Shuley Mine wants PNPI execs cited for contempt

THE PHILIPPINE MINING INDUSTRY'S WEEKLY NEWSPAPER

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Saving Siana Mines: How Red5 plans to emerge from brink of collapse

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PRODUCTION prospects had been rosy at Greenstone Resources Corporation’s Siana Mines. A new managing di-rector had just been appointed in February as part of the company’s overall strategy to ramp up production.

For the first time, the company took direct control of mining activities. It replaced its old earthmoving contrac-

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Adnama mining operations paralyzed as Mamanwa tribesmen set up barricade

FISCAL OVERHAUL IS VITAL BUT HIKE SHOULD NOT SCARE OFF INVESTORS, IMF SAYS

THAT government will have its way in the impending overhaul of fiscal regimes in the mining sector is all but certain. What remains unclear is the specific range

of adjustments, or the system under which the increases would be implemented.

Mining Week examines a recent study by a team of ex-perts from the International Monetary Fund (IMF), which explores alternative mining fiscal regimes that seek to bal-ance the need between improving government revenues and maintaining an attractive investment climate for the country’s minerals sector. Updates are also provided on the status of the proposed tax reform. FULL STORY INSIDE

New mining tax regime: How much should the gov’t get?

Special Double Issue

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Ambassador StephenLillie:Extractingmaximum benefit

Gerard Brimo:Correcting lies and disinformation(Conclusion)

SEEING BEYOND THE PIT. Mining Week staffers Danilo V. Adorador III and Jocelyn B. Ferol join Greenstone Resources Corporation Managing Director Steve Nor-regaard (center) at the company’s Siana Mines open pit after visiting the tailing storage facility that cracked two months, prompting the Australian miner to halt milling operations and lay off hundreds of personnel. PHOTO BY ROEL N. CATOTO

tor and a minerals processing consulting and engineering firm was engaged in March. A new dewatering method

was also put in place to address perennial water management issue.

Things took a sudden turn on April 24, when a crack was discovered on the external wall of the compa-ny’s Tailings Storage Facility (TSF) 4. FULL STORY INSIDE

CA hears environment protection order vsillegal small-scale mines in CDO

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Philex-Silangan gold reserves worthUS $22 billion

Axed MGB exec seeks reinstatement, files admin charge vs Jasareno

FOR VIOLATING COURT ORDERS

FOR their alleged failure to comply with an existing court order, Pacific Nickel Philippines Inc. (PNPI) and its officials are being charged with indirect contempt of court by Nonoc nickel miner Shuley Mine Inc. (SMI).

Named respondents are PNPI president Evaristo M. Narvaez and two other officials.

FULL STORY INSIDE

SAYING he was denied of due process and his relief done arbitrarily, the region-al director of the 0Mines and Geosciences Bureau in Caraga (MGB-Caraga) is re-portedly mulling an admin-istrative case against MGB chief Leo L. Jasareno.

Sources close to Director Roger A. de Dios said he may file the case before the Civil Service Commission (CSC) on Thursday, June 20. The official declined to confirm or deny the report when Mining Week sought verification.

A draft complaint ob-tained by this paper from the same sources showed that De Dios has asked the commission to invalidate Jasareno’s May 14 order,

which stripped De Dios of all signing authorities. Al-though he was not trans-ferred to other regions, De Dios had earlier opined that his relief effectively re-moved him from office and can be construed as a form of constructive dismissal.

FULL STORY INSIDE

DE DIOS

JUNE 10-23, 2013

MainStory

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THAT government will have its way in the im-pending overhaul of

fiscal regimes in the mining sector is all but certain. What remains unclear is the spe-cific range of adjustments, or the system in which the increases would be imple-mented.

The Mining Act of 1995 provides specific schemes and rates for Mineral Produc-tion Sharing Agreements (MPSAs) outside minerals reservations, MPSAs within mineral reservations, and Financial and Technical As-sistance Agreements (FTA-As). Aside from the 2 percent excise tax, MPSAs within mineral reservations must pay a 5 percent royalty tax. Government takes a 50 per-cent cut for FTAAs, the only fiscal regime that allows 100 percent foreign ownership. In addition to the corporate income tax (CIT), mining companies pay customs du-ties and fees on imported capital equipment, plus a host of local taxes. (The Su-rigao City government, for example, collects an envi-ronmental fee of P25,000 for each ore-loading ship that

docks within its waters.

For the Aquino ad-ministration an across-t h e - b o a r d fiscal re-structuring is crucial to sustaining the country’s recent impressive eco-nomic performance. The reform in the min-erals sector has been a par-ticular focus such that when President Aquino issued Ex-ecutive Order 79 last year, he suspended the grant of new mineral agreements until Congress enacts a law im-proving government share from mining operations.

Mines and Geosciences Bureau chief Leo Jasareno and other government offi-cials have mentioned a uni-fied system which imposes a 7 percent tax on gross revenue (or 7 to 10 percent according to other media reports) plus 3 percent on windfall profits. There is no categorical statement from the Department of Finance (DoF) regarding these fig-

ures but presumably, this simplified fiscal regime would consolidate all cur-rent levies into one.

Because a single tax scheme may effectively remove royalty fees, it is presumed that the sharing system under this regime would incorporate some compensation mechanism for lands owned by Indig-enous Peoples (IPs). A De-cember 2012 statement by the DoF gave an assurance that under the new scheme, IPs “will continue to receive royalties if the mining area is located in an ancestral land or domain.”

“As I understand, the DoF

TEXT BY DANILO V. ADORADOR III, Editor

IN THE KNOWMining taxation: A look at IMF study on ideal rates, schemes

under Secretary (Cesar) Purisima is aiming for one, single tax. The proposed revenue sharing scheme will be based partly on the gross sales, which it is less sub-ject to discretion,” Director Jasareno told Mining Week in a phone interview.

Jasareno confirmed the range of 7 to 10 percent tax rate plus tax on windfall but did not elaborate, saying he would leave it to DoF to dis-close the final specific rates and schemes.

Nevertheless, the MGB director said that under the proposed adjustments, the government aims to collect as much as P10 billion annu-ally from the current level of P2 billion.

Another considerable factor in this proposal is the broader push on fiscal incen-tives reform which is likely to result in the removal, or at least reduction of, tax hol-idays that are deemed be-reft of valuable trade-offs. Meaning, these perks have not produced the ideal out-come for which they were introduced in the first place: to encourage more invest-ments in the mining sector.

In recent interviews, Puri-sima has indicated the gov-ernment’s effort to “strike a balance between gener-ating more revenue for the state and keeping the coun-try attractive to investors.”

Investment firms and credit rating agencies couldn’t agree more.

Global investment bank-ing and securities firm Gold-man Sachs last month said the passage of the mining reform bill would further bolster the country’s Foreign Direct Investments (FDI) and sustain its impressive eco-

TAXES, ROYALTEES AND FEES PAID BY THE MINING INDUSTRY

nomic growth. Sound pol-icies in the minerals sector are needed to fully unlock the country’s mineral poten-tials, it said.

Echoing the same assess-ment, Credit rating agency Moody’s Investors Service said that among all neces-sary fiscal improvements, the legislation related to the mining sector in partic-ular could provide a greater boost to government reve-nue. Moody’s is expected to upgrade the Philippines to investment grade anytime soon.

This so-called unified tax scheme that Purisima ap-pears to favor bears striking resemblance to the one that the International Monetary Fund (IMF) proposed last year. In a study titled “Re-form of Fiscal Regimes for Mining and Petroleum,” the IMF sought the adoption of a 7 percent single tax that would combine excise, roy-alty and other levies that mining companies currently pay.

Purisima had earlier praised the IMF study and

described it as “an important input.”

It is therefore instructive to explore the findings and recommendations of the IMF study and influence it may have on the govern-ment’s final position.

Q: Can the government just extend the royalty fees to mines outside mineral res-ervations as a way of raising taxes? Or why not simply in-crease the excise tax on min-erals?

IMF study: Simply ex-tending the royalty to mines outside a mineral reserva-tion or increasing the rate of the mineral excise would increase production-based levies and would make the fiscal regime unattractive for mining projects of low prof-itability.

Q: What is the ideal fiscal regime for future large-scale mining projects?

IMF Study: A modified version of the FTAA regime should be the only regime available for future large

The Philippines is considered to be the 5th most mineral-rich country in the world for gold, nickel, copper and chromite

worth over $840 billion, according to the Mines and Geosciences Bureau (MGB).

PRODUCTION-BASED LEVIES ON METALLIC MINERALS MINED IN A MINERAL RESERVATION

CONTRIBUTION OF THE MINING INDUSTRY 2007–2010

JUNE 10-23, 2013 3

If developed, the Tampakan project in South Cotabato would become one of the top 10 copper mines in the world. The gross production from the mine could be US$2billion per year, which would add an additional 1 percent of GDP per year to the size of the mining sector.

mining projects, as over-re-stricting foreign investment in the mining sector has likely held back investments in the mining sector. A mod-ified version is needed as the FTAA regime imposes a heavy burden on low-profit projects, as it requires a 50 percent government share. The current FTAA regime is not competitive internation-ally.

The major reform of the FTAA fiscal regime would be to replace the current version of the additional government share, which serves as a minimum tax, with a 10 percent surcharge on cash flow after the corpo-rate income tax but before financing. This would lower the government take on less

profitable projects and make the overall fiscal regime less regressive.

Q: What happens to the royalty fees and excise tax?

IMF study: The 5 percent royalty and the 2 percent ex-cise on mineral production should be combined into a single royalty that applies to mines inside and out of mineral reservations, with the combined royalty to be collected by the Bureau of Internal Revenue. This would ensure early revenue to the national government to be shared with local gov-ernments. Recognizing that the high royalty rate, partic-ularly when combined with other production-based

levies, would make the fis-cal regime uncompetitive, the mission proposes that the mining companies be allowed a tax credit against their income tax for the amount of royalty payment in excess of 5 percent.

