Philippines: South Cotabato maintains ban on open pit mining
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Philippines: South Cotabato maintains ban on open pit mining

The provincial government of South Cotabato is holding its ground on its decision not to allow open pit mining in any part in the province, putting again on hold the future of Sagittarius Mines Inc (SMI).

SMI owns the Tampakan Copper and Gold Project located in the mountainous area of Tampakan in South Cotabato.

In a resolution passed on July 21, the provincial board “reaffirmed the validity of Section 22 (B) of the Environment Code that prohibited the use of the open-pit mining method in mining activities” anywhere in South Cotabato.

The Provincial Environment Code was passed in 2010, which was signed by then outgoing Gov. Daisy Avance Fuentes.

Fuentes, who regained her post as provincial governor in 2013, said she “fully supports the provincial board’s stand on the open-pit mining ban.”

Provincial Board Member Ellen Grace Subere-Albios however said they have not totally banned mining in the province but only regulated it “through methods that would not gravely endanger and adversely impact the environment.”

The Tampakan project covers over 9,000 hectares of vegetated mountain range that straddles the towns of Columbio in Sultan Kudarat, Kiblawan in Davao del Sur and Tampakan in South Cotabato.

The local legislative body claimed SMI operations could cause massive deforestation, loss of biodiversity, degradation of lands and the depletion of the water resources of surrounding communities.

SMI however has repeatedly assured critics that it is taking its environmental responsibilities very seriously.

“We understand that mine waste and water management are important issues for our stakeholders and they form an important part of our design, operation and rehabilitation plans for the Project,” SMI said in its website.

According to SMI studies indicate royalty payments and direct contributions in excess of PhP39.8 billion ($1.2B) would be made to local communities and indigenous groups over the Project’s life in addition to the excise and other taxes it will pay to the national government.

The US$5.6B Tampakan project is reputed to contain Asia’s largest untapped copper deposits with estimated 2.94 billion tons  at a grade of 0.51% copper and 0.19 grams per tonne gold, using a cut-off grade of 0.2%.

“This represents 15.0 million tonnes of copper and 17.6 million ounces of gold,” according to SMI.

SMI recently underwent several corporate turnovers with the Alcantara-led Filipino investment company Alson’s Prime Investment Corporation acquiring the 62.5 percent stake of world commodities giant Glencore International in SMI only last June.

Sources however said the Alsons takeover will not be completed until next month.

In January this year, Alsons also secured the 37.5 percent minority stake of Indophil Resources NL in SMI at a cost of US$296 million that was paid in cash.

Before the provincial government passed the environmental ordinance in 2013 banning open pit mining, SMI announced it was going to start commercial operations in 2018.

But Glencore, which gained control over SMI after booting out Xstrata Plc from the project in 2013 as part of its US$75 billion hostile takeover of the world’s 4th largest copper producer, decided to scale down SMI operations after failing to secure the nod of the provincial government.

Glencore likewise said it was hesitant to further finance ‘greenfield’ projects.

At the time Glencore took over SMI, the project has not gone beyond completion of its feasibility studies and exploration activities.