Philippine Resources Issue 1 2012

Philippine Resources Mining, Petroleum & Energy Journal Issue 1 2012, February - April

Pusong Minero: The good miners

Scapegoats in the blame game

Honors for the five best miners

Cold water on oil hopes

High-tech tools for boreholes

Current Resources February - April 2012

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Headlines in this issue

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Front cover photo shows a portable water filtration system provided critically needed safe drinking water in Cagayan de Oro during the recent flood disaster, after being rushed to the area by the Philippine Mine Safety and Environment Association Pusong Minero team. Pictured inspecting the equipment, which can produce 30 gallons of drinking water per minute, are (from left) Bam Bam Villanueva (left) of the Mines and Geosciences Bureau Region 10’s mining environment and safety division, PMSEA director Roger Casido), PMSEA president Louie Sarmiento, and Holcim Philippines’ Christopher Ramos and Jason Niza.

Resources Viewpoint

Resources Commentary

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Pusong Minero

My 2012 New Year wish list Scapegoats in the blame game Leaving behind a positive legacy

Mineral Resources

Top awards for five good miners Coal mine contracts for auction Turkey cash earmarked for Acoje Zamboanga del Norte block on open pit ban ‘a breakthrough’ Apex, Teresa Crew merge

Events Resources

A win for miners facing local bans

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Oil and Gas Resources

Energy Resources

Supply Resources

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BHP deal and Galoc keeping Otto busy Shell pours more cold water on Palawan oil and gas hopes Gas2Grid hits a hitch with Malolos well RE proponents see rough year ahead Meralco eyes another power plant Modular plants save time, money Debut for hi-tech borehole televiewer Looking after the community

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Philippine Resources Mining, Petroleum & Energy Journal Issue 1 2012 February - April 2012

Philippine Resources Journal is published independently for executives in Philippine mining, petroleum and energy and associated business sectors.

Publisher Elizabeth Galura Charismatic (WA) Pty Limited Consulting Publisher Greg Brimble Editor Simon Halley Sales Manager Cora A. Laureano Design/Production Edrick Bruel Contributors Mars Buan Patricia A.O. Bunye Fernando Penarroyo ___

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Pusong Minero

usong Minero” in Tagalog translates as “Heart of the Miner” or “Miners with Heart” in colloquial English. It’s the name of a promotional documentary presentation that was previewed at the Philippine Mine Safety and Environment Association annual awards night dinner in Baguio last November.

It was an attempt to show people what good miners are doing as unsung heroes, and to partially counter the negative publicity that has clouded the industry over the past year. It included photos and film clips of miners who volunteered to help in disasters such as the earthquake that devastated Baguio City in 1990, another collapsed building in Quezon province, floods, landslides and other disasters.

They went in to help because they had the skills, training and the experience required in dealing with such difficult and dangerous situations.

The “Pusong Minero” presentation was greeted with applause by guests at the safety and environment awards night. On a personal note, it took me

Manila publishing office Lomar Offices Paseo de Roxas Bldg, 3rd Floor 111 Paseo de Roxas Legaspi Village Makati, Metro Manila, Philippines Phone +632 815 8836 or +632 714 0029 ___ Individual contacts Greg Brimble greg@philippine-resources.com Australia: +614 172 20759 Manila: +63949 338 3664 Simon Halley edit@philippine-resources.com Phone +63917 833 1656 Cora Laureano ads@philippine-resources.com +63918 959 3536 Edrick Bruel luovoolagallina@gmail.com Phone +63905 2684656 ___ Philippine Resources Journal is printed in Manila by IPrint.

Digital online edition www.Philippine-Resources.com

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Heroic miners’ efforts to help people in trouble were revisited for Philippine Resources Journal sales manager Cora A. Laureano, on a trip to Washington DC. She went to a multimedia exhibition called “Against all odds: Rescue at the Chilean mine” at the National Museum of Natural History, centering on the rescue in October 2010 of 33 miners trapped for more than two months after a partial collapse of the San José Mine in Chile.

back to Baguio in 1990, when I witnessed the earthquake devastation first-hand as part of a relief mission ferrying medical supplies and food up the mountain from La Union. In the small hotel where I as billeted, a group of mud-covered and tired men – mine workers it turned out – came in one evening. They cleaned up and came to the bar for a drink, and I now recall one of them telling me how they had been searching the rubble of collapsed buildings. I had forgotten all about the incident until now and I don’t recall his name or the name of his company, but they were there as volunteers because they knew what to do and wanted to help.

Ironically and sadly, the previewing of “Pusong Minero” was prescient.

Just weeks later, very heavy rain from Typhoon Sendong triggered massive flash floods that tore through the cities of Iligan and Cagayan de Oro, leaving more than 1,200 people dead, many others missing and hundreds of thousands of people homeless.

Pusong Minero suddenly became more than a documentary presentation.

Mining companies and organizations, with the Philippine Mine Safety and Environment Association took on lead role, galvanized into action sending expert manpower, equipment and supplies to Iligan and Cagayan de Oro and the surrounding stricken areas. The mining companies were too many to list here but they were there, some of them publicly acclaimed and others quietly working away from the headlines. Others also rushed to help and are still helping, but the Pusong Minero effort was a standout and even the anti-miners must have been impressed.

Then, almost before the Iligan/ Cagayan de Oro flood waters had subsided, more heavy rain in Mindanao brought an unstable hillside crashing down on top of a village in Pantukan, Compostela Valley, killing dozens with more still missing and presumed dead under the mud and debris – in a tragic replay of the Compostela Valley landslide a year earlier. Again, the Pusong Minero teams went into action.

But sadly, the more fervent among Continued on page 42 >

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My 2012 New Year wish list

By Fernando Penarroyo

be declared constitutional. The law may have its flaws but to replace it at this ince the beginning of every year point is similar to the adage “changing is the time for best wishes and horses midstream.” resolutions, I find it opportune to 2. There is an expeditious resolumake my 12 wishes for 2012 for the Phil- tion on the legal standing of local govippine resources sector. ernment units to ban resources projects

1. Congress does not pass a new in their jurisdiction. mining law. The Philippine Mining Act Whether it is the courts or some govof 1995 went through a thorough vetting ernment agency that will make the final process. Two sets of Implementing Rules determination, there should be an early and Regulations were passed by the De- resolution of this issue, which is holding partment of Environment and Natural up a lot of resources investments.

Resources, the last of them shepherded 3. At least one of the Financial and by one of the staunchest opponents of Technical Assistance Agreement FTAA mining who used to be DENR undersec- mining projects goes on stream. retary and is now with the academe.

We are nearing two decades since Even the law’s provisions on Fi- the Philippine government awarded the nancial and Technical Assistance Agree- first two agreements in mid-1990s. Up to ments allowing full foreign ownership now, there is still no certainty if the Diof mining projects were challenged in dipio or the Tampakan project will prothe Supreme Court by anti-mining lob- ceed because of local opposition and byist and environmental groups, only to the lack of political will by the national government. The industry needs to showcase a largescale, foreignowned mining project to boost investments.

4. The Department of Environment and Natural Resources and the Department of Energy get their acts together in the administration of energy laws.

The energy department has the mandate over energy resources but most of these projects are located in protected areas or areas covered by other land use agreements like mining Fernando “Ronnie” Penarroyo is the managing or logging concespartner of Puno and Penarroyo Law Offices (www. sions under the punopenalaw.com). He specializes in energy and resources jurisdiction of the law, project finance and business development.

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environment department. The hapless contractor is thus left with an energy service contract but is prevented from accessing its area.

The two agencies should review procedures for permitting and consult private industry in setting up time frames for obtaining licenses and permits. It has been reported that the two departments have executed an agreement to create a technical working group to address the challenges impeding coal development projects. This is a good start, but I want to see if anything concrete will come out of this.

5. The National Commission on Indigenous Peoples (NCIP) truly represents the interests of indigenous cultural communities.

Speaking of a government agency that needs to get its act together, the NCIP in my experience as a lawyer in private practice and a resource developer, is an enigma. With all due respect, I cannot fathom how rules and judgments are promulgated.

Nevertheless, I give the officials the benefit of the doubt; the NCIP is a relatively young administrative agency with enormous quasi-legislative and quasi-judicial powers. At the end of the day, the NCIP must be accountable only to the indigenous cultural communities and not to any interest group, politician or resource developer.

6. Petroleum in commercial quantity is found in sedimentary basins other than Northwest Palawan.

Experts are unanimous in their opinion that the Philippines’ potential for oil and gas has not been really investigated despite the fact that we have sedimentary basins located near the petroleum-rich territories of Indonesia, Malaysia and China. Most of the prospective sites are located in Northwest Palawan. The upstream petroleum industry needs a shot in the arm. While the country can benefit from the United Nations Convention on the Law of the Sea, which can increase Continued on page 10 >

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Optimism despite the challenges < Continued from page 8 the areas that the Philippines can claim as its own for exploration by a factor of 20, the territorial dispute with China seems to have added political uncertainty to offshore exploration particularly in the South China Sea. Meanwhile, exploration in the Sulu Sea basin near Sabah has been disappointing so far notwithstanding the massive risk capital poured in

by ExxonMobil.

And to further spur petroleum exploration, the government should begin initiatives to revive the Trans-ASEAN Gas Pipeline Project, which aims to connect the natural gas fields in the region to the major markets. With the proposed infrastructure, several marginal fields can be put onstream if provisions for the pipeline as a “common carrier” can be included in the project package.

7. Congress promulgates a new law that sets the parameters for an “energy project of national significance.” Energy projects are unduly delayed because of non-aligned and non-harmonized laws and legal roadblocks from local government units, indigenous people and some interest groups whose opposition to these projects are often based on misinformation. The Department of Energy’s initiative in pushing for a law that will recognize projects of national significance announced by Secretary Jose Rene Almendras during the 2011 Energy Investment Forum is a welcome development, as a number of projects such as transmission lines and coal power plants cannot move forward because of problems with local government units.

