PCCI: Investors may dump PH over cancelled mining agreements

PCCI: Investors may dump PH over cancelled mining agreements
'How can a company risk stockholders' money in projects if the investment rules are unclear and uncertain?' says the president of the Philippine Chamber of Commerce and Industry

MANILA, Philippines – The country’s largest business group, the Philippine Chamber of Commerce and Industry (PCCI), warned that both local and foreign investors could be turned off by the cancellation of mining deals.

Environment Secretary Gina Lopez had announced on Tuesday, February 14, that 75 mineral production sharing agreements (MPSAs) would be cancelled for mines operating in watersheds.

An MPSA, according to the Mines and Geosciences Bureau (MGB), is a deal where “government shares in the production of the contractor… as owner of the minerals” and in return, the contractor provides “financing, technology, management, and personnel for the mining project.”

PCCI president George Barcelon pointed out that the cancellation of the 75 MPSAs happened despite a resolution by the Mining Industry Coordinating Council (MICC) to respect due process. Lopez co-chairs the council along with Finance Secretary Carlos Dominguez III.

“Due process and multi-stakeholder reviews were guaranteed by DENR Secretary Lopez herself and other MICC members just days before the new cancellation orders,” said Barcelon in a statement on Wednesday, February 15.

“She herself signed the MICC resolution and now it is not followed,” he added.

Barcelon also said the actions of the Department of Environment and Natural Resources (DENR) would give investors a lot to think about.

“How can a company risk stockholders’ money in projects if the investment rules are unclear and uncertain? Business needs confidence that rulemakers would honor contracts,” he explained.

“We hope the President could consider moving on this issue of due process quickly because investors could put on hold their investment decisions.”

The cancellation of the MPSAs came less than two weeks after Lopez ordered the closure of 23 mining operations and the suspension of 5 others. The DENR chief said these mining operations were destroying the environment. (READ: Confusion over the mining list: How did DENR decide on closure?)

Philex disputes findings

Meanwhile, Philex Mining Corporation sought to reassure investors, as it questioned the DENR’s findings on the MPSAs of its subsidiaries, Silangan Mindanao Mining Company, Incorporated (Silangan Mining) and Philex Gold Philippines, Incorporated (PGPI).

Philex said in a disclosure to the Philippine Stock Exchange (PSE) on Wednesday that areas covered by the cancelled MPSAs of the two subsidiaries are not located in watersheds.

Silangan Mining, added Philex, secured an MPSA for its gold and copper mining project in Surigao del Norte “only after a thorough review process by all relevant government agencies and the endorsement of the host communities and local government units.”

Philex noted that for the first 10 years of operation – starting 2020 – the Silangan Mining project is expected to generate an estimated P170 billion in revenues, P31 billion in national and local taxes, and at least 8,000 jobs.

As for PGPI, Philex said: “Four tenements of another subsidiary… have also been included in the list for MPSA cancellation, even if all these MPSAs have been validly issued.”

Philex called on the DENR to follow due process. 

“While the DENR, as regulator, has the right, if not also the duty, to enforce faithfully all mining laws, and to act against erring mining companies, it must do so within the bounds of the Constitutionally-mandated due process procedure,” it said. (READ: Green vs greed? The Lopezes’ new family saga)

Philex is 32.1% owned by a Manuel V. Pangilinan-led conglomerate, First Pacific Company Limited, which is listed on the Hong Kong Stock Exchange. First Pacific made the same disclosure to its shareholders. – Rappler.com

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