Q: Does the mining sector need income tax holiday?

IMF study: The income tax holiday is not needed. Ex-perience in other countries shows that income tax hol-idays or tax exemptions are a particularly inefficient way to promote investment in new enterprises, which typ-ically are unprofitable in the early years and thus unlike-ly to benefit. The principal beneficiaries are more likely

to be those foot-loose en-terprises that seek low-cost labor, are profitable from the outset, and might not need-incentives.

Tax holidays are particu-larly inappropriate for min-ing companies, as it is the resource rents (the surplus value after all costs and normal returns have been accounted for) associated with mineral deposit in the ground, and not tax incen-tives, that attract invest-mentinto the mining sector. There is usually a gap be-tween the amount of invest-ment.

How about the other in-centives?

IMF study: The need to

rationalize Philippine’s tax incentives is widely recog-nized and long overdue. A serious effort is underway within the government and the Congress to harmonize-and rationalize incentives.

The House of Representa-tives passed H. No. 4935 in-August 2011. This bill would provide a 6-year income tax holiday for mining compa-nies that process minerals and export 70 percent of the output, followed by a 5 percent tax on gross income earned for the next 19 years, which would be paid in lieu of all national and local tax-es except the real property tax. Alternatively, registered mining companies could elect a 50 percent reduction in the corporate tax rate for a period of 25 years.

An alternative bill, pre-pared by DOF and which is being discussed within gov-ernment, would eliminate tax holidays. The mission would strongly recommend elimination of tax holidays, at a minimum, for mining and remove the granting of incentives from the Board of Investments.

Q: How to make LGU pay-outs faster?

IMF Study: To improve the procedures for transferring funds under this program and to foster local support for large-scale mining, Con-gress should enact a con-tinuous appropriation for the distribution of the LGUs share, and payments should be made to LGUs based on estimated amounts with adjustments when final amounts are known. A joint monitoring commission, with national and local rep-resentation, could be intro-duced to oversee the distri-

bution of revenues to LGUs.

Q: What is the ideal model for collecting the additional government share?

IMF study: The most promising alternative that retains a cash-flow based levy would be a cash flow surcharge, which could be known as the new addi-tional government share (NAGS). The tax base for the surcharge would be deter-mined by adding back de-preciation and interest and other financing charges to regular taxable income be-fore the loss carryover, and deducting any capital ex-penditure and the regular CIT.

This yields a tax base of net cash flow in the year after the regular income tax but before any financ-ing. Instead of permitting an annual uplift for losses carried forward, the sur-charge tax rate could be set sufficiently low to im-ply such compensation, or a simple uplift (investment allowance) could be added to the capital costs at the start. If taxable income for purposes of the surcharge is negative one year, the surcharge loss is carried for-ward to subsequent years so the surcharge would not be charged until the project has positive cash flow.

The mission considers a rate of surcharge on cash flow in the range of 10 per-cent to be appropriate. A rate at this level removes the need to specify uplift, as under the RRT (resource rent tax). The surcharge does give companies a choice in periods of high profits: invest more (and, thus, in-crease the tax base for the future) or pay extra tax.

B. PROFITABLE PROJECT

A. MARGINAL PROJECT

GOVERNMENT TAKE: SELECTED REGIMESInternational comparison.

Based on the current and IMF-recommended alternative regimes, the figures on the left show that the Philippines ensures a large government take comparable with countries like Zambia and Mongolia. The Zambian regime is tougher on account of a high royalty rate (recently increased for both copper and gold to 6 percent from 3 percent and 5 percent re-spectively) and an income tax which at the minimum is 30 percent. In Mongolia, the royalty is composed of a fixed rate of 5 percent plus an additional royalty that varies with prices. The government can also take equity participation in the project (assumed at 34 percent). Such regimes perform well on profitable projects, but are also highly onerous on mar-ginal investors. An untapped location like the Philippines would want to rank somewhat lower on this scale.

The other comparators tend to have more balanced fiscal regimes. Peru and Chile use a progressive royalty system in which rates increase gradually with changes in project operating margins. South Africa also applies a variable royalty calculated with a formula linked to operating margins and allows immediate deduction of capital expenditure in the calculation of chargeable income. In lieu of a royalty, the United States charges a state severance tax and Canada a two-tier mining tax—both on a measure of net profits. The Australian Mineral resource rent tax is included only for illustration purposes because in practice it will ap-ply exclusively to coal and iron ore projects. It does show however that resource rent tax is highly flexible—capturing more of the profitable project but putting a lower burden on the marginal investment. The new cash flow surcharge recommended by the mission brings the Philippines closer to these producers.

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JUNE 10-23, 2013 4

Red5 maps out resumption plansSAVING SIANA MINES

PRODUCTION prospects had been rosy at Green-stone Resources Corpo-

ration’s Siana Mines. A new managing director had just been appointed in Febru-ary as part of the company’s overall strategy to ramp up production.

For the first time, the com-pany took direct control of mining activities. It replaced its old earthmoving contrac-tor and a minerals processing consulting and engineering firm was engaged in March. A new dewatering method was also put in place to ad-dress perennial water man-agement issue.

Consequently, the Aus-tralian miner reported vast improvement in productivity the following month. It had $17.4 million dollars in the bank and 1,175 ounces in gold bullion as of April 5.

That all changed on April 24, when a crack was discov-ered on the external wall of the company’s Tailings Stor-age Facility (TSF) 4. Within two hours, milling operations were suspended, with the entire resources of the com-pany mobilized to conduct immediate mitigation mea-sures.

Rapid responseSteve Norregaard, the new

managing director, said com-pany resources were brought to bear to perform “rapid re-sponse projects” which took them five weeks to complete.

This entailed focusing on construction of a 900-me-ter containment bund wall, earth fillings where the crack occurred, and a diversion of Magpayang River which was 240 meters long and 20 me-ters wide.

Norregaard said the work was completed early this month at a cost of US$3.5 million, including the pur-chase of seven hectares of private lands and payment for crops.

He also made it clear that the TSF 4 issue had nothing to do with the waste rock dump facility, which was a subject of concern from Tubod Mayor Hemady R. Ar-cillas.

The mayor had earlier de-manded that the company make a written statement guaranteeing the safety of communities living below the waste facility. Norregaard said the facility has remained in stable condition.

StabilizedGreenstone’s mitigation

measures have stabilized TSF 4 and possible environmen-

tal risks have been mitigated, said Rene Gonzales, mining environment division chief of MGB-Caraga. Gonzales said he personally inspected the dam two days after Green-stone employees discovered a crack and found that the company had already put earth fillings on the crack, made a containment bund wall and diverted a river path.

He said such measures were enough to mitigate the effects of a possible spill, which, he stressed, did not occur.

Romeo Daludado, geology division chief of MGB-13 said the company told him the tension crack that occurred on the dam’s slope was 250 meters long and had two meters of land displacement.

Daludado said the tailings dam, which serves as catch-ment of wastes from the mill-ing processing plant “is very stable now.”

Originally owned and op-erated by Surigao Consoli-dated Mining Co., the Siana Mines are among the oldest in the country. It began com-mercial operations in the 30’s, closed down and then reopened after World War II, and shuttered again sever-al times in the succeeding years because of persistent occurrence of mine flood-ing and underground fire. Greenstone—a subsidiary of Australian-listed miner Red5 Limited—secured a permit to conduct exploration activ-ities in 2002. An Environmen-tal Compliance Certificate (ECC) was granted in April 2009 but production did not come until 2012 because of water management issues.

When it joined the produc-tion stream last year, Green-stone shipped 421.7 ounces of gold and 4,380.5 ounces of silver worth $829,083.37. It was poised to ship a total of 1,802 ounces of gold on the same day the TSF 4 crack was discovered.

LayoffThe sudden turn of events

has particularly been difficult for the company’s close to 400 personnel, said Adminis-trative Superintendent Rose F. Padilla. Of the 274 regular workers that were laid off last month, 227 were locally hired.

“Suddenly, we have hun-dreds of employees out of job at such a bad time be-cause it’s enrollment period,” Padilla told Mining Week. “It was unexpected and the events were so abrupt that it stunned everyone in the company.”

Padilla said Greenstone paid the laid off workers half of the 13-month bonus plus a month’s salary. They were also advised to avail of ben-efits like sick leave so that they can be paid while out of work.

The company also helped them find jobs in other min-ing projects in Surigao del Norte, she added.

Padilla clarified that the layoff was only temporary and had no effect on a reg-ular employees’ length of service.

“The laid off employees can go back to work when the company resumes op-erations,” she said, adding they are looking at six to 12 month to return to normal

operations.The company has retained

107 personnel — 11 Lumads, 74, regular employees and 22 temporary workers in their drilling site.

ResumptionNorregaard said the stop-

page is just temporary and they are working for a re-sumption of operations.

Despite assurance from MGB officials that TSF 4 has been stabilized, the compa-ny has no plans for its further usage.

He said the company is in discussion with its banker, Credit-Suisse, and is actively pursuing other funding initia-tives to secure financing for the construction of a brand new tailings dam. Greenstone is also looking for alternative sources to fund its operations in the next 12 months “until income can be derived from the recommencement of the milling operations.”

Because the construction of a new dam “would take time,” Norregaard said they will pursue short and medi-um term approaches to get the milling operations back on track and return the com-pany’s profitability.

In a June 13 report to the Australian Stock Exchange (ASX), Norregaard said the planned short and medium term solutions entail the use of geotextile bags, or thicken and filter the tailings to gen-erate a dry tailings product or alternatively, use a cemented paste fill.

“The short and medium term solutions have signif-icant positive solutions for an earlier recommencement operations at a lower capital cost,” he said.

