Davids vs Goliaths: Face off in Mindanao mines


By Edwin G. Espejo

GA_googleFillSlot(“Philippine_areas_incontent_mediumrectangle300x250”);

_GA_googleAdEngine.createDOMIframe(‘google_ads_div_Philippine_areas_incontent_mediumrectangle300x250′ ,’Philippine_areas_incontent_mediumrectangle300x250’);

FILIPINO partners of foreign mining firms are slowly beginning to realize that inviting prospective offshore investors is proving to be more than they could handle than all shades of activists opposed to mining operations in the country.

These differences are taking deep roots in the boardrooms where giants in the global mining industry are slowly building up their interests and investments in Philippine mining companies.

What’s your take on the Mindanao crisis? Discuss views with other readers

Asiaticus Management Corporation (Amcor) president Vicente Jayme Jr. said the difference goes beyond clashes over management style and cultural sensitivities.

“We have altogether different objectives which resulted into the delay of our exploration activities,” Jayme said, referring to Australian mining giant BHP Billiton with which he and his Filipino group have a joint venture agreement to explore ore deposits at the Pujada Nickel Project in Davao Oriental.

Trouble began when Filipino partners of Amcor questioned the priorities of BHP Billiton, which owns 40 per cent of the company.

“We have been waiting for them (BHP Billiton) over the last seven years to make good of their commitment to pour in investment for the project exploration,” he said in an interview at the break of the first Mindanao Mining Forum held at the Waterfront Insular Hotel in Davao City two days ago.

His fellow company official, Amcor Vice President Lauriano Barrios, said he is getting the impression that big foreign mining companies are only engaged in “mine banking.”

By claiming stakes in Philippine mining projects, he said these mining giants are already amassing huge profits in the stock markets. “They are building up their capital at our expense,” Barrios said.

While acknowledging that their case is mere microcosm of clashing interests between Filipino and foreign investors, Jayme said each and every mining corporation has its own peculiarities.

He has a point.

At the Sagittarius Mines Incorporated (SMI) in Tampakan, South Cotabato, an internecine corporate war is also brewing.

Xstrata Copper, a subsidiary of Xstrata Plc, is engaged in a bitter and costly war to hold off a bid of investors from taking control over the 34 per cent stake held by its partner, another Australian mining firm Indophil Resources Ltd., after it foiled an attempt by Hongkong-based Stanhill Consortium to get into the corporate picture.

Filipino corporate conglomerate Alsons Group is now trying to buy Indophil’s stake at Tampakan Copper and Gold Project.

With ore deposits of over 12.8 million tons of 0.6 per cent copper and 15.2 million ounces of 0.2 grams per ton of gold, The Tampakan Copper and Gold Project is reportedly the biggest of its kind in Asia. This potential find has sent the share prices of Indophil Resources Ltd., at the Australian Stock Exchange from AUS$0.35 per share to 1.32 per share at the time Stanhill made its offer in June this year.

The corporate war in SMI has spilled over to the corporation itself. The ensuing corporate shakedown following the takeover of Xstrata people in the management of SMI has heightened the opposition to the mining operations of the company.

A former consultant of SMI said, since Xstrata gained control over the project, nothing good has come out for the company in the local media.

Filipino partners of Philex Gold in Surigao are likewise moving to buy out the 50 per cent interest of Anglo American Plc following divergent views with the foreign mining firm “on a number of assumption and conclusions made in (its) feasibility studies such as metal prices, treatment and refining charges, engineering and owner’s costs and capital contingency.”

Jayme, whose father is former public works and finance secretary Vicente Jayme Sr. during the Aquino administration, said some global mining companies are using their “proprietary rights” over mining technologies and stacks off cash to hold Filipino mining interest hostage.

He said they finally decided to rescind their contract with BHP Billiton “because of our commitment to the communities.”

If need be, they will do it on their own sans BHP Billiton, he pointed out.
Technologies, he revealed, are no longer the private domains of these foreign mining firms.

“We have made several consultations with Chinese and Japanese mining firms and they are willing to help us out,” Jayme said.

BHP Billiton is the world’s biggest diversified mining company and holds varying amount of stakes over scores of mining claims all over the world. Xstrata Plc, on the other hand, is the world’s fourth largest mining firm while Anglo American Plc is among the world’s leading mining giants.

Barrios said with BHP Billiton having so much and so many interests in mining all over the world, exploring nickel at the Pujada project has become the least of its priorities.

“What about us? We cannot wait for them forever. Ginugutom nila ang mga (They are starving the Filipino) investors,” he rued.

Jayme refused to characterize the ongoing boardroom wars in many local mining firms with foreign partners as a product of birthing pains following the passage of Republic Act (RA) 7942 or the Philippine Mining Act of 1995.

RA 7942 was crafted to ostensibly resuscitate the mining industry in the country which, during the pre Martial Law era, was Asia’s biggest and most developed.

Until recently, Mindanao has been largely untapped as past mining operations were heavily concentrated in Luzon and Visayas. Since the passage of the law, there are already over 64 mining applications from 26 mining firms in the South Cotabato-Cotabato-Sultan Kudarat-Saragani-General Santos City (Soccsksargen or Central Mindanao Region) area alone.

With the Supreme Court (SC) in 2004 upholding the constitutionality of the RA 7942, which allows foreign corporations to wholly own mining firms and claims in the country, there is no telling where these intra-corporate wars are headed to.

Jayme is not straightforwardly asking the government to intervene and review its policy on the development of the mining industry in the country. But he has these parting words: “Support what is Filipino that belongs to the Filipinos.” (SunStar)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: