Mining in the Philippines: concerns and conflicts

This report explores the effects of mining in the Philippines. The report argues that mining in the Philippines is being developed at a speed and in a manner likely to cause massive long-term environmental damage and social problems.

The report finds that:

• current mining plans will undermine the Government’s own strategy for sustainable development by destroying or severely damaging critical eco-systems, including watersheds, rivers, marine eco-systems and important agricultural production areas
• implementation of the proposed mining plan will bring insufficient benefits to the Filipino people
• corruption is a serious problem in the Philippines and it can be expected that plans for extensive mining operations in remote areas requiring licensing, regulation and monitoring will make it worse
• the Philippines currently faces a crisis of extra-judicial killings. More than 700 activists – including civil rights and environmental advocates – have been killed since the current administration came to power in 2001.

The report recommends that:

• the Philippine government should cancel all current mining applications that will inevitably cause major environmental damage to critical watersheds, eco-systems, agriculture or fisheries and result in social disruption
• the Philippine government should revoke the Mining Act of 1995 and enact alternative legislation that more effectively protects the interests of the affected local communities, indigenous peoples and the environment
• the World Bank Group should halt its promotion and support for mining expansion in the Philippines under current conditions
• all mining projects should be inspected by reputable independent organisations before investment.
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The Destructive Impacts of Corporate Mining in the Philippines: The Tampacan Copper-Gold Mining Project in Mindanao

The Philippines has an estimated $840 billion worth of untapped mineral resources, according to the Mines and Geosciences Bureau of the Philippines which is responsible for giving permits to mining companies to do exploration of mining areas and to commence operation. Small-scale mining industries have contributed to national revenues.

A big problem ensued with the signing of the Philippine Mining Act of 1995 authored by then Senator Gloria Macapagal Arroyo which allowed 100% ownership of the claimed mining land area and minerals by foreign multinational mining corporations. Large-scale mining is destructive as it uses the method of open-pit mining which entails clearing thousands of hectares of rainforests and agricultural lands, deep excavations to extract minerals, the use of toxic heavy metals and chemicals to process mineral ores, and the consumption of millions of liters of water – all of which negatively impact the lives of the Filipino citizens with the grave disregard for their right to health, life, food security, livelihood, and a clean environment. This is the social justice issue of large-scale mining. Large-scale mining is against the sustainability of the environment and of the people’s cultural identity and quality of life. 

Corporate mining permits multiplied under the administration of President Benigno Aquino III in the belief that large-scale mining tax revenues would spur economic growth. However, environmentalists blame the liberalized mining sector for the greater destructiveness of natural disasters in the country. According to Marya Salamat of bulatlat.com (2013), environmentalists blame mining companies for contributing to massive siltation of the rivers, poisoning the waterways and agricultural fields with toxic chemicals and rendering communities more vulnerable to flooding. At the same time, local communities affected by mining bewail the loss of their former livelihood in fishing, agriculture and forestry, “as some of them were forced to become mineworkers instead, or service workers for those at work in the mines, including some women becoming prostitutes, reportedly driven to it by the combination of their family’s loss of land, livelihood and influx of men working in the mines” (Salamat, 2013).

Tampakan Mining (Source: Mining Journal)

If realized, the proposed Tampacan copper-gold mining project by the Sagitarrius Mining Incorporated in South Cotabato, Mindanao would be the largest open-pit mine in the Philippines and one of the largest of its kind in the world. The open pit would reach an extent of 500 ha and a depth of 785 meters while the topsoil stockpile would cover an area of 5 ha and the pit ore stockpile 49 ha, according to conservation and development consultants like Clive Montgomery Wicks. On February 2013, the Mines and Geosciences Bureau under the Department of Enviroment and Natural Resources issued an Environmental Compliance Certificate to SMI. But various civil society groups and church leaders strongly oppose the Tampacan copper-gold mining project because of its disastrous impact to the environment, to the watershed area spanning three major rivers in Mindanao, to agricultural production, and to the displacement of 5,000 people living in the area where the proposed mining will be done.

