Mining in the Philippines

[firestarter]

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Mining is in for an overhaul, time to upgrade, observe rules or get out.

Zambales mines: A history of questionable practices 1BY KATRINA STUART SANTIAGO ON FEBRUARY 16, 2017 OPINION ON PAGE ONE
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KATRINA STUART SANTIAGO


BETWEEN the pro-mining students protesting against the Department of Environment and Natural Resources (DENR) officials, and the insistence that we talk only about the jobs to be lost and the stock market crash, it is clear that we are being distracted from the more important questions about whether or not the mining projects that the DENR has ordered closed have in fact been bad for the environment and our communities.


For some of these mines, there is already enough proof and data, enough studies through the years, enough protests, that prove how these have adversely affected the environment and the communities that are in close proximity to the mines.


Case in point: Zambales.


2012: destructive mining
In 2012, the Movement for the Protection of the Environment (Move Now!), accompanied by farmer and activist groups, went on a fact-finding mission on the effects of mining on communities in Sta. Cruz Zambales. They found that the repercussions on the livelihood and health of the community outweighed whatever benefits might be had from these mining projects.


Working for the mines might mean higher salaries but even the community realized that what they were getting in exchange was environmental degradation: rivers and creeks were stagnant with orange-red water, and whatever fish they catch was infected; rice farms that could produce 70 to 100 cavans per hectare twice or thrice a year, went down to 30 to 50 cavans; irrigation with red water produces hard-as-cement soil that renders the farm unproductive (Bulatlat.com, March 21, 2012). The Move Now! report states that “The forests in the Sta. Cruz mountains are now totally wiped out, <…> the water from pumps cause skin diseases and is not potable” (Punto Central Luzon, May 19, 2012).


Joseph Canlas, chair of the Alyansa ng Magbubukid ng Gitnang Luson (AMGL), who was part of the fact-finding mission, reported: “The atmosphere here is intolerable as trucks that carry ore from the mining site are everywhere, they operate 24 hours a day” (Punto Central Luzon, 2012). The armed private security guards are in charge of the community, disallowing people from getting supplies from the forest and mountains (Bulatlat.com, 2012).


In June 2012, the Supreme Court issued a writ of kalikasan against the LNL Archipelago Minerals Inc. (LAMI) operating in Zambales. It was filed by Agham party-list representative Angelo B. Palmones who said that “LAMI is destroying <…> the environment by cutting mountain trees and leveling a mountain to the damage and detriment of the residents of Zambales without any of the concerned government agencies and officials stopping such illegal actions” (GMA News, June 11, 2012).


LNL Archipelago Minerals is one of the Zambales mines listed by the Move Now! fact-finding mission, alongside Benguet Corp Nickel Mines and Eramen Minerals Inc.


2014, 2015: Suspension, floods
In July 2014, the Mining and Geosciences Bureau suspended the aforementioned mines plus Zambales Diversified Metals Corp for “unsystematic strip mining” (Rappler.com, July 4, 2014). In December 2014, the DENR regional office in Central Luzon gave the mines permits to transport ore, saying this was needed to rehabilitate and compensate communities and prevent disaster. In February 2015, the suspension was temporarily lifted; mining companies had 90 days to comply with requirements in the suspension order (Business Mirror, June 18, 2015).


By June 2015, the Concerned Citizens of Sta. Cruz, Zambales (CCOS) was asking the Court of Appeals to again suspend LNL, Eramen, and Benguet Corp as these have been “the subject of numerous complaints for the pollution of water bodies, including fishponds, in the town of Santa Cruz, Zambales” (Business Mirror, June 2015).


In October 2015, Typhoon Lando happened and Zambales did not only suffer flooding, but the flooding of red mud. According to CCOS’s Benito Molino: “With the rain that poured in our province, flooding was highly possible, but the volume of red mud is a different case. We think nickel laterite may have mixed with the waters that flood parts of the province now. This is the second time that we experienced this, the first time was in July when some of the dams of mining companies were destroyed and flooded our rivers. We’ve had these kinds of problems since mining started in 2011” (Human Rights Online, October 25, 2015).


Seven residents died in those “head-high floods,” animals were killed, farmlands destroyed (Rappler.com, February 10, 2016). Benguet Corp. denied that the mines had anything to do with the floods (Manila Standard, October 28, 2015).


