Government News Analysis

Philippine mines – pits in a hole

More woes for Philippine mine operators as Department of the Environment and Natural Resources (DENR) Secretary, Gina Lopez, halts operations at three more mines, bringing the number of pit closures to 10 in the past six weeks.

And the impact of the closures is being felt beyond the archipelagos’ shores. The Philippines is the world’s largest extractor of nickel – the metal that has been the hardest hit by an industry-wide DENR audit that is evaluating the fitness of the country’s mining sector on grounds of safety, environmental impact and sustainability. Eight of the pits suspended are nickel mines.

News of the latest stop notices raised the price of nickel ore to US$11,030 a ton, its highest level in a year. And with other nickel operations under threat, the price could rise further. The audit which started in mid June is expected to be concluded by the end of this month.

The latest suspension orders – they run indefinitely – were issued against Mt Sinai Mining Exploration and Development Corp., and Emir Mineral Resources Corp. Both operations are located at Homonhon Island in Guiuan, Eastern Samar. Last year, Mt Sinai produced 50,000 tons of chromite; Emir produced 150,000 tons of nickel. The main market for both mines is China.

The Mt Sinai pit had closed earlier in the year following severe damage from 2013 super-typhoon, Haiyan, and a slump in metal prices. However, its failure to maintain the site secured it a place on the suspension list. Emir was found to have violated a number of environmental standards including siltation, neglect of reforestation and lack of drainage system.

Operations at a third mine, this one in Bulucan and run by Ore Asia Mining Development Corp., were abruptly halted when the company’s transport permit – allowing the haulage of ore from site to market – was withheld. Ore Asia – the Philippines’ sole working iron mine – had failed to acquire ISO 14001 certification, a DENR requirement for all mines. The company was also found to have caused silting in a nearby river.

The other seven mines which have fallen foul of the DENR are: BenguetCorp Nickel Mines Inc.; Eramen Minerals Inc.; LNL Archipelago Minerals Inc.; Zambales Diversified Metals Corp.; Berong Nickel; Citinickel, and Claver Minerals

Meanwhile, the embattled US$5.9 billion Tampakan copper-gold project, just north of General Santos City in Mindanao – believed to be the world’s largest copper-ore resource; an estimated 2.94 billion tons – could lose its environmental clearance certificate. The mine has been stalled since 2010. Lopez, a staunch anti-mining advocate, has given Tampakan managers, Saggitarius Mines Inc., one week to explain why its environmental mining permit should not be cancelled.

She has also cited Semirara Mining and Power Corp. for environmental violations including air and water pollution at its operation on Semirara Island, Antique. While the company will be expected to provide an explanation, it’s unlikely that the DENR will issue a suspension notice in Semirara’s case, given the country’s dependence on coal-fired power generation and the constant threat of outages.

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