8. Congress reviews existing energy exploration laws.

The petroleum and coal exploration laws were martial law babies enacted dur-

ing the 1970s. To give an added impetus to high-risk and high-capital energy exploration, the government should revisit these laws and, among others, provide more incentives for deep-water petroleum exploration and mine-mouth coal power projects.

9. The government implements feed-in-tariff rates and guidelines for renewable portfolio standards for renewable energy. Investors are waiting

resource assessment will help also in developing technical expertise.

11. Critical collaboration grows between civil society organizations and the resources industry.

We cannot discount the role of civil society in the resources industry. In the renewable energy sector, the World Wildlife Fund has initiated a program called the “Ring of Fire” to unleash the potential of geothermal energy in Southeast Asia, particularly in the Philippines and Indonesia. WWF hopes the program will show it is possible to achieve the use of geothermal energy in a sustainable way, conserving biodiversity, and at the same time supporting innovation and green economic growth, countering climate change and improving the living conditions of targeted communities. Now if only this can be replicated in other resource sectors.

12.

Public-private partnership grows in the field of research, development and demonstration for new technologies in resource exploration.

With the Filipinos propensity to easily adapt to new technologies, their good command of the English language, and the enormous resources potential of the country, the Philippines can be a hub for geoscientific research. What we need is private investment in the establishment of research institutions and more data acquisition stimulated by financial incentives by the government and hopefully grants from development agencies.

I conclude by quoting a New Year aphorism by Bill Vaughan, an American columnist and author: “An optimist stays up until midnight to see the new year in. A pessimist stays up to make sure the old year leaves.” I fervently hope the resources sector will remain optimistic despite all the challenges besetting it. ■

Experts are unanimous in their opinion that the Philippines’ potential for oil and gas has not been really investigated despite the fact that we have sedimentary basins located near the petroleum-rich territories of Indonesia, Malaysia and China.

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for these and unfortunately their patience doesn’t last forever.

The Philippines passed its RE Law before Malaysia but that country has started implementing feed-in tariff rates ahead of us. Whatever the outcome is, government should implement the feed-in tariff rates and let renewable energy investors decide if the rates are acceptable to them.

10. The DOE spearhead implementation of a geothermal resource reporting code and develop a publicly available database.

I am very bullish on geothermal energy since the country is blessed with this renewable energy resource.

New geothermal exploration companies have heeded the call of government by taking up exploration acreage.

In time these companies will be culling investments locally through initial public offerings or private equity placements.

For the protection of the investing public, there is thus a need for standardized reporting by these exploration companies similar to the Philippine Mineral Reporting Code. Protocols and tools for

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Scapegoats in the blame game

By Patricia A. O. Bunye

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n December 2011, Typhoon Sendong ravaged Mindanao, particularly the cities of Iligan and Cagayan de Oro, leaving more than 1,200 people dead and countless others still missing. Barely a month later, a landslide took dozens of lives with many more missing under the mud and debris in Pantukan, Compostela Valley.

Activist groups quickly and loudly blamed mining as the cause for both tragedies, contending that without mining the disasters would not have happened. Kilusang Mayo Uno’s chairperson said of Typhoon Sendong: “It is now clear that the destruction of the environment due to wanton mining and logging caused the flashfloods that killed more than a thousand of our fellow Filipinos and washed away entire communities,” and that “in the interest of the Filipino workers and people, the Supreme Court should act swiftly to stop the implementation of (mining) laws and to junk them immediately. Large-scale corporate mining and logging should be banned completely.”

Ifugao Representative Teddy Brawner Baguilat weighed in, urging that new forest conservation and alternative mining legislation be passed “to prevent a repeat of the Sendong devastation in Mindanao and other areas of the country.”

Patricia A. O. Bunye is a senior partner at Villaraza Cruz Marcelo & Angangco (website www.cvclaw.com). Her areas of specialization are mining and natural resources, power and energy and intellectual property (particularly IP commercialization). She may be reached at po.bunye@cvclaw.com.

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The fact is, as the Chamber of Mines of the Philippines pointed out and the government Mines and Geosciences Bureau confirmed, there are no large-scale mining operations in Cagayan de Oro and Iligan.

In the case of the Pantukan disaster, activists tried to link the landslide to the activities of large-scale miners. However, it transpires the local government units and residents were warned as early as April 2010 that the area was a geo-hazard and were advised to evacuate. On this score, the Secretary of the Department of Interior and Local Government has called for a probe into the failure of local government officials, particularly the mayor of Pantukan town and the barangay chairman of Napnapan, to stop illegal mining activities there.

Legally, while the Department of Justice, in its Opinion No. 29, Series of 2011, has confirmed that Republic Act No. 7076, otherwise known as the “People’s SmallScale Mining Act of 1991” (RA 7076), completely repealed Presidential Decree No. 1899 (“Establishing Small-Scale Mining as a New Dimension in Mineral Development”) [PD 1899], but it qualified this by adding that individuals remain entitled to pursue small-scale mining, and that small-scale mining is not limited to qualified cooperatives only (cf. Defining the Small-Scale Mining Rules, Philippine Resources, Issue 3 2011, August-October online edition).

It must be noted that PD 1899 was not expressly repealed by RA 7076. Section 28 of RA 7076, however, contained a repealing clause that provided that all laws, decrees, letters of instruction, executive orders, rules and regulations, and other issuances, or parts thereof, which are in conflict or inconsistent with it, are accordingly repealed or modified.

Considering, as the Department of Justice itself pointed out in the foregoing opinion, implied repeals are not favored, and the urgency of transferring the responsibility of regulating small-scale mining from local government units to the national government, particularly to the DENR, the Chamber of Mines has repeatedly called for the express repeal of PD 1899 and has formally recommended this to the Minerals Policy Group created by the president to develop a comprehensive national mining policy.

It is easy for anti-mining groups to point fingers at the mining industry, particularly large-scale mining operations, as the culprit behind environmental disasters. They purposely overlook the fact that large-scale mining in the Philippines, surface or underground, is heavily and strictly regulated by a myriad laws and regulations, including but not limited to: Republic Act Nos. 7942 (Philippine Mining Act); 8749 (Philippine Clean Air Act); 9003 (Ecological Solid Waste Management Act); 6969 (7586, [National Integrated Protected Area System (NIPAS) Act].

The Philippine Mining Act and its Implementing Rules and Regulations, as consolidated in DENR Administrative Order 2010-21, are underpinned by the policy that mining activities attendant to permits, agreements and leases shall be managed in a technically, financially, socially, culturally and environmentally responsible manner to promote the general welfare of the country and the sustainable development objectives and responsibilities as provided for in these implementing rules and regulations.

In view of this, the following are required of mining operations whose permits are granted under the Mining Act: 1. Maintenance of sustainable environmental conditions at all stages of the mining operation: During every stage of operation, as well as after the termination stage, all open pit work areas, underground workplaces, mine waste and tailings impoundment systems, quarry sites and other mining-disturbed landforms, including those disturbed during exploration, must be progressively rehabilitated to a condition prescribed in the Environmental Clearance Certificate (ECC) and/or Environmental Protection and Enhancement Program (EPEP). a. An ECC is required based on an environmental impact assessment and procedures under the Philippine Environmental Impact Assessment System, including Sections 26 and 27 of the Local Government Code of 1991, which require national agencies to maintain ecological balance, and prior consultation with the local government units, nongovernmental Continued on page 14 >

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Scapegoats in the blame game < Continued from page 12 and people’s organizations and other concerned sectors of the community.

b. The EPEP must provide a description of the expected and considered acceptable impacts and sets out the life-of-mine environmental protection and enhancement strategies based on best practice in environmental management in mining. It includes a statement on post-mining land use potential for various types of disturbed land (i.e. pits, waste dumps, tailings-impounding structures and infrastructure sites) and extends to completion of the commitments in the rehabilitation of the disturbed land in a technically, socially and environmentally competent manner. More importantly, the program must include implementation schedules, system of environmental compliance guarantees, monitoring, reporting and cost provisions.

2. Establishment of a functional postdisturbance land use capability: Mine site decommissioning and rehabilitation must aim to establish a land use capability that is functional and proximate to the land use prior to the disturbance of the mine area, unless other more beneficial land uses are predetermined and agreed in partnership with local communities and local government units.

Requirements for mining operations whose permits are granted under the Mining Act also include preservation of downstream freshwater quality; preservation of sea water quality and natural habitats for marine life; prevention of air and noise pollution; and respect for the traditional and/ or sustainable management strategies concerning natural resources of indigenous cultural communities and other communities.

Additionally, an environmental work permit is required for exploration permits, mineral agreements, and financial or technical assistance agreements which undertake exploration activities. This details the environmental impact control and rehabilitation activities proposed during the exploration period, including the costs, to enable sufficient financial resources to be allocated to meet environmental and rehabilitation commitments.

A final mine rehabilitation/decom14 Philippine Resources

missioning plan (FMR/DP), including the corresponding cost estimates, is integrated with the EPEP. The cost estimates cover the full extent of work necessary to achieve the objectives of mine closure including decommissioning, rehabilitation, maintenance and monitoring and employees and other social costs, including residual care, if necessary, over a 10-year period. A Final Mine Rehabilitation and Decommissioning Fund (FMRDF) must be established by each operating contractor/permit holder to ensure that the full cost of the approved FMR/DP is accrued before the end of the operating life of the mine. The FMRDF must be deposited as a trust fund in a government depository bank and must be used solely for the implementation of the approved FMR/DP. To effectively implement the approved EPEP, an Annual Environmental Protection an Enhancement Program (AEPEP) must be submitted to the Mining and Geosciences Bureau every year, and this program must be implemented during the year for which it is submitted. This includes exploration, development, utilization, rehabilitation, regeneration, revegetation and reforestation of mineralized areas, slope stabilization of mined-out areas, waste dumps (acid mine drainage control), tailings-covered areas, aquaculture, watershed development and water conservation and socioeconomic development.

