REVIEW OF PHILIPPINE

LARGE-SCALE METALLIC MINES

Synthesis of the MICC Review of Large-Scale Metallic Mining
Operations in the Philippines, 2018 – 2020
Contents
Table of Contents iii
Foreword vii
Executive Summary viii
List of Tables xi
