mine exporter in the world, said the effect of former Environment Secretary Regina Paz Lopez had in the mining industry is still very apparent up to this day.

During her term in 2017, Lopez wanted to shut down and suspend more than half of the operating mines in the country, citing environmental violations. To do this, she launched a government-led audit against mining companies, which was followed by another audit carried by interagency Mining Industry Coordinating Council (MICC) a few months later.

This year, MICC would conduct a second round of audits to go after big mining companies, most of which already passed the Lopez-led audit. This would include Global Ferronickel’s subsidiary, Platinum Group Metals Corporation.

Bravo said mining companies now have to go through three or more audits every year. Aside from the “objective fact-finding and science-based review” that MICC swore to conduct on mining companies, the Department of Environment and Natural Resources (DENR) also now conducts two separate audits — one that is led by the central office and the other one by the regional office.

This, while local government units (LGU) and host barangays also require mining companies to present annual reports on their operations.

“Government is running out of people,” Bravo said. “Reports on safety, health, and environment are being reported several times.”

Meanwhile, he likewise pointed out that Securities and Exchange Commission (SEC) now requires all listed companies, including mining companies, to submit sustainability reports.

“So that’s another regulatory requirement,” he added. “We are really being regulated and we are compliant.”

Through PGMC, Global Ferronickel operates a nickel mine here in the Municipality of Cagdianao in Claver, Surigao del Sur. This year, the company’s nickel ore output at this mine site is expected to go up from 5.1 million wet metric tons (WMT) in 2018 to 5.5 million WMT.

But, Bravo also said that operation expenses at its Cagdianao mine is expected to increase beyond the normal rate of 8 to 10 percent due to the government’s relatively new policy on progressive rehabilitation, which aims to minimize the disturbed area of a mining project at any given time.

This, according to him, will “definitely” have an impact on the company’s bottomline for the year.

“It’s really burdensome. But you really have to comply,” Bravo said.

In December, Global Ferronickel reported that the proven and probable ore reserves at the Cagdianao mine went up by 21 percent to 43.8 million WMT from the 36.3 million WMT recorded in June.

On Friday, PGMC turned over a production facility building for chips and woodcraft and a school bus to Barangay Cagdianao.

The distribution of the school bus was done under PGMC’s Social Development and Management Program (SDMP), Bravo said.

During the turnover ceremony, he highlighted some of the good provisions of the Philippine Mining Act, which requires the implementation of SDMP.

He said the law is good enough as it is designed to spur the economy of areas that host mining operations as well as improve the livelihood of the communities. Right now, mining industry contributes 20 percent of Caraga’s economy.