MGB eyes bidding of Surigao mining asset

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05:18 AM January 2nd, 2013

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By: Riza T. Olchondra, January 2nd, 2013 05:18 AM

MANILA, Philippines—A gold-rich area in Surigao del Norte may soon be up for bidding, according to the Mines and Geosciences Bureau (MGB). This, if the company formerly in charge of exploration loses its hold on the asset.

“The initial period for exploration is only 10 years. San Manuel Mining Corp. (SMMC), the company that used to explore the area, has had enough time,” MGB director Leo Jasareno told reporters.

Jasareno said the company might still appeal the MGB’s decision to deny its application for further exploration. “SMMC can take up the matter with higher authorities,” he said, referring to the Department of Environment and Natural Resources or DENR, the Office of the President, the Court of Appeals and the Supreme Court.

In November, the MGB denied the application of SMMC to undertake further exploration in the contract area covered by Mineral Production Sharing Agreement (MPSA) No. 004-91-X, which was granted on Jan. 7, 1991. It covers 1,480 hectares within Parcel II of Surigao Mineral Reservation.

Having exceeded the maximum exploration period allowed by law, MGB deemed SMMC unfit to continue to explore the area.

Jasareno pointed out that the MPSA was now in its 21st year but SMMC had yet to determine ore reserves.

The area is situated in Masapelid Island, Surigao del Norte.

The regional office of the MGB in Surigao City also said it found that illegal exploration activities in the area were being conducted by Bundok Mineral Resources Corp. (BMRC), an Australia-based company.

BMRC has no legal personality to explore the area because it has no approved agreement with San Manuel Mining Corp., Jasareno said.

The MGB is cleaning up “nonmoving” exploration permit applications and exploration contracts that have not produced results under the timelines set by law. Mining assets with canceled applications and permits will go on auction under new mining policy rules.

Jasareno said the hundreds of mining areas with canceled applications and permits would be assessed to determine which ones might be offered for bidding.

Section 3 of Executive Order 79 issued in July 2012 provided that  a “multistakeholder” team led by the DENR would “review” existing mining operations based on the specific mining contract or agreement and on other pertinent or applicable laws, rules and regulations, such as the Mining Act of 1995 and the labor code.

Section 5 provided that potential and future mining areas with known strategic mineral reserves and resources would be declared mineral reservations for the development of strategic industries identified in the Philippine Development Plan and a National Industrialization Plan “after proper consultation with all concerned stakeholders” including local governments.

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