The US$81 million Dinkidi copper/gold project (located within the Didipio area) owned by Climax Mining will be the first major mine to be developed in the Phillippines.
Philippines Environment and Natural Resources Secretary Mike Defensor made the announcement Monday of DENR approval of the feasibility study for the project. He stressed that environmental and social expenditures stemming from the project will amount to $8.6 million and $2.8 million, respectively. In a news release issued Monday, the DENR stated "the development of the Didipio project is seen to attract more foreign investments in the local mining scene as the project holds the first Financial or Technical Assistance Agreement (FTAA) that will prove to be workable in the Philippine setting. A FTAA is allowed to recover its investments after which the sharing of 60% (due the government) and 40% (due the contractor) of the benefits of mining shall apply."
Didipio is located near the Municipality of Kasibu, Nueva Viscaya and Carraroguis, in the Quirinto Province on the Island of Luzon. Exploration for the project began in 1989 with construction planned to commence early next year. Commercial production is planned for the first quarter of 2007. The project is anticipated to have a mine life of 15 years and employ 500 at mining and processing operations.
The project is designed for a throughput of 2 million tonnes of ore annually from open-pit and underground mining , which will be processed by flotation. It is expected to yield 150,000 ounces of gold equivalent annually, containing 94,000 ounces of gold and 10,000 tonnes of copper in concentrate.
The largest 20 shareholders in Climax are ANZ Nominees, Ltd. with nearly 33% of the shares, Citicorp Nominees, Ltd. with 15.8%, the Den Dutys Corporation with 7.2%, and Lippo Securities Nominees (BVI) with nearly 7.4%. Financial negotiations are currently on-going between Climax and a bank syndicate led by ANZ Investment Bank of Australia.
Originally, former Philippines President Fidel Ramos granted an FTAA to Climax Arimco Mining on July 20, 1994. The Environmental Clearance Certificate (ECC) was issued on August 11, 1999. However, former DENR Secretary Alvarez issued a notice of suspension of exploration activities on October 11, 2001.
Opponents claimed the FTAA and the ECC should be cancelled because the project was allegedly within a "proclaimed watershed." They also asserted that the project would be detrimental to a river irrigation project in the area. The opponents also claimed that the Memorandum of Agreement between the company and the officials of Barangay Dipidio were illegally obtained. Climax-Arimco is chaired by Jose Leviste, former governor of the Philippines Board of Investments and brother-in-law of a former Filipino Senator.
Bishop Ramon Villena of Bayombong also supported the public appeal for Climax Arimco to pull out of Didipio. "The open-pit and underground mining operations of Climax in Kasibu will certainly spell out unfathomable destruction to our watershed areas and that would lead to the depletion of our groundwater reserves, which we need to sustain our citrus industry in Kasibu," he declared.
Mayor Romeo Tayaban of the Municipality of Kasibu told the Manila Times that he felt large-scale mining "will destroy our booming upland agriculture, particularly in Barangay Didipio where the planting of rice and citrus plantations have been developed for years."
As recently as March of this year, local residents of Barangay Didipio urged local and provincial officials to eject the proposed mine from the area. However, the local government unit of the Barangay Didipio is supporting the project. The Provincial Government Luisa Lloren Cuarema opposed the project expressing fear that it would harm the province's main agricultural industry.
Climax Arimco Chairman Leviste said the project will create a new mining district. He said the company intends to look into listing with the Philippine Stock Exchange.
Philippines officials expect up to $6.5 billion in foreign investments in 23 mining ventures over the next five years. Officials hope these projects revive the nation's mining sector and help meet China's appetite for metals. Meanwhile, embattled Philippines President Gloria Arroyo is trying to wipe out budget deficits by selling state-owned properties and natural resource companies.
A recent meeting of the ASEAN Ministers responsible for minerals and mines in Malaysia urged ASEAN nations, including the Philippines, to exploit their competitive advantage in mineral resources. The ministers said they viewed mineral assets as a natural tool which can stimulate and enhance economic growth potential and social progress in member nations.
The group adopted the ASEAN Minerals Cooperation Action Plan, which contains 19 concrete and strategic actions, including promoting cooperation in minerals information and databases, trade and investment in minerals, sustainable mineral development, and capacity-building in minerals. A Forum on Private Sector Cooperation will be established in ASEAN promote trade and investment in joint venture projects, and generate creative partnerships in the ASEAN minerals sector. Among the signators to the document was Philippines Environmental and Natural Resources Minister Defensor.
In a August 2 speech at the Asian Development Bank in Mandaluyong City, Philippines, Defensor stressed that the Mineral Action Plan of the Philippines will serve as a master plan to revitalize the mining industry. "From tolerance, we are now actively promoting responsible mining that adheres to the principles of sustainable development," he declared.
"In addition to the existing environmental safeguards, we have introduced new reform measures in the mining sector," he explained. "Every foreign mining investor will be required to secure certification from his embassy here attesting to the company's satisfactory track record of environmental management and community relations in the firm's home country."
Meanwhile, Defensor said miners will be required to post reclamation bonds from the day mining operations commence. Third-party environmental audits will be required, and environmental impairment liability insurance will be mandated for "all environmentally critical businesses." He vowed that "polluters must pay for the disasters and accidents they will cause."
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