Mining mayhem hits the Philippines

Tragedy, taxes and tension are threatening the mega-millions invested by Canadian companies lured to the Philippines to hunt for a treasure trove of minerals.
Last week, the Zamboanga del Norte provincial government issued an ordinance banning open-pit mining in the province, which would take effect on Nov. 6. This law gives existing operations such as Canadian firm TVI Pacific Inc.’s Canatuan project one year to close shop.
Mount Canatuan is located east of the town of Siocon, Zamboanga del Norte, on the island of Mindanao, approximately 800 km south of Manila. The peak of this mountain is the ‘sacred altar’ to the 2,000-strong Subanon tribe.
It is here that Calgary-based TVI Pacific was developing its project for the last seven years looking to extricate 182,951 ounces of gold, 6.99 million ounces of silver, 93.8 million pounds of copper and 68.4 million pounds of zinc.
Despite heavy local opposition, that even saw the tribe members travel to Canada to appeal to local politicians, TVI soldiered on company and was considered by many as a ‘role model’ of responsible and environment-sensitive mining while winning awards for environment, safety and labor-friendly policies.
Now its future is uncertain.
TVI Pacific said it would challenge the local ordinance in court through local affiliate TVI Resources Development Philippines Inc.
The Canadian Embassy in the Philippines said it disappointed over Zamboanga del Norte’s passage of an ordinance banning open-pit mining, saying this runs counter to what the national government wants to do with the local mining industry.
“We are discouraged that our mining investments are being frustrated. (What happened recently is) not within the jurisdiction of the party taking these actions,” Canadian Ambassador Christopher Thornley said.
He said that Canada was a “responsible” mining country, and that Canadian mining companies follow a stringent set of rules, both in their home country and overseas, including the Philippines.
Thornley said that despite the setback, Canadian mining firms remained keen on investing in the Philippines.
“I don’t think anybody is considering pulling out at this stage…They’ll go where the minerals are. It’s up to the government to resolve the issues because there are other countries that also have mineral resources and may be easier to operate in,” he said.
Canadian Chamber of Commerce of the Philippines president Julian Paynesaid that despite the setback, Canadian mining firms remained keen on investing in the Philippines.
The Chamber of Mines of the Philippines criticized the local ordinance.
“We appeal to our political leaders to stop penalizing legitimate and responsible enterprises and stop believing false and anti-development propaganda disguised in the name of the environment or ancestral domain,” Rocky G. Dimaculangan, Chamber of Mines of the Philippines vice-president for communications, said in an earlier statement.
Before the local authorities drop the open-pit mining bombshell, Manila looking to boost its coffers announced possible plans to impose new mining taxes: a 5% royalty on atop a 2% excise tax from mining firms’ gross sales.
Two weeks ago, The Filipino Post reported that Canadian mining giant, Ivanhoe, abandoned its project on Tablas Island after continued local opposition against its proposal.
Ivanhoe’s departure sends a signal to the Canadian mining industry that Philippines may not be the best place to do business, said a Vancouver-based analyst.
“The company has spent millions on this project but in the long run if you do not get local support, this may have been the best thing to do,” he told the Filipino Post.
This was followed by a plan by Manila to allowing mining firms to hire private armies to protect their interests.
According to Filipino human rights organizations, six anti-mining advocates have been killed this year in the Philippines, and 33 environmental activists have been killed since 2001. None of the 33 cases of killings have been resolved to date. The most recent victim gunned down last October 17 was Fr. Fausto Tentorio, an Italian missionary who advocated for indigenous people in Mindanao as they faced violations of their rights by mining companies.
At Press Time, police were searching for three South Korean men who have been kidnapped in Lanao del Sur province, an area home to several armed groups. It is believed they were in the area scouting for mining opportunities.
Philippine Agriculture Secretary, Proceso Alcala, says the continuing violence on Mindanao island is scaring off foreign investors and hurting the government’s efforts to promote the region.
Manila last month approved a military proposal to use private armies in securing mining sites following the attack of three mineral extraction firms in Claver town, Surigao del Norte by members of the Communist New People’s Army recently.
Communist rebels have been fighting the government since the late 1960s, making the movement one of the longest-running leftist insurgencies in Asia. It entered negotiations with the government in 1987.
Philippines has vast amounts of gold, nickel, copper and other valuable minerals. The government estimates the Philippines has 83 billion tonnes of mineral ore deposits.
The country’s estimated gold ore reserves of four billion tonnes is the world’s third largest, its 7.9 billion tonnes of copper the fourth largest and the 815 million tonnes of nickel ore the fifth biggest in the world, it says.It said the country’s mineral reserves are estimated to be worth about $800 billion, and the industry could raise about $2.2 billion annually, enough to wipe out the country’s fiscal deficit.
This has attracted many Canadian companies to the Philippines who hold dozens of permits. They include Altai Resources Inc, Canada Resources Corporation, Crazy Horse Resources Inc, MBMI Resources Inc, Metallum Resources Inc, Mindoro Resources Ltd, Panoro Minerals Ltd, Philex Gold Inc, Philippine Metals Inc, Rugby Mining Ltd, and Tiger International Resources Ltd, and 6 Toronto Stock Exchange mining companies with 28 properties in the Philippines, namely, CGA Mining Ltd, Crew Gold Corporation, Medusa Mining Ltd, Oceana Gold Corporation, Olympus Pacific Minerals Inc, TVI Pacific Inc.
Mining opponents have been highly critical of Canadian investment in the Philippine mining sector saying it aids in alleged human rights violations.