SPECIAL REPORT: Philippine mining industry takes steps to conform with global standards

MANILA, Philippines — While the Philippine mining industry continues to shape up and provide the worth of its existence, adhering to internationally-accepted standards may not be a walk in the park given its tedious process. The good news is that the sector is slowly starting.

Following a stern warning from President Duterte to police their rank, mining companies continue to find a solution to a problem that has long been there, but was only pointed out and seriously tackled about two years ago.

The Chamber of Mines of the Philippines (COMP), the country’s association of large-scale miners, is looking into the adoption of the Towards Sustainable Mining (TSM) initiative of the Mining Association of Canada (MAC), one of the global benchmarks in the extractive minerals industry.

Established in 2004 by MAC, TSM is a set of tools and indicators to drive performance and ensure that key mining risks are managed responsibly. It aims to enable mining companies to meet society’s needs for minerals, metals and energy products in the most socially, economically and environmentally responsible way.

The COMP and its 28 member companies formally adopted the TSM last December 2017 as part of efforts to show that the local industry is serious in addressing the problems hounding the sector.

“We have signed that commitment because having TSM will improve our direction. It may be difficult for us, but at least we are starting,” TSM committee chairman and Philex Mining Corp. president and CEO Eulalio Austin Jr. told The STAR.

Austin represented the industry during the recent MAC meeting in Toronto, Canada, attended by countries subscribing to TSM such as Argentina, Finland and Botswana, as well as those that are yet to adopt, including Norway and Spain, among others.

“We want to see the dynamics on how to traverse this since we are a neophyte in this. It will be hard if we do not know what we are going to do and we already foresee many challenges,” Austin said.

Budget problem

The mining industry is not a one-time investment as extracting minerals takes about 20 to 25 years to fully exhaust a mine.

In the Philippines, mining entails a lot of financial aspect, from feasibility studies, exploration, to actual operations and adopting globally-accepted methods and standards, which mean additional expenses for the industry.

“What we learned from Canada during the meeting is that about 50 percent of their budget is spent on TSM, which likely means that each mining company also share about half of their expenditure for TSM. The question is, can we fund that?” Austin said.

In some advanced large mining countries, like Canada, Australia, Brazil and Argentina, the largest mining companies are leading the financing of the initiative.

“I think, if we really want to improve the image of the mining industry, we have no choice but to really spend for that and it really entails a lot of effort and money,” Austin said.

“Mining companies, for sure, would have to shell out additional budget and that would be the direction. As for Philex, we are willing to contribute,” he said.

While some countries are financially-supported by their own governments, the COMP has to do it privately and independently given the still unresolved issues it has with the current administration.

“It would be too early for that, we have to show first that there are developments before we could get financing. The whole TSM would be financed by the chamber,” Austin said.

“We will probably see after a few years, in terms of the sustainability of the project, if there will be a need to seek support from the government,” he added.

Search for a nat’l coordinator

Another factor stalling the full implementation of TSM in the country is the continued search for a national coordinator, a person who will be overall in charge, but is not connected to any mining company.

“We have listed the qualifications and standards on hiring the coordinator who would will directly handle TSM and report to the executive director of COMP. But then again, our problem is, will there be guys willing to do that?” Austin said.

The national coordinator will have to conduct trainings for the mining companies, visit mine sites to do some gap analysis based on the standards set, and lay out the programs especially the financial part, among others.

The coordinator would also have to conduct TSM training with some government officials from the Department of Environment and Natural Resources and the Mines and Geosciences Bureau on how help in the regulatory environment.

“We are looking within the year to find a candidate so we can start already. After we hire that person, MAC is willing to train him or her,” Austin.

COI advisory panel

Apart from the national coordinator, the TSM committee will also have to form the Community of Interest (COI) advisory panel, an important group structure of the TSM that should be independent, transparent and credible.

“What is really critical is the formation of the advisory panel because the panel will be the one to lay out the protocols that will be adaptable to our country. We can not entirely follow the protocols of Canada because some are not applicable to us,” Austin said.

“We want to form it before the end of the year while we are doing gap analysis on our own. Members will be third party people not connected to mining companies. They are experts in their own fields like environment, water, agriculture, and other areas affected by mining,” he said.

In Canada, for instance, the advisory panel is a multi-stakeholder group comprised of about 12 to 15 individuals from indigenous people, environmental and social organizations, labor and financial organizations, an international development representative, and select members of the mining industry.

The panel is expected to conduct yearly reviews of companies’ verified results to analyze company systems and practices and provide critical perspectives by raising emerging issues of concern beyond those covered under TSM.

The TSM will cover areas on IP and community outreach, energy and emissions management, tailings management, biodiversity conservation, safety and health, crisis management, communications planning, mine closure, preventing child and force labor, and water management.

3 years

The local mining industry is hopeful everything will be in place in the next three years, the same period it took other countries to fully implement TSM and see significant results.

“For the first year, we will do revisions on our policies. We have specifics, we will insert those applicable protocols to us and delete those that are not,” Austin said.

“It really depends on the pacing and commitment of mining companies. If they would like to expedite things, it is really all on them,” he added.

And while the industry strives to clean its name, Austin admitted that anti-mining lobbyists would always be a part, and one could only convince some of them to believe in the sector’s efforts.

“At the end of the day, we should not discuss whether we mine or not, the discussion should be how to do it, and that should be the bottomline,” Austin said.

For his part, Daniel Malchuk of Minerals Americas, a subsidiary of the world’s second-largest mining company BHP Billiton Ltd., said the industry as a whole should begin to think more wholistically and work harder to contribute to communities.

“We must keep improving because success is measured in generations rather than in terms of quarter results. We must spend more time and effort into deeply understanding the negative impact of our activities and more importantly to mitigate this,” he said.

“Mining is essential to the global economy. It is our responsibility to be efficient, sustainable, and productive. We need to be there for the long term,” he added.

Moving on

Even if the Philippines is looking at Canada as a model, some would still raise their eyebrows as one of the largest mining disasters in Philippine history is caused by a Canadian company, Marcopper Mining.

More than two decades ago in Marinduque, a fracture in the drainage tunnel of a large pit containing leftover mine tailings led to a discharge of toxic mine waste into the Boac river system and caused flash floods in areas along the river.

Marcopper Mining was a Canadian company that started operations in 1969 at the Mt. Tapian ore deposit and then moved to the nearby San Antonio copper mine when Mt. Tapian reserves were depleted in 1990.

This is one of the many reasons why some still maintain that mining remains to be a disastrous and dangerous activity regardless of its economic value, and this will likely remain a challenge today as the industry tries to clean its name.

“That would always be part of the challenge, but we have to move forward. Yes, it would always be brought back in the picture every time there is an argument. But for me, how could we move forward if we keep looking at that?” Austin said.

“Philex alone, we had our Padcal accident [the country’s biggest mining disaster in terms of volume]. We accepted the fact that it will always be told and retold,” he said.

Tailing spills and accidents are also part of the TSM and the industry is banking on this to avoid any untoward incident from happening again in the future.

“Part of the TSM intervention is to really look into how protocols on tailings management are improved to avoid repetition. TSM is there to improve itself to address such issue,” Austin said.

“Accidents like those of Marcopper and ours will always be brought into the discussion. We just have to move forward for the mining industry and keep improving our standard,” he added.