By Janina C. Lim , Reporter

Big miners confident audit will vindicate them

Posted on September 27, 2016

THE Department of Environment and Natural Resources (DENR) is set to release today the results of its mine audit, with miners positive about the long-term impact of stricter environmental standards, even as uncertainty over future suspensions hangs over the industry, which is the world’s top nickel exporter.

In an open letter to President Rodrigo R. Duterte published on Monday, the Chamber of Mines of the Philippines (CoMP) said that the administration’s push to raise environmental standards is expected to “establish a stable business climate by allowing only responsible miners to operate in the country.”

The big miners also expressed optimism that the audit results will be in their favor.

“We are still fairly confident that it would be positive for us. Based on (the) audit team’s visit, there were no serious concerns raised with us,” said Francis G. Ballesteros, Jr., head of the Public and Regulatory Affairs at the county’s top gold producer, Philex Mining Corp., in a phone interview.

Dante R. Bravo, president of Global Ferronickel Holdings, Inc., the second largest nickel miner by output, said that the company is confident it will receive an endorsement from the regulator because it continues to comply with government requirements on the environment, safety and health, social development, and tenement maintenance.

Asked if the report will remove an element of uncertainty hanging over the industry, Mr. Bravo said: “Hopefully. But we cannot rejoice when some members of the industry are going to be hit as that would create a negative sentiment within the industry.”

Suspension for mines would translate to displaced employees, discontinuation of social development efforts at the local level, and a halt in investment, among others, according to Mr. Bravo.

For one analyst, the ongoing crackdown against irresponsible mining has been beneficial for the big stakeholders.

“Actually the big miners, like PX (Philex Mining) and NIKL (Nickel Asia Corp.), especially, benefited from the pronouncement. More nickel mines closing means more pressure to supply which may jack up prices. So investors fled to the safer mining companies,” said Ralph Christian G. Bodollo, equity research analyst at RCBC Securities, Inc., in a text message.

With the DENR signaling more mine suspensions, Mr. Bodollo noted that “surprises are possible, and hence tension may exist for miners and investors alike.”

GFNi and the top nickel supplier Nickel Asia, said that they have not laid out business plans in connection with the anticipated results.

So far, the Environment Department has halted 10 mine operations, eight of which account for 8% of the country’s nickel output. The department, in a Sept. 21 briefing, said at least 12 more mines could face suspension.

In addition, Environment Undersecretary Leo L. Jasareno, who heads the audit team, said in a phone interview that the agency may also release the validated results of the responses of the four companies issued with show cause letters to explain why their environmental compliance certificate should not be revoked.

These companies are Sagittarius Mines, Inc., Century Communities, Inc., Semirara Mining and Power Corp., and Austral-Asia Link Mining Corp.

Semirara told the stock exchange on Sept. 20 that based on the report it requested from the regional office of the Environmental Management Bureau, the coal-producing firm’s Molave Expansion Project “shows full compliance to environmental laws.”

The COMP, in addition, warned of possible calls from industry for the Environment Department to conduct another round of audits if many fail in the social aspects of the examination, citing outside interference by organizations that are less than “impartial.”

“If we see that a lot of companies are found deficient in the social acceptability or community aspect, there might be call for another review,” said Ronald S. Recidoro, vice-president of the CoMP’s Legal & Policy Division in a phone interview on Monday.

In its open letter to the president, the CoMP noted that “the mine audit conducted was not totally impartial” with the inclusion of the anti-mining civil society organization Alyansa Tigil Mina (ATM) and their allied grassroots organizations.

Should the government conduct mine reviews in the future, the CoMP requested that the audit “be kept impartial, free from any bias, and only involving only DENR personnel and acknowledged experts in the fields relevant for the review.”

However, Environment Secretary Regina Paz L. Lopez stressed that the ATM does not have an anti-mining agenda but opposes “irresponsible mining” in particular.

She added in her text message that “all our decisions are based on sciences and not fanaticism.”

For his part, Francis G. Ballesteros said that the Environment department should make the original reports publicly available and accessible “in the spirit of transparency.”

Mr. Jasareno assured that the reports provided by the mine audit teams prior the validation done by the agency, will be accessible as it is part of due process.