A multipartite monitoring team monitors the activities in each EPEP and AEPEP. This includes representatives from the Mining and Geosciences Bureau regional office, DENR regional office, Environmental Management Bureau, the contractor/ permit holder, the affected communities, the affected indigenous cultural communities, if any, and an environmental nongovernment organization.

Further, contractors and permit holders must incorporate in their mine organization a mine environmental protection and enhancement office which sets the level of priorities and marshals the resources needed to implement environmental management programs.

Given all these requirements, it’s clear that large-scale mining companies must go through the eye of a needle. With this level

of regulation, probable disasters would have been addressed by the proper mitigation measures. The DENR and the agencies under it – the Mining and Geosciences Bureau, Environmental Management Bureau and Pollution Adjudication Board – regulate the mining industry because of their technical capability to deal with the various environmental and safety concerns involved in mining operations. Thus, it is imperative that even small-scale mining be placed under these agencies that have this specialized experience and expertise.

Ironically, the very same mining industry that is demonized by critics for alleged culpability in natural disasters is at the forefront of rescue and relief efforts in such tragedies.

The Philippine Mine Safety and Environment Association (PMSEA) has been very active in providing relief to the victims of Typhoon Sendong. In addition to distributing relief goods, PMSEA dispatched its water filtration unit to provide safe drinking water. Sagittarius Mines set up a relief operations center at the DENR compound with the assistance of the Mining and Geosciences Bureau’s regional office and Holcim Philippines.

PMSEA along with Apex Mining, Philex Mining, St Agustine and Nadecor deployed teams to assist in the search and rescue operations after the landslide in Compostela Valley.

This history of miners turning out to help in times of need goes back a long way.

In the 1990 Baguio City earthquake, miners from Philex were responsible for rescuing former senatorial candidate Sonia Roco from the rubble of the Hotel Nevada where she was attending a conference. Miners led

by PMSEA went to Real, Quezon province, to help rescue victims trapped in the collapse of a building during a storm in 2004.

There remain unscrupulous mining companies which are unregulated or which defy government regulations, but the majority of mining companies strive to comply not only with Philippine laws and regulations, but also international best practices. It is a disservice to include in the blame game these responsible companies driving economic growth and providing livelihood to communities throughout the Philippines. ■

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Leaving behind a positive legacy

By Dorcas Ho and Orenz Nito

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he Philippine mining sector has become an object of constant criticism. The anti-mining line from different sectors such as the Catholic Church, nongovernment organizations, leftists groups, communist rebels and even local government units, paints a grim image of the industry – that of being an environmental despoiler and plunderer of resources. Aside from supposed environmental degradation, other issues that have cast the industry in a bad light are community health concerns

contributions of mining to host communities and different countries worldwide.

Recognizing both the importance of the minerals industry and the concerns about mining activities, government regulations and industry practices have adopted the concept of responsible and sustainable mining; one that is technically appropriate, environmentally sound, financially profitable and socially responsible.

Global efforts to improve sustainable development performance in the mining and metals industry led to the creation of the International Council on Mining and Metals in 2001. Today, 21 For 50 years, Murdochville was a massive, unsightly copper mining and metallurgical operation. Today, post-mining rehabilitation by Xstrata has transformed it into a provincial, well-run community popular with tourists for its skiing and other snow sports during the winter months, lake sports, a golf course and its long scenic line of wind turbines running long the crest overlooking the former mine-site.

as well as widely publicized insolvency cases that appear to have circumvented significant liabilities of some mining companies.

The stigma attached to Philippine mining and the generalizations that mining activities are unsustainable, however, are very simplistic and quite inaccurate.

Little has been said about how the global mining industry has changed dramatically over the past 20 years alongside the growing global concern for the environment. Similarly, more needs to be said about the significant socio-economic Dorcas Ho and Orenz Nito are business intelligence research analysts with Pacific Strategies and Assessments (www. psagroup.com), based in Manila.

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of the world’s leading mining and metals companies are members of the ICCM and have committed to implement the ICMM Sustainable Development Framework. In the Philippines, ICMM member companies are Sumitomo Mining, Xstrata, BHP Billiton, Anglo American and Anglo Gold.

The Sustainable Development Framework binds ICM members to:

• Implement and maintain ethical business practices and sound systems of corporate governance;

• Integrate sustainable development considerations within the corporate decision-making process;

• Uphold fundamental human rights and respect cultures, customs and values in dealings with

employees and others who are affected by our activities;

• Implement risk management strategies based on valid data and sound science;

• Seek continual improvement of our health and safety performance;

• Seek continual improvement of our environmental performance;

• Contribute to conservation of biodiversity and integrated approaches to land use planning;

• Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products;

• Contribute to the social, economic and institutional development of the communities in which we operate

Among the five stages of mining — exploration, evaluation, development, mining and closure — mine closure and rehabilitation have shown the greatest change over the past two decades. Previously treated as merely a last-minute tidy-up of a site to relinquish bonds, mine closure and rehabilitation are now integral parts of mine feasibility studies as well as an ongoing component of the mine during operation.

Rehabilitation – the process of repairing the impacts of mining on the community – may entail converting an area to a safe and stable condition or even restoring the pre-mining conditions as closely as possible to support the future sustainability of the site.

The idea of sustainable and responsible mining, specifically rehabilitating old mine sites into new communities, remains a ludicrous notion to many in the Philippines. While these efforts have been consistently overshadowed by publicized and one-sided anti-mining pronouncements, a number of large foreign mining companies operating in the country have actually been working within the framework of sustainable mining and have brought in technology and foreign capital as well as served as engines of growth and development in different communities all around the world. It’s worth taking a look at what they are doContinued on page 18 >

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Leaving behind a positive legacy < Continued from page 16 ing, in terms of leaving a positive legacy when the mining is over.

One good example is in Quebec, Canada, where the Murdochville copper mine and metallurgical plant were completely shut down in 2002 after almost 50 years of operation. Then came three years of study and detailed engineering of the final closure and reclamation plan which involved extensive consultation with the local community and multiple assessments and approvals by the provincial government, including the Ministry of the Environment, Ministry of Natural Resources and public health authorities.

With the main goal of converting the mine site to its pre-mining condition as well as enabling local stakeholders to pursue new opportunities for development, a five-year US$118 million closure and reclamation program was approved in 2006. Local employees and contractors were trained and hired to carry out the closure and reclamation activities which included demolishing surface facilities, excavating and remediating soils, re-vegetating tailing sites, reconfiguring surface-water flows and reinforcing water management infrastructure, collecting and recycling equipment, waste rock and contaminated soil safety disposal, removing electrical transmission lines, demolishing pipelines and re-profiling the site.

During the entire process, numerous measures were undertaken to protect the environment and ensure the health and safety of workers, including safety and personal protection training and equipment, regular air quality sampling and biological monitoring.

In line with the goal of achieving sustainable development, employee assistance such as early retirement packages, retraining and support in finding alternate employment were provided.

As part of the local economic development program, land and service buildings were transferred to the town of Murdochville for the creation of an industrial park. Even after its closure, the Murdochville site is supervised on a full-time basis by an Xstrata 18 Philippine Resources

employee responsible for monitoring the ongoing success of the reclamation activities including inspecting the water management infrastructure and ensuring equipment is operating properly.

In 2011, Xstrata received the Shreyer Award for its responsible rehabilitation and ethical awareness at its Murdochville project.

Another example is in Western Cape, South Africa. Considered a paragon for sustainable development in the mining industry, the Chemfos rehabilitation project of BHP Billiton – the world’s largest mining company – is among the best models of mining rehabilitation in the world.

The Chemfos phosphate operation there was an open cast mine that operated for about 50 years before decommissioning, closure and rehabilitation started. The rehabilitation program undertook a holistic approach which involved environmental, social, commercial and capacity building initiatives. In the process, local people were closely consulted and involved in the redevelopment plan. Former mine employees together with the local community from the mine village were employed and trained to assist in the rehabilitation project.

The old mining village, now known as the Green Village, has been re-vegetated with wide variety of indigenous plant species and has been redeveloped with public housing, a school, church, health clinic and recreation facilities. Power and water supplies and other essential infrastructure have also been upgraded.

These newly built assets including 50 hectares of land were transferred to the newly formed Village Management Company consisting of residents as well as representatives of the mining company.

Aside from the Green Village, the Fossil Park, a world-class ecotourism, research and education facility, was also established. Residents who suffered trauma with the closure of the mine were either employed within the new park or received small-business support. Thus, the rehabilitation of the mine site and the establishment of a Fossil Park provided a

post-mining socio-economic benefit that transformed the village into a viable selfgoverning community.

For its Chemfos project, BHP Billiton won four national awards in 2002 from the South African Landscapers Institute – the overall Gold Award of Excellence, Best Landscaping Project for the Fossil Park, and the Rand Water Trophy for rehabilitation excellence. The judges particularly lauded BHP Billiton for its “highly innovative and excellently documented” vegetative rehabilitation project at the Chemfos mine, and also noted that the project “encouraged a high level of community involvement in terms of economic empowerment, education and skills training and long term involvement.”

Successful mine site rehabilitation and its significant contributions to the community clearly demonstrate sustainable practices in the mining industry.

The clamor for environmental protection, desire for reduced human health risks and a new consciousness about the use of land and resources have led to marked improvements in regulatory requirements and mining practices. Increasingly, the ability to develop a new project becomes tied to the company’s reputation, and post-mining rehabilitation becomes its permanent legacy.

With this, mining companies have become more persistent in improving their practices.

Many international mining companies have gone to great lengths to integrate sustainable development to complete the full cycle of mining in areas across the globe. More governments, multinational development agencies and financial institutions, as well as national and international mining associations, are enjoining mining companies to integrate mine closure planning as early as the construction stage and operation of the site, with innovative use of advanced technology in rehabilitating old mine sites.

In the Philippines, several international mining companies operating or planning to operate in the country Continued on page 20 >

Resources Commentary February - April 2012

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Leaving behind a positive legacy < Continued from page 18 have proven track records of strong environmental performance standards.

These companies are also recognized internationally for their rehabilitation and closure of mining projects as seen in their sustainable mining practices across nations.

The Tampakan copper-gold project of Xstrata in South Cotabato recently received its fourth Presidential Mining Industry and Environmental Award. The award is the highest Philippine award given to a mining company that has displayed leading practices in sustainable development and responsible minerals development. Meanwhile, the Dow Jones Sustainability Index Review in 2011 named Xstrata as the global mining sector leader for the fifth consecutive year and super sector leader for basic resources industries.

Elsewhere, Gold Fields received the Sekondi-Takaoradi Regional Chamber of Commerce and Industry’s award in Ghana in 2011 for the company’s outstanding corporate social responsibility in helping accelerate socio-economic development in Ghana. In the Philippines, Gold Fields is partnering with Lepanto Consolidated Mining to operate the Far Southeast Project in Benguet Province.

While illegal mining activities have resulted in problems, particularly environmental degradation, responsible mining can bring palpable and concrete socio-economic developments in host communities that go beyond care for the environment. Philippine local communities have benefited from roads, water and power infrastructure, educational and health facilities, training and employment provided by mining companies.

In the case of the Tampakan project, for instance, US$3 million was invested in 2010 alone on local health services, training, educational, livelihood and enterprise development programs. Another $1.5 million was earmarked to fund infrastructure development, including potable water systems, health facilities, classrooms, village halls and roads.

Similarly, the Canadian mining 20 Philippine Resources

firm TVI Pacific’s Canatuan copper mine in Zamboanga del Norte has constructed school buildings, day-care centers, health centers, community water systems, power lines and roads for the local community, alongside the provision of community liveli- The former Chemfos phosphate mine in Western Cape, South Africa, hood and capac- is an award-winning example of mine closure and rehabilitation.

BHP Billiton turned the arid waste-land into the Green Village with ity building pro- innovative environmental and community development techniques. grams. TVI also built a $3.3 million world-class dam that of responsible mining, which leaves the received both international and Philip- debate very one-sided and implies that pine government recognition for its ad- pro-mining groups have no response to herence to international environmental the negative allegations lodged against guidelines and good corporate citizen- them. As support for mining opposition ship. TVI was particularly lauded for snowballs, the Philippines runs the risk contributing to economic growth, creat- of losing the few foreign-invested mining social equity and participating in en- ing companies operating in the country vironmental protection and sustainable — companies that bring in technology and foreign capital and serve as engines development.

Unfortunately, these contributions of growth and development, particularly to community development and efforts in the countryside. of sustainable mining are undermined in President Noynoy Aquino has to the Philippines by a limited understand- make a firm commitment and exert poing of mining. Local ordinances banning litical will in implementing national poliopen pit mining issued separately by cies, if the Philippine government is to the provincial governments of South sustain foreign mining investment. The Cotabato and Zamboanga del Norte Philippines will also forfeit socio-ecothreaten the future operation of the nomic and development opportunities Tampakan and Canatuan projects. if it fails to foster a truly sound and duNeedless to say, they also threaten rable foreign-invested mining industry. other related businesses working Improvements in infrastructure, with the mining companies in the lo- particularly in roads, dams and power cality, providing transportation, of- lines, are well-documented in areas fice and food supplies and logistical where legitimate and responsible minrequirements. Currently, there are ing companies are operating. Moreat least 13 local ordinances banning over, host communities not only benmining, the majority of which were efit from local employment, but also passed at the provincial level and receive new schools and medical facilities. While the cash-strapped Philipprohibit large-scale mining.

While anti-mining groups have pine government cannot realistically shifted the battle to political lobbying alleviate rural poverty and provide for and public relations campaigns, there community development, it has to enis, however, no concerted pro-mining sure that those capable of supporting voice — outside mining sector interest and meeting its foreign investment regroups — designed to extol the virtues quirements can operate efficiently. ■

Mineral Resources February - April 2012

www.philippine-resources.com

Top awards for five good miners

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ive mining companies won the Presidential Mineral Industry and Environmental Award for 2011 – the first time five firms have shared the limelight in receiving the prestigious award. The multiple citation “manifests a very clear sign of the mineral industry’s stronger commitment to achieve, beyond compliance, the highest levels of standard in the fields of occupational safety, health, environment and social de-

velopment,” said Philippine Mine Safety and Environment Association president Louie Sarmiento at PMSEA awards night dinner.

The five are FCF Minerals Runruno gold-molybdenum project, the MRL Gold Surigao-Agusan projects and Sagittarius Mines’ Tampakan copper-gold project in the exploration category, and Holcim La Union and Holcim Bulacan in the quarry category. An additional special presidential award went to Apex Mining’s Maco gold

mine in recognition of five consecutive years of operation without a fatal accident at its underground mine in Masara.

Presidential Mineral Industry Awards, established through Executive Order No. 399 of February 1997, recognize exemplary performance by companies in environmental management, safety and health, and social development and management programs, evaluated by an eight-member selection committee drawn from the

Apex Mining’s president Peregrino Resabal (far right) and executive vice president Emelita Fabro (second from right) were presented with the Presidential Mineral Industry and Environmental Special Award for the company’s four consecutive years of operation without a fatal accident at its Maco gold mine in Masara. They received the award from Philippine Mine Safety and Environment Association president Louie Sarmiento (left) and Mines and Geosciences Bureau assistant director Elmer Billedo (second from left).

Ironically, Apex Mining was also cited at the same PMSEA awards and testimonial dinner last November for the company’s role in the search, rescue and recovery operations after the landslide tragedy in Pantukan, Compostela Valley, which happened earlier last year. Now Apex experts are again at work after another similar landslide in Pantukan.

24 Philippine Resources

Mineral Resources February - April 2012

www.philippine-resources.com

government and est program are private sector.

Philex Mining’s In other Padcal operaawards for 2011, tions in the mesafest mine tallic category, awards went to Holcim La Union TVI Resource plant in the nonDevelopments metallic categofor surface opry, MRL Gold’s eration, RepubSurigao-Agusan lic Cement Buprojects in the lacan for cement exploration catplant operaegory, with speResource Development, represented by its president Eugene Mateo (second from tion, Apo Land TVI cial awards for right) and chief operating officer John Ridsdel (far right), won the award for the safest mining and Quarry for operation as well as safest mine awards for surface operation and mineral processing Apex Mining quarry opera- (concentrator categories). They received the awards from PMSEA president Louie and Rio Tuba Sarmiento (far left) and Mines and Geosciences Bureau director Leo Jasareno (second tion, FCF Miner- from left), with awards committee member Lita Lee (center) of Rapid City Realty and Nickel Mining als for explora- Development Corporation. for best nursery tion (category and best rehaA), MRL Gold Surigao-Agusan for Mining Service for mineral process- bilitation strategy respectively. exploration (category B), Repub- ing (crushing plant category).

PMSEA’s Pasasalamat Award was lic Cement Norzagaray for mineral Carmen Copper was cited for conferred upon former Mines and processing (cement category), TVI safest combined operation, Northern Geosciences Bureau director and DeResource Development for mineral Cement for most improved safety per- partment of Environment and Natural processing (concentrator category), formance and TVI Resource Develop- Resources undersecretary Jerry DoApex Mining for mineral processing ment for safest mining operation. lino for his contributions to uplifting (extraction category) and Philippine Awardees for the best mining for- the Philippine mining industry. ■

Philippine Resources 25

Resources Events February - April 2012

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A win for miners facing local bans

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Michael Marasigan (left) of Information Architects with Sandy Gilles of First Metro Asset Management.

Keynote speaker Clifford M. James, chairman, president & CEO of TVI Pacific Inc. Mylene Sanchez (left) and Laurie Ann Malibago of ANZ Bank.

Jose Marcel Jr (left) of Johson Gold Mining, Ernesto Ciriano (center) of Citiparts and Lawrence Tumaneng of Midas Resources.

Tim Nillos (left) of Devonian Metals with Carlo Montecillo of SGS Philippines.

26 Philippine Resources

Peter Wallace (left) of Wallace Business Forum, Roy Lotzof (center) of TVI Resource Development and Gavan Collery of Indophil.

Jaime del Rosario (left) of SGV & Co., Gia Veloso (center) of Geoproject (center) and Leo Cleto Gomolo of Intex Resources.

Photos by Dean Homer, www.chromagraphic-images.com

Rocky Dimaculangan (left) of the Chamber of Mines of the Philippines, Eugune Mateo (center) of TVI Resource Development and Dennis Quintero of Quisumbing Torres.

he dangers of facing down a looming ban on mining operations imposed by provincial authorities have been spelled out by Clifford M. James, chairman, president & CEO of TVI Pacific Inc. Ironically, James discussed the ban in a strongly worded keynote speech to members of the Philippine Mining Club just weeks before TVI Resource Development finally won a preliminary injunction against an ordinance that would have banned open pit mining in Zamboanga Del Norte, including the company’s own copper-zinc mine in Canatuan.

In his speech, James defended TVI as having an outstanding record in safe mining, environmental protection, community involvement and responsible business practices, saying the Canatuan operation enjoyed strong support from and a good relationship with the local community.

After the favorable court decision, the company issued a statement describing the injunction as “the first step towards complete victory. TVIRD is now preparing for a legal battle to prove that this ordinance is invalid and unconstitutional. We believe we are on the side of the law and we expect to win this.”

Mines and Geosciences Bureau director Leo L. Jasareno greeted the injunction as “welcome news” for the mining industry.

The next Philippine Mining Club lunch is scheduled for February 10, when the keynote speaker will be Mick Wilkes, managing director and chief executive of OceanaGold which has a gold-copper project in Didipio, expected to be commissioned late this year. ■

Oil & Gas Resources February - April 2012

www.philippine-resources.com

BHP deal and Galoc keeping Otto busy

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HP Billiton has sealed a deal to acquire a 60 percent stake in an oil prospect offshore Palawan from Otto Energy. The giant takes over as operator of Service Contract 55, which covers 9,000 square kilometers in the southwest Palawan basin.

