By Jonathan L. Mayuga & Cai U. Ordinario
The Chamber of Mines of the Philippines (COMP) warned that the value of the country’s metallic mineral production could go down by as much as 50 percent this year, due to the closure and suspension of 28 operating mines.
Ronald S. Recidoro, COMP vice president for legal and policy, said nickel is the country’s “best performer” and the closure of several large-scale nickel mines would significantly affect the performance of the metallic minerals sector.
“[The closure of mines] will impact not only on metallic production but also on exports, foreign currency earnings, and employment,” Recidoro said.
Based on the 2015 data of the COMP, the 28 mining companies account for about 51 percent of the production value for nickel.
Recidoro said the COMP is set to conduct a comprehensive study on the impact of the Department of Environment and Natural Resources’ (DENR) decision to shutter large-scale mines. The COMP official, however, noted that several large-scale mines remain operational after they have filed an appeal with the Office of the President.
“Some companies received the closure order on February 13 and they immediately filed an appeal. Under Executive Order (EO) 22, an appeal to the President automatically stays the execution of any order,” Recidoro said.
The COMP official made the pronouncement after the Mines and Geosciences Bureau (MGB) disclosed on Wednesday that Philippine metallic mineral-production value dropped by 8.4 percent to P100.56 billion last year, from P109.84 billion in 2015.
The MGB, an attached agency of the DENR, attributed the sector’s lackluster performance in 2016 to poor base metal price, the string of mine suspensions and the decision of some mines to temporarily suspend operations.
The agency, however, said the 2016 data only took into account the suspension of several mines. On February 2 Lopez announced the closure and suspension of a total of 28 large-scale mines, which mostly produce nickel. Data from the MGB showed that gold accounted for the lion’s share of the value of metallic minerals output last year at 44 percent, or P44.85 billion.
Of the total value of metals output last year, the share of nickel direct shipping ore, together with mixed nickel-cobalt sulfide, reached 37 percent, or P36.84 billion, followed by copper with 18 percent, or P17.76 billion.
The remaining 1 percent, or P1.11 billion, came from the consolidated output of silver, chromite and iron ore.
The P10.88-billion gain in the price of gold and silver was offset by the P16-billon decline in the production value of copper and nickel last year, according to the MGB.
Nickel direct shipping ore production volume and value alone, went down by 23 percent and 41 percent, respectively, from 32.07 million dry metric tons (DMT) valued at P36.60 billion in 2015 to 24.65 million DMT valued at P21.77 billion in 2016.
According to the MGB, of the 28 nickel mines, seven are currently suspended and four others temporarily stopped operations. Their combined output in 2014 reached about 5.23 million DMT valued at P8 billion.
The suspended nickel mines are Zambales Diversified Metals Corp., BenguetCorp Nickel Mines Inc., Eramen Minerals Inc. and LNL Archipelago Minerals Inc., all in Santa Cruz, Zambales; Berong Nickel Corp. (Berong Nickel Project); Citinickel Mines and Development Corp. (Toronto and Pulot Nickel Projects) in Palawan; and Claver Mineral Development Corp. (Tandawa Nickel Project) in Surigao del Norte.
Those that suspended operations are Minahang Bayan ng Mamamayan ng Dinagat Island Cooperative (Bel-at Nickel Project); Oriental Vision Mining Philippines Corp. (Palhi Nickel Project); Wellex Mining Corp. (Wellex Area II Nickel Mining Project); 4Sinosteel Philippines H.Y. Mining Corp. (H.Y. Nickel-Chromite Project). All four companies are operating on Dinagat Islands in Mindanao.
Major nickel producers, like Rio Tuba Nickel Mining Corp. in Palawan, Taganito Mining Corporation in Surigao Del Norte, Platinum Group Metals Corp. in Surigao del Norte, and SR Metals Inc. in Agusan del Norte, all incurred production setbacks, both in volume and value.
Canceled MPSAs
Canceled mineral production-sharing agreements (MPSAs) can be appealed to the President if the companies have exhausted their legal options under the law, according to the President’s chief legal counsel. In a phone patch interview with Malacañang reporters on Wednesday, the President’s chief legal counsel Salvador S. Panelo said mining firms can file motions for reconsideration.
“They have remedies under the law. They can file a motion for reconsideration fighting errors that they perceive to be and then if they are not clarified with their position on their motion for reconsideration, they can [appeal to] the office of the President,” Panelo said.
However, Panelo made an assurance that Environment Secretary Regina Paz L. Lopez observed due process in cancelling the 75 MPSAs. “The mining companies have been given due process by the DENR, otherwise, I don’t think it will arbitrarily close any mining company,” Panelo said.
Malacañang said in a statement that the DENR’s actions were consistent with Republic Act 7942, or the Philippine Mining Act of 1995, which calls on the government to preserve watersheds. On Tuesday Lopez said she canceled the 75 MPSAs to protect the country’s watersheds. The MPSAs covered 37 mining projects in Mindanao, 11 in the Visayas and 27 in Luzon.
She also canceled the Financial and/or Technical Assistance Agreement of the Tampakan Gold-Copper Project purportedly to remove its threat to freshwater sources in South Cotabato.