Source: Mining.com

The sad and unfortunate concomitant to the struggle against the Tampacan copper-gold mining project is the lack of in-depth analysis of most mainstream media news on the issue, and instead of providing an assessment of the impacts vis-à-vis the alleged benefits from the mining project, tend to provide news on the corporate affairs of the multinational corporations which have interest on this project. In contrast, alternative media like bulatlat.com and davaotoday.com provide news reports with in-depth analysis of the mining situation and show the alternative viewpoints of those who are against the mining project. In 2012, Bulatlat.com reported on what has not been reported by the mainstream media: the massacre of a B’laan family whose head declared a tribal war against SMI. Davaotoday.com reported on the Catholic Bishops’ plea to President Aquino to stop the Tampacan mining project on strong moral grounds. Civil society groups which are against the Tampacan mining project such as Kalikasan Peoples’ Network for the Environment, Alternative Forum for Research in Mindanao, Center for Environmental Concerns, and international non-profit, cause-oriented organizations such as War on Want, London Mining Network, Banktrack, and Indigenous Peoples’ Link have posted press releases, investigative reports, and analytical articles on the destructive impact of the proposed large-scale mining project and expressed a clear, strong opposition to the proposed mining project.

The proposed mining project straddles the jurisdiction of two regions, four provinces, four municipalities, and nine barangays. If this mining project will be realized, its environmental cost and negative impact to the livelihood, health, and quality of life of the Filipinos living in affected areas in four provinces of Mindanao (South Cotabato, Sarangani, Sultan Kudarat, and Davao del Sur) will be immense and incalculable, to say the least. The open pit will not be back filled, and according to Dr. Godilano (2012), the billions of tons of acid forming waste rocks and mine tailings that the mining corporation will leave behind will require management in perpetuity. According to the Catholic Church in South Cotabato, if Sagittarius Mines, Inc. (SMI) will be allowed to operate, it will destroy the environment by massive clearing of 6,935 hectares of rainforests and agricultural lands, contaminate three major watersheds (ridge-rivers-reef) for five provinces, and dry up the irrigation systems in the lowlands and the aquifers in General Santos and Koronadal City. It will result to the dislocation of almost 6,000 surface dwellers, mostly B’laans, from their ancestral land, and has actually led to human rights violations with the killing of anti-mining indigenous people and activists and the restrictions of access by the indigenous people to the forests and agricultural lands claimed by the mining corporations.

In addition, it impacts negatively the people’s health, safety, food security and right to life and livelihood by the constant risk of breakage of the dam that will hold the mine tailings and the contamination of water, soil, and air by toxic chemicals and heavy metals that will be used for processing the mineral ores from the mining area in Tampacan. The added risk is that the Tampacan mining area sits on fault lines, which increases the risk of seismic activity that poses threat to the spilling of the dam for mine tailings and the contamination of flood waters with toxic mine wastes due to the deforestation of the area, soil erosion, and siltation of rivers, which further aggravate and are aggravated by climate change.

Because of these huge environmental, social, and cultural costs, allowing the SMI to operate tantamounts to a betrayal of the Philippine nation and of the Filipino people because no amount of taxes that will be obtained from SMI can compensate for the environmental destruction and long-term negative impacts on the health, food security, and right to life and livelihood of the Filipinos in five provinces of Mindanao- South Cotabato, Sarangani, Sultan Kudarat, Davao del Sur, and Maguindanao – and the cities of General Santos and Koronadal. The promises made by the mining company to provide scholarships and provide livelihood to the affected people, especially the indigenous B’laan tribe, are mere palliatives in comparison to the massive environmental destruction and long-term negative impacts of this proposed large-scale mining project.

The government must listen to the cry of the Filipino people to stop the Tampacan mining project. The Philippine Mining Act of 1995 which allows for 100% ownership of mineral ores and land covered in the claimed mining area should be repealed because it is against national sovereignty and against sustainability of the environment, cultural identity, quality of life, and livelihood of the Filipinos that will be most affected by the large-scale mining projects. President Benigno Aquino should learn to adopt the principles of sustainable development, repudiate neoliberal economics which is pro-corporate profits and breeds grave inequities in the world, and repudiate the impositions of World Bank, World Trade Organization, and International Monetary Fund.

Citizens who understand the situation must shout together the protest against the evils of neo-liberal capitalism exemplified by large-scale, corporate mining and must put a stop to the desecration of nature and the violation of human rights of the poor and the indigenous peoples of the Philippines and other developing countries.

source:Mining.com

The impacts of mining in the Philippines

The impacts of mining in the Philippines

Mining is a top and very controversial environmental issue in the Philippines today. It is increasingly becoming a divisive issue too. The government cite economic benefits as sufficient justification to support and encourage mining. In fact, the Intellasia News Online (http://www.intellasia.net) reported on 08 August 2011 that the Philippines' Mines and Geosciences Bureau (MGB) has announced that about 5 million hectares of potentially mineralised areas across the archipelago are now open to local and foreign investors. On the other hand, environmental and religious groups strongly oppose mining because of its well-known negative environmental and health impacts.

A Fact-Finding Team composed of human rights and environmental experts from the United Kingdom which looked into the impact of mining on the environment and peoples' livelihoods in the Philippines highlighted the occurrence of mining-related human rights abuses affecting local communities especially indigenous people; extrajudicial killings of persons protesting against mining; corruption in the mining sector; political pressure on the judiciary resulting in pro-mining decisions; and environmental impacts.

The team observed that "the record of mining companies with regard to environmental protection, disasters and post-mining clean-up in the Philippines is widely acknowledged, even with the government, to be very poor. As of 2003, there had been at least 16 serious tailing dam failures in the preceding 20 years and about 800 abandoned mine sites have not been cleaned up. Clean-up costs are estimated in billions of dollars and damage will never be fully reversed."

It warned that "water contamination from mining poses one of the top three ecological security threats in the world. Many mining applications in the Philippines are in water catchment areas close to the sea, and pose major threat to valuable marine resources." The severe pollution of the Taft river system in Eastern Samar as a result of the mining activities in Bagacay is a vivid example (please see related article in this blog).

The report also emphasized the very high geo-hazard risks in the Philippines. "In the Philippines, over half of the active mining concessions and two-thirds of exploratory concessions are located in areas of high seismic risk where earthquakes are likely."

"The Philippines is considered as the hottest hotspot in the world in terms of threats to its mega diverse biodiversity. Thus there is an urgent need to properly manage its natural resources. It is estimated that 37% of Philippine forests may be exposed to new mining."

Should universities campaign for or against mining?

Some leading state universities in the Philippines are reportedly being pressured by environmental and religious groups to take an “official” anti-mining stand. Universities may take lead in promoting responsible mining and in fact should conduct relevant scientific investigations to prevent or minimize the impacts of mining on the environment and people. But universities should not take an anti or a pro mining stand. They should remain neutral and allow their constituents (the researchers and scientists) to evaluate facts and decide for themselves what stand to take about mining. A university should strive to seek the truth. Always.

source:http://soil-environment.blogspot.com/2011/09/impacts-of-mining-in-philippines

Gold Mining in Philippines
- Overview

Lode and placer gold deposits occurin most of the 73 provinces in the Philippines. The principal producing districts are Baguio and Paracale in Luzon; and Masbate, Surigao and Masara in Mindanao. Gold production in 2003 totalled 37,800 kg compared to 35,800 kg in 2002.

Most of the production was attributable to small-scale mining opera­tions. Output by Lepanto Consolidated Mining Co, the only major gold producer, declined from 3.5 t to 2.8 t. Philex Mining Corp's by-product gold output totalled 2.8 t. Lepanto mines the Victoria 1 and Victoria 2 high-grade gold deposits in Mankayan, Benguet, and has obtained a Board of Investments registration for its Victoria 2 project, which will entitle the company to a further four to six years' income tax holiday for its gold operations.

TVI Pacific Inc is running an 80 t/d pilot plant at Canatuan, in Zamboanga del Norte, processing tailings from small-scale mining activities in the area. Benguet Corp's Acupan project and Philsaga Mining Corp's Banahaw project are also processing the output of small-scale mining operations.