The US$7.3 million deal finalizes the earlier decision by BHP Billiton to exercise its farm-in option on the block. Otto Energy’s stake falls to 33 percent from the original 85 percent. Trans-Asia Oil and Energy Development has 7 percent of the service contract.

The consortium plans to dig an exploration well in the area by April next year.

“2012 is an exciting year for Otto Energy shareholders as we prepare for drilling of the Cinco prospect in service contract 55 during the second quarter,” said Otto Energy chief executive Gregor McNab. “More importantly, there is a depth of opportunity beyond this first well in our acreage portfolio that provides ongoing exploration and development potential,” McNab said.

The Cinco prospect has an estimated oil and gas potential of 7.4 million barrels of oil.

Otto Energy and its partners are also eyeing another area in service contract 55, the Hawkeye prospect. Drilling costs for the Hawkeye prospect will also be shouldered by BHP Billiton.

Overall, SC55 is estimated to have a potential of 19 trillion cubic feet of gas and 670 million barrels of oil.

McNab said the area “has seen little historical offshore exploration drilling, and no deepwater offshore drilling has occurred to date. This is an exciting new frontier that has significant scale and potential sitting between proven oil and gas fields.”

• Otto Energy’s Galoc Production, operator of the Galoc oil field off Palawan, anticipates a substantial rise in production there after a three-month upgrade of the floating, production, storage and off-loading vessel deployed in the area.

“The upgrade... is expected to substan-

tially increase the reliability and uptime of the FPSO and is a crucial component of infrastructure to enable the Galoc joint venture to move ahead with a potential Phase II development program,” said a Galoc Production statement.

The vessel, with a storage capacity in excess of 400,000 barrels, is being upgraded in Singapore and will return to the Philippines towards the end of the first quarter of 2012.

Production at Galoc will resume after the vessel’s return and reconnection. The field has estimated reserves of about 10 million barrels.

Galoc started producing crude oil in October 2008 at 18,000 barrels per day to become the first major field since the 1990s to come onstream in the underexplored Philippines. It suffered a number of disruptions, some of them triggered by bad weather.

The field life is expected to range from two to six years from 2008, depending on the reservoir performance. ■

Philippine Resources 27

Oil & Gas Resources February - April 2012

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Shell pours more cold water on Palawan oil and gas hopes

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opes for petroleum prospects in the northwest Palawan basin area have suffered another setback, with the pull-out of Shell Exploration Philippines from the group exploring the Service Contract 54B block.

This area, near the existing Malampaya natural gas field, includes the Pawikan oil and gas prospect currently being explored amidst high hopes.

The importance of Shell’s withdrawal was quickly downplayed by its partner as well as the government Department of Energy.

“We remain optimistic on the prospectivity of the block especially by the potential exploration upside identified in the large Pawikan Lead to the south of the Gindara-1 location and only 10 kilometers from the producing Nido ‘A’ and ‘B’ fields,” said Nido chief executive Jocot de Dios.

“The recently acquired Pawikan 2D seismic survey is designed to mature this lead to prospect status and a potential future drilling opportunity. Preliminary seismic data from the Pawikan survey is encouraging.”

The DoE described the move as part of Shell’s risk management and would al-

low the company to look at more sites in the country. “Shell has expressed to the Energy Department its continued interest in exploration opportunities in the Philippines and will bid for new areas,” said Energy Undersecretary Jose M. Layug. “Shell is consolidating its exploration plans and pooling financial and technical resources for development of oil and gas in the Philippines.”

The government is offering 15 oil and gas areas for exploration and development in the latest contract auction this year.

Shell Philippines Exploration had a 45 percent interest in the SC54B while Nido Petroleum had a 33 percent stake.

Kairiki Energy rounded out the consortium with a 22 percent interest. After the pullout, Nido now has a 60 percent stake and Kairiki 40 percent.

The Energy Department approved the entry of Shell Philippines to SC54B in January 2011 year, paving the way for the drilling of the Gindara well with Shell contributing 75 percent of the Gindara-1 exploration well and seismic costs. But the Gindara-1 well was abandoned last June, after it had been found to be water bearing – although earlier it had estimated

with a potential of two billion barrels of oil.

In late 2011, the consortium finished undersea surveys of the area aimed at helping them find potential areas to drill.

However, de Dios said Nido is now not in a hurry to conduct more drilling activities at the SC 54B. “Importantly, there are no drilling commitments required in SC54B before the expiry of the service contract in August 2013, so the timing of the drilling of a Pawikan well, should the joint venture decide on this, would be at the SC 54B partners’ discretion,” he said.

• The Shell disappointment came just after Nido had announced a tie-up with Total in a joint study and bid agreement to jointly evaluate the oil and gas exploration acreage offered to investors under new Philippine Energy Contracting Round 4.

The pair will thus undertake technical and commercial evaluations of all the 15 prospective petroleum blocks with Nido Petroleum holding a 30 percent interest in the partnership and Total 70 percent.

The bidders have between April and July 2012 to submit their respective bid offers for the petroleum blocks they are eyeing. ■

Gas2Grid hits a hitch with Malolos well

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romising test results have been reported at a re-exploration and work-over of an old petroleum exploration site in Cebu, but work has encountered an unexpected hitch in the shape of an obstruction in the drill hole that dates back 50 years.

The site is the Malolos-1 well being drilled by the Sydney-based company Gas2Grid on onshore Cebu about 50 kilometers west-southwest of Cebu City.

It’s within the Service Contract 44, of which Gas2Grid holds 100 percent.

Petroleum exploration wells drilled during the 1960s on surface anticlines within the area flowed natural gas to surface and/or recovered significant volumes of oil during open-hole testing.

28 Philippine Resources

However, there was no further evaluation of the discoveries until increases in the price of natural gas and electricity increased to the extent of justifying looking at the natural gas flow potential of the original discoveries and assessing their potential as a fuel supply for a natural gas fired power station.

Gas2Grid believes part of the original 1960 cased-hole testing equipment became stuck in the hole and was abandoned. The hitch came as the company identified a number of gas zones worth flow testing at Malolos-1. Cased-hole logging with a pulsed neuron tool confirmed five sandstone reservoirs were gas-bearing and warranted cased-hole testing flow testing.

Attempts to mill out the obstruction have been unsuccessful, so testing of the deeper oil-bearing sandstone has been delayed until the arrival of a drilling rig which will be mobilized in the coming months and previously unknown existing well perforations are secured. ■

This June 2011 flare showed sure signs of gas at the Malolos-1 well. Now Gas2Grid has to find out how much.

Mineral Resources February - April 2012

www.philippine-resources.com

Coal mine contracts for auction

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he Philippine government is offering 30 coal exploration projects that may need total investments of up to US$600 million, in a bid to boost local supply and reduce costly fuel imports.

The potential coal sites are located in the central and northern provinces. The Department of Energy said it has identified 30 blocks that are ready for exploration.

Bids are to be submitted by endMarch. The department will evaluate the bids within 90 days and exploring each block may require investment of about $20 million, it estimates.

Energy undersecretary Jay Layug said each coal contract area could generate investments of 80 million pesos over a fouryear contract period. The development period for a coal area runs up to 20 years.

He said the government is promoting the development of coal areas be-

30 Philippine Resources

cause of the country’s coal potential of up to 2.4 billion metric tonnes.

The areas are mainly located in Quezon, Camarines Norte, Albay, Sorsogon, Masbate, Occidental Mindoro, Negros Occidental, Cebu City, Agusan del Norte, Agusan del Sur, Surigao del Sur, Compostela Valley, Davao Oriental, Lanao del Sur, Lanao del Norte and Zamboanga Sibugay.

The Philippines produced a total 7.33 million tonnes of coal in 2010, including 7.02 million tonnes from the Semirara open pit mine in Antique.

Semirara, owned by conglomerate DMCI Holdings, is the country’s only large-scale coal producer.

Some production comes from smallscale and medium-scale underground mining operations in the coal-rich provinces of Surigao, Zamboanga Sibugay, Cebu, Negros Occidental and Albay.

With local output not enough to

Much of the Philippines’ local coal comes from the massive Semirara open pit mine in Antique.

meet domestic demand, the country last year imported a total 10.97 million tonnes of coal, including 10.6 million tonnes from Indonesia. It also bought coal last year from Australia, Vietnam, Russia and the United States.

Coal for power generation currently accounts for 72.5 percent of the Philippines’ total coal consumption of 13.31 million tonnes. Coal is also used in cement production. ■

Mineral Resources February - April 2012

www.philippine-resources.com

Turkey cash earmarked for Acoje

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ickel miner ENK is forecasting the money it raised from the sale of its Caldag mine in Turkey will be crucial in developing its flagship Acoje mine in the Philippines. ENK sold Caldag last September for US$40 million and chief executive Rob Gregory says this means management can now focus solely on getting Acoje built.

“A key tenet of mining is not to dilute shareholders. By having this money we can get news out, get the work done on the feasibility study and work towards getting strategic off-take arrangements. As we do all of that, the share price will follow,” he told the financial newsletter Proactive Investors.

Deals with strategic partners are another key plank of the plan as Gregory says Acoje is very amenable to project finance through forward sales and off-take agreements. “Watch this space for forward sales with strategic partners that will use the Nickel hydroxide product and go directly to final product type arrangement without thermal processing,” he said.

ENK has already made the decision to move away from a mixed hydroxide product to a singular nickel hydroxide and a separate cobalt product. That has meant higher amounts paid for each product and significantly more in the case of cobalt. Another departure is the recent decision to move

away from the heap leaching pioneered by the company in its old European Nickel form and to use tank leaching instead.

Natural elements played a part with the heavy rain in the Philippines not conducive to the heap process, but it was the working capital element that also swayed Gregory.

Capital costs are similar, but tank leaching can get the nickel out in 12 hours as opposed to months using a heap leaching process. Tank leaching is also scalable, he says, without the need for everything to be built on day one.

Recoveries have been impressive.

