MERGED: Mining Issues

[wanderlust]

---

The Philippine mining industry has been on the uptick following the Supreme Court decision allowing 100% foreign ownership of operations. This is good news for the millions of folks who will benefit from the jobs that could be created around mining sites. Needless to say, foreign companies will be more likely to follow international standards particularly in regard to environmental concerns, as they have the funds to do so.

The latest news on mining:

Lafayette Mining confirms big gold, silver deposits
By Rocel C. Felix
The Philippine Star 08/24/2005

Australian mining company Lafayette Mining Ltd. has confirmed the presence of significant recoverable gold and silver reserves at the Hixbar mine site within its Rapu-Rapu mining area in Albay.

"Exploration drilling at the Hixbar mine area has proven to be successful, with the initial program providing results that have enabled the definition of an inferred resource of 1.3 million tons grading 1.7 grams per ton gold and 15.4 grams per ton silver,"said Lafayette’s chief executive officer Andrew McIlwain in a recent disclosure to the Australian Stock Exchange.

The Hixbar deposit is located less than three kilometers west of Lafayette’s Rapu Rapu project and was previously an open cut and underground mine that was commercially developed in the 1930s, producing copper and pyrite until the early 1960s.

"We have always seen Hixbar as a great opportunity once production capacity had been established at the Rapu Rapu project," said McIlwain.

McIlwain said the mineralization at Hixbar is a repetition of what the mining firm is currently doing in the Ungay orebody.

"This drilling has concentrated on the gold oxide potential surrounding the old mine. Encouragingly, these results are all from within a maximum depth of around 20 meters from surface and mining will be simple. Additionally, previous work has identified the continuation of deeper sulphide mineralization and we will work towards confirming this into resource status as well," he said.

Last month, Lafayette commissioned its gold plant at the Rapu-Rapu polymettalic project and will begin its production phase in the fourth quarter this year.

McIlwain said the company poured its first gold in the plant and the next step would be to continue with the commissioning of the base metals plant toward the fourth quarter when it starts to produce copper and zinc concentrates.

"This is a significant event in the company’s history, transforming the company from a junior explorer to a producer," McIlwain said.

The Rapu-Rapu polymettalic project is the first foreign-funded mine to be commissioned in the Philippines in 30 years.

The project’s mineral resource will support an initial six-year mine life and is projected to yield 10,000 metric tons (MT) of copper concentrates, 14,000 MT of zinc concentrates, 50,000 ounces of gold and 600,000 ounces of silver annually.

Lafayettte’s local unit Lafayette Philippines Inc. started mining operations earlier this year.

Currently, only about 407 hectares of the approved mining rights of 4,663 hectares are being developed by the mining project.

The development of the Rapu-Rapu mining area is estimated to cost P1.4 billion while the projected taxes for the mine’s planned six-year operation would be about P1.458 billion, with the municipal and barangay levels getting P380 million, the provincial government about P78 million, and the National Government P1 billion.

The project was granted an environmental compliance certificate (ECC) July 2001 with 29 major and 17 sub-environmental and social conditionalities, including the imposition of an Environmental Protection and Enhancement Program (EPEP) and a Social Development and Management Plan (SDMP).

Previously, Lafayette’s Philippine country manager Rod Watt said the company is also undertaking additional exploration activities at the Rapu Rapu site with preliminary results indicating that the life of the mines can be extended.

The project is financed through a syndicate of banks comprising NM Rothschild & Sons (Australia) Ltd., ANZ Investment Bank, ABN Amro Bank NV (Australian Branch), Korea First Bank and Investec Bank (Mauritius) Ltd.

Lafayette made its first drawdown of funds under this facility in September 2004.

Being the first foreign-funded mining project in 30 years, the Rapu-Rapu projects boosts the government’s efforts to sustain the revived interest in the local mining industry.

The Philippine mining sector is getting its second wind after more than a decade in the doldrums.

Prior to the slowdown of mining activities in the last decade, the Philippines was recognized as Southeast Asia’s largest gold producer and is also the region’s most prospective country for gold. The country is still ranked as the world’s eight largest gold producer and has the potential to move up to rank five or more.

The country is now being deluged with inquiries from both local and foreign investors, especially after the approval of the Minerals Action Policy and the favorable ruling of the Supreme Court that now allows a 100 percent foreign participation in the local mining industry.

The Arroyo administration is pinning its hopes of economic salvation from a reinvigorated mining sector and has been encouraging investors to do business in the country by offering investor-friendly incentives packages and other sweeteners.

Recently, the Philippine Stock Exchange liberalized its rule on the three-year track record of profitability as a pre-requisite to listing so that foreign companies could participate in the local bourse.

---

What's your take on the mining industry in the Philippines?

[jerx d great]

this is industry is a good investment and a good business that would make the philippines move on...!!!!!!!!!