2016: Mining vs community
After the 2015 floods, residents banded together against mining companies in Zambales. The people blocked ZDMC trucks passing through the national highway. Note that in 2014 and 2015, the mining companies had an agreement with local governments to build roads that lead to their sites; the mining companies did not build roads and continued to use the national highway (Rappler.com, February 10, 2016).


Zambales Diversified would sue members of the community for blocking their trucks. Community barricades against mining companies would continue (Bulatlat.com, March 2, 2016).


In March 2016, the Center for Environmental Concerns (CEC) released the results of its fact-finding mission done after the October 2015 flooding, and declared that “the ecological destruction caused by the decade-long nickel mining in Sta. Cruz aggravates the impact of natural calamities” (Bulatlat.com, March 4, 2016).


In May 2016, COSS filed for a writ of kalikasan against Benguet Corp, Eramen, LNL, and Zambales Diversified, plus one other mine (Manila Times, May 21, 2016). On June 21, 2016, the Supreme Court issued the writ of kalikasan, ordering the affected mining firms to prove that they were not hurting the environment (Rappler.com, June 21, 2016).


In July 2016, the new DENR led by Secretary Gina Lopez suspended the licenses of Benguet Corp and Zambales Diversified.


In February 2017, the two mines plus LNL and Eramen became part of the list of mines ordered closed by the DENR.


Historic end
A reading of this history from readily available sources, allows one to make sense of why these four Zambales mines have been ordered closed by the DENR. And while pro-mining advocates insist on science to prove the adverse effects of mines on the environment, that must be balanced out with the history of protest against these mines, based as this is on the science of environmental degradation and the lives of people who have suffered in the hands of these mines.


Too, if these companies were as responsible as they insist they are, there would be no need for spin or propaganda on the “good” they are doing. They themselves would be transparent. That they are not, is absolutely telling.

[obelisk]

I hope na sakto dyod ni ang rule-breakers dyod ning mga mining companies na gipang revoke ang permit. Sila ray nadatu ana. At the cost na guba.on atong natural resources.

[jntio]

oras na gyud pud nila ma undang

[RayGunz]

Utro sab nang DENR... corruption alley sab na

[lstorya]

Biggest factor ani kay si GMA. I remember during her time she signed an agreement or a low or something which makes it easier for foreign companies to do mining here in the Phils with very little restriction from the government. But I believe iya tumong ato is to give more jobs, but as they always say, "The road to hell is paved with good intentions.".

[firestarter]

Biggest factor ani kay si GMA. I remember during her time she signed an agreement or a low or something which makes it easier for foreign companies to do mining here in the Phils with very little restriction from the government. But I believe iya tumong ato is to give more jobs, but as they always say, "The road to hell is paved with good intentions.".

Mas ni grabi daw panahon ni Noynoy ug Roxas.

Weak states like ours impotent to regulate mining [/B]
BY RIGOBERTO D. TIGLAO ON

FEBRUARY 20, 2017 OPINION ON PAGE ONE



WE have to face reality, and review the past.

We have had, and continue to have such a weak state—its bureaucracy ridden with corruption and inefficiency—that we have been, and will be at least in the next decade unable to regulate mining. Without a strong state, unscrupulous miners, and there are many, will wreak havoc on our environment, and steal—yes, steal as I discuss below—our gold and other natural resources.

We should just leave it for future generations to benefit from the wealth of gold, nickel, and other mineral resources beneath our territory, when our state is strong enough to really regulate all, not just a few mining firms.

Mining, like logging, has unique, obvious features that make it extremely difficult for the state to regulate: Mines and logging operations are located in the hinterlands, where state authority, especially its police and military, are the weakest. This is because we don’t have the roads going to those areas, nor sufficient government personnel and transport equipment such as helicopters—as Australia and Canada have—to regularly patrol mining sites.

Do you think an employee of the Department of the Environment and National Resources’ regional office will really be able to monitor and make sure that all the gold on Mt. Diwalwal in Compostela Valley are sold to government, as required by law?

