Daguma touts economic benefits of coal project

Daguma Agro Minerals Inc. —the concession holder of the Department of Energy’s (DOE) coal mining project in Lake Sebu, South Cotabato—remains hopeful that its operations can still proceed despite the rejection by the local council in a controversial vote, considering the project’s importance.

In a statement, the company said the decision of the Sangguniang Panlalawigan of South Cotabato was “most unfortunate, particularly because this project, which was initiated by the DOE, has national significance.”

“Consistent with the DOE’s mandate to search for, develop and utilize indigenous sources of energy including fossil fuels, tapping into our country’s own coal reserves to generate electricity remains the more sensible approach to achieving power security,” it said.

Its critics claim the proposed project violates the provisions of the provincial environment code that bans open pit mining.

Daguma insisted its mining method was not open pit, but “contour strip mining.” It pointed to section 168 of the provincial environment code which calls on parties to respect the original terms and condition of contract entered prior to the passage of the provincial environment code.

Contour strip mining is a more environmentally sound method that only scrapes off soil or “overburden” on top of the coal seam, and replaces it immediately for rehabilitation, the company said.

Supporters of the project say the provincial code contradicts the Mining Act of 1995, which even recognizes the open pit scheme as a valid mining method. Coal projects, however, are governed by Presidential Decree 972, also known as “Coal Development Act of 1976,” and not by the Mining Act of 1995.

Daguma said the project would significantly reduce the country’s dependence on imported coal, the supply and prices of which were dictated by global factors beyond local control.

“These in turn, directly impact our electricity supply and more importantly, power rates,” the firm added.

Apart from these national implications, Daguma said the decision also impacted the people of Barangay Ned and Lake Sebu, where the mining area is located, in a more direct way.

In terms of total share in revenue, as mandated by national laws and local government code, with prevailing coal prices factored in, the local government units will get 40 percent out of the state’s total share in net revenue.

Of this, 20 percent goes to the provincial government, 45 percent to the municipality and 35 percent to the barangay.

Another major consideration, the company said, was the number of direct and indirect jobs the project would provide.