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Government steps up mine crackdown

Posted on February 15, 2017

THE ENVIRONMENT DEPARTMENT yesterday turned up the heat on the country’s miners, announcing this time the cancellation of permits for 75 undeveloped mines nationwide.

A nickel mine site managed by Hinatuan Mining Corp., a subsidiary of Nickel Asia Corp.
In a press conference at the Department of Environment and Natural Resources (DENR) headquarters in Quezon City, Secretary Regina Paz L. Lopez said the government was cancelling mineral production sharing agreements (MPSA) of 37 projects in Mindanao, 11 in the Visayas and 27 in Luzon for being located in watersheds.

The latest 75 contracts, involving projects in exploration stage or otherwise not yet in production, are all in watershed zones and would threaten water supply if they were to proceed, according to Ms. Lopez, who told reporters: “You kill the watershed, you kill life.”

Yesterday’s move follows the department’s Feb. 2 announcement that it was cancelling the permits of 23 of the country’s 41 operational metal mines and suspending those of five others for various infractions. Fifteen of those cancelled then, Mr. Lopez has said, were operating in watersheds.

Four listed firms -- Benguet Corp.; Lepanto Mining Consolidated Corp.; Marcventures Holdings, Inc. and Nickel Asia Corp. -- said in separate disclosures yesterday that they have finally received the department’s order of cancellation or suspension.

Marcventures said it “shall file the necessary legal action to prevent implementation of the said order” affecting unit Marcventures Mining and Development Corp. while Nickel Asia said it was consulting its external lawyers on behalf of Hinatuan Mining Corp. and that it “will accordingly act based on their advice”.

Benguet said its unit, Benguetcorp Nickel Mines, Inc., will file a motion of reconsideration to “hold the execution of the final order,” while Lepanto said it “will immediately file a notice of appeal with the Office of the President” to lift its order of suspension.

Republic Act No. 7942, or the Mining Act of 1995, allows 60% foreign ownership under MPSAs and 100% under financial or technical assistance agreements.

There are 311 MPSAs, including those for the 41 operating mines, government data showed.

MPSAs cancelled yesterday included that for the $1.2-billion copper-gold project in Surigao del Norte of Philex Mining Corp. subsidiary Silangan Mindanao Mining Company, Inc., as well as for four tenements elsewhere in Mindanao of another Philex Mining unit, Philex Gold Philippines, Inc.

“While the DENR, as regulator, has the right, if not also the duty, to enforce faithfully all mining laws, and to act against erring mining companies, it must do so within the bounds of the Constitutionally mandated due process procedure,” Philex Mining said in a statement last night.

First Pacific Co. Ltd., which owns more than a quarter of PLDT, Inc., is the single biggest shareholder of Philex Mining. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

“Following the press conference, the ensuing confusion and uncertainty surrounding... Secretary Lopez’s pronouncements... has endangered the Silangan project, which is nearing its project implementation, by eroding investor confidence in the midst of a worrisome regulatory landscape that appears to disregard due process and interprets applicable laws as it wishes,” Philex Mining said of its Silangan project set to start production this year.

MPSA cancellations also hit Norway-based Intex Resources ASA’s $200-million nickel project on Mindoro island and King-king Mining Corp.’s $145-million copper-gold project in Compostela Valley that are scheduled to start production in 2018 and 2020, respectively.

Also scrapped was the permit for the planned $5.9-billion Tampakan copper-gold project of Sagittarius Mines, Inc. straddling Tampakan, South Cotabato; Columbio in Sultan Kudarat; Kiblawan in Davao del Sur; and Malungon in Sarangani. -- Janina C. Lim and Reuters