Notice that the Communist Party and its noisy propaganda arms have been mum over the debate on the mining industry. Logging used to be the New People’s Army’s major source of “revolutionary taxes”. When many of these folded up because of the government-declared moratorium on new logging permits, the mining firms have become the NPA’s biggest moneymaker. It is not a coincidence that mining sites like Surigao, Northern Samar, and the Compostela Valley in Davao are the main guerrilla fronts of the NPA, where they are even able to amass company formations.


A QUIRK: Protesters in 2012 against Philex Mining’s Padcal disaster; right, Environment Secretary Regina Lopez.

What “selective logging” was to loggers is now “responsible mining” for mining firms. Both merely allow the steady destruction of our environment.

Logging and mining
The analogy between logging and mining isn’t mine. It was President Duterte who first articulated the similarity between these two industries that plunder our natural resources when he pointed out back in August: “Mining is a sunset industry, almost. Including logging. It’s not even sunset time, it’s already too late.”

These two industries, often perceived as environmentally destructive, are sources of economic growth the country can do away with, added the President. “Ika nga (As they say), if there are 24 hours in one day, logging is on its 25th hour. Tapos na ‘yan (It is finished). We cannot have this,” he said.

A silly, old argument of pro-mining advocates is that we rely on products of mining all the time, and our iPads and iPhones are almost 100 percent built from materials mined from the earth; therefore we have to support the local mining industry. This is of course the same old argument of loggers, that we can’t live without furniture, desks, even toothpicks and matches.

It doesn’t need a second to figure out the fallacy of the mining argument. Of course we need materials dug from the earth, and civilization’s eras are even labeled from these stuff: the Iron Age and the Bronze Age.

But haven’t you guys heard of the global market? We buy these materials from countries which have been able to mine them while keeping their environment intact, with Australia, Canada, China, and the US now the world’s biggest producers of iron ore and gold. We don’t even process the gold, nickel, and aluminum that are used as materials for our cell phones.

Will we ever suffer from a deliberate embargo by these nations of their output of metals? Probably, but that would mean a total global economic conflagration, as most countries don’t mine and process these materials. Japan and all of the Asian Tigers—South Korea, Singapore, Taiwan, and Hong Kong—of course had practically no mining industries, yet became industrialized countries in a generation.

The nature of a country’s state is important. I agree with the Netherlands’ legalization of pot and even prostitution, but in the Philippines with a weak state and with millions impoverished, it will only mean the legalization of the biggest crime syndicates.

Very bad cases
There are several very bad cases that indisputably demonstrate that because we have a weak state, it will be impossible to regulate the mining industry.

First, investigative reports by the British news agency, Reuters, and by the Asian Sentinel, a region-wide news site that has won journalism awards, exposed in 2012 the massive smuggling of gold and other mineral resources by Chinese mining firms in the Philippines. A comparison of Philippine data on shipments of gold to Hong Kong and those by Hong Kong authorities showed that only 3 percent of gold produced in the country were sold, as required by law, to the Bangko Sentral ng Pilipinas. The remaining 98 percent were smuggled to Hong Kong and then to the Chinese mainland.

An indication of the miners’ hold on President Aquino’s administration and the media as well, no government investigation of the allegations was made, and media hardly reported the articles.

Second, even mining firms you would expect to be so careful, and with the finances to be so, in complying with environmental laws have had episodes of severely damaging the environment:

In 1996, the Canadian firm Marcopper Mining Corp.’s copper mine resulted in the largest mining disaster in the country, when its toxic mine waste spilled into the Makulapnit-Boac Rivers in Marinduque, poisoning it.

In 2012, the Padcal mine in Benguet province of Philex Mining, a stock market-listed firm controlled by the Indonesian magnate Anthoni Salim, spilled 20.6 million tons of toxic tailings into water bodies. In terms of volume, the spill though less toxic was 10 times larger than the Marcopper disaster, according to the Environmental Justice Atlas.

(It was Philex Mining chairman Manuel Pangilinan who in March 2012 made a scene at a forum when he called Lopez “a liar” for saying that mining sites are ugly, and implied that his firm’s Padcal mine site was a nice place to live in. The Padcal mine disaster occurred a few months later in August.)


