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Lopez bans prospective open-pit mines

The Panian Mine operated by Semirara Mining Corp is the biggest open-pit coal mine in the Philippines. Image from NASA, file

MANILA, Philippines — Just a few days before her confirmation hearing at the Commission on Appointments, Environment Secretary Gina Lopez fired another shot at the mining industry after she issued an order banning all prospective open-pit mines in the country.

In a briefing Thursday, Lopez announced that she is banning the open-pit method of mining for copper, gold, silver and complex ores all over the country.
                                                               
“As a matter of policy, which is my prerogative as DENR secretary, we’re banning open-pit mining, prospective, for the following reason: that pit is gonna be there forever and a day, eternally,” Lopez said.

The Environment chief cited several reasons for the ban including its financial and environmental liability; deprivation of economic use of the area; continuing adverse impact on the environment; and its high risk to host communities.

Open-pit is defined as an excavation or cut made on the surface of the ground for the purpose of extracting ore and which is open to the surface for the duration of the mine's life.

Lopez claimed that it was within her prerogative to issue an order to ban the practice, which is allowed under the Philippine Mining Act.

“Open-pit mining is too much of a risk. I have the mandate to evaluate and I have the duty to put a stop to it,” Lopez said.

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"Each open pit is a financial liability for government for life. It kills the economic potential of the place,” she added.

Lopez emphasized that open pits have ended up as perpetual liabilities, causing adverse impacts to the environment, particularly due to the generation of acidic and heavy metal-laden water, erosion of mine waste dumps and vulnerability of tailings dams to geological hazards.

She added that records show that most of the mining disasters in the country were due to tailings spills associated with open-pit mining.

Order issued in anticipation of CA hearing

Lopez admitted that she is now imposing the ban because she is uncertain as to what may happen during her confirmation hearing before the Commission on Appointments on May 2.

“I am doing this because I have no idea what’s going to happen on Tuesday. I’m doing this because I find politics very unpredictable,” Lopez said.

Since her appointment as Environment chief, Lopez has made public her stand against the practice, which is being used by most mines in the Philippines.

Among the biggest prospective open-pit mines are the over $2-billion Pangilinan-led Silangan mine in Surigao del Norte and the $5.9-billion Tampakan project in South Cotabato, dubbed as potentially the country’s biggest foreign investment and believed to be one of the largest gold prospects in the world.

The DENR is set to issue show cause orders to projects that are under the exploration stage while those under application will no longer be approved, Lopez said.

'Order is absurd'

Meanwhile, the industry group Chamber of Mines of the Philippines (COMP) countered Lopez’s decision, saying it is absurd and that the law actually allows open-pit mining.

“While the DENR does have the power to regulate mining, they have to do it within the ambit of the Constitution and the law. Lopez cannot add or deduct from the law by herself. It needs amending legislation from Congress,” COMP Legal and Policy vice president Ronald Recidoro said.

“The law does not ban open-pit mining. Quite the contrary, the Constitution even gives the state the duty to explore, develop, and utilize our mineral resources. With this open-pit ban, she is essentially banning the mining of shallow ore deposits that can only be extracted using that method,” he added.

The industry group said that open-pit mining is an internationally accepted method, which can be done safely and properly. It said mines can be rehabilitated in a manner that allows for other land uses such as agriculture, fisheries, and tourism

“How does she propose to mine shallow mineral deposits found just two to 20 meters underground? Nickel, coal, marble and aggregates are normally found near the surface of the earth and can only be mined using open-pit and open-cast mining,” Recidoro said.

“She is ill-advised or this is her own thinking because she already has a preconceived thinking that she will not allow it as early as July last year. She does not think about the repercussions to the country as a whole,” COMP executive vice president Nelia Halcon added in a separate text message.

While Environment Undersecretary Maria Paz Luna admitted that no consultation with the industry stakeholders has been made, she said it still within the discretion of the secretary to issue such decisions.

But, Recidoro maintained otherwise, citing a portion of the Revised Administrative Code, which requires public participation.

Should Lopez fail to get confirmed next week, the mining industry may be hopeful that the next secretary may counter the recent order.

“A department administrative order can be reviewed, revised, or even revoked by subsequent Environment secretaries,” Recidoro said.

'Ban may lead to energy crisis'

Mining experts have already warned that banning open-pit mining in the country may affect energy supply nationwide.

“Open-pit mining is done in most countries around the world. It could be done safely and is one of the most economical methods in mining,” mines expert Gabriel Pamintuan Jr. of the University of the Philippines said.

Pamintuan cited Semirara Mining and Power Corp.’s (SMPC) open-pit mine as an example.

“Shutting down Semirara would mean a power crisis given that coal contributes an estimated 47 percent of Luzon’s power requirements. Calaca, which feeds on 100-percent Semirara open-pit coal, even if it only contributes seven percent to the peak power demand, is a base load plant. Any outage by base load power plants can trigger cascading brownouts that could extend to a Luzon-wide outage,” Pamintuan said.

SMPC produces 8 million metric tons of coal annually from its operations in the 55-square kilometer contract area in Semirara island with projected reserves expected to last until 2036. The coal being mined in the region is graded as sub-bituminuous with a heating value of 9,300 British thermal unit per pound, the highest quality of coal locally available.

Philex’s Silangan mine

Meanwhile, Pangilinan-led Philex Mining Corp.’s subsidiary Silangan Mindanao Mining Co. Inc. said it has yet to receive the official order from the DENR.

“We will await whatever order or issuance the secretary-designate would have regarding her pronounced ban on open-pit mining before we take the necessary decisive action,” Philex Public and Regulatory Affairs head Francis Ballesteros told The STAR.

“So far, all we know is that these are mere announcements made in a press conference or forum, as is the case with her previous pronouncements,” he added.

The mineral production sharing agreement of Silangan was cancelled last February because of its proximity to a watershed, but the company maintained otherwise and iterated that it is not violating any environmental law.

Philex earlier admitted that it is facing serious concern over the cancellation of Silangan’s copper and gold project in Surigao del Norte, which it expected to be its next big prospective mine with an investment opportunity of P40 billion.

The Silangan project is Philex’s next big prospective mine that will replace the Padcal copper-gold mine in Benguet whose mine life is expected to end by December 2022.

The company has invested over P13 billion for the initial exploration and related works on the site as of end-2014, on top of the estimated commercial-operations project cost of approximately $1.2 billion.

By 2020, the Silangan project is seen to generate P170 billion in revenues, P31 billion in national and local taxes and at least 8,000 employment opportunities for the first 10 years of operation.

Silangan Mining is also expected to spend P6 billion over the same period for social development and infrastructure programs that will benefit Mindanao.

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