OceanaGold to resume mining in Nueva Vizcaya after new deal with gov't

The Philippine government allowed Australian-Canadian miner OceanaGold Corporation to resume operations of the Didipio gold-copper mine in Nueva Vizcaya, two years after the firm halted mining and became locked in a dispute with the local government.

OceanaGold's financial or technical assistance agreement (FTAA) was renewed retroactively from June 19, 2019, until 2044, with financial terms and conditions unchanged.

It was, however, required to go public within the next 10 years and offer 10% of shares of its subsidiary, OceanaGold Philippines Incorporated (OGPI).

These are the other modifications of the FTAA:

  • The equivalent of an additional 1.5% of gross revenue to be allocated for community development
  • Reclassification of net smelter return to be an allowable deduction and shared 60%-40% rather than wholly included in government share
  • OGPI will offer for purchase by the Bangko Sentral ng Pilipinas not less than 25% of its annual gold doré production at fair market price and mutually agreed upon terms
  • Transfer of OGPI's principal office to the host province within the next two years

OceanaGold aims to achieve full underground production capacity within a year.

"Once fully ramped up, the company expects Didipio to produce approximately 10,000 gold ounces and 1,000 tonnes of copper per month at first quartile all-in sustaining costs," it said.

Didipio is a major direct and indirect employer in the provinces of Nueva Vizcaya and Quirino.

In 2019, Nueva Vizcaya Governor Carlos Padilla stopped OceanaGold's operations when the FTAA expired.

'Illegal and destructive'

Environmental groups have long urged President Rodrigo Duterte to reject the contract renewal of OceanaGold due to alleged violation of environmental laws and failure to consult indigenous peoples.

The Kalikasan People's Network for the Environment (Kalikasan PNE) on Thursday, July 15, denounced the government's move to revive what it called "the illegal and destructive OceanaGold mine."

"With this, Duterte has condemned the people of Nueva Vizcaya to 25 more years of water depletion, agricultural losses, and human rights violations," Kalikasan PNE said in a statement.

"We...along with other allied environmental groups and people's organizations, will challenge this in court to put an end to the destructive operations of OceanaGold."

When asked about the environmental impact, Presidential Spokesperson Harry Roque said that "there is such a thing as responsible mining."

"The challenge for our regulatory agencies like DENR (Department of Environment and Natural Resources), MGB (Mines and Geosciences Bureau), [is] that there has to be responsible mining. In the time of a pandemic, many people lost their jobs. We know that mining is an industry we did not close during the ECQ (enhanced community quarantine) because many depend on it for livelihood," Roque said.

"This decision is to recognize that we need to create more jobs for our countrymen during a pandemic, but we won't allow Mother Nature to be destroyed that's why DENR will ensure responsible mining." – with reports from Pia Ranada/Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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