Government orders renegotiation of OceanaGold contract

MANILA, Philippines — The government seems to continue warming up to the mining industry after President Duterte ordered the renegotiation of the contract of Australian-Canadian mining firm OceanaGold.

The Mines and Geosciences Bureau (MGB) said the Office of the President issued an order to the Philippine negotiating panel to start negotiating with OceanaGold on the terms and condition of its financial and technical assistance agreement (FTAA).

“We wanted to finish the negotiation fast without sacrificing government interests, so that the project can begin to contribute to the economic recovery of the country and most of all the stakeholders of the project,” MGB director Wilfredo Moncano told The STAR.

OceanaGold’s FTAA for its Didipio mine in Nueva VIzcaya expired in June 2019 and it has failed to secure a renewal of its mining contract, and therefore, mine closure was implemented by local authorities.

As of now, 76 percent of its 1,500 workforce have been permanently laid off. Most of its workers are from the local communities of Nueva Vizcaya and Quirino.

OceanaGold confirmed that it has been notified by the OP regarding the renegotiation.

“The OP gave instructions to the Department of Environment and Natural Resources and the Department of Finance to engage with us and renegotiate,” OceanaGold Philippines communications manager Marjorie Idio told The STAR.

“But as to the details, we really haven’t commenced discussions. We were just informed very recently. We are still waiting for further instructions, but we are looking at this in a very positive light,” she said.

The OP earlier found a deficiency based on the Indigenous Peoples’ Rights Act. The first 25 years of OceanaGold was not covered by the IPRA law and the mine area was outside the ancestral domain of the Bugkalot tribe.

However, during its renewal, the tribe also filed an application for expansion, which technically covered the area of OceanaGold.

This dragged the FTAA final renewal of OceanaGold even if it has secured the endorsement from the DENR and MGB since last year.

The President has the final decision on the grant and renewal of an FTAA.

As the industry is placed in a rather better light, the Philippine Mining and Exploration Association (PMEA) emphasized that OceanaGold’s renegotiation is a positive development for the sector.

“This is much better rather than we are in limbo and doing nothing. We are moving forward and we might see Didipio mine contributing substantially next year,” PMEA president Joey Ayson said.

OceanaGold said it would work as quickly and safely as it can to rehire hundreds of workers and restart operations should the FTAA be renewed as it aims to contribute to the country’s economic recovery amid the pandemic.

OceanaGold’s FTAA covers some 10,000 hectares. Out of that, only 975 hectares have an approved environmental compliance certificate and only 330 hectares are being utilized.

An FTAA is entered into between a contractor and the government for the large-scale exploration, development and utilization of gold, copper, nickel, chromite, lead, zinc and other minerals. It is granted to foreign-owned corporations seeking to operate in the Philippines.

OceanaGold Philippines accounts for one-third of the global business of the company. Its other operations are in New Zealand and the United States.