Gov’t eyes sale of idle mining assets
The Duterte administration is pushing for the revival of the country’s mining industry to help counter the economic devastation wrought by the coronavirus pandemic.
From the issuance of Executive Order No. 130, which lifted a nine-year mining ban and, possibly, the ban on open-pit mining, the government is now taking steps to monetize idle state mining assets, most likely through their privatization.
In a phone interview, Wilfredo Moncano, chief of the Mines and Geosciences Bureau (MGB), said their agency and the Department of Finance (DOF) were now ironing out decades-long legal impediments involving two mining assets—North Davao Mining Corp.’s in Davao del Norte and that of Pacific Nickel Philippines Inc. in Surigao del Norte—to pave the way for their sale.
Moncano said the two mining assets could raise for the government up to P17 billion—P1.34 billion from the sale of North Davao and P15.7 billion from Pacific Nickel.
Both areas are endowed with valuable metal resources like gold, copper, and nickel, the prices of which have been steadily rising since last year.
“It’s really a big amount but there are pending cases surrounding these two. We are updating the geological mining data and other information for the sale, but the DOF-led Privatization and Management Office (PMO) will be responsible for the billing,” Moncano said.
Up for evaluation
Also up for evaluation are the mining properties of Maricalum Mining in Negros Occidental, Marcopper Mining Corp. in Marinduque, Basay Mine in Negros Oriental, and Bagacay Mine in Eastern Samar.
The DOF said the previous management of Maricalum Mining and North Davao Mining failed to settle their debts with government financial institutions, which led to their foreclosure and the transfer of their assets and shares of stocks to the national government.
While the government has previously auctioned off the shares of these firms, the winners failed to fulfill their obligations, which resulted in decades of litigation.
Interest high
A huge part of North Davao Mining was also declared protected area, Moncano said. The bureau is now finding ways to reconvert this portion of the property for mining.
Gerard H. Brimo, president of the Chamber of Mines of the Philippines and CEO of Nickel Asia Corp., said some of their member companies might be interested in joining the bidding for these assets. However, he said they had to know first what exactly were the assets that would be auctioned off and the terms of the sale.
For now, miners are more interested in EO 130’s implementing rules and regulations (IRR) which may lead to the lifting of the open-pit mining ban.
Moncano said they were expecting Environment Secretary Roy Cimatu to approve the IRR next week. Once the ban is lifted, two companies are expected to resume operations.
These are Sagittarius Mines Inc.’s $5.9-billion Tampakan copper project in South Cotabato—touted to be the largest copper project in the country —and St. Augustine Gold and Copper Limited’s $2-billion King-king copper-gold project in Compostela Valley.
Philex Mining’s Silangan Project in Surigao del Norte, valued at $750 million, used to employ an open-pit method but changed its mode of extraction following the ban.
President Duterte, in his EO, said less than 5 percent of the country’s mineral resources had been tapped. Conservationist groups, however, said that opening the country’s resources to more mining projects might destroy the country’s water and land resources, and displace rural communities.