Permit questionedJaybee Garganera, national

coordinator of Alyansa Tigil Mina (ATM), had earlier ques-tioned the MGB for granting

Greenstone the permits de-spite history of mine flood-ing and underground fire in Siana.

Garganera noted that an ECC was granted despite a prior scheduled Final Mine Rehabilitation and Decom-missioning Plan expected late May of the same year.

But MGB’s Gonzales refut-ed this, saying Suricon is not obliged to submit a decom-missioning and mine reha-bilitation plan since it is not covered by the Mining Act of 1995, having been created before the law was passed.

However, he admitted that the problematic TSF 4 was built on top of an old tailings dam.

According to Red5, the Si-ana gold project is designed to produce a minimum of 849,000 ounces of gold at a cash cost of $400 per ounce over a 10-year life, with possi-ble extensions under review. By Roel N. Catoto

1 23

1.CRACK. Greenstone Managing Di-rector Steve Norregaard shows to Mining Week the location of the crack on the slope of tailings dam. The crack is no longer visible as the company conducted earth fillings as part of multi-pronged mitigating measures to contain any mine waste, should it occur. 2. DIVERTED RIVER. A portion of Magpayang River in Barangay Siana, Tubod, Surigao del Norte is being diverted following the construction of containment bund wall, purposely to trap any spill from the tailings dam should it occur. 3. TAILINGS DAM. Mr. Norregaard points to Mining Week the crack where it occurred.

PHOTOS BY ROEL N. CATOTO

News Environment | Mines&Money

IN FOCUSy

Communities | Environment

JUNE 10-23, 2013 5

About 30 million hectares of land in the Philippines is deemed as pos-sible areas for metallic minerals. Of these, only a small percentage has been covered by present mining permits. Source: MGB

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CAGAYAN DE ORO CITY–The Court of Appeals (CA) continued hearing on June 19 the Temporary Environmen-tal Protection Order (Tepo) sought by civil society groups to compel government au-thorities to protect Cagayan de Oro from destructive min-ing practices.

Filed Bangon Kagay-an, Inc. (BKI), Save CDO Now Move-ment and other groups and private individuals on Febru-ary 13, the Tepo was seen as a strong community response in the wake of typhoon Sen-dong that struck Cagayan de Oro, Iligan and other parts of Northern Mindanao in 2011, killings thousands. Illegal log-ging and illegal small-scale mining have been blamed for the high number of deaths from the floods.

The respondents are the local government of Cagay-an de Oro led by now out-going mayor Vicente Emano, the Department of Environ-ment and Natural Resources (DENR) represented by Sec. Ramon Paje, including the agency’s Mine and Geosci-ences Bureau (MGB), and the mining companies allegedly operating in Iponan River—a major tributary that spans from Bukidnon province to Cagayan de Oro. They had been expected to present their side in the June 19 hear-ing.

The groups filed the peti-tions in response to the un-abated destruction of the Ip-onan River due to illegal and destructive mining practices through hydraulic mining lo-cal known as “plasher (which is a derived from the term ‘flusher’).”

Writs

CA hears environment protection order plea in CDOOn February 13, Associate

Justice Renato C. Francisco of the 22nd Division of CA ordered the Writ of Kalikasan and Continuing Mandamus against the respondents.

‘Not performing’BKI explained that the

Writ of Kalikasan is directed against the respondents for them to desist from allowing the operation of illegal activi-ties that are destructive to Ip-onan River and the surround-ing environment.

Meanwhile the Writ of Con-tinuing Mandamus is also directed against the respon-dents to compel them to ob-serve and enforce all existing environmental laws.

“So don’t wonder why MGB is performing well now-adays, it is their job, otherwise disobeying the order of the CA will make them liable for contempt,” BKI said in a state-ment, criticizing the bureau’s regional office for failing to do its job.

The group also explained that the Tepo sought to de-clare Iponan River and the surrounding environment as protected from all activities that may result to its further degradation.”

“Why temporary? This is to give mother earth enough time and space to breath, while we attempt to find the best means to proceed in harnessing our resources in a responsible and safe man-ner. A Tepo can lead to (Pepo (Permanent Environmental Protection Order) as the court may deem so,” the group add-ed.

RaidsPrior to the filing of the pe-

tition, there have been two major raids against alleged il-legal mining operators in the hinterland villages near Ip-

onan River. In February 2012, the provincial government of Misamis Oriental, in coordina-tion with MGB and military, conducted the raid in the jurisdiction of neighboring Opol town.

Opol is under the jurisdic-tion of Misamis Oriental prov-ince while Cagayan de Oro is a chartered City and its polit-ical jurisdictions is divided by the Iponan River.

In October 2012, author-ities and pro-environment groups also raided the illegal mining operations in an up-land village in Cagayan de Oro, where they apprehend-ed two Chinese nationals and “paddlocked” a barge-like machine that is said to sift sand and gravel but allegedly pointed also to mine gold de-posits from the river.

In April, the City Prose-cutors Office charged two mining companies for illegal mineral extraction after they allegedly failed to secure ex-ploration permits.

The erring companies were named as South Ocean Mining Corporation (SOMC) and the Philippine Long Sangda Mining Corporation (PLSMC). Both companies were only allowed to ex-tract sand and gravel on hinterland areas along the Iponan River but were found by MGB to have explored for gold.

Named respondents were PLSMC directors Johnry Lore-ja, Lucille Sy, Yuan Xue Song, Huang Ying Xiang, Janette Go Sy, Roberto Buniales, Mari-lou Alquizar, and Ivy Edong; SOMC president Peter Sy and ompany directors Dennis Chua, Delfin Milan, Minghui Yan, and Ping Shang.

MGB filed the case against SOMC in August 2012 and and PLSMC officials were charged in November 2012.

BY NEF LUCZONCorrespondent,Northern Mindanao

A barge-like platform used by illegal miners to extract gold and other minerals is seen at the Iponan River in this September 2012 aerial photo. MINDANEWS PHOTO BY FROILAN O. GALLARDO

Ilocos Sur ‘helpless’ vs illegal black sand mining THE illegal mining of black

sand in Ilocos Sur has placed coastal areas and commu-nities at risk of erosion, ac-cording to environmental advocates in the province as well as the Mines and Geosci-ences Bureau (MGB).

Illegal miners export the illegally extracted black sand, which contains iron and me-tallic minerals for making steel, out of the country.

Pro-environment groups have complained of the mat-ter to the Mines and Geo sci-

ences Bureau (MGB), whose geohazard mapping showed the coastal areas are vulnera-ble to wind and water erosion which makes sand mining a prohibited activity.

No less than MGB Direc-tor Leo Jasareno has said that black sand mining in Ilocos Sur remains illegal. In fact, Jasarno said MGB has ordered a blanket moratori-um on permits for processing black sand in the province.

Residents of Sta. Catalina, town has long complained of

subsidence—a gradual cav-ing in or sinking of an area of land—in their area. They said coastal erosion of up to 100 meters from the beaches has been observed,

“Through letters and pe-titions, we have appealed to President Benigno Aquino III to put a stop to the illegal activity,” said Melchor P. Ines, Ilocos Sur Collective Action for the Protection of the Envi-ronment (ISCAPE) convenor.

“Nothing is happening. We don’t know what to do to stop this,” he said.

Ines claimed mining com-panies continue to haul black sand from coastal areas and ship the commodity out of the country—likely a case of smuggling—while local offi-cials turn their heads the oth-er way around. The ISCAPE convenor alleged that some local officials are likely in connivance with the mining companies.

The illegal extraction of black sand along the rivers and beaches of Ilocos Re-gion has been going on since 2008, Ines noted. MW

Sumitomo to use own process for higher ore grade recovery

SUMITOMO Metal Mining Co. Ltd. (SMM) of Japan dis-closed early this month that it has developed a technology that extracts higher iron grade from nickel ore, which the company will use in its operations in Palawan.

In a disclosure to the local bourse, the company said it succeeded in raising the grade of iron extracted from tailings to 60 percent based on a review of the process for recover-ing nickel and cobalt using high pressure acid leach (HPAL). SMM holds majority stakes in nickel processing companies in Palawan and soon to be commissioned THPAL in Taganito, aganito High Press Acide

The tailings left by nickel and cobalt recovery in its Philip-pine operations contain iron in the form of hematite, Sumi-tomo Metal noted. But the grade of the hematite, however, is “low,” approximately 30 percent and 40 percent and cannot be used as raw material for iron and steel.

“SMM, has, however, through a review of the process after the leaching and recovery of nickel and cobalt using HPAL technology, succeeded in raising the grade of the iron in this tailing to approximately 60 percent, which is equivalent to normal iron ore,” the company said.

“When this technology is developed for commercial use, not only will it allow a more efficient utilization of resourc-es but it will also make a large contribution to reducing the amount of waste disposed of in landfills,” it added.

SMM currently produces nickel-cobalt mixed sulfides us-ing HPAL technology at its Coral Bay Nickel Corporation fa-cility in Palawan. MW

CORAL BAY N

ICKEL CORPO

RATION

JUNE 10-23, 2013 6

Shuley Mine wants PNPI execs cited for contempt

BRIEFLYAtok allocates$200M budget

Atok Big Wedge Co., Inc. said it is al-locating some $200 million to buy min-erals and exploration firms in Southeast Asia.

Atok president Jose Raymund Apos-tol said that among the company’s focus is on “worldwide exploration” opera-tion, and this would begin in the region.

“Once I see a project that’s worth investing for, it’s time to raise funds,” Apostol said, adding the company welcomes both pre-operating or explo-ration stage.

Atok currently has two whol-ly-owned subsidiaries namely, AB Stock Transfers Corp. and Tidemark Holdings Limited, a Hong Kong-based company that holds 25.92 percent of gas and oil exploration and production company Forum Energy plc. Mining museum mulled

CAMP John Hay may soon host an-other attraction in the form of a mining museum.

