SPECIAL REPORT

Foreign TNCs Dominate Mining Industry
Second of three parts

Recent applications for mining exploration and extraction cover 66 percent of the Cordillera land area.

By Windel Bolinget
Northern Dispatch
Posted by Bulatlat

BAGUIO CITY – The Macapagal-Arroyo government’s aggressive mining policy to attract new investors in the mining industry and hence to boost government revenues appears to be paying off. In the Cordillera region, the number of new mining applications has increased with the revival of old applications overlapping each other and covering vast territories. Foreign mining companies are entering into partnerships with the actively operating mining companies in the region such as the Lepanto Consolidated Mining Corporation and Philex Mines.

The total area applied for already covers 66 percent of the region’s total land area.

This year, the Mines and Geosciences Bureau-Cordillera Administrative Region (MGB-CAR) received 11 applications for the FTAA, each application costing only P10 per hectare as filing fee at MGB-CAR. For application alone, MGB-CAR, which is under the Department of Environment and Natural Resources (DENR), reportedly collected P7.207 million. (See table below for the list of FTAA applications.)

As of March 31 this year, the MGB-CAR processed a total of 114 various types of applications: FTAA (11), Mineral Production Sharing Agreement (MPSA - 65), Exploration Permit (EP - 37) and Industrial Sand and Gravel (ISAG - 1).  The applications cover a total land area of more than 1.2 million hectares or more than 66 percent of the overall land area of the region. (See the distribution of the mining applications in various provinces in Table 2 below.)

On top of the abovementioned applications under process, 15 were approved by the MGB, nine of which are MPSA (13,166.7700 has.), two are EP (545.675 has.), and four ISAG 53.5 has.).  These cover 13.8 million hectares. Benguet province hosts the most number of approved applications, followed by Abra and Kalinga (see Table 3 below). Note that not a single FTAA filed was approved in the region just after the enactment of the Mining Act ten years ago. This is due to the stiff resistance of the Cordillera people.                                                           

Mining operations and TNC partners

Three big mining companies continue to operate in the Cordillera Region, particularly in Benguet. After the Itogon communities successfully stopped the bulk-mining operations of Benguet Corporation, the company shifted to its Acupan Contract Mining Project in Balatoc, also in Itogon.  Lepanto Consolidated Mining Co. (Lepanto) is expanding its operations from Mankayan toward Buguias town, also in Benguet, and remains the No. 1 gold producer in the country. The main copper producer, Philex Mining Corporation (Philex) continues to operate in Tuba, Benguet. 

Lepanto has entered into a partnership agreement with Ivanhoe Mines, a Canadian mining company. The partnership was proposed to Ivanhoe Mines by President Gloria Macapagal-Arroyo. With its investment, Ivanhoe got a 12.7 percent share of Lepanto. Infused with more capital, Lepanto can pursue expansion projects outside of Mankayan. For this, Ivanhoe has shares in the mining operations and applications covering 16,470 hectares processed for MPSA as well as the 243,000 hectares covered by its FTAA applications in the provinces of Benguet, Ilocos Sur, and Nueva Vizcaya. Lepanto operates its Victoria and Teresa gold projects (with 7 years tax holiday) as it plans to revive its copper porphyry given the continuing rise in the price of copper in the international market. 

On the other hand, affected communities are persistent in their protests to stop the expansion operations of Lepanto.  They cite the impact of the company’s alleged destructive mining operations, which is going on for several decades. 

But Lepanto, like other mining companies in the region, is troubled by labor unrest with mineworkers accusing it of exploitation and violations of workers rights. From June 2-Sept. 10 this year, 1,685 workers of the company, led by the Lepanto Employees Union-Naflu-KMU, went on strike after a deadlock in the negotiations for a new Collective Bargaining Agreement (CBA). Their proposal for an increase in wages and benefits was consistently denied by management.

As in the 2003 strike, peasant communities showed their firm support to striking workers. International, national, and regional broad support was also shown in solidarity with the striking workers, for genuine unionism, and against corporate greed and domination. In the end, 19 union officers agreed to accept their dismissal in exchange for the reinstatement of more than a thousand other workers. The 19 officers continue represent the workers in the ongoing CBA negotiations. 

The Philex Mining Corporation, on the other hand, has a partnership agreement with the Anglo-American Mining Company based in South Africa. With mining investments all over the world, it competes with BHP Billiton and Rio Tinto as the biggest mining company worldwide.  Anglo-American and Philex operate Northern Luzon Exploration as a joint-venture. Anglo-American owns 50 percent of Philex Gold and has interests on the 1,019 hectares of approved and ongoing applications of Philex and Northern Luzon Exploration. As a partner of Philex, Anglo-American shares over the 22,712 hectares covered by the contracts and applications of the former for MPSA. 

Philex is being investigated by the Benguet provincial board for its forced decongestion program and its refusal to allow the children of retrenched workers to enroll in schools within the mine site. 

Other than Philex, Anglo-American solely owns and operates the Cordillera Exploration.  On top of the 27,804 hectares covered by its applications for EP in the provinces of Apayao, Kalinga, Abra, Mountain Province, and Ifugao, Cordillera Exploration has a single FTAA application covering 77,549 hectares within the provinces of Abra, Mt. Province and Benguet in the Cordillera, and nearby Ilocos Sur province. It has taken over this FTAA application previously owned by Newmont. Other foreign mining companies with investments and interest in the Cordillera are Terra Nova, Canadian mining company which owns most of Wolfland Resources, and Oxiana of Australia. Northern Dispatch / Bulatlat