DOF to address legal issues of mining assets

MANILA, Philippines — The Department of Finance (DOF) has formed an interagency team tasked to address the legal issues hampering the privatization of mining assets held by the government.

In a memorandum addressed to the DOF, the Privatization and Management Office (PMO) said the government’s efforts to privatize its mining assets have been set back by lawsuits from their respective private sector proponents.

To sort out these issues, Finance Secretary Carlos Dominguez said a team composed of representatives from the DOF, the PMO, Department of Environment and Natural Resources , Mines and Geosciences Bureau and the Office of the Solicitor General will be created.

“We are forming an interagency team to study ways on how we can clear the path for these assets to be privatized and revive their operations,” Dominguez said.

Earlier, Dominguez said the government is pushing for the privatization of its mining assets to help reinvigorate the mining industry, thereby providing more jobs in rural areas and propelling economic development in the countryside.

The finance chief said the valuation of these assets are currently being updated.

According to the PMO, some of the mining assets that are still facing legal issues are the copper-gold project of the Maricalum Mining Corp. in Negros Occidental, the nickel mines of Nonoc Mining and Industrial Corp. in Surigao del Norte, and the gold and copper mine of the North Davao Mining Property in Davao del Norte.

These mines failed to settle their debts with government financial institutions, leading to their foreclosure and transfer of assets and shares of stocks to the national government.

The PMO said the government had auctioned off the shares of these mining firms, but winning bidders failed to fulfill their obligations, which resulted in decades of litigation that have left these mining assets idle.

Moreover, the PMO said the copper mines of the Basay Mining Corp. in Negros Oriental and the nickel mine of Marinduque Mining and Industrial Corp. (MMIC Bagacay Mine) in Western Samar have also remained unoperational because of legal concerns on how these assets should be disposed.

Basay Mining, formerly the CDCP Mining Corp., had its operations suspended in 1983 because of lack of working and operating funds. The company had entered into a Deed of Assignment of Mining Claims and Leasehold Rights with the Philippine National Bank   to secure credit

Technical studies by the PMO showed that Basay mine is estimated to contain at least 105 million tons of copper ore and could generate at least P1 billion.

MMIC Bagacay mine, for its part, had been involved in environmental complaints, and was foreclosed by the Development Bank of the Philippines and PNB in 1984 with an outstanding claim of P19.5 billion.

Meanwhile, the PMO said DENR Administrative Order 2012-07, which tasks the MGB to formulate the guidelines for the privatization of mines, also needs to be reconciled with the PMO’s mandate to dispose of state assets, in order to move forward with the revival of these mining operations.