[Zirv]

mining industry...this is mine...that is mine...

[mosimos]

I dont favor Mining. It destroys the environment aside from bringing health problems to our people.

[jerx d great]

i know it will destroy!!!

but if manage properly then it will lessen the destruction!!! mining is a great source of income in a country where the resources is very abundant!!! and its dependency acquires 70% of its total income!!

[franklin]

I dont favor Mining. It destroys the environment aside from bringing health problems to our people.

more health problems will arise if more are jobless. yes mining may destroy nature but it there are measures to lessen its impact to nature. bear in pollution cant be stopped it can only be controlled. if we dont exploit these resources now when they are badly needed, more problems will arise.

[mosimos]

Have you seen a mining area? The mountains are destroyed, the rivers are heavily silted, and the area is totally polluted. Would this enough to compensate for the money you are going to earn? Look at Lafayette, its destroying the entire Rapu rapu island. People suffered. nature will suffer. And in areas where there are mining, wala man mi asenso ang mga tao. nangasakit nuon.

[mosimos]

Mayor vows to stop Lafayette mining

First posted 08:37pm (Mla time) Nov 22, 2005
By Blanche S. Rivera
Inquirer News Service



Editor's Note: Published on page A18 of the November 23, 2005 issue of the Philippine Daily Inquirer.

PROMISES UNKEPT have pushed the pro-mining mayor of Rapu-Rapu Island, site of the P1.4-billion Rapu-Rapu Polymetallic Project and recently, two mine spills, toseek Malacañang's intervention in closing down the foreign-funded mining project.

Rapu-Rapu Mayor Dick Galicia signed on Monday a municipal resolution asking President Macapagal-Arroyo and the Department of Environment and Natural

Resources to revoke the environmental compliance certificate issued to Lafayette Philippines Inc.

Galicia said Lafayette had deliberately fooled the people of Rapu-Rapu when it assured them the firm would use the best technology to ensure the protection of the fragile ecosystem of the 5,000-hectare island.

Lafayette also secured tax exemptions, contrary to a promise it had given the municipal government that the mining firm's taxes would give Rapu-Rapu enough revenues to turn it from a fourth class to a first class municipality.pro-Lafayette, but because of what happened to us, I'm going to stand up against it … We will find a way to get them out of the island," Galicia told the Inquirer during an interview in Quezon City Monday.

Galicia said Rapu-Rapu would get only two percent of the gross earnings from the mine operations, instead of the 35 percent in corporate taxes it should have received if Lafayette had not worked to have the island proclaimed as a special economic zone.

He said Lafayette even refused to disclose how much gold it has processed or sold in its four months of operation. Galicia had summoned an accountant of the mining firm who said she did not know the figures.

"When I saw the mine spills, I knew we would get nothing out of this (project)," Galicia said.

The municipal council's resolution expressed "disgust over the anomalous and irregular manner" by which Lafayette accomplished the proclamation of the island

as an eco-zone, allowing it be tax-exempt for at least five years.

The resolution would be submitted to the President, the Supreme Court, the Department of Justice, the DENR, Philippine Economic Zone Authority, and

senators.

Rodel Batocabe, president of the Cagraray Environmental Protection and Development Foundation, said Lafayette, a subsidiary of Australian mining

giant Lafayette Mining Ltd., was giving Australian mining firms a bad reputation because of what it had done in Rapu-Rapu.

[franklin]

Have you seen a mining area? The mountains are destroyed, the rivers are heavily silted, and the area is totally polluted.Â* Would this enough to compensate for the money you are going to earn?Â* Look at Lafayette, its destroying the entire Rapu rapu island.Â* People suffered.Â* nature will suffer.Â* And in areas where there are mining, wala man mi asenso ang mga tao. nangasakit nuon.

yes i've seen a mining area for 12 years specifically atlas mining in toledo city, which was once considered the biggest copper mine in the world. it made toledo a city, brought jobs to thousands of people even to the illiterate, gave homes and shelter to thousands of its employees and income for the government. the mining company didnt gave any serious environmental problem until a few years ago when a fish kill occured in toledo city after years of inactivity. but that fish kill was already resolved. the biggest problem is that the company was already closed because of mismanagement when it was in crisis and also because of the good for nothing labor group KMU.

[ddemmon]

i favor mining! i see mining as good for our country it gives us investments and money, we all know that in any business or project there are always risk to take and expect. if the pollution and environmental impact are the result of this, why dont the people who are concern with this, move and develop new laws to safeguard this then. stopping mining is not the issue, mining is here to stay. the issue should be to put, develop or add more safeguards and laws to protect the environment from spillovers or pollution from mining.
This should be the issue the church should have put out to the politicians before... now i'm wondering what does the church have to do with this why is our church branching out to politics and now mining