Philex chairman Pangilinan in March 2012 telling Lopez (foreground, back to camera) to her face that she is a liar. SCREEN CAPTURE OF VIDEO

If these firms couldn’t comply with regulations to protect the environment, what would you expect of the smaller, less capitalized firms, especially those operating in the country’s hinterlands?

Third, a number of mining firms have violated the Constitution’s 40 percent limit on foreign ownership. Can you expect them to comply with the regulations of a mere department? Little discussed is the fact that probably two-thirds of the country’s mining firms now plotting to remove Environment Secretary Regina “Gina” Lopez are owned by foreigners from opposite sides of the globe, North America and China.

In 2014, the Supreme Court itself issued a decision that found three mining firms which had claimed to be majority-owned by Filipinos were actually majority- owned by a Canadian firm, MBMI Resources, Inc.: Narra Nickel Mining and Development Corp., Tesoro Mining and Development Inc., and McArthur Mining. MBMI used a corporate layering scheme to hide the fact that its ownership of the three firms was at least 60 percent.

Layering scheme
This is the same kind of corporate layering scheme used by Philex Mining, the biggest mining firm in the country. Through several intermediate firms, the Indonesian tycoon actually owns 44 percent of Philex Mining. (Details in my book Colossal Deception: How Foreigners Control our Telecoms Sector, available in local bookstores as well in amazon.com.)

But the illegal foreign ownership of the four mining firms was disclosed only because of a court suit brought against them by a Filipino-owned competitor that wanted to get its hands on the mining rights that the Department of Environment and Natural Resources (DENR) had awarded them.

How many more firms would be exposed as foreign controlled, in violation of the Constitution, if court suits were brought against them, or if the DENR also audited their ownership? I suspect many of the new mining firms with Chinese equity (even names!) are really controlled by them, with their purported Filipino partners —a few even former government officials—being mere dummies.

Just as we have a very unorthodox President willing to take on the ruling elite, we are lucky that he appointed a probably more unorthodox person as environment secretary, Lopez.

Only a person with Lopez’s unique background—a missionary of the meditation-social service cult Ananda Marga (“Path of Bliss”) for over 20 years that included 11 years in the most squalid conditions in Africa—could be not only so detached from the elites of the mining industry, but also devoted to saving the environment.

Such a quirk of fate for a weak state to have an island of strength in Secretary Lopez. Duterte appointed her to the post on impulse, probably getting bored when Lopez lectured him on environmental concerns when she visited him in Davao right after the elections, and told her to just shut up and head the DENR. That is certainly lucky for this unlucky country.

79% of gold mined in PH smuggled to HK: $4.2B or P200B from 2005-2015 20
BY RIGOBERTO D. TIGLAO ON FEBRUARY 22, 2017 OPINION ON PAGE ONE


Mostly during previous BS Aquino regime
THE mining industry’s claims of its contribution to the economy aren’t all correct, among other reasons, because of one important phenomenon: There has been massive smuggling of gold not only because of a corrupt bureaucracy, but because our borders in Mindanao, a major mining area, are so porous.

In short, the country’s precious metal gold, is being stolen, and this is possible because we are a weak state, we are unable to stop it. That’s the core problem we face in the mining industry.

According to data from UN Comtrade, or the United Nations International Trade Statistics Database, Hong Kong reported that $5.3 billion of gold were imported from the Philippines from 2005 to 2015. The Philippines though reported only $1.1 billion exported to the territory in the same period.


MUCH OF THEIR OUTPUT SMUGGLED TO HONG KONG: Child miners pan for gold in Mt. Diwalwal in Mindanao, innocently using poisonous mercury and cyanide.

The discrepancy of $4.2 billion, or 79 percent of gold value reported by Hong Kong, approximates what was smuggled out of the Philippines. In peso terms, this amounted to P200 billion. The bulk of this smuggling, or 86 percent, occurred during President Aquino’s term.

(See technical note below for an explanation on how these figures were derived from the UN data.)


Gold smuggling surged during Aquino administration. Computed from UN Comtrade Data

The data show that gold smuggling started only in 2005, but rose to huge amounts during the administration of former President Aquino, when more than two dozen Chinese companies rushed into the gold mining industry in the country. Aquino’s Liberal Party and its 2016 candidate Mar Roxas were known to be close to several miners, and were very supportive of the mining industry.