Former Ambassador Delia Albert presented at the John Hay Manage-ment Corporation (JHMC) has pro-posed plans for the construction of geopark and virtual museum inside Camp John Hay.

Arnel Casanova, Bases Conversion Development Authority (BCDA) presi-dent and chief executive officer, wel-comed the plan, saying “cultural and heritage conservation brings soul and spirit to Camp John Hay.”

Albert disclosed that the proposed virtual museum will house memora-bilia featuring the growth and devel-opment of Baguio that started with the mines.

Benguet posts P637-m net income

Benguet Corp. posted a net income of P637 million in 2012 as revenues reached P1.8 billion, sustaining its growth from the previous year.

The high profit margin was boosted by increased revenues from the nickel

operation contributing 61 percent and the gold operation accounting for 24 percent of the total, the company said in a disclosure to the Philippine Stock Exchange.

It said operating revenues in 2012 increased 83 percent to P1.8 billion from P994 million in 2011, supported by nickel operations.

Nickel operations, run by subsid-iary BenguetCorp Nickel Mines Inc., contributed P1.1 billion in 2012, rep-resenting an increase of 120 percent from P501 million in 2011.

Poverty and tougher envi goals

Governments must impose radical limits on everything from water use to greenhouse gases if they want to have any chance of ending global poverty, a group of scientists said.

States needed to tighten clean air laws, at least halve the amount of water drawn from river basins and start cut-ting some environmentally damaging pollution, all by 2030, they suggested.

“The stable functioning of Earth systems - including the atmosphere, oceans, forests, waterways, biodiver-sity and biogeochemical cycles - is a pre-requisite for a thriving global soci-ety,” the Australian-led team wrote in journal Nature early this month.

The report suggested setting a new aim of ending global poverty by 2030 - but said that would only be possible if states put more effort into preserving the planet while they drove for eco-nomic growth.

Global warming brought an in-creased risk of floods, droughts and heatwaves which in turn threatened food production and economic devel-opment.

The scientists said the existing U.N. guidelines for sustainable develop-ment, or economic growth that does not harm the environment, needed more stress on environmental protec-tion because of damage from a rising global population.

SecondFrontpage

FOR their alleged failure to comply with an existing court order, Pacific Nick-

el Philippines Inc. (PNPI) and its officials are being charged with indirect contempt of court by Nonoc nickel miner Shuley Mine Inc. (SMI).

Named respondents in the May 22 complaint are PNPI president Evaristo M. Narvaez; company chief security offi-cer Marlon L. Destajo and OIC resident manager Andres C. Oribe.

ViolationsSMI alleged that PNPI and

the respondent officials have violated—and continues to violate—an existing injunc-tion granted by Regional Trial Court Branch 29 on May 6, which restrained PNPI and its officers from impeding and preventing SMI from con-ducting mining and shipping operations, including the loading and unloading of its ships or barges at the port area in Nonoc Island.

The order also prohibited PNPI from taking any action that would hamper or pre-vent SMI and its personnel from performing their “rights, powers, and functions” based on SMI and PNPI’s Mines Op-erating Agreement (MOA).

But “undaunted by the rul-ings, orders and writs issued by the RTC-Surigao in the In-junction Case,” SMI said PNPI “resorted to other means to put a stop to petitioner’s min-ing operations.”

Because PNPI “violated the

Writ of Preliminary Injunction,” SMI said the company should “make complete restitution” for “all costs incurred and damages suffered as a conse-quence of their contumacious acts.”

DamagesFor this, SMI is seeking P5

million for compensatory damages; P100,000 in exem-plary damages; P100,000 in attorney’s fees and at least P100,000 in litigation ex-penses.

SMI noted that in an April 24 letter, PNPI had requested the MGB to suspend the issu-ance of OTPs and MOEPs in favor of petitioner and to stop the operations of petitioner.

“Thus, on respondent PNPI’s prodding, the MGB is-sued a Memorandum dated 7 May 2013, which directed (1) the denial of the issuance of OTPs and MOEPs in favor of petitioner, and (2) the sus-pension of petitioner’s min-ing operations in Nonoc,” the eight-page petition reads.

PNPI even “took it upon itself to implement the MGB Memorandum” when the agency suspended SMI’s operations, the company al-leged.

It said PNPI “deployed a considerable number of armed personnel in the con-tract area to block the ingress and egress of petitioner’s mining site and to physically put a stop to petitioner’s min-ing and shipping operations” on May 18.

PunishedIn particular, SMI said De-

stajo, PNPI’s head of security and resident manager Oribe, along with a “considerable” number of PNPI’s armed se-curity personnel, “entered petitioner’s contract area and attempted, several times, to stop the construction of pe-titioner’s guard post in the Duyangan Area.”

“Respondents, without just or lawful cause, violated the clear and unambiguous directives in the Order and corresponding Writ of Prelim-inary Injunction issued by the RTC—Surigao in the Injunc-tion Case. These constitute contumacious acts that clear-ly defy the lawful orders of this Honorable Court. Thus, respondents must be pun-ished and held accountable,” SMI said in its petition.

ComplexPNPI officials were not im-

mediately available for com-ment.

The Nonoc dispute is a complex government and corporate clash, which pitted SMI against its former partner, PNPI, with MGB and Depart-ment of Finance (DoF) seek-ing to stop mining in the is-land because it is supposedly onerous to the government.

It has already alarmed local

officials who are wary about the massive job loss in the island, where some 2,000 res-idents in three barangays are employed.

Mayor Ernesto T. Matugas has called on the MGB and other relevant government agencies to ensure that the mining operations in the is-land remain uninterrupted, noting that the locals’ liveli-hood was of paramount con-cern for the city government.

For its part, SMI said it will continue to exhaust all legal avenues to ensure that its rights are protected under its MOA with PNPI, which re-mains enforceable until April next year. The MOA, signed in 1999, was approved by MGB.

MGB Director Leo L. Jasare-no issued a stoppage order against SMI on May 10, de-spite a 2011 Temporary Re-straining Order (TRO) and recent court injunctions bar-ring the agency from imped-ing SMI’s mining and ship-ping operations.

MGB was merely following DoF Secretary Caesar Purisi-ma’s order to stop mining ac-tivities in Nonoc, Dir. Jasareno said, although he was mum when asked about the legal basis of the order.

DOF, through the Privat-ization Management Office which controls the Nonoc mines, has demanded pay-ment of some US$263 mil-lion dollars from Philnico, the original holder of the 23,000 hectare Nonoc nick-el mines. DVAIII

Armed security personnel of Pacific Nickel Philippines Inc. in Nonoc Island initially resisted when police served the Temporary Restraining Order in mid-April, which directed the company not to hamper the mining and hauling operations of Shuley Mine Inc. PHOTO COURTESY OF NATZ CORBETA

Apex posts P29-M Q1 loss;plans to increase Maco mine capacity

APEX Mining Co. Inc. posted a net loss of P29.2 million in the first quarter of 2013, although the company said it managed to pay expansion expenditures amounting to P722 million.

Apex blamed the appreciation of the peso and the de-crease in the price of gold as the main contributors to the first-quarter net loss.

It expects rise in its ore production within the year as ef-forts to increase throughput “advance toward completion.”

From January to March this year, Apex Mining’s sales fell by 10 percent to P402 million against P445 million in the same period last year.

The company’s main resource is the Maco gold and silver mine in Compostela Valley.

In the first quarter of the year, Apex Mining produced a to-tal of 57,876 tonnes of gold ore with an average grade of 5.04 grams per tonne. In 2012, it reported a net loss of P56 million against net loss of P39 million in 2011.

In a disclosure to the local bourse, Apex said it plans to increase the capacity of its Maco mine’s processing plant in Compostela Valley from the current 850 tons per day to 3,000 tons per day by the end of the year.

This will be accomplished by the company’s expansion project which, said president Baiverth Diabo, Apex has been able to generate funding despite net losses.

“The plant construction, started in June 2012, has reached 36 percent of physical completion, while civil works and structures are ready for the equipment installation,” said com-pany chairman Benoit de Galbert.

The company hopes that the increase in ore produciton over the next two years will lower the production cost per ounce. MW

Governance | Health&Safety | Environment

JUNE 10-23, 2013 7

MGB-Caraga exec to file illegal dismissal charge vs JasarenoSAYING he was denied

of due process and his relief done arbitrarily, the regional director of the 0Mines and Geosciences Bureau in Cara-ga (MGB-Caraga) is reported-ly mulling an administrative case against MGB chief Leo L. Jasareno.

Sources close to Director Roger A. de Dios said he may file the case before the Civil Service Commission (CSC) on Thursday, June 20. The official declined to confirm or deny the report when Mining Week sought verification.

ReinstatementA draft complaint obtained

by this paper from the same sources showed that De Dios has asked the commission to invalidate Jasareno’s May 14 order, which stripped De Dios of all signing authorities. Although he was not trans-ferred to other regions, De Dios had earlier opined that his relief effectively removed him from office and can be construed as a form of con-structive dismissal.

De Dios also sought his reinstatement as MGB-Cara-ga director, according to the draft complaint, arguing that as a career service executive, he enjoys security of tenure “which protects him from any form of arbitrary removal or suspension.”

In his order, Jasareno used as basis in suspending De Dios the May 10 memo-randum of Department of Environment and Natural Resources Secretary Ramon Paje. That memorandum commanded Jasareno to withdraw all of De Dios’s sign-ing authorities, including the signing of Ore Transport Per-mits and Mineral Ore Export Permits; and for Jasareno to assume the post “until a re-placement is designated.”

PMO requestSecretary Paje’s May 10

memo disclosed that the Privatization Management Office (PMO) had requested De Dios’s relief “in order to avert further loss to the gov-ernment”—referring to the mining operations of Shuley Mine Inc. (SMI) at the Nonoc nickel mines.