National Resource Mineral Development Corp (NRMDC), the DENR's corporate arm, operates the direct state-utilisation project in Diwalwal, Davao del Norte. A tailings dam is being constructed to impound the tailings of the small-scale miners, who have been issued mining permits. NRMDC has successfully negotiated the takeover of the lowest adit of one of the three major small-scale contractors, and plans to undertake a diamond-drilling programme to check on the downward extensions of the two major veins, Balite and Buenas Tinago.

Lafayette Mining Ltd, through its subsidiary companies and Philippine partners, holds an interest in the Rapu Rapu polymetallic project in the Philippines. The initial six-year mine life will process around 1 Mt/y of ore for annual production of approximately 10,000 t of copper-in-concentrate,14,000 t of zinc-in-concentrates, 50,000 oz of gold and 600,000 oz of silver.

In early 2005 Crew Gold announced that it had reached an agreement, in a joint venture with local companies, to acquire 72.5% of the issued capital of the Philippine- based Apex Mining Company for a total consideration of US$7 million in cash.Apex (AMCI) is listed on the Manila stock exchange. Its principal asset is the Masara Gold Mine (``Masara'') in the south of Mindanao Island, which ceased production in March 2000. The mine was previously operated as a small-scale underground operation and has a treatment plant with the capacity to process 1,200 tonnes of ore per day.

The Australian company Climax was granted the Didipio Project's Environmental Protection and Enhancement Programme during January 2005. Operations of the Didipio gold/copper project will be conducted through Australasian Philippines Mining Inc, which is incorporated in the Philippines specifically for the purpose of developing the Didipio project. The granting of the EPEP allows APMI to now proceed to complete the permitting process for the project and obtain Government approval under the FTAA to license the project for commencement of project construction and development

.

Sur American Gold Corporation discovered a strong 800 metre wide and minimum 400 metre deep resistivity anomaly that is open at depth and partially coincident with a moderate chargeability anomaly at its Comval Gold and gold-copper project, located in East Mindanao. The major anomaly occurs within the Batoto Gold project area in a zone called Santa Fe about 2500 metres to the south west of the Clark area and is represented by a very strong 800 metre wide and minimum 400 metre deep resistivity anomaly.

Mindoro Resources Ltd. and Panoro Minerals Ltd have identified two promising porphyry copper-gold drill targets on the Agata project.A major geophysical program has been completed, which defines remarkably strong IP anomalies extending semi-continuously over 4.5 kilometers of strike. Two particularly strong porphyry copper-gold targets are emerging, one in the north area of the project and one in the south. Agata is a highly mineralized project, and has been the site of historical and ongoing artisanal gold mining. It is in a favorable structural setting, at the intersection of cross-cutting faults and a splay of the Philippines Fault, which has focused mineralizing intrusions Mindoro Resources has also enlarged its claim holdings in Batangas Province to 14,400 ha. At its Lobos project, it has concentrated its grid-pat­tern drilling in the Southwest Breccia area to block out sufficient reserves in order to justify a small high-grade operation.

Australian-based Oxiana Ltd, through Oxiana Philippines Inc, has more than 300,000 ha under exploration for high-grade porphyry copper-gold and epithermal gold deposits, and three early-stage exploration projects cover ground in Southern Leyte, Panaon Island and Surigao.

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In The Know: The Philippines’ mining industry

LIGHT IN THE TUNNEL Under EO 79, small-scale miners like the one above in Itogon, Benguet, will be confined to the “Minahan ng Bayan.” They are also banned from using mercury to process the mined ores. RICHARD BALONGLONG / INQUIRER NORTHERN LUZON

Of the country’s total land area of 30 million hectares, some 9 million ha have been identified as having “high mineral potential,” said the Mines and Geosciences Bureau (MGB).As of January 2012, the bureau estimated that some 3.8 percent (around 1.14 million ha) of the Philippines’ total land area was covered by mining tenements.