During the 2016 election campaign, Roxas used a lot of the helicopters and small planes of Eric Gutierrez, the owner of San Roque Metals (SRMI), one of the largest mining firms in the country. Congressman Edgar Erice, the LP spokesman, was also for a time SRMI’s chairman.

Because of the huge smuggling, gold had fast become one of Hong Kong’s biggest imports from the Philippines, accounting for 11 percent of its total gold imports from 2011 to 2015.

A November 2012 investigative piece in the region-wide news site Asian Sentinel entitled “China’s Filipino Gold Rush,” reported:

“A vast and growing river of gold, much of it illegal, is being mined in the Philippines by Chinese companies and is pouring into Hong Kong before most of it is transshipped into China. Chinese mining companies, many of them operating illegally, have been exporting gold, nickel and other precious minerals out through the island country’s porous coastal ports, where there are no customs officials and plenty of bribable officials to turn their eyes the other way.”

The British news agency Reuters earlier, in August 2012, in an article entitled “Philippines’ black market is China’s golden connection,” reported: “Traders and officials say it looks like much of the gold is going to Hong Kong, the main conduit for gold flows into China.”

The Reuters article also pointed out: “Hong Kong’s top source of gold imports from 2005 to 2010 was the Philippines, official data from the Chinese territory shows…Official statistics in the Philippines, reflecting legal exports, show gold exports to Hong Kong in 2010 and 2011 at just around 3 percent of the total volume recorded by Hong Kong authorities.”

The Reuters and Asian Sentinel reports were ignored by the Aquino government, and no investigation was ordered. The UN Comtrade data show that from $590 million in 2012, smuggled gold even increased to $716 million the next year.

The Bangko Sentral ng Pilipinas requires that 60 percent of gold export proceeds be sold to it, for the foreign exchange to be part of our international reserves. With $4.2 billion smuggled, and therefore not sold to the BSP, the country lost about $2.5 billion in foregone foreign exchange.

Maybe even worse, gold sales are imposed a 5 percent withholding tax and a 2 percent excise tax for a total of 7 percent in taxes. With P222 billion smuggled and therefore unreported, government lost P14 billion in foregone taxes.

The mining industry spokesmen have been claiming that it is small miners, especially those in Mount Diwalwal in Compostela Valley in Mindanao, that have been smuggling the gold.

Sources, however, explained that such small miners—mostly poor and illiterate—sell their gold to traders, who then turn these over to Chinese-affiliated firms which have the connections to ship these to Hong Kong. A significant part of the smuggled gold is shipped to Hong Kong through our ports, but undervalued, with the connivance of corrupt customs officials.

The mammoth smuggling of gold together with Duterte’s clampdown, through his determined environment and natural resources secretary Gina Lopez, on erring mining firms is worrying.

The stakes are so huge that there are now billions of reasons for removing Duterte as early as possible, by hook or by crook.

Technical note
The estimates on gold smuggling in this column are based on data from the UN Comtrade, specifically those on the trade in gold between the Philippines and Hong Kong (international product code 710.

UN Comtrade provides two sets of data. The first set has the value of gold imports from the Philippines, as reported by Hong Kong authorities. The second set of data has the value of gold exports to Hong Kong as reported independently by our government. Imports by mainland China of gold from the Philippines have been insignificant.

To compare the two sets of data, economists use various formulas, the simplest of which involves reducing the import value by 10 percent to account for the cost of freight, insurance and other shipment costs. The difference between the reported value of Hong Kong’s gold imports, less freight and insurance and other costs, and the Philippine reports of its exports to Hong Kong represents the estimates of smuggled, i.e., unreported gold. While certainly not 100-percent accurate, because of time lags in reporting, economists use this method to approximate the scale of smuggling between the two countries.

[brownie]

Well im very familiar with this since im into it but in a very super small scale it's not even worth mentioning, by being a middleman or sort of. Chinese got it big time for coal and that's its main target. Gold, copper and even nickel were just cherry toppings. Even our own biga pit near sugod was the coal center of visayas back then but fronted a toxic wastage bin and the sad thing is that the denr was involved with it for quite a long time already until one of the business leaders of that corporation left/died. We ask why? Bribery. That man is the reason why denr was covering the whole corp for years.