With the number of mining firms under exploration concessions, gold, nickel and copper in the rocky mountains of Davao region continue to be up for grabs. But government earnings from the excise taxes paid by mining firms are small.

By MARILOU AGUIRRE-TUBURAN

Davao Today

DAVAO CITY, Philippines -- Anytime now, Malacañang will unveil its new mining policy, with a draft executive order aiming to increase taxes on mining firms and review existing contracts.

As Mindanao businessmen were quick to criticize the move saying this would hurt business, and Presidential spokesperson issuing a statement to allay these fears, just what is at stake for mining in the Davao region?

With the number of mining firms under exploration concessions, gold, nickel and copper in the mountains of Davao region continue to be up for grabs. But government earnings from the excise taxes paid by mining firms are small.

Apex Mining, one of only two mining firms in full operation in the region, contributed to government coffers only PHP 18.7 million (USD 0.44 million), in the first half of last year. The other firm, Holcim cement, was taxed even lesser, at PHP 1.2 million (USD 0.028 million) covering the same period.

Apex Mining has been mining the mountains of Maco town, Compostela Valley since the 1970s. It first ventured in copper mining but shifted to gold in the mid to late ‘70s when the prices of copper were decreasing while gold prices were soaring. In 2008, it was registered with the Board of Investments as a new producer of gold, silver bullion and copper concentrates with gold, silver, zinc and lead values on a non-pioneer status. All of its production is smelted in Switzerland.

In the first half of 2011, the company produced 424 Kilograms (Kg) of gold amounting to PHP 857,261,869 (USD 20,121,900) with an excise tax of PHP 16,524,917.21 (USD 387,878) or only 1.09 percent of the total amount. It produced 2,336.2o Kg of silver amounting to PHP 117,904,463 (USD 2,767,490) with an excise tax of PHP 2,231,050.15 (USD 52,367.9) or only 1.89 percent of the total amount.

Meanwhile, Holcim started in a tiny village of Holderbank, Canton Aargau in Switzerland in 1912. From the name Holderbank Financiere Glaris Limited, it changed its name to Holcim in 2001. It operates in more than 70 countries in the world supplying cement, crushed stone, sand and gravel, ready-mix concrete and asphalt. Its entry in the region more than a decade ago forced the closure of Hi Cement Corporation, Union Cement Corporation and Bacnotan Cement Corporation.

In Davao region, Holcim operates in Ilang village, this city and in Dawan, Davao Oriental. Its plant is capable of producing more than 1,500,000 bags of cement annually. Its quarry in Bunawan village is currently producing limestone and it has ship loading facility in its own wharf at Ilang village.

In 2011, Holcim produced 881,499.43 metric tons of limestone (a component of cement). It produced 17,183,730 bags of cement last year of which 12,589,620 were sold to the local market while 592,700 were sold to foreign markets such as Madrid, Palau, Singapore and Holland.

In the research presented by Maita Gomez of Bantay Kita during an International conference on mining held last month, the average share of mining industry to Davao region’s gross domestic regional product from 2001 to 2009 is only 3.97 percent while its average share to the country’s Gross Domestic Product is only 0.91 percent.

Davao City produces lime, limestone, earthfill, sand and gravel. Compostela Valley province produces gold, silver, lead-zinc ore, magnetite sand, limestone, silica, copper tailings, sand and gravel. Davao del Norte produces earthfill, sand and gravel. Davao Oriental produces ores of chromite, copper and manganese, as well as magnesite, pebbles, sand and gravel. And Davao del Sur produces earthfill, boulders, sand and gravel.

Based on the documents furnished by Mines and Geosciences Bureau to davaotoday.com, companies have been granted exploration permit (EP) and Mineral Production Sharing Agreement (MPSA).

In Davao del Sur, the Sagittarius Mines, Incorporated (Inc.) obtained an EP for gold, copper and silver in Kiblawan in 2008-2009 covering 9,597 hectares. In Davao del Norte, Holcim had an MPSA for limestone in Panabo City since 2002 to 2027 covering 5,248 hectares. In Davao City, Holcim has three MPSA for limestone which started as early as 1997 and ends as late as 2033 covering a total of 6,547 hectares. It also had an MPSA for shale covering 148 hectares.

In Compostela Valley province, Alsons Development (Devt.) and Investment Corporation (Corp.) has an MPSA for gold and copper in Manat, Nabunturan town. It started in 1997 and will end in 2022 covering 1,547 hectares. King Eagle Exploration and Mining Corp. has an MPSA for gold and silver in Boringot, Pantukan town in 2002-2007 covering 324 hectares. Nationwide Dev’t. Corp. has an MPSA for gold and silver in Pantukan town since 1992 to 2017 covering 1,656 hectares. Napnapan Mineral Resources, Inc. has an MPSA for gold, copper and silver in Pantukan town since 2010 to 2035 covering 4,921 hectares.

