According to the Department of Environment and Natural Resources (DENR), LCMCo filed in January 2005 for an Application for Financial Technical Assistance (AFTA) covering 77,549 hectares in Benguet; 81,000 hectares in Ifugao, Nueva Vizcaya and Benguet; and another 81,000 hectares in Ilocos Sur and Abra.
For its foreign partners, KMU reported that the company clinched deals with big foreign investors from the US, Japan and Australia, specifically with NM Rothschild & Sons-Australia, Dredsner Bank for their Gold Hedging, Financing and Loans, Chemical Bank, International Metal Company, ASAP Company (USA), Nippon Mining (Japan), Conzinc Rio Tinto (Australia) and Ivanhoe Mines Ltd.
The capital that gold built
The company posted retained earnings amounting to P2.72 billion, P2.57 billion and P2.59 billion ($49.21 million, $46.63 million and $46.86 million, based on an exchange rate of P55.20 per U.S. dollar) for the years 2002, 2003 and 2004 respectively, according to a recent KMU fact sheet on the ongoing strike at Lepanto.
The economic slump may not seem to affect to the sale of gold. Independent research think-tank IBON Foundation explained that gold, as a commodity, reacts inversely to the crisis. During global economic recession, the demand for gold increases, and similarly in instances of wars and currency turmoil. IBON clarifies that gold is the traditional store of value such that investors buy gold when prospects of other assets are at risk.
From its Teresa Ore Body expansion, Lepanto targets to produce P83.02 billion ($1.50 billion) from its estimated gold reserve of 110,418 kilograms (kg). This mine site has a 15-year lifespan. These figures were derived from converting the estimated gold reserve (110,418 kg) to grams (110,418,000 g) and dividing it by 31.157 g, which is the value of 1 troy ounce. The quotient was multiplied by the $428.50, the price of gold in the international market as of June 7, 2005. (The computations were lifted from an article posted at the Cordillera Peoples Alliance website at http://cpaphils.org/campaigns/cpa-teresa_4c04.htm, except for the recent price of gold in the world market.)
The Victoria Gold Project meanwhile started in 1997, where Lepanto produced 3,432.47 kilograms of gold and earned P1.47 billion ($26.63 million) for that year alone. The Save the Abra River Movement (STARM) in its 2003 primer on the effects of corporate mining on the Abra River System stated that from 1998 to 2002, the company earned P9.55 billion ($173.04 million).
Clearly, the money does come in.
In the June 5 issue of Northern Dispatch, we presented the figures the union would acquire if its proposal – i.e., to increase daily wages by P29, P29 and P33 for the first, second and third year of the collective bargaining agreement’s (CBA) effectivity – were approved, which is P93.69 million ($1.70 million) for three years. This amount is only 4.7 percent of the company’s retained earnings in 2004.
The company issued a statement last May 24 titled Updates on the CBA negotiation which claimed that the total proposed package (wages and non-cash benefits) of P133 million ($2.41 million) is greater than the previous package, which is P103 million ($1.87 million). But with the rising cost of living, it would only be proper for a corporation like LCMCo to increase the wages of its workers. Using the same formula, P133 million ($2.41 million) is only 3.95% of the 2004 retained earnings.
A worker’s daily pay is P340 ($6.16). In monetary terms, the benefits per worker amount to P260 ($4.71), which is why company reports the daily wage at P610 ($11.05) per worker. Then again, the benefits refer to boots, eyeglasses, allowances and the like which are not given daily but monthly or yearly.
The National Statistical Coordinating Board (NSCB) and the National Economic and Development Authority (NEDA) reported that in the Cordillera region, a family of six needs P573 ($10.38) to survive daily.
IBON stressed that the buying power of the peso continues to slide, such that its real value is down to P0.53 ($0.01). And this is due mainly to the increasing prices of goods and services.
Buying power or purchasing power is the amount of goods and services a person can buy with P1 ($0.02) using a base year as point of comparison. This means that P1 ($0.02) can now only buy P0.53 ($0.01) worth of goods and services.
The workers’ basis for their proposed wage hike is therefore valid. It is also just and legitimate. This truth cannot be denied. Nordis/Bulatlat