As of June 2012, the country had 30 operating metallic mines—18 nickel mines, five gold mines with silver as coproduct, three copper mines with gold and silver as co-products, two chromite mines, a polymetallic mine with gold, silver, copper and zinc as products; and an iron mine, according to the MGB.In 2011, the country’s total metallic mineral production was worth P122 billion, up from P112 billion in 2010. Gold production for 2011 alone was valued at P63.14 billion.

However, for the first quarter of 2012, data from the MGB showed that metallic mineral production declined from P31.4 billion in the same period last year to P19.6 billion this year.

Nickel mines are located in Zambales, Palawan, Agusan del Sur, Surigao del Norte and Surigao del Sur, while the gold with silver mines are in Benguet, Masbate, Camarines Norte, Davao del Norte and Agusan del Sur.

The copper with gold and silver mines are located in Benguet, Cebu and Zamboanga del Norte. The copper mine with gold, silver and zinc is in Albay, while the metallurgical chromite mines are in Surigao del Norte and Eastern Samar. The iron mine is in Leyte.

Mining contributed 1 percent (P99.2 billion) to the country’s gross domestic product in 2011, according to MGB data.

Investments in exploration and mining projects have amounted to more than $4.4 billion from 2004 to 2011.

The mining industry employs some 238,000 people, said the Department of Labor and Employment.

According to the Environmental Management Bureau, there were around 300,000 small-scale miners in the country as of December 2011. Compiled by Kate Pedroso, Inquirer Research

Sources: Mines and Geosciences Bureau website, Inquirer archives

An Assessment of the Philippine Mining Industry; Issues and Challenges that Lie Ahead

Ronald Recidoro

Vice President, Legal & Policy at Chamber of Mines of the Philippines

2014 was an uneventful year for the mining industry. Despite the country’s much-vaunted mineral potential and sizable investor interest in mining in the Philippines, the DENR and MGB have continued to withhold action on pending applications for MPSAs and FTAAs pursuant to the President’s directive under EO No. 79. And despite the lifting of the moratorium on the issuance of exploration permits in March 2013, only one (1) new exploration permit (EP) was issued by the MGB, with 17 EP renewals.

Since 2011, government has not actively pursued investments in minerals development, opting instead to focus on reviewing the current fiscal regime for mining. In 2012, mining was excluded from the government’s Investment Priorities Plan (IPP) and all incentives, save for those under the Mining Act and the National Internal Revenue Code, have been removed. The policy change was premised on the notion that government was “getting a mere pittance” as its share in mining revenues while the country bears the cost of the environmental degradation brought about by mining activities.

But industry data readily debunk these assumptions. Under its current fiscal regime, mining companies—MPSAs operating with no fiscal incentives—already give government a substantial share in a project’s net cash flows, averaged over its entire mine life. More importantly, mining companies have set up social development and environmental protection funds to ensure the development of host communities, the rehabilitation of mined-out areas and the compensation of affected communities in the case of mine accidents. (Footnote: In 2012, MGB reported that companies spent over Php673 million for their environmental protection and enhancement programs, and an additional Php498 million for social development and management programs.)

Nonetheless, the Cabinet-level Mining Industry Coordinating Council (MICC) has gone on to propose draft legislation with an inordinately high tax rate that would make the country uncompetitive for foreign investments.

The MICC has also proposed to expand the areas closed to mining applications.

As a result, the Philippine mining industry is now in deep freeze. No new mining agreements have been approved and worse, even projects with approved ECCs and DMPFs have not moved forward. Only 3 small mining projects were expected to start operations in 2014:

source:https://static.licdn.com:443/scds/common/u/lib/fizzy/fz-1.3.8-min.js

The Philippine Mining Act of 1995:

                                                        Is the law sufficient in achieving the goals of output growth, attracting foreign investment, environmental protection and preserving sovereignty? Dr. Roberto B. Raymundo School of Economics De La Salle University Manila, Philippines roberto.raymundo@dlsu.edu.ph Abstract: Mining in the Philippines plays a crucial role in the pursuit of industrial development because of its ability to provide mineral resources that serve as raw materials for the manufacturing, construction, utilities as well as the services sub-sectors. It is also a major contributor of foreign currency through the exports of mineral ore and other processed and semiprocessed mineral products and provides employment to communities in far flung areas where the only source of economic activity is mining operations. Although the industry produces output and provides employment, it also destroys the environment through deforestation, and the loss of vegetation and biodiversity. It alters the land and the natural terrain due to open pit mining, soil erosion, and river pollution. There is also the human health impact of cyanide and other chemicals used in mining and the acid mine drainage which encroaches into the settlements of the people and their communities, which leads to their displacement alongside the loss of productive agricultural land. The Philippine Mining Act of 1995 is the main policy/ legislation which governs all mining operations in the country and includes various measures to protect the environment and defines areas in which mining can be allowed. The legislation provides two approaches in forming and finalizing mining contracts namely: the Mineral Production Sharing Agreement (MPSA) and the Foreign Technical Assistance Agreement (FTAA) which permits 100 percent foreign ownership of mining operations. The primary objective of the study is to determine the extent by which the provisions of the Philippine Mining Act of 1995 may have been able to help achieve the goals of increasing mining output, attracting foreign direct investment, protecting the environment and preserving national sovereignty. The methodology used is the descriptive approach which includes a thorough discussion of the policy provisions as well as the evaluation of the mining industry performance after the enactment of the law. A discussion of documented cases involving the environmental impact of several major mining projects is also included to determine the effectiveness of policy implementation. Initial results have indicated that further reforms will be necessary in order to improve the effectiveness of the Philippine Mining Act in attracting new investments, protecting the environment and settling sovereignty issues. In addition, there is a need to address the method or process by which regulation is implemented as well as increase the extent of transparency and accountability in order to better serve the interest of local communities, industry and government. The Philippine Mining Act of 1995 is the main policy/ legislation which governs all mining operations in the country and includes various measures to protect the environment and defines areas in which mining can be allowed. The legislation provides two approaches in forming and finalizing mining contracts namely: the Mineral Production Sharing Agreement (MPSA) and the Foreign Technical Assistance Agreement (FTAA) which permits 100 percent foreign ownership of mining operations. The primary objective of the study is to determine the extent by which the provisions of the Philippine Mining Act of 1995 may have been able to help achieve the goals of increasing mining output, attracting foreign direct investment, protecting the environment and preserving national sovereignty. The methodology used is the descriptive approach which includes a thorough discussion of the policy provisions as well as the evaluation of the mining industry performance after the enactment of the law. A discussion of documented cases involving the environmental impact of several major mining projects is also included to determine the effectiveness of policy implementation. Initial results have indicated that further reforms will be necessary in order to improve the effectiveness of the Philippine Mining Act in attracting new investments, protecting the environment and settling sovereignty issues. In addition, there is a need to address the method or process by which regulation is implemented as well as increase the extent of transparency and accountability in order to better serve the interest of local communities, industry and government.Philippine Mining Act of 1995 and Executive Order 79 In March 1995, President Fidel Ramos signed into law the Philippine Mining Act (Republic Act No. 7942) which was designed to revive the mining industry and attract more foreign investment by defining the agreements for mineral exploitation, and provide the requirements for acquiring mining rights. It governs the exploration, development, processing and utilization of mineral resources in the Philippines. It is expected to protect the national interest by ensuring that the benefits from mining are shared with the government through the Mineral Production Sharing Agreement (MPSA). The law allows 100 percent foreign ownership of mining projects through the Financial or Technical Assistance Agreements (FTAAs) and provides several incentives to encourage mining such as a four year income tax holiday, tax and duty free capital equipment imports, value added tax exemptions, income tax deductions (when operations are posting losses) and accelerated depreciation. It strengthens the role of local government units in mining projects both as beneficiaries and as active participants in mineral resource management, consistent with the provisions of the constitution and government policies on local autonomy and empowerment. It fully recognizes the rights of indigenous people and cultural communities and respect for ancestral land and institutionalized stringent measures to ensure compliance of mining contractors and operators to internationally accepted standards of environmental management.
:Dr. Roberto B. Raymundo School of Economics De La Salle University Manila, Philippines roberto.raymundo@dlsu.edu.ph