In Davao Oriental, among the firms include the Oro East Mining Corp., Inc. which has an MPSA for gold, among others, in the towns of Mati and Lupon since 2010 to 2035 covering 7,798 hectares. The Dabawenyo Mineral Corporation has an MPSA for molybdenum ore in the towns of Mati and Lupon since 2007 to 2031 covering 6,917 hectares. The same is true for the Phil. Youbang Mining International Corporation. Holcim has two MPSA for silica in Mati town which started as early as 1997 and will end as late as 2034 covering 166 hectares and 255 hectares, respectively. Patrick Mining and Devt. Corp. has an MPSA for nickel in Mati town since 2004 to 2029 covering 2,289 hectares. Galactica Mining and Devt. Corp. has an MPSA for nickel in the towns of Mati and San Isidro since 2005 to 2030 covering 2.337 hectares. (Marilou Aguirre-Tuburan/davaotoday.com)

Exploring a policy framework for mining

The government’s role is under increasing scrutiny, in the heels of a new mining policy that would decide the fate of large-scale mining and mining operations in the country.

By MARILOU AGUIRRE-TUBURAN

Davao Today

DAVAO CITY, Philippines -- If the Mines and Geosciences Bureau (MGB) would have its way, they would like to hire additional drillers, geologists and community relations officers. This, as a new mining bill proposes to “reorient” the bureau to become a scientific research institution that will explore and identify strategic mineral resources.

“It’s really not easy. We can’t even get technical personnel now because they consider the government salary a pittance. There’s a limitation on financial and availability of technical personnel,” mining engineer and lawyer Wilfredo Montano, chief of the Mine Management Division of the regional MGB, told davaotoday.com.

The government’s role is under increasing scrutiny, in the heels of a new mining policy that would decide the fate of large-scale mining and mining operations in the country.

Bayan Muna Representative Teddy Casiño authored a bill in Congress called the People’s Mining Bill (HB 4315). In a press briefing here, he presented the salient points of the bill in contrast to the controversial Philippine Mining Act of 1995 (Republic Act 7942).

Casiño said many problems “stem directly from the wrong policy framework of the mining industry.” He said the country’s current mining law is designed to meet the demands of international market rather than the local market. He added it has nothing to do with the country’s industrial programs and is very disadvantageous to the local communities and national government.

In a nutshell, RA 7942 or the Philippine Mining Act, which Casiño tags as the “sweetheart deal” of mining companies, grants 100 percent ownership to foreign mining companies and 100 percent remittance to their mother company. It allows these companies 25 years to operate that is renewable for another 25 years.

The People’s mining bill, on the other hand, is to “preserve the country’s mineral resources,” said Casiño. He added, mining should always be in consideration to the people and the environment as well as it should be domestic-oriented. The country’s own industry should primarily benefit from mining as he stressed that “the real value of mineral resources is that it’s a key ingredient in industry.”

Currently, the mining bill is being consolidated with two other versions, the Alternative Mining Bill and Alternative Minerals Management Bill.

Meanwhile, MGB’s Montano, said “it is okay” if they will be tasked to conduct exploration, “provided that there is enough funding because that has been our problem, that’s why we pass that to qualified private persons because our government has no funding for exploration.”

Montano said the simplest stage of exploration, the first stage, would amount to at least PHP 3 million (USD 70,125) per year for every 1,000-hectare area. “Exploration is a risky operation. There’s no assurance that it will hit,” he added.

Meanwhile, the MGB echoed the sentiments of the mining business sector when it was not invited in last month’s international conference on mining initiated by the Catholic Education Association of the Philippines and the Ateneo de Davao University (Addu).

“We were really disappointed. We were not given the opportunity to present our side,” Montano added.

Representatives from the Chamber of Mines (COM) were also not allowed. It issued a full-page paid advertisement in a national broadsheet, scoring the conference for its “bias.”

But, Jesuit priest Joel Tabora, Addu president, said during the forum, “We operate in academic freedom. Nobody outside the academe or this university has the right to determine our academic agenda.”

He added they are not against listening to the mining companies if only they don’t destroy the environment, including the people, streams, water resources and forests. “We have to get together to be able to convince our policy-makers what these people are about and that this is not acceptable to us. We are here to join our forces and resources together in defense of our environment and in defense of our people,” he said.

Bayan Muna’s Casiño said, “The message was echoed loud and clear, throughout the whole country, that the people of Mindanao are against destructive large-scale mining,” he said. (Marilou Aguirre-Tuburan/davaotoday.com)