The Tampakan Copper and Gold Project: Whose mine is it anyway?By Edwin Espejo Feb 20, 2012 7:34AM UTC
Sagittarius Mines Inc. general manager Mark Williams said the company had already spent more than US$360 million on the initial development of the US$5.9 billion Tampakan Copper and Gold Project.
When allowed to go to commercial production, the mining project will reportedly contribute an average of one percent to the annual gross domestic product of the Philippines, which also is 10 percent of Mindanao’s GDP, according to one David Pearce, executive for Australia’s Center for International Economics. The Tampakan project will reportedly have a mine life of up to 25 years.
Trouble is: the Department of Environment and Natural Resources (Denr) recently rejected the company’s bid to obtain a vital environment compliance certificate (ECC) which would have allowed Sagittarius Mines Inc to meet its 2016 target start for commercial production.
The rejection came in the midst of the Aquino administration’s move to find a new ‘workable’ policy on mining which, as expected, is being met with howls of protests from the mining industry. The Chamber of Mines of the Philippines has also raised alarms over what it claimed was a move that created uncertainty in the industry and is causing jitters in the international mining community. Some are even dragging a scion of a giant Philippine television network as among those responsible for the review of the national mining policy of the Aquino government and fear her anti-mining advocacy could alter the course of the country’s mining industry.
The government has, on record, already said the existing excise tax rate on the production of minerals, at 2 percent, is not commensurate to the profits and income of mine companies. The government wants to raise excise tax on mining to at least 7 percent.
In a 2006 report, for example, the excise tax collection was only P490 million (US$11.4 million) as against the P75.556 billion (US$1.757 billion) gross revenue from mining and quarrying.
SMI has repeatedly claimed that the promised direct investment at the Tampakan mine project will boost the economy of the region.
What the company has not indicated and stated, however, are how much total revenues will it generate from the mining operations, how much will go to the coffers of the government aside from the excise tax and where will the ore deposits and their valued added products end up. It also has not disclosed how much its mining activities will cost the environment and the communities around the site and all areas that will be affected by the company’s operations. These do not even include the attendant social costs.
These are also precisely the reasons and apprehensions why the provincial government of South Cotabato enacted a local ordinance that prohibits and bans open pit mining in the province. Unfortunately for SMI, its main mining area in Tampakan is also one of the few remaining watershed areas in South Cotabato.
Mark Williams, who has repeatedly declined interview requests from the local press here, is now suddenly very visible in the national scene.
Last week, he made a pitch for his company’s cause by telling the press that SMI had already submitted an appeal for Denr to reverse the rejection of its ECC application.
He went even further by arguing that the Denr cannot use the provincial ordinance in rejecting their application. He said the Philippine government “policies should be consistent to create investor confidence, the contract needs to be honored, and there needs to be clarity between local and national laws.”
SMI only has itself to blame for its current woes.
SMI officials have arrogantly taken for granted the powers of local government units.
It shamelessly presumed that by being “mere contractors” of the Columbio Financial Technical Assistance Agreement, which holds the Tampakan Copper and Gold Project, it can bulldoze its way into the province.
Did they not say that the mine is owned by the government?
In the last five years since Xstrata Plc took effective control over SMI, we have yet to see a representative of the government in the board of directors of the mining company. If the government really owned the mine, then it would have already come to SMI’s rescue at the first hint of trouble.
As it is, SMI officials have never been up front with the residents of South Cotabato.
All they want is the precious metals lying underneath the mountains of Tampakan.