Philippines: Mining giant Xstrata-SMI suffers another blow
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Philippines: Mining giant Xstrata-SMI suffers another blow

The Xstrata-controlled Sagittarius Mines Inc (SMI) suffered yet another setback when the Sangguniang Panlungsod (SP, or Provincial Board) of South Cotabato on Monday, January 21, reiterated a previous resolution reaffirming the validity of a provision of the Provincial Environment Code that bans open pit mining in the province.

The resolution dashed any hopes SMI had to have the landmark local legislation reviewed by the local legislative body before the May elections this year.

SMI was hoping the provincial government would lift the ban on open pit mining to pave the way for its planned commercial production. The mining firm had announced in the past that it will start commercial operations in 2016.

But a latest statement from SMI said it is moving its production target to 2019 due to its failure to get the necessary permits and licenses.

In January 2012, the Environmental Management Bureau denied the application of SMI for an environmental compliance certificate (ECC) citing existing provincial ban on open pit mining.

Former South Cotabato governor Daisy Avance Fuentes signed the provincial ordinance in June 2010, several days before she stepped down from office to run for a seat in the House of Representatives.

Fuentes won in the congressional race but is now seeking to regain her gubernatorial post.

She will be up against incumbent Gov. Arthur Pingoy who also repeatedly and publicly stated he will implement the ordinance unless it is declared by the court as unconstitutional.

SMI has refused to seek the opinion of the courts but has been lobbying for the repeal of the ordinance arguing that it is a mere contractor under the Columbio Financial Technical Assistance Agreement which served as the legal basis of the Tampakan Copper and Gold Project.

A company source, speaking on condition of anonymity, said the Philippine government should stand pat on the primacy of national laws over a local legislation.

The Aquino government however has put on hold all issuance of new mining permits and licenses pending the issuance of a new mining policy and drafting of a new mining bill.

But with only six session days left before Congress goes into a recess, President Benigno Aquino is expected to until after the May elections before tackling controversial mining issues.

SMI said it will pour in more than US$5.9 billion into mine – estimated to return 15 million tons of copper and 17.6 million ounces of gold – at its main min development site in Tampakan, South Cotabato.

The company is said to have already spent more than P10 billion (US$250 million) leading to the permit and licensing stage of the mining project.

Vice Gov. Elmo Tolosa however stood pat and said that “only a court of law can declare whether the ban on open pit mining is valid or not.”