Gregory says the tropical laterites it recovers at Acoje respond very well to its three-way leach process with 92 percent of the nickel and 97 percent of the cobalt being recovered.

Once up and running, Acoje is expected to produce 24,500 tonnes of nickel and 930 tonnes of cobalt a year. At the moment the Acoje operation has a 10-year mine life, although the company has recently completed infill drilling at Acoje and is also currently drilling at its neighboring Zambales chromite tenement with a view to more than doubling the mine life.

For the next six months, the focus will also be on completing the feasibility study and working very closely on the financing op-

tions with the aim of accelerating construction “as soon as we can”. This will also include appointing a debt adviser and running a lot of things in parallel, Gregory adds.

There are no regrets over Caldag.

Gregory says ENK did not want to be minority shareholder in the project, while Acoje was always seen as better in terms of grade, leachability, total resource and growth potential. “The only difference is that Caldag was halfway through construction. All things equal we would always have gone for Acoje, “he added.

“It is also very, very important that we have this cash in the bank. We won’t be spending it all on the feasibility study. We will be spending between US$6 and 10 million to complete the study, so a lot of money will be available to help us through the financing stage. And if we have to go and get some equity fund raising we will be doing at a much less dilutive level.”

The one thing Gregory does not have control of is the nickel price, which has been hit by the substitution of cheap pig iron coming out of China.

But while he says this puts a lid on the nickel price, the cost of laterites and high cost of sulphide also means a floor.

“On current projections of long term prices we will make a very healthy margin at Acoje” he said. ■

Philippine Resources 31

Mineral Resources February - April 2012

www.philippine-resources.com

Zamboanga del Norte block on open pit ban ‘a breakthrough’

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he Philippine mining sector has welcomed legal action in which the court has granted a preliminary injunction against a local government ordinance that would have banned open pit mining in Zamboanga del Norte. The Chamber of Mines of the Philippines has expressed “great relief” at the order and a senior mining executive in the area called it “the breakthrough we’ve all been waiting for.”

The chamber issued a statement saying it hopes the Zamboanga del Norte court order will convince provincial officials of South Cotabato to reconsider their position on a similar ordinance.

Referring to TVI resource Development, the chamber said the order clearly recognizes the excellent track record of TVI in protecting the environment and in advancing the interest of its host communities. The ban would have prevented TVI’s neighbor constituents from reaping the benefits of transforming minerals into wealth such as that being enjoyed by hundreds of employees and their families, as well as thousands of residents in host and impact communities of TVIRD, the chamber said.

Government Mines and Geosciences Bureau director Leo L. Jasareno called the court resolution “welcome news” for the mining industry and “proves our position that local legislations cannot rise above national policies.”

The Dipolog City Regional Trial Court ruled that TVI “held a valid contract for its Canatuan copper and zinc mine” and would suffer “grave and irreparable damage and injury” if forced to halt operations. It said the company had the right to seek an injunction as it was party to a mining agreement with the national government under a mineral production sharing agreement.

If the ban were implemented, it noted, TV would have to deal with the consequences of having to prematurely pay off millions of dollars worth of outstanding loans including US$6.35 million from the Metropolitan Bank and Trust Company and another $$9.68 million from the Bank of the Philippine Islands. However, TVI was also ordered to post a bond amounting to 2 million pesos “to answer for any damages which the respondents (Zamboanga governor Rolando E. Yebes et al.) may sustain” should the court ultimately decide to lift the injunction.

TVI president Eugene T. Mateo issued a statement calling the injunction “the first step towards complete victory.” TVI is now preparing for a legal battle, he said, “to prove that this ordinance is invalid and unconstitutional. We believe we are on the side of the law and we expect to win this.”

The company has been fighting the the Zamboanga del Norte ordinance saying it was contrary to provisions in the Local Government Code of 1991 and the Philippine Mining Act of 1995.

The TVI mine in Zamboanga del Norte still has enough mineral resources to enable the company to operate it for four more years. The company says it stood to lose about $448 million in gross revenue if the Canatuan copper-gold mine closed premaContinued on page 33 >

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Mineral Resources February - April 2012

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< Continued from page 32 turely because of the ban. The annual gross revenue of the mine is about $112 million, it says, and a major portion of the revenue would have been spent on operating costs, royalties to indigenous people, and community development.

TVI Pacific president and chief executive officer Clifford James said: “We strongly believe the powers to be assumed by the province under the ordinance, and by the provincial governor of Zamboanga del Norte, are unconstitutional. While the court order allows TVI to continue its operations in Canatuan unimpeded, we will continue to relentlessly pursue ultimate relief from what we view as an unconstitutional local legislation.”

Another group, the Coalition for Responsible Mining in Mindanao, said the ban on open pit mining contradicts the national policy on mining as embodied in Republic Act No. 7942 or the Philippine Mining Act of 1995. “Moreover these ordinances violate due process, equal protection, and non-impairment of contract clauses of the 1987 constitution.”

The group said local ordinances banning open pit mining are “anti-responsible mining” as they tend to favor illegal small-

scale mining activities that often employ crude practices. “The ban imposed by local government units will not only put to risk the employment and livelihood of the mining communities but will also seriously undermine the ongoing development and good governance initiatives in these communities,” the statement read. The coalition said its members believe in the potential of responsible mining as an “engine of growth” in Mindanao and the rest of the country.

• In Davao City, meanwhile, local lawmakers have initiated moves to declare Davao City a mining-free zone after passing a resolution on the same day that it approved a coalfired power plant. The legislative measure seeks to ban both open pit and underground mining.

The resolution, however, exempts quarrying for limestone as well as sand and gravel, from the ban. Davao is host to Holcim Philippines, listed among the local government’s top 10 taxpayers in 2010, which extracts limestone for the production of cement.

The lawmakers backing the Davao ban cite environmental issues including erosion, formation of sinkholes, loss of biodiversity and contamination of soil, groundwater and surface water by chemicals from mining processes, their resolution stated.

“For example, 99 tons of wastes are generated per ton of copper, with even higher ratios in gold mining. These tailings can be toxic,” said city councilor Victorio U. Advincula, proponent of the resolution.

The resolution on the mining ban, coauthored by councilor Paolo Z. Duterte, brother of the mayor and son of Vice-Mayor Rodrigo R. Duterte, alluded to the Marcopper mining disaster in 1996 when a pit containing tailings ruptured and released 1.6 million cubic meters of toxic chemicals into Boac River in Marinduque.

They also cited irresponsible mining as the reason for the death of three men in a landslide in Pantukan, Compostela Valley in April 2011.

“To date, none of the mining companies that operate in the country have owned up responsibility, or effectively rehabilitated the devastated environment,” Advincula said.

• In Romblon, local law-makers have renewed their call on the Philippine Senate to rally behind a proposed bill declaring Romblon as a “mining-free zone.”

They are referring to House Bill 4815, which seeks to ban mining operations and related activities in Romblon, which has been pending before the Senate since August 2011. ■

Apex, Teresa Crew merge

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Awards haul for MRL

The MRL Gold team was on stage three times to receive top awards at the 2011 National Mine Safety and Environment Conference awards night in Baguio. MRL won the Presidential Mineral Industry Environmental, Best Mining Forest and Safest Exploration awards.

On stage for the Safest Exploration Award presentation were (from left) Quest Exploration Drilling president Ramon T. Santiago, PMEA president Louie R. Sarmiento, PMEAís Joey Nelson R. Ayson, Mining and Geosciences assistant director Elmer B. Billedo, with MRLís Edsel M. Abrasaldo, Jean Ravelo, Maya Flores Arguelles and Fernando Magno.

pex Mining has merged with affiliate Teresa Crew Gold Philippines in a bid to achieve operational efficiencies and improved profitability.

Apex is the surviving corporation in the merger, which involves a series of share-swap deals among company stockholders including Mapula Creek Gold and Mindanao Gold. All interests, assets and properties of Teresa Crew are being transferred to Apex, which has also assumed all debts and liabilities of Teresa Crew.

Teresa Crew, headquartered in Maco, Compostela Valley, is a company in which Apex’s former principal, Crew Gold of Britain, has divested interest. Its main business is providing funding, technical services, equipment and processing plants to Apex.

Apex owns and operates a 700 metric tonnes per day gold mine producing gold/silver ore and holds a contract for porphyry copper-gold deposits in Maco, Compostela Valley. ■ Philippine Resources 33

Energy Resources February - April 2012

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RE proponents see rough year ahead

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nhappiness prevails in the renewable energy sector as 2012 gets under way. Energy developers, investors and would-be producers accuse the government of stalling on power transmission, service contracts and a fed-in tariff structure, while the government is on the defensive saying it is moving as fast as it can. Meanwhile, legal action by lobbyists further threatens the sector.

“It’s getting ridiculous,” complained a delegate at the recent international Geothermal Energy Summit conference in Manila. “Can somebody please explain what is going on in the Philippines?” Similar complaints were raised at the European Chambers of Commerce of the Philippines Renewable Energy Forum in Manila. Nobody volunteered any specific answer.

The latest to weigh in on the issue has been the National Grid Corporation of the Philippines. In its latest Transmission Development Plan, the NGCP says the government’s “wait-and-see” approach to pending transmission investments for renewable energy facilities will have adverse implications for both congestion and overall system reliability, and may push up electricity prices.

The Energy Regulatory Commission’s approach “does not encourage a timely implementation of investments and may lead to less optimal transmission solution to support incoming renewable energy resources,” says the NGCP. It says a piecemeal approach instead of a proactive plan would lead to imprudent investments, requiring more right-of-way arrangements and longer transmission lines, resulting in heavy investments and increased power rates to end-users.

A more efficient approach, the NGCP says, would be to have all connection requirements coordinated, to ensure that a transmission backbone and strategically-located substations are built to provide access, for instance to wind farm sites already identified.

“This is a more prudent and economically feasible approach to connect to the 34 Philippine Resources

system in contrast to each wind farm building its own long individual lines,” it says.