De Dios contended that both Paje and Jasareno’s or-ders lacked legal basis, nor did it afford him “any oppor-tunity” to present his side, according to the draft com-plaint.

The draft complaint noted that “government employees in the Civil Service, holding both career and non-career service positions, are entitled to protection from arbitrary removal or suspension, as “en-shrined in Article IX-B, Section 2, paragraph 3 of the 1987 Constitution, which states that “No officer or employee of the civil service shall be re-moved or suspended except

for cause provided by law.”

No disobedienceIt continued: “This consti-

tutional edict of security of tenure is echoed Article IX, Section 36 of the Presidential Decree No. 807, otherwise known as the Civil Service Decree, which provides that “No officer or employee in the Civil Service shall be sus-pended or dismissed except for cause as provided by law and after due process.”

In the draft, De Dios also explained that he did not dis-obey his superiors pertaining to the SMI operations in Non-oc, which was the ultimate basis cited in the relief order.

De Dios pointed out that his issuance of OTPs to SMI was in compliance with an existing writ of injunction preventing MGB and other parties from impeding SMI’s operations.

“De Dios never disobeyed any order of his superiors in connection with the issuance of the OTPs in favor of SMI. On the contrary, Complainant De Dios only acted pursuant to the standing July 2011 Order and the Writ issued by the Surigao RTC and, at all times, faithfully and duly informed his superiors of his every ac-tion,” the draft complaint said.

De Dios had earlier belied Jasareno’s claim that despite several directives, De Dios had continued the issuance of OTPs for SMI. De Dios has maintained that Jasareno has full knowledge of all OTPs and documents relating to SMI operations in Nonoc.

“However, the numerous written correspondences and memoranda sent by Com-plainant De Dios to Respon-dent Jasareno only fell on deaf ears, as Complainant De Dios never received any ad-vice or order directing him to suspend or revoke issuance of OTPs to SMI,” the draft com-plaint alleged.

TROSMI sought and was grant-

ed the TRO against MGB in July 2011 after the agency

issued a stoppage order on May of the same year. That in-junction, the draft complaint noted, remains in effect.

De Dios has said that when he assumed the Caraga post in October last year, he was obliged to follow the court order, lest he be cited in con-tempt of court.

“Thus, Complainant De Dios, as the new Regional Director of MGB Caraga Re-gional Office No. XIII, suc-ceeding RD (Alilo) Ensomo, was duty bound to follow the July Order and the Writ that remained in force and effect. Under the circumstances, it was obligatory for Com-plainant De Dios to issue OTP and MOEP because the Writ commanded the desistance from the implementation of the order suspending issu-ance of OTP and MOEP,” the draft complained argued.

“Complainant De Dios was constrained to obey the terms of the Writ under pain of being punished for con-tempt of court if he fails to do so. Such issuance of OTPs, therefore, cannot be a basis for his sudden relief as Re-gional Director of MGB Cara-ga Regional Office,” it added.

The draft complaint also chided Jasareno for claiming he was unaware of De Dios’ actions.

Jasareno knows“Respondent Jasareno

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cannot feign ignorance of Complainant De Dios’ ac-tions pertaining to the pro-cessing of OTP applications because, throughout his post as Regional Director of MGB Caraga Regional Of-fice No. XIII, he took pains in duly informing Respondent of his actions and decisions and even sought guidance from him. His intervening re-quests for advice and guid-ance were only ignored by Respondent,” it said.

It narrated that “as far back as September 2012, Respondent Jasareno was well aware that there were applications for OTP pend-ing before Complainant De Dios and that there was a standing July 2011 Order that prevents Complainant De Dios from ignoring the applications for OTP.

“Respondent Jasareno was consistently updated, in writing, by Complainant De Dios about the process-ing of the OTP and MOEP applications. To further en-sure that he would be doing acts in accordance with the

orders of his superiors, Com-plainant De Dios prudently sent Respondent Jasareno a Memorandum dated 18 September 2012, categori-cally informing Respondent Jasareno that his Office was processing the issuance of OTP to SMI in compliance with the July Order and the Writ.

Other relevant govern-ment agencies were also furnished a copy of the said 18 September 2012 Mem-orandum. Despite Com-plainant De Dios’ request for guidance from Respondent Jasareno, no written re-sponse to the 18 September 2012 Memorandum was giv-en by the latter.”

The draft complaint was prepared by Manila-based Kapunan, Garcia and Castillo Law Offices.

Mining Week sources said De Dios may also file criminal and administrative charges against Jasareno and PMO chief Karen G. Sing-son before the Ombudsman. DVAIII with reports from Vanessa L. Almeda

Philex ready to resume formal operations at PadcalPHILEX Mining Corp. is

prepared to resume for-mal operations at its Padcal Mine, as it has put in place urgent measures to rehabil-itate a tailings pond that ac-cidentally leaked water and sediment in Itogon, Benguet last Aug. 1.

“We are well prepared and well equipped to return to our normal production at Padcal, as our tailings pond has been stabilized,” the com-pany’s senior vice president for Corporate Affairs, Michael Toledo, said.

He stressed, however, that Philex Mining is still continu-ing with the rehabilitation of Padcal’s Tailings Storage Fa-cility No. 3 (TSF3), so it could withstand even the heaviest downpour and worst ty-phoons and earthquakes.

The open spillway being constructed as part of TSF3’s rehabilitation is on track for completion by the end of June while Padcal has pro-duced significant amount of fresh tailings for the filling and beaching process re-quired to further stabilize the pond.

Libby Ricafort, vice pres-ident of Philex Mining and resident manager of Padcal Operations, said the second of the spillway’s three chutes would be completed by the end of the month while the third will be undertaken during the next dry season.

“With two chutes we are already very confident of the stability of TSF3,” stressed Mr. Ricafort, who said Philex Mining would ask for a four-month extension of TSF3 rehabilitation should govern-

ment not allow it to resume formal operations yet.

Government regulators had allowed Padcal to re-sume operations temporarily for four months until July 8.

Mr. Ricafort said that once completed, the P327-million open spillway can channel as much as 1,000 millimeters of rain over a 24-hour period. This would be equivalent to more than twice the amount of rainfall brought about by typhoon “Ondoy,” which in 2009 dumped 455 millime-ters of rain over 24 hours.

He told reporters who vis-ited Padcal Mine over the weekend that the company has so far produced 2.4 mil-lion cubic meters of fresh tailings to fill up the conical void in the pond as a result of the leak as well as to create a beach that would push accu-mulated water away from the pond and into the spillway.

Mr. Ricafort joined report-ers and Philex Mining em-

ployees on Saturday in plant-ing vetiver grass at Balog Creek, which was affected by the tailings-leak accident but has now been cleaned up by Padcal employees, although its rehabilitation is ongoing.

A tropical plant that grows naturally and endemic to In-dia, vetiver minimizes algal bloom to regulate oxygen for fish and other aquatic life in a pond. With its deep, thick root system that spreads ver-tically, vertiver is also good in preventing soil erosion.

Philex Mining earlier said it was also well prepared to start pumping the sediment that accumulated at Balog Creek’s convergence area with Agno River back to TSF3, but was still awaiting the necessary permits from local governments and the Na-tional Power Corp., which has jurisdiction over some areas concerned, for the installa-tion of its pumping system.

Mr. Ricafort said the pres-

ence of excessive water in TSF3, which was built to hold solids, could breach the off-set dike and cause the crest of the main embankment to slum and trigger the unnec-essary release of water and sediment into the surround-ing area.

He added that TSF3 has now been stabilized, but another 1.1 million cubic meters of fresh tailings are needed to bring it to its pre-vious condition before the accident on Aug. 1, 2012 that followed historically un-precedented rains brought about by two successive ty-phoons.

The spillway is designed to replace TSF3’s underground drainage system, whose Pen-stock A and Tunnel A were condemned following the accident. The pond’s Pen-stock B and Tunnel B may still be used if needed, even after the completion of the open spillway. PR

Padcal Mine’s P327-million open spillway, June 15. PHOTO SUPPLIED

The Philippines metal deposit is estimated at 21.5 billion metric tons and non- metallic minerals are at 19.3 billion metric tons.QUICK

FACTS

JUNE 10-23, 2013 8

News Governance | Environment | Mines&Money

NPA vows stronger armed resistance vs Tampakan project

KORONADAL CITY–The New People’s Army (NPA) will launch stronger armed resis-tance against the Tampakan copper-gold project of the merged Glencore Xstrata plc., a rebel leader said early this month.

In an e-mailed statement, “Ka Efren,” spokesperson of the National Democratic Front-Far South Mindanao Region, also appealed “to the people’s greater vigilance and fervent stand for the protec-tion of our environment, our subsistence, and our national patrimony against the cat-astrophic attack of foreign large-scale mining.”

“The most recent intru-sion of the multinational Glencore will bring about a wider anti-mining resistance in Far South Mindanao. The revolutionary forces are un-remittingly preparing for the extensive battle to defy the multinational’s invasive as-sault,” he said.

Glencore International plc announced on May 2 that it has completed the takeover of Xstrata plc to form Glen-Core Xstrata, making it the world’s fourth biggest mining company and the world’s big-gest commodities trader.

Xstrata, through its wholly owned Xstrata Copper, owns 62.5 percent of the 40 percent controlling equity at Sagittari-us Mines, Inc. (SMI), developer of the Tampakan project.

Australian firm Indophil

Resources NL owns the rest or 37.5 percent of the con-trolling equity. It is Indophil’s flagship asset in its portfolio.

The Tampakan project straddles the towns of Tam-pakan in South Cotabato, Columbio in Sultan Kudarat, Kiblawan in Davao del Sur and Malungon in Sarangani.

The Department of En-vironment and Natural Resources issued an envi-ronmental compliance certif-icate to the Tampakan project last February, after rejecting it twice last year because of the open-pit ban imposed by the South Cotabato provincial government.

In December last year, SMI announced that it was mov-ing the start of commercial operation from 2016 to 2019. Among the major challeng-es the company cited is the open-pit ban in South Cota-bato.

On New Year’s Day 2008, communist guerillas stormed the base camp of Sagittarius Mines in Barangay Tablu in Tampakan town, burning fa-cilities and equipment worth at least P12 million.

On January 29, 2009, NPA rebels also attacked the mu-nicipal police station in Tam-pakan. Four people, including three policemen, were in-jured in the daring attack that left the police station partially destroyed

SMI has repeatedly ac-knowledged in their annual sustainability reports that se-curity threats are among the risks facing the project.

“A stronger armed and le-gal resistance shall continue

to arise,” Tuesday’s statement from the NDF-FSMR warned.

Besides the security threat posed by the NPA, the Tam-pakan project is also facing opposition from B’laan tribes-men who took up guns in re-sistance.

The local government units of Kiblawan, Tampakan and Columbio earlier agreed to form the Task Force Kitaco to take charge of security ar-rangements in the mountains that include the tenement of SMI.

The mining company has been providing support to the military-led task force through its annual financial assistance to the LGUs strad-

dled by the mining project.The Tampakan Forum,

a coalition of international and local non-government organizations and the local Catholic church opposing the Tampakan copper-gold proj-ect, said that before Glencore acquired Xstrata, the former wrote them that it does “not believe in military presence in the mine site and will demili-tarize when it takes over.”

“The Tampakan Forum is taking with a grain of salt the Glencore pronouncement. But if it is able to sincerely demilitarize the project site immediately and unilaterally, this will be extremely wel-comed,” it said.

BY BONG S. SARMIENTOCorrespondent,Mindanews

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Silangan reserves seen worth $22B; Philex to spend P8B for 2013PHILEX Mining Corpora-

tion said its Silangan project in Surigao del Norte is estimated to contain copper and gold reserves worth at least $22 bil-lion, and exploration works in the adjacent mine expected to enhance the project.

In a disclosure to the Phil-ippine Stock Exchange, the country’s biggest miner said the figure is based on inde-pendent mineral resource es-timates for the project by SRK Perth, Australia.

Philex said the combined measured and indicated re-sources in the site contain an estimated metal content of five billion pounds of copper and nine million ounces of gold. It added that resource estimates were based on ver-ified drill results from over 80,000 meters of drilling it completed in June of last year.

The 5,184-hectare Silan-gan copper and gold mine is adjacent to the Kalayaan site. Philex finalized an agreement with Manila Mining Corp. for the exploration and devel-opment of the 286.6-hectare Kalayaan mine in May. It said the exploration works in the

Kalayaan site are expected to further enhance the value of the Silangan project.

For 2013, Philex is spending P5 to 8 bil-lion this year for the exploration and devel-opment works at Silangan, businessman Manuel V. Pan-gilinan said on June 14.

Pangilinan told reporters after the annual stockhold-ers’ meeting of the Philippine Long Distance Telephone Co. that the Silangan project is on track for its targeted commer-cial production in 2017.

“At the moment, we’re building a decline, which is the most important step [for the mining project’s com-mercial operation],” said Pan-gilinan, who also chairs Philex.

The mining method we’ll use is block caving, an under-ground method similar to the Padcal project in Itogon, Ben-guet and not open-pit meth-od like the Tampakan project in South Cotabato, the busi-nessman said.

Philex has a minor inter-est at the Tampakan project through the stake of Aus-tralian firm Indophil Re-

sources NL. Majority of the controlling equity at the Tam-pakan project is owned by the merged Glencor Xstrata plc.

Last year, Philex was fined by the government with at least P1 billion after Padcal’s tailings pond leaked.

Pangilinan said the total cost to bring the Silangan project into commercial oper-ation would amount to US$1 billion.

Last year, Philex spent some P10 billion for exploration and development works at the Sil-angan project, he added.

Pangilinan noted that the ores at the Silangan project will be mined using drilling and explosives to break the

rocks into smaller pieces.The Silangan project com-

bines the development of the Boyongan and Bayugo de-posits, which comprise gold, copper and silver.

As of July 2011, the com-bined measured and indicat-ed mineral resource for Boy-ongan is 273 million tons of 0.52 percent copper and 0.72 grams per ton (g/t) gold and, for Bayugo, 125 million tons of 0.66 percent copper and 0.66 g/t gold, a company study showed.

In February 2009, Philex consolidated its interest in Silangan project by purchas-ing the remaining 50 percent equity interest held by Anglo American Exploration BV and Anglo American Exploration (Philippines) Inc. for a consid-eration of $55 million.

The project is covered by Mineral Production Sharing Agreement 149-99-XIII and Exploration Permit XII-03.

The portal development for the Silangan project started in April 2011 while the first blast was done on Aug. 10, 2011, the company said. MW/ Bong S. Sarmiento/MindaNews

AMRI halts operations in Claver as Mamanwa IPs set up barricade

SURIGAO CITY—A barri-cade set up on June 15 by at least 150 Mamanwa tribes-men in Barangay Urbiztondo, Claver, Surigao del Norte has paralyzed the operations of the mining company.

Datu Reynante Buklas, one of the Mamanwa chief-tains who spearheaded the barricade told Mining Week in a phone interview that they are holding a barricade at the mine site of Adnama Mining Resources Incorporat-ed (AMRI), which operates in Barangay Urbiztondo, Claver, Surigao del Norte.

AMRI mines nickel in the area and exports it to China.

Datu Buklas said AMRI failed to pay its royalty obli-gation to the Mamanwa tribe in the area, which holds the ancestral domain title. Buklas said AMRI has not paid them since last year, forcing them to hold a barricade.

This was disputed by Dul-mar M. Raagas, president of Chamber of Mines in Caraga Region.

“It was not AMRI who failed to meet the obligations. On the contrary, AMRI has fully paid its royalty payments on time, and the delay is on the part of the National Commis-sion on Indigenous Peoples (NCIP),” said Raagas, who spoke to the company mine site manager and vice presi-dent, Engr. Omar Abanid.

Raagas said Buklas and his constituents should demand the NCIP to release their roy-alty fees, which is said to be at P30 million.

“We are deprived of this share and we feel being

abused by this mining com-pany,” Buklas spoke in Suriga-onon dialect.

Under the Philippine Min-ing Act of 1995 and the Indig-enous Peoples Rights Act of 1997, the Lumads in the min-ing areas are entitled to one percent of the gross earnings of the mining operations in their respective areas.

Four firms are currently operating in Claver — the Taganito Mining Corpora-tion (TMC), Oriental Synergy Mining Corporation (OSMC) which is now operated by AMRI, and Platinum Group Mining Company (PGMC) and Taganito High-Pressure Acid Leach Nickel Corpo-ration. The 48,678-hectare mining areas in Barangays Taganito and Urbiztondo are covered by a Certificate of An-cestral Domain Title (CADT)

Mining Week tried to con-tact Engr. Abanid to no to avail.

Buklas said they will con-tinue to barricade until their demands are met.

He admitted that the bar-ricade has affected mining activities to extent that the company has stopped its op-erations.

Lt. Col. Vincent Iringan, battalion commander of the Army’s 30th Infantry Battalion based in Bad-as, Placer, said they are monitoring the sit-uation and has coordinated with the Claver Municipal Po-lice Station to ensure a peace-ful assembly.

“We have to ensure that no violence will occur in that area,” Col. Iringan said. By Roel N. Catoto

BRIEFLYPHL mining

industry declinesMining incidents and declining glob-

al mineral prices led to the 17% decline in the mining industry in the first quar-ter of 2013.

This surpassed the 16.3% contrac-tion in the 4th quarter of 2011, and the 1.7% in the 1st quarter of 2012.

Napocor demands payment

National Power Corp (Napocor) has asked Philex Mining Corp to pay the state-owned firm at least P6 billion for the damage to its reservoir caused by last year’s tailings spill at the Padcal copper-gold mine.

In a disclosure to the Philippine Stock Exchange, Philex said it has received a letter of demand from Napocor seek-ing immediate removal of 13.5 million cubic meters of mine waste deposited on the state firm’s reservoir, or failing to do that, the immediate payment of P6.418 billion to finance the clean-up and restore the reservoir to its condition before the August 2012 tailings spill.

Napocor also asked that Philex pay P6.266 million as opportunity loss for every year of delay in the reservoir cleanup. On top of that, the state firm has demanded that Philex pay P1.040 million for the damaged vegetation and

another P500,000 as penalty.Barricade in VizcayaTribal folk in this Kasibu town in

Nueva Vizcaya are taking turns in watch-ing two road barricades they have set up to block the entry of equipment and supplies for an Australian-owned mining firm.

“This show of resolve by our mem-bers is what keeps this movement going for the past weeks. The show of unity by our people is just inspiring,” said Santos Yonga-an, chair of the Kasibu Intertribal Response for Ecological Development (Kired).

Residents have been blocking roads in Barangay Paquet here and in Barangay Binuangan in Dupax del Norte town in an effort to cut off a sup-ply route and cripple the exploration activities of Royalco Philippines Inc. in Barangay Pa-o.

Joey Nelson Ayson, Royalco country manager, said the barricades are illegal.

Ayson said the roadblocks have started to disrupt Royalco’s operations, prompting company officials to consid-er filing charges against the protesting residents.

“We remain patient. But if the sit-uation gets out of control, we will take legal remedies against these people,” he said.

Insight&Commentary Feedback: info@phminingjournal.com

JUNE 10-23, 2013 9

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DISCLAIMER:MINE TO MARKET PUBLISHING, Publisher and owner of Mining Week and all of its officers, employees, correspondents, consultants and agents and related entities do not make any warranty whatsoever as to the accuracy or reliability of any information, estimates, opinions, recommendations or conclusions contained in this publication and, to the maximum extent permitted by Philippine laws, the Publisher disclaims all all liability for any direct or indirect loss or damage which may be suffered by any person or entity by relying on anything contained in, or omitted from, this publication whether as a result of negligence on the part of the Publisher or not.

CORRESPONDENTS

BEN O. TESIORNADavao Region

CHRIS V. PANGANIBAN Agusan Provinces

NEF LUCZONNorthern Mindanao Region

RUSSEL DELVOSoccsksargen

AMB. STEPHEN LILLIEGuest Columnist

6

Extracting maximum benefitONE of the reasons

why people talk positively about

the Philippines’ economic prospects is the untapped potential in the mining sec-tor. Stick a spade far enough into the ground and you might just find gold, sil-ver, rare earth metals or other valuable minerals. Unfortunately, identifying where these minerals are has proved a lot easier than getting them out of the ground. However, the Phil-ippines has just taken a step which I think in time will be seen as important in chang-ing this.

I’ve written previously about the UK’s Presidency of the G8 this year and Prime Minister David Cameron’s Golden Thread of issues which can help spur devel-opment and prosperity. One element in the thread is trans-parency. And transparency is what can spur investment in the mining sector.

Late last month the Phil-ippines was accepted as a

Natural resource exploita-tion offers a major oppor-tunity for prosperity. While history tells us there are risks, including of environmen-tal degradation, corruption, weakened governance and the so-called “natural re-source curse”, these can be overcome. They should not hold back progress and pros-perity. Responsible mining is

about utilising the country’s resource endowment, with-out compromising on gover-nance.

When President Aquino signed Executive Order 79 last July, he committed the Philippines to joining EITI and has been true to his word. Presidential Adviser on Cli-mate Change Secretary Beb-et Gozun has been working tirelessly with civil society and the Department of Bud-get and Management to put in place the infrastructure and human capital necessary for EITI to function effectively. My Embassy, along with col-leagues from AusAid and the World Bank, have been part-ners in this work.

And a lot of work is on-going. There is now a Multi Stakeholders Group (MSG) consisting of members from government, civil society and business. They will work to-

gether to design and deliver the Philippines’ own EITI ac-tion plan and ensure it is thor-oughly road-tested. They will get support and advice from the EITI Secretariat which is very experienced in helping candidate countries achieve the necessary standards. The system works well in other countries. It can be just as ef-fective here.

Becoming a candidate is only the first step of the journey. There is much work ahead to train local commu-nities and put in place the building blocks to make the Philippines fully EITI compli-ant. Becoming a fully fledged EITI member within the next two years is the next big aim. But the ultimate test will be whether this allows more of the nation’s mineral wealth to be utilised to help reduce poverty and increase jobs and growth.

(Stephen Lillie is the British Ambassador to the Philippines. This article, as printed in the Philippine Star, is reprinted with permis-sion from the Ambassador)

Gold mining in 1859IN 1859, Sir John Bowring

went on a mission to Manila and across the country with

the purpose of developing British trade with the Philip-pines.

Aside from being knighted by his monarch, Bowring was a scholar linguist who spoke fluent Spanish and Chinese. He was a political economist and a prolific writer. He was given high honors in Siam and a number of European coun-tries and was the governor of Hong Kong and the British representative to Peking. I re-cently came upon his book in our community library at the Archaeological Studies Pro-gram in UP Diliman titled “A Visit to the Philippine Islands” published by the Filipiniana Book Guild in 1963.

In Chapter 17 of Bowring’s book, he wrote about the state of mining in the country at the time of his visit in 1859. I find this interesting because our mining industry today is mired with many controversial issues that include the heavy pol-lution of our rivers and bays, the murder of anti-mining advocates and the torching

of heavy mining equipment. Plus the recent withdrawal of the huge financial support of tycoon Manuel V. Pangilinan to his alma mater, Ateneo de Manila University, due to the anti-mining stand of Ateneo that is clearly a big slap to his position as the head of Philex Mining.

However, 153 years ago, Bowring wrote that the min-ing laws in this country, known as the “Reglamento de Minas,” were very liberal. It allows concessions to be made by any person, Spaniard, Indian (Filipino), mestizo, naturalized or established foreigner who shall discover and report the discovery of a mine and un-dertake to work on it. Colonial officials and ecclesiastics are excluded from this privilege.

The work must be entered upon in ninety days under cer-tain conditions; four months of continued suspension, or eight months of interrupted labor, within the year bring the loss of conceded privilege. There must not be less than eight laborers employed. The mines are subjected to inspec-tion by the mining depart-

ment. The mining regulations were published by Captain (?) General Claveria in January, 1846 (p.175).

Gold in the Philippines is produced by washing and digging. In several provinces, it is found in the rivers, and the natives are engaged in wash-ing their deposits. The rivers of Caraballo, Camarines and Misamis, and the mountains of

Caraga and Zebu, are the most productive. Many Indian fam-ilies support themselves by washing the river sands, and in times of heavy rains, gold is found in the streets of some pueblos when the floods have passed (pp. 175 - 176).

The Misamis river men-tioned here by Bowring is puz-zling since in the 1775 report of Capt. Thomas Forrest, he wrote explicitly that Epunan (Iponan) and Cagayan (Cagay-an de Oro) rivers were among the few that abound with gold. I have yet to know about a Mis-amis river here in Misamis Ori-ental or in Misamis Occidental and if there is, then, I stand cor-rected. What is clear though is that the Iponan and Cagayan rivers are both located in Mis-amis Province. He may have obtained his information from a Spaniard who was not too familiar with the geography of Mindanao for in the course of his travel throughout the country, he was always in the company of spanish colonial officials.

Bowring further wrote that the Spaniards have not pen-etrated far into the interior of

Mindanao, which is peopled by a race of Indians (Lumads), said not to be hostile but be-ing frequently at war with the more formidable Mahom-medans (Muslims). That gold dust was the instrument of ex-change in the interior of Mind-anao, and was carried about in bags for the ordinary purposes of life (pp. 176 and 222). He was amazed to see the indif-ference of the Spanish colonial officials with regards to their open acknowledgment that there are many places in the Philippines that are rich in gold and other minerals.

So based upon his obser-vations, he came up with sev-eral factors why the mining industry was neglected by the colonial government – the ruggedness of the rocks (?), the thickness of the forest jungles, the indolence of the natives (let me add the indif-ference of the Spanish offi-cials), the absence of an intel-ligent direction and sufficient pecuniary resources and not

providing good roads leading to the mining areas and the necessary machinery for gold extraction.

This was the state of the gold mining industry in the 19th century. Today, we are faced with a different set of problems that are hounding this industry. I do not pretend to know all the mining issues and problems except for what I read in the national dailies. All I know is that the Philip-pines is blessed with a great abundance of gold and other minerals and that if these are properly extracted without harming our environment, if the right amount of taxes are paid by the miners to our government, this will in turn greatly benefit the communi-ties where these mines are lo-cated as well as regularly bring billions of pesos to the coffers of our government. I hope this is not a pipe dream, but if we can get our act together with the government, we can make this truly happen.

candidate country to join the Extractive Industries Trans-parency Initiative, or EITI for short. The purpose of EITI, as David Cameron explained re-cently, is to remove the “veil of secrecy” which surrounds the extractive industries, cov-ering both the mining and oil and gas sectors.

The “EITI Standard” means that extractive companies publish details of what they pay to the government in taxes and royalties. The gov-ernment in turn produces its own report of what it has received from the companies and an independent audit then takes place to verify and explain any discrepancies. The beauty of the idea is its simplicity. Too often a lack of transparency, openness and proper rules have enabled governments and firms to mismanage mineral wealth, divert it for dubious ends, or not re-invest it in local economies. This has to stop. Transparency is the answer. It builds confidence and reduc-es scope for corruption.

A. PAULITA ROAGuest Columnist

6

(A dear friend to Mining Week editor, Ms. Roa is a Cagayan de Oro-based historian. She finished Archaeology at the University of the Philippines)

Even the best resettlement programs and social investments fail to deliver sustained

healthy relationships for the mining compa-

nies. That doesn’t mean that assets can’t be

developed successfully and sustainably. It does mean that development has to be not only of the

mine, but of the com-munities, region, and

nation around it—or it won’t work.

‘

~ Jonathan Berman, an author and advisor to

Fortune 500 companies and investors operating

in frontier markets.

DULMAR M. RAAGASTechnical Consultant

Insight&Commentary

JUNE 10-23, 2013 10

I could have shown slide after slide of the wildlife that is even-tually found in the rehabilitated areas since we track each and every one of them, but I only had 15 minutes to present.Talking about wildlife, I showed this slide.

That croc was captured in, of all places, Rio Tuba, and on its way to the Palawan Crocodile Farm.

If the waters of Rio Tuba were toxic, (they like to say that) they would not be there, or grow to that size! Therefore, the banner in the ‘no to mining in palawan’ website that I show on top of the picture is a bunch of crock! Well, another lie!

I covered a portion of that banner on this slide, but that will be uncovered below. Read on!

The pictures below show a Philex project in Zamboanga del Norte that has been almost fully rehabilitated.

Below are parts of the Taganito mine site in Surigao del Norte.Don’t freak out with the picture on the left. It is a mining area

within the Surigao Mineral Reservation and not suitable for anything else. It is a lateritic nickel mine, so the top 20 meters is mined, not the entire mounain, and it is then rehabilitated.

And reforestation...

Here’s a little known fact. The mining industry (note: large-scale) has planted 15 million trees in the past 10 years.

If you don’t believe me, please, be kind enough to check with the DENR. They have the figures. Every year we com-pete with each other to see who plants the most trees and

awards are given.Time now to go to what I call mining and building human

capital.We are all required to now spend 1.5% of our operating

costs to social development programs, and this is done in consultation with the host communities.

The funds go to sustainable projects such as infrastructure, livelihood programs, water projects, cooperatives, training, medical care, and schools.

Yes, dear reader, the mining industry educates thousands of kids every year, and these are good schools!

And now to mining and Indigenous Peoples (IPs), one of my favorite topics.

There’s a law in place called the Indigenous Peoples Rights Act of 1997. If you want to do anything in their an-cestral lands, mining or anything else for that matter, you need to get their consent and compensate them. And so we have.

GERARD BRIMO,Guest Columnist

6

Correcting lies and disinformation

In 2010 the members of the Chamber of Mines (note: not all operating mines are members) paid close to P300 million in royalties to IPs, un-doubtedly the most marginal-ized sector of our society.

Some of them, for the first time in their lives, have some money in their pockets, and it comes from the mining in-dustry!

Here’s another little known fact. In Rio Tuba there are about 13,000 members of the Palaw’an tribe, but they don’t have ancestral land title.

Nevertheless, Rio Tuba treats them as if they do and pro-vides a number of services. One of them is housing. See the picture on the top left – that’s where they live.

We offered them housing in coordination with the Gawad Kalinga Foundation, on a voluntary basis of course, and they have accepted. Since then, 6 clusters with a total of 210 hous-ing units have been built and we have committed to building up to 1,000 houses to accommodate them all. But there is more.

They get free medical care in the company hospital, a num-ber of livelihood projects and an Indigenous Learning System, accredited by the Dep Ed, which educates about 800 IP chil-dren and adults!

Who does all this? Government? NGOs? Gina? No, it’s a min-ing company for crying out loud! And they want to stop this??

So now let’s go back to the ‘no to mining in Palawan website’ and show the rest of the banner.

Oh, so now we’re killing indigenous people? That’s slander, no? Here we are, housing them, taking care of their medical needs, ed-ucating and giving them livelihood projects…. and a lie like this is being spread? Shame on the Save Palawan Movement!

And they use them as well, at least those that they can grab (bribe?). The lady that you see in the slide, a member of the Palaw’an tribe, receives all of what is listed on the slide as a beneficiary of our social development programs, but allows herself to be used by the anti-mining groups in their propaganda.

Let’s move on to the issue of mining and poverty.

Sorry, a lot of info on this slide, but I only had 15 minutes to present. What this shows are statements being made about mining not contributing to the economic development of mining areas, citing the Caraga region and particularly Bataraza, the host municipality of Rio Tuba, as examples.

It then proceeds to link the catastrophe of Sendong with the industry in a Business Mirror article quoting Christian Monsod.

Let’s deal with the latter first. There are no large-scale mines anywhere near Cagayan do Oro or Iligan city. Mr. Monsod could have easily have gotten this information from the MGB, but it appears he chose not to.

On the issue of poverty in the Caraga region, the mining companies there pay a total of about P1.1-B in excise taxes and royalties. The local government units in Caraga are enti-tled to 40% of that (over P400 million).

Can you imagine what the region would be like without this source of income?

Let’s now address the issue of Bataraza. Take a look at the pictures below.

Is that a poor municipality? If it is, I hate to think what the other 22 municipalities in Palawan are like!

It is not difficult to understand why it is actually a pros-perous municipality.

The municipality is host to the Rio Tuba mine and the Coral Bay nickel processing plant, the first of its kind in our country, with combined personnel of 4,200 (including con-tractors).

4 NEXT PAGE

(Conclusion)

Stuffbox

JUNE 10-23, 2013 111

CROSSWORD PUZZLEMINING TERMSFill in the crossword puzzle by using the clues:

ACROSS5. A rotary type of rock drill in which the cutting is done by abrasion rather than percussion (2 words).7. The surface entrance to a tunnel or adit.9. A mixture of minerals from which at least one of the minerals can be extracted at a profit.12. The worthless materials associated with valuable minerals in an ore deposit.13. The cylinder of rock that is recovered by diamond drilling.15. The machine used for raising and lowering the cage or other conveyance in a shaft.

Mining Week aims to highlight in this page the important work that Community Relations officers do in their respective companies. Through pictures and simple words, this corner will give color to community events, company activities and other happenings in mining communities that best demonstrate the fun and colorful side of mining. Contribute now! It’s free!

Apply the multiplier effect (easily 5 times) and the aver-age family size in our country, and that’s a lot of people! That’s a lot of mouths to feed, and that spurs agriculture, fishing, a whole bunch of services for them and so on.

Consider the combined payroll of close to P600 million in one year, combined social expenses of close to P200-M spent in Bataraza alone, and combined Palawan-based tax-es and fees of P160-M in 2010.

Consider that the employees get free housing and util-ities, free medical care, free education for their kids up to high school, yearly bonuses and so on. Apart from food, their salaries are largely disposable income, spent in Batara-za and other parts of Palawan.

Do you get my point? (By the way, we’re looking for me-chanics, engineers, geologists, medical technicians, phar-macists, environmentalists – go to the Nickel Asia website and apply! It does not get any better than this!).

Do you not agree that a poor country such as ours re-quires all feasible forms of economic activity to spur devel-opment and make a dent on poverty? These activities are not mutually exclusive.

And so I ended with this slide, and I hope that by now you realize why.

Mr. Brimo is President and CEO of Nickel Asia and a director of the Chamber of Mines of the Philippines. Reprinted with permis-sion, this article originally formed part of Mr. Brimo’s presentation during a mining forum held last year.

DOWN1. A method to separate minerals that causes certain mineral particles to attach to bubbles and float, while others sink.2. Materials rejected from a mill after the valuable minerals have been recovered.3. A mineral deposit in solid rock.4. A surficial deposit of sand, gravel or other unconsolidated materials containing valuable minerals.6. Prospecting, drilling, and other activities involved in the search for ore.8. A fissure, fault or crack in rock that is later filled by minerals deposited from fluids passing through it.10. The conveyance used to trans-port men and equipment in a shaft; a mining term for elevator.11. Solid rock forming the Earth’s crust, frequently covered by overburden or water.14. To test ores or minerals by chemical or other methods to determine the amount of valuable metals contained therein.

Caraga Chamber of Mines prexy joins Mining Week as consultant; regional correspondents picked

RAAGAS

MINING WEEK continues to boost its ranks with the entry of President Dulmar M. Raagas as technical consul-tant to the paper.

Mr. Raagas is expected to advise the editorial staff on the tecnical aspects of min-ing, processes, governance and unique industry issues that our journalism intends to explore.

His experience in several mining consultancies all over the country and his broad

insight on the workings of local government units (hav-ing served as vice mayor of a mineral-rich town in Surigao del Norte) is of great value to Mining Week as we strive to understand further a com-plex industry, the challenges it is facing and the future that lies ahead.

We have also added new regional correspondents, who are mostly based in Mindanao. Their names are listed on the staff box and we

will formally introduce them in the next issues. We will continue to enlist more cor-respondents in line with our “reporting from the mines” mantra, whose goal is to cov-er the industry’s nook and cranny in a way that has never been done before.

See you on the next issue!

Danilo V. Adorador III

PHILEX MARATHON. Libby Ricafort (L), vice president of Philex Mining Corp. and res-ident manager of Padcal Mine, and Padcal’s Manager for Legal Division Eduardo Aratas (3rd, R) pose with Padcal Mine employees and two students of St. Louis High School – Philex for a souvenir photo at the First Baguio-Benguet Philex Marathon, on Sunday, June 2. With them are Joel Obra, a power-plant mechanic who placed 9th in the 42-km race; Enrico Arceo, legal officer, who finished 7th at the same event; Roy Quittle, a security guard; Leo Javier, a heavy-equipment operator who placed 6th in the full marathon; Roger Samson, a miner; and Bickson Batawig, security-guard supervisor. In front of Mr. Quittle are Rolly Refilino, storage man at Materials Man-agement Department, and Jonathan Dulalas and Jordan Tanawe, junior and sophomore students respectively at St. Louis High School– Philex, in Itogon, Benguet. PHOTOS SUPPLIED

PROFILE: NICKEL

Nickel is a strong, lustrous, silvery-white metal that was not isolated by scientists until the mid-18th century, but is now a staple of our daily lives and can be found in everything from the batteries that power our television remotes to the stainless steel that is used to make our kitchen sinks.

Properties: Atomic Symbol: Ni Atomic Number: 28 Element Category: Transition metal Density: 8.908 g/cm3 Melting Point: 2651 °F (1455 °C) Boiling Point: 5275 °F (2913 °C) Moh’s Hardness: 4.0Characteristics:Pure nickel reacts with oxygen and, therefore, is seldom found on the

earth’s surface, despite being the fifth most abundant element on (and in) our planet. In combination with iron, nickel is extremely stable, which explains both its occurrence in iron containing ores and its effective use in combination with iron to make stainless steel.

Nickel is very strong and resistant to corrosion, making it excellent for strengthening metal alloys. It is also very ductile and malleable, properties that allow its many alloys to be shaped into wire, rods, tubes and sheets.

Applications:Nickel is one of the most widely used metals on the planet. According to

the Nickel Institute, the metal is used in over 300,000 different products. Most often it is found in steels and metal alloys, but it is also used in the production of batteries and permanent magnets.

Nickel metal hydride (NiMH) and nickel cadmium (NiCd) batteries are rechargeable battery cells, which use nickel oxyhydroxide (NiOOH) for their positive electrode. NiMH batteries are used in more than two million hybrid cards worldwide, as well as in rechargeable batteries for consumer electronics. NiCd batteries are widely used in portable electronics, toys, flashlights (torches), cordless power tools and standby power units.

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