Vengeance is mining
LUCKY. Fortunate. Privileged. Choose your word.
It will still apply to the owners of this little known company called Hinatuan Mining, apparently the operator of a mining claim in Mindanao, amassing for itself, in only six years at that, windfall profits of almost P13 billion.
Now, keep your eye on the eight ball.
The mining site is the 25,000-hectare claim in Surigao del Norte, said to be rich in nickel deposits previously owned by Nonoc Mining, which belonged to the bankrupt Cabarrus group.
Just to refresh your memory, way back in the 1980s—or during the Aquino (Part I) administration—Nonoc could not pay Philippine National Bank, still owned by the government at that time, its debts of some P13 billion.
Thus, Nonoc became for the government another NPA, a nonperforming asset, and at that time, the Asset Privatization Trust (APT), which later became the Privatization and Management Office (PMO), handled all the NPAs for “privatization.”
The most valuable—okay, the “only” valuable—asset of Nonoc was the 25,000-hectare claim in Surigao, for which it actually held a so-called mineral production sharing agreement (MPSA), sort of a license from the government to operate the mining site.
To cut a long story short, in the 1990s, during the time of Kuya Eddie (a.k.a. former President Fidel V. Ramos), the government sold Nonoc (meaning, actually, the valuable MPSA) to a firm called Philnico for $250 million—in installment.
Surprise—the owner of Philnico was also the Cabarrus group! Hay naku!
Anyway, when Philnico could not honor the deal, the owner sold it to two other companies called Pacific Nickel Holdings and Pacific Nickel Philippines, or PNPI, and watch out for this name PNPI.
With these two companies as new owners, Philnico then entered into another agreement (second time around) with the government to buy Nonoc (i.e. the valuable MPSA) for a higher amount of $294 million, plus P74 million, also in installment.
Still during the time of Kuya Eddie, by some sort of magic or whatever, that same agreement gave birth to a “supplementary agreement.”
Simply, the magic in it was that the “rights” over the 25,000-hectare mining claim went to PNPI, while the obligation to the government ($294 million, plus P74 million) stayed with Philnico. Bright!
Obviously, without control over the mining claim, Philnico could not possibly honor its obligations to the government.
Apparently feeling merciful or something, nevertheless, the government agreed to give Philnico a lot of chances, such as by extending the period for payment and even giving cuts in the monthly amortization.
Here comes the eight ball!
In late 2001, during the time of the cute administration of Gloriaetta, PNPI got a sudden inspiration to enter into another agreement, this time with—tantararan—the lucky fortunate privileged Hinatuan.
Under the agreement, Hinatuan got the “exclusive” rights to operate the 25,000-hectare mining claim in Surigao.
Who owns Hinatuan again? There seems to have been changes in the ownership structure over the years. Still, at that time, it was said to be under the control of Salvador “Buddy” Zamora II, whose group also had mining interests in Palawan called Rio Tuba.
Whatever considerations PNPI got for the mining rights have remained a deep secret up to today.
Nobody in the government, both in the cute administration of Gloriaetta or in the Aquino (Part II) administration, was kind enough to inform us, the public, the taxpayers, who shouldered the tax burden from all those NPAs, in the first place.
But here is a little infuriating fact: The government did not get a single US cent, nor a single Philippine centavo, out of the purchase price for Nonoc of $294 million, plus P74 million.
Court cases are hanging up to today, in effect preventing the government from getting back Nonoc, or the valuable mining claims. You know how these things work in court. Right, slowly!
Look, from what I gathered, the last hearing was done some four years ago. Really, four long years ago!
Meanwhile, Hinatuan is said to have been feasting upon the 25,000 hectares of rich nickel deposits in the Surigao Mineral Reservation.
Here is something just between us girls, and never tell this to anybody in the Aquino (Part II) administration, lest they do some serious work: If you check with the SEC, maybe the records would show that Hinatuan has been raking it in since 2004.
In 2001, it was possible that Hinatuan was even in the red, perhaps to the tune of P50 million.
From 2004 to 2009, there might be indications from the SEC records that its net income suddenly ballooned to almost P13 billion in six years.
Guess how much dividends were given to its owners—with a vengeance. My guess is anywhere between P4 billion and P5 billion.
It all went to the fortunate, lucky, privileged owners! Or one single owner!