What is required, the NGCP urges, is a pr-active mechanism to eliminate the “chicken-and-egg” problem in the renewable energy sector, in which generation investors are not willing to build a project without adequate transmission facilities, while transmission operators will not expand transmission facilities without guarantees from generation investors.

“NGCP cannot respond proactively if transmission regulations and existing policies prevent it from doing so. RE developers, on the other hand, cannot build their projects when there is no adequate transmission capacity,” the NGCP said.

“With the expected growth of the RE industry, particularly that of wind power, the required mechanism and strategies that will guide NGCP and RE developers must be in place soon. Otherwise, the industry will face a ‘chicken and egg’ problem on transmission and generation development.”

The NGCP wants to see creation of a renewable energy zone and a national transmission corridor. “The government under its own National Renewable Energy Plan should identify areas with high potential for large scale development of RE resources. Once identified, the area can be declared as a competitive renewable energy zone,” NGCP said. “This will facilitate not only the competitive deployment of RE-based generating facilities but will serve as NGCP’s reference in formulating a long-term plan for the transmission capacity needed to support the RE zone.”

As this issue awaits resolution, controversy also surrounds the approval of renewable energy service contracts. The Department of Energy was compelled to issue a denial that it has been holding up approval of contracts. Energy Secretary Jose Rene D. Almendras told media that DoE continues to approve and release renewable energy service contracts following the adoption of a new set of terms that will help ensure the delivery of commitments by project proponents.

Almendras said the DoE has signed and approved over 1,000 megawatts of hy-

dropower and mini-hydropower plant projects in the past few months in areas “where it really works.” Whereas in the past the department released and issued service contracts without fixing “the peripheral issues,” under his stewardship the DoE makes sure that a project covering a particular service contract will get off the ground and be operationally viable.

“We know we have a lot of problems or challenges but we have the solutions and implemented solutions. We’ve tested it and it works, so now it’s just implementing it and we can expect it will continue,” said.

According to a July 2011 DoE report, 236 contracts had been awarded to renewable energy proponents, with a total generation capacity of 2,823 MW. Of these, 124 contracts involved hydropower, three ocean energy, 21 geothermal energy, 46 wind farms, two solar power and 40 biomass plants.

Based on that report, 164 of the 236 contracts are currently at predevelopment stages while 72 are in the development stage.

The DoE says it has yet to award or approve 384 pending renewable energy project applications – 191 involving hydropower, 70 solar power, 59 wind farm, 28 biomass, 21 ocean energy and 15 geothermal, with a total potential combined capacity of 6,046 MW.

The biggest in the line-up are Pan Pacific Renewable Power’s 600 MW hydropower project in Apayao, Coastal Power Development’s 420 MW wind farm project in Sorsogon, Jobin-Sqm’s 100 MW solar power project in Zambales, Eoil and Gas’ 60 MW geothermal power project in South Cotabato, and Green Power Bukidnon’s 35 MW biomass project in Bukidnon.

Again on the defensive but focusing specifically on Mindanao, Secretary Almendras countered allegations by critics that he is apparently blocking investors and developers proposing renewable energy plants, particularly solar-powered units. In an interview with the Philippine Continued on page 36 >

PMC FP

Energy Resources February - April 2012

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RE proponents see rough year ahead < Continued from page 34 Daily Inquirer newspaper, he said the government is pacing the entry of more expensive energy sources in the grids to ensure that consumers are not burdened by higher power rates.

“I have no problem if Mindanao wants renewable energy and if consumers are willing to pay for it. I have nothing against biomass and hydro, the applications for which we are approving left and right because one, they can be brought into the grid and second, their consistency levels are good so we can expect less interruption,” Almendras said.

“They want 100 megawatts of solar in Mindanao at 17.95 pesos per kilowatthour. If the people of Mindanao want solar energy at that price and they will pay for it, it is not my job to stop them. They can do what they want and they do not even need to go into the grid,” Almendras said.

He noted, however, these solar facilities should be embedded, meaning the power to be generated from the solar power plants should not go through the grid and thus not entitled to the feed-

in-tariff rates. This would mean those paying for power generated by solar facilities would be those who use it, so that not everybody connected to the grid would be burdened by higher electricity rates, he said.

If proposed feed-in-tariff rates are approved, solar power and ocean energy producers will enjoy the highest rates of 17.95 pesos a kilowatt-hour and 17.65 per kwh respectively. Investors in wind farms would get a feed-in rate of 10.37 pesos per kwh; for biomass 7 pesos per kwh; and for hydropower 6.15 pesos per kwh.

To further complicate the issue, opposition to the feed-in tariff structure is hardening. In late 2011, an application for a temporary restraining order to halt proceedings of the Energy Regulatory Commission on feed-in tariffs was filed by the so-called Foundation for Economic Freedom.

Frustration by project proponents was summed up by David Sutton, director of UPC Renewables and a member of the Wind Energy Developers’ Association of the Philippines, during the European Chambers of Commerce of the Philippines Renewable Energy Forum.

“Those who have already invested to develop the market for renewable energy in the Philippines are having difficulty because of the delay in the implementation of feed-in tariff,” he said. “For the wind sector, it is very difficult to proceed without the feed-in tariff.”

The Foundation for Economic Freedom, filed for the TRO with the Court of Appeals, against hearings by the Energy Regulatory Commission and the petition by the National Renewable Energy Board on the feed-in tariff – which would guarantee national grid payment to renewable energy producers through a universal charge.

The foundation’s petition claims the ERC hearings to set the feed-in tariff should be suspended because “the commission committed grave abuse of discretion amounting to lack or excess of jurisdiction in refusing to dismiss the NREB petition due to prematurity as there were no renewable energy portfolio standards rules yet... and refusing to dismiss the petition due to its failure to find that the weekly publication of its notice of hearing was not actually complied with.” ■

Obstacles to renewable energy options continue to worry proponents of new facilities, to the extent that many wonder whether more wind farms like this one at Bangui in Ilocos Norte will ever happen.

36 Philippine Resources

Energy Resources February - April 2012

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Meralco eyes another power plant

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Photo: Anthony Bayarong

ower distribution and now generation firm Manila Electric Company has a new power plant on the drawing board, and is looking at coal-fired, natural gas and hydroelectric options. It is eyeing production of up to 600 megawatts, hopefully by 2016-2017, and connecting to the Luzon electricity grid.

Meralco chief operating officer Oscar Reyes said the timetable depends on supply and demand, centering on which of the existing power plants are going to be retired and when. “But we’re mainly looking at 2016 or 2017,” he said.

Feasibility studies are under way looking at the viability of coal and liquefied natural gas. Coal is attractive mainly in terms of cost efficiency. Natural gas would depend on availability of supply, whether more gas will be made available from the Malampaya gas field off Palawan, as well as the availability of the necessary infrastructure such as a land-based gas terminal or a floating storage and regasification unit.

“If more natural gas becomes available, then we would prefer natural gas because it’s indigenous. We’re busy exploring all options but natural gas would be a good play because it offers diversification,” Reyes said.

Meralco is also looking for poten-

Meralco hopes its new power plant project won’t encounter the same stiff opposition it faced with the coal-fired 300-to-600 MW operation the company is building in Subic Bay Freeport. Local community and environmental groups there came out strongly against that project, filing joint protests which Alex Hormoso (center), lead convener of the Olongapo-Zambales Civil Society Network, gave to Meralco PowerGen president Oscar Reyes (right) and Aboitiz Power president Erramon Aboitiz as the two signed their mid-2011 joint venture pact for the Subic plant with another partner, Taiwan Cogeneration International.

38 Philippine Resources

tial hydropower projects, especially those which might be combined with bulk water supply. “We’re scouting in Luzon. There are various potentials of about 150 to 300 megawatts of impounding hydro,” he said. Among the sites being considered are the Laiban Dam, Sierra Madre area and Kaliwa and Kanan Rivers, for which several proposals for bulk water supply projects have already been put forward to the government.

“With hydro resources, you could have a bulk water and power project.

But if you’re looking at supplying water requirements for Metro Manila, then you’ll have to go for a source that is reasonably near to the market like the Sierra Madre area, Kaliwa and Kanan Rivers and Laiban. I think those will be led by bulk water projects. We’re just exploring what the opportunities are,” Reyes said.

Meralco’s chairman is Manuel V. Pangilinan, who also chairs Manila’s west zone water concessionaire, Maynilad Water Services. In terms of possible partners in a power plant venture, Reyes said: “I think for us, we will partner with whoever can bring better value both for our customers and for us,” Reyes said. The company also needs to look for a partner that “has the technology, who’s got the water rights and experience,” he said. “It’s open.

We’re partner agnostic.”

Meralco earlier formed Meralco PowerGen in an effort to reduce rates

and secure electricity supply. Under current regulations, power retailers such as Meralco can source electricity from its own power plants provided these do not exceed more than half of their total requirements.

Meralco PowerGen has since acquired a majority stake in an Aboitiz Power Corporation joint venture that is building a coal-fired power operation in Subic Bay Freeport to produce up to 600 megawatts The corporate vehicle there is Redondo Peninsula Energy, known as RP Energy, set up as a 50-50 joint venture company between Aboitiz Power’s wholly owned subsidiary Therma Power and Taiwan Cogeneration International.

After encountering strong opposition to the project from local community and environmental groups, the builders are now going ahead with the plant projected to start operation in 2014, linked to the Luzon power grid. ■

Supply Resources February - April 2012

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Modular plants save time, money

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s coal mining projects have long and fit-up problems at site are eliminated. or a slab to support the structural modules and gestation period of about seven • Ease of disassembly and shifting the depends on the site conditions.

Each module is pre-wired with wirto eight years for underground plant to another coal mine location; mines and four to five years for open • Add-on features of module to enhance ing in rigid galvanized steel conduits except where the conduit is used for field cast mines to reach peak production, a capacity of modular plant. new concept in designing modular coal In construction of modular plants, connections between modules. Each preparation plants offers the advantages all structural steel models in the modules module has a junction box and once the of gradual build-up on beneficiation ca- are in accordance with current standards modules are stacked in place, the flex pacity. This keeps up with the increased in design and fabrication of structural conduit is simply connected from the production and thereby obviates the ne- steel for buildings. Structural steel con- upper module to the junction box of the cessity of blocking capital investment at nections are designed for field-bolted next lower module. The pre-wiring includes assembly. Each module has wide flange all electrical devices such as motors, stop-jog the outset, hence saving on capital cost.

Now the mine equipment specialist Met- floor members with T cord upper mem- switches, lighting and electrical outlets. so says it has taken modular coal prepa- bers which fit together as modules are The basis for the selection of all ration plants to a new level in design, fab- stacked. All necessary bracing is included preparation equipment within a moduon each module before shipment. This lar coal preparation plant is the same rication and installation.

The main advantage of modular results in a rigid frame to withstand with as would be used in a conventional coal preparation plant. The customers’ raw plants is that they are pre-engineered and equipment in place.

The framework of all modules is pre- coal size analysis and washability data are have a shorter completion time than con- ventional prep plants. They offer the ef- engineered and standardized to the same reviewed by engineers to determine the most ficiency and reliability available in most size. The size of a module is 11’–0” wide efficient and economic method of cleaning to meet the particular quality requirements. Then custom-built plants, but with the added by 12’–0” high by 30’–0” or 40’–0” long. the various modules are assembled to develop benefit of being easy to disassemble and Interconnection of Modules move to a new location. Modular plants Each module is manufactured in- the circuits determined to be the most efficient can also be designed to allow the addition cluding jigs and fixtures to ensure that all and economical by the preparation engineers.

Even though the modules are stanof future modules for expansion only interconnections match when lifted into when warranted by production increases. place during field erection. Most connec- dardized, variations in stacking obtain Metso plants employ conventional tions are by hi-tensile steel bolts with all different circuits and combinations of coal washing equipment. Many standard the holes drilled in the workshop before circuits to create a functional plant that circuits are available including heavy me- shipment. Splice plates are used on all gives the flexibility necessary to produce an efficient plant design. dium washing (both vessel and cyclone), column connections.

Foundation work consists of estab- All modules are designed for rail jigs and water-only cyclones.

Metso offers a full range of equip- lishing construction lines and levels from cus- truck transportation with lifting lugs proment: sieve bends, raw coal de-sliming tomer’s benchmarks, furnishing and installing vided on each. If it becomes necesscreens, clean coal D&R screens, refuge concrete, forms, reinforcement steel and an- sary to move a plant, it can be disconcoal D&R screens, heavy media cyclones chor bolts. The actual foundation can be piers nected at the modular connections and transported and re-as(Multotec), classifying cysembled at the new site. clones (Multotec), lo-flo

Once the foundation bath, low intensity magwork is completed, the field netic separators, slurry erection of modular plants pumps, centrifuges, and all primarily consists of lifting chutes, tankage and launeach module from the truck ders. or rail car and placing it in

The advantages are the proper position. After a • Shorter completion module is lifted into positime hence lower overtion, all that remain are the all capital cost; connections to anchor bolts • Lowest payback period; and other modules, connect• Cost reduction due to preing flexible electrical connecengineered plant; tions between junction box• The majority of assemes, piping connections, and bly work is done in a adding the necessary chutes, Metso workshop under hoppers and sluices to comexpert supervision; The Lamella thickener portable water treatment system is an plete the circuits. ■ • Field receiving, storage integral part of the modular coal preparation plants built by Metso.

40 Philippine Resources

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Debut for hi-tech borehole televiewer

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ew technology and equipment for down-hole surveys by mineral exploration companies is now available in the Philippines. The acoustic televiewer tools - which give much more comprehensive views of the surrounding rock features down the hole, allowing better identification of potential ore deposits - have been brought in by the geological, exploration and drilling supplies specialist GXD. GXD has acquired the latest ALT Instruments ATV equipment, which generates an image of the borehole wall by transmitting ultrasound pulses from a rotating sensor. GXD provides onsite teams to operate the equipment in partnership with Resources Development Contractors of New Zealand, known as RDCL, which provides specialized professionals for the interpretation of the data generated.

Acoustic borehole scanner tools generate an image of the borehole wall by transmitting ultrasound pulses from a rotating sensor and recording the amplitude and travel time of the signals reflected at the borehole walls interface between mud and formation.

The most widely used applications for the ATV are fracture detection and evaluation; detection of thin beds; determination of bedding dip; lithological interpretation; breakout analysis;

monitoring of earth stress field; casing inspection; and high resolution caliper measurements.

GXD’s latest generation of the ALT ATV is a multi-echo system. This is achieved by digital recording of the reflected wave train. On-line analysis of the acoustic data is made by digital signal processor. Sophisticated algorithms allow the system to detect the reflection from the acoustic window and to separate/classify all subsequent echoes.

Minimum input of the operator is needed to enable: automatic optimization of measurement window under all borehole conditions; automatic adaptation to variable borehole conditions; improvement of dynamic range of signal detection; very high travel time resolution; and implementation of different operating modes.

Main features of the new ATV are: • Direct linear 14bit, 10mhz A/D conversion (automatic gain settings); • Dynamic range of amplitude measurement is 84 db; • Calliper resolution is better than 0,1mm; • Orientation sensor which does not require field calibration; • Increased telemetry bandwidth (data transmission rate up to 500kbits depending on wire-line), 166kbps typical on 300m four-conductors; • Full wave form recording and real-time

The GXD team at work with the company’s new ATV down-hole equipment, at an exploration borehole in Batangas.

42 Philippine Resources

display for quality control; • Multi-echo mode to realize acoustic measurements through plastic pipes (requiring the plastic pipe to be centralized inside the borehole); • Pipe-inspection mode to detect inner corrosion, outer corrosion, and wall thickness; • Automatic measurement window definition to gain optimum performance and variable borehole conditions. ■

Pusong Minero < Continued from page 6 the anti-mining and environmentalist lobby started firing from the hip without looking or thinking. They burst into the headlines blaming both the Iligan/Cagayan de Oro and the Pantukan tragedies on the usually suspects - logging and mining. This continued for a week until the reality became clear: there are no large mining operations in the Iligan/Cagayan de Oro area, and none around the Compostela Valley.

Yes, illegal logging is rampant in the region, as evidenced by the myriad logs washed down-river by the flash floods.

And yes, there are many small-scale miners burrowing into hillsides in the Compostela Valley, which operate either illegally or under the radar of the local officials who are supposed to police that sector. They are a law unto themselves and have nothing to do with large-scale, responsible mining.

Hopefully, the reality is now accepted that large, responsible, mining companies were not involved in triggering the tragedies. If blame has to be apportioned, the finger should be pointed at the small, local, informal miners – and at the local government officials who let them dig unsafe holes in unstable ground. To the contrary, the Pusong Minero major miners are doing the best possible job of helping local communities recover after the damage has been done. ■

Simon Halley Editor

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Toasting to a new identity

Senior executives gathered in Manila to toast to the success of Hansa Meyer - ATS Projects following corporate restructuring and resulting name changes. Pictured at the party were (from left): master of ceremony Sandra Seifert, Hansa Meyer - ATS Projects (HATAS) president and chief executive officer Klaus Schroeder; retired shareholder and consultant Karl-Georg Gorski; HATS chief operating officer Stefan Schmitz; HATS project support manager Alfred Schroeder; Hansa Meyer Global Transport Germany director and HATS director Holger Hartmann; HATS operations manager Matchit Dela Cruz; Hansa Meyer Global Transport managing director Juern Schmidt; HATS project manager and industry head for power transmission and distribution Roberto Yco Jr; HATS project manager and industry head for mining and renewable energy Fernando de Achaval; HATS project manager and industry head for power generation Leonard “Jaypee” Lim; Hansa Meyer Global

Advertisers’ Index ADEN 31 AMC – Reflex 19 Austhai Geophysical 13 Black Pearl (Business Profiles) 17 Brunel 24-25 Cape 22-23 Cardno 11 GXD 21 Hansa Meyer 7 Indodrill IBC Intertek 5 iPrint 30 JCL International 15 Lomar 32 Maccaferri 29 McConnell Dowell BC Metso 3 Mining Australia 41 Monark CAT 9 MRL Gold 27 Orica 2 Pacific Strategies 38 Paperless Trail 39 Philippine Mining Club 37 Philippine Resources Journal 43 QED IFC SGS 1 44 Philippine Resources

Transport managing director Norbert Giese; HATS assistant manager for project support Stefanie Kuehnapfel; NN-ATS president and chairman Jun Tagud; HATS project manager and industry head for telecommunications Catalino David and HATS project manager Edward “Woody” Wuthrich.

The corporate reorganization comes after the Aboitiz family sold Aboitiz Transport System to Negros Navigations and Aboitiz Transport System was renamed NN-ATS. The sales contract between Aboitiz and Negros specified that that the name Aboitiz had to be removed from all company names within one year of the date of sale.

This also affected APTSC - Aboitiz Projects Transport Systems Corporation and APTSC was renamed as Hansa Meyer - ATS Projects. The company stresses that all the company’s business and relationships remain unaffected by the change.

Looking after the community

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n its remote site projects all over the world, ADEN Services continually considers the surrounding areas and the local population. The company’s standard policy is to employ 95 percent local while attempting to also procure all project operation supplies locally. Strict regulations concerning health, safety and environmental policies and international hygiene standards are implemented on all the projects.

Since providing the services for the Masbate Gold Project in Masbate in 2009, the company has been actively involved in social and economic development in the region. By way of donations and sponsorship of local community organizations or sporting teams, ADEN is actively involved in improving the quality of life for local communities.

But the company’s engagement in the sustainable development does not stop there. ADEN is constantly developing new green and eco-friendly solutions in every aspect of the services it provides - and its clients know that.

That’s why ADEN is expanding its presence in the Philippines year by year, signing new contracts and increasing its initiatives in sustainable development in the country. ■

Another ADEN clean-up day at for the environment.

McCowell