COMMENTARY

Mining on a roll as foreign investments start coming in
P. Julian

MANILA – The world's biggest miner plans to dig deep into its pocket and invest US$1 billion in a Mindanao nickel project.

BHP Billiton plans to put its money on a nickel mine in the Pujada Peninsula at Mati, Davao Oriental. It will be a substantial boost to the US$700 million so far placed in the Philippines since the mining industry was revitalized in January 2004.

That was when the Supreme Court upheld a 1997 law allowing foreign mining companies to skip constitutional restrictions and invest in mineral resources.

This year, the Department of Environment and Natural Resources (DENR) expects investments in the mining sector to reach US$348 million.

In Davao alone, mining investments are on the upswing. The Mines Geosciences Bureau reports that mining investments in the region has almost doubled in just a year, from 14 mining companies that applied for exploration operations in 2005 to 26 firms last year.

Their total paid up capital of P799 million in 2006 was considerably higher than the paid up capital of P872 million the previous year.

The 26 firms will spend more than P291 million compared to the P192 million spent by the 14 companies in 2005.

Eight mining companies are doing ground exploration activities in Davao Oriental and Compostela Valley: Hall Mark Mining Corp., Davao Mining Corp., Southern Horizon Mining Corp., Jake Mining Corp., Bunawan Mining Corp., Philippine Mining Corp., Omega Resources Philippines Inc., and Alsons Development Corp.

Overall, mining investments nationwide are upbeat: the expansion of the HPAL facility in Coral Bay in Palawan would bring in about US$154 million; the continuing rehabilitation of the Carmen copper project in Cebu, US$97 million; and a gold project in Masbate, US$36 million.

Another US$23-million investment was expected from the construction of the base metal plant of TVI in Zamboanga del Norte and US$21 million from the construction and development of the Didipio copper-gold project in Nueva Vizcaya.

In the three years since the Supreme Court landmark decision, some US$694 million in foreign mining investments has been generated.

Environment Secretary Angelo Reyes expects the value of metallic and non-metallic minerals to grow to $1.385 billion this year, up from $1.282 billion in 2006. Mining’s share to total exports is expected to rise to 9% in 2007.

In 2006, the mining industry’s gross production was valued at P68.4 billion. Total exports of mineral and mineral products amounted to US$2.06 billion, while taxes, royalties and fees from mining reached P3.1 billion.

The Philippines has 18 medium to large-scale mines. There are 23 projects in the advanced stage and 41 others in a stage of exploration.

As a result, employment in mining rose to 141,000. About 3,000 new mining-related jobs will be generated this year on top of the 6,500 jobs created since 2004, the DENR proclaims.

Critics are not overly excited over that as well as the fast rate of mineral extraction by foreign firms, from US*800 million in 2005 to US$1.3 billion in 2006 to US$2 billion for 2007.

According to the Kalikasan Peoples Network for the Environment (Kalikasan PNE), a $4-billion class suit by the people of Papua New Guinea has been filed against BHP Billiton for dumping 80,000 tons of mine tailings filled with toxic heavy metals such as lead directly into the Fly and Ok Tedi rivers.

For two decades, the dumping ruined the livelihoods of the people, poisoned forests and contaminated river systems, according to Kalikasan PNE.

Anglo-American, the fourth largest mining company in the world, paid its South African laborers the world’s lowest wages and was named as one of the main toxic lead polluters in North America, Kalikasan said in a statement.

Anglo-American has mining operations in the Cordillera and Mindanao, the statement pointed out.

Reyes, admitting the mining road is “never easy,” expects to skirmish with critics over the adverse effects of the government’s mining policy especially after the reopening of the controversial Rapu-Rapu polymetallic mine in Albay last February.

Already, activists in three countries, including the Philippines, have protested the reopening of the large-scale – and controversial – mining project.

Pickets were held before offices of the ABN AMRO (an international bank in the Netherlands that is one of the high-profile investors behind the Rapu-Rapu mine project) in Amsterdam, Hong Kong and Makati. (Other major stakeholders are ANZ of Australia, KFSX of South Korea and Standard Chartered Bank of the United Kingdom.)

The Australian company Lafayette Mining Limited owns and operates the Rapu-rapu polymetallic mining project. In 2005, its commercial open-pit mining operations was blamed ofr two mine tailings spills that caused cyanide contamination and fish kills in the rivers and adjacent coastal areas.