Back to the insult mines
A cloud of confusion hangs over the stock market nowadays, created in part by the mixed-up statements from incoming Cabinet members of the incoming President, the motorcycle riding Duterte Harley.
The confusion started with a name, “Gina Lopez,” short for Regina Paz Lopez, who belongs to the rich Lopez clan and its multibillion-peso business empire in media, power generation and distribution, and real estate.
Last week, Duterte Harley shocked the stock market by naming Lopez secretary of environment and natural resources, head of the powerful DENR, the Department of Environment and Natural Resources.
To say it mildly, the stock market did not welcome her appointment, because the market knew her as a staunch anti-mining advocate who was gifted with a good measure of media savvy.
Thus, to the stock market, did her appointment mean the incoming administration of Duterte Harley would want to close down all the mines in the country, or just make life hell for the sector?
Immediately, mining stocks suffered a bloodbath, prices tumbled across the board, with the biggest mining concern in the country, Philex, shedding more than 20 percent of its price.
Such a dramatic drop in the stock price of Philex wiped out about P10 billion of its market capitalization in just two days.
Despite the recovery of mining shares toward the end of the week, analysts were still one in saying that the sector would still wallow in uncertainty in the next several months.
They said pronouncements from members of the Cabinet of the incoming administration sounded worse than the cries of stray cats in heat.
One of the spokesmen of Duterte Harley, Ernesto Abella, said that under the incoming administration, “responsible mining would still play a key role in the Philippines.”
There—“responsible” should be the operative word.
Incoming Finance Secretary Carlos Dominguez echoed the statement of Abella on “responsible” mining, even adding that the Duterte administration would not force upon mining firms bigger take of the government from their revenues, which the Aquino (Part II) administration wanted to impose.
At the same time, even in the face of the damage control attempted by Dominguez and Abella, reports quoted Lopez as saying there could never be such a thing as “responsible” mining— i.e. all mining was bad, period.
The question in the stock market thus became this: Who between Dominguez and Lopez would have the ears of Duterte Harley? Nobody could as yet profess to know the answer.
To Epimaco Densing III, professor of finance and economics at the Ateneo Graduate School of Business, nothing was resolved in the market by the pronouncements of people in the incoming administration.
He said everything would be a “waiting game,” and it could take months or years, and who would know how long.
Now the stock market reacted rather vehemently at the mere mention of the name “Gina Lopez,” perhaps because Lopez had a history of bad blood with top executives in the mining industry.
About four years ago, the Aquino (Part II) administration tried to push for a ban in mining, apparently egged by anti-mining advocates like Lopez.
That was the great mining debate of 2012, and in huge forum, Lopez had heated exchanges with the likes of Manuel V. Pangilinan, aka MVP, and Gerard Brimo, the recognized leaders in the mining industry.
They actually insulted each other over the mining issue. For instance, from MVP to Lopez: “Now you’re lying.” From Brimo to Lopez: “You don’t know what you are talking about.” From Lopez to both: “I do not lie.”
Those were times of trouble in the mining sector that should still be fresh in the minds of stock investors.
So why in heaven’s name did Duterte Harley have to appoint somebody in the DENR who already showed she had a closed mind regarding mining?
Even during the last presidential campaign, Deterte Harley himself promised to do a comprehensive review of the operations of all mining companies, threatening to close down those that did not follow the rules.
That could be the key to solving the Gina Lopez mystery: Duterte Harley wanted a staunch anti-mining advocate to implement the strict rules of the government on the mining industry.
For one, she would be hard to corrupt. She hated miners.
Like it or not, even during the time of our leader Benigno Simeon, aka BS, many mining companies could get away with environmental rape, reportedly because of corruption at the DENR, or even the highest levels of the government.
From what I gathered, only three mining companies—out of hundreds—actually obtained an international certification for mining standards called ISO 14001.
The certification solely comes from this group called International Organization for Standardization, an independent non-government organization whose members are the standards organizations in some 164 countries.
In other words, the ISO 14001 certification has been the seal of world-class good house keeping for mining companies.
With only three local mines able to comply with the stringent environmental requirements of the ISO certification, the DENR thus forced all the others to acquire the so-called ISO 14001.
In fact, the controversial DENR head, Secretary Ramon Paje, personally issued an order, the one famously known in the mining sector as Administrative Order 2015-07, mandating all mining contractors to secure the ISO-14001 certification.
Paje issued the order in April last year, and gave all the mining companies only one year to follow it.
Never mind that the one-year grace period was a bit of a rush, as it took those three ISO compliant mining companies a few years to obtain the certification.
Guess what—none of the other hundreds of mining companies, both big and small, were able to get the ISO-14001 certification.
From what I gathered, even when the deadline set by our beloved Paje expired last April, the DENR did nothing to the mining companies.
According to our sources in mining, those companies simply coughed off some—if you know what they mean.
Lopez, in short, would have a lot of work to do, more than just exchanging insults with mining executives.
