Xstrata unit’s PH mine suffers another blow

GENERAL SANTOS, Philippines – The Sagittarius Mines Inc. (SMI), a unit of Swiss global miner Xstrata, suffered yet another setback when the local government that hosts its Tampakan mine in South Cotabato stood by its position banning open pit mining in the province.

On Monday, January 21, the Sangguniang Panlungsod (Provincial Board) reiterated a previous resolution that reaffirmed the validity of a provision of the Provincial Environment Code that bans open pit mining, which is the extraction process for the Tampakan copper gold project.

The resolution dashed any hopes for SMI to have the landmark local legislation reviewed by the local legislative body before the May elections this 2013.

SMI was hoping the provincial government will lift the ban on open pit mining to pave the way for its planned commercial production, which has been moved to 2016.

SMI further moved the start of its commercial production to 2019 due to its failure to get the necessary permits and licenses.

The investors of Tampakan mine was set to invest up to US$5.9 billion in the project, the single biggest investment in the Philippines, which is mineral-rich.

Court or not?

The SP members said questions on the legality and constitutionality of the controversial ordinance should be pursued in court.

SMI has refused to seek the opinion of the courts but has been lobbying for the repeal of the ordinance arguing that it is mere contractor under the Financial Technical Assistance Agreement (FTAA) 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 6 session days left before Congress goes into a recess, Aquino is said to just wait until after the May elections before tackling controversial mining issues.

National vs. local

In January 2012, the Environmental Management Bureau of the national government 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 has also repeatedly and publicly stated he will implement the ordinance unless declared by the court as unconstitutional.

SMI said it will pour in billions of dollars to mine the estimated 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 leading to the permit and licensing stage. – Rappler.com