Tampakan firm to pursue project despite uncertainty

Xstrata-led Sagittarius Mines Inc. (SMI) said in a briefing Monday that the company would operate the $6-billion Tampakan copper-gold project in Mindanao even without income tax holidays. Company officials also said that they would continue trying to work out permits to be able to take the project through to production.

“All our revenue assumptions so far do not include tax holidays,” said SMI finance and commercial manager Justin Hillier. “We’ve had feedback that there won’t be any further income tax holidays. The IMF [International Monetary Fund] is of the view that there should not be tax holidays. If that happens, we will accept that.”

In the meantime, Hillier said, the government has not said formally whether tax holidays would apply or not when the company does start to operate. Also, SMI has not secured an ECC for developing the project.

In a decision dated May 22, 2012, the Department of Environment and Natural Resources (DENR) denied SMI’s appeal of an earlier rejection of its ECC application. This was mainly due to the ban on open-pit mining that remains in place in South Cotabato, one of the host provinces of the project.

The DENR said that while SMI challenges the constitutionality of the open pit ban, the issue of constitutionality was outside the department’s purview. “Further, the constitutionality of an ordinance cannot be attacked collaterally. Its validity and legality therefore shall be respected until the same is declared unconstitutional by the appropriate authority,” said DENR OIC assistant secretary for legal affairs Anselmo C. Abungan.

In January, SMI filed an appeal on the government’s decision rejecting the ECC application for the Tampakan project, citing the decision was not based on the merits of the mine project/environmental impact assessment it submitted to the DENR.

The DENR denied the ECC application for the Tampakan project, noting that issues involving the use of the open-pit mining method while a ban on such method was in place in South Cotabato would have to be resolved first.

An ECC certifies that a project will not lead to unacceptable impacts to the environment. It is one of the requirements to secure a permit to operate the mine.

SMI external communications and media relations manager John B. Arnaldo said the company has not been formally informed of the supposed rejection.

Earlier, SMI general manager for operations and external affairs Mark Williams said the firm might elevate the matter to the Office of the President if the DENR were to deny SMI’s appeal. He also said the firm intended to pursue the project, citing the benefits the mine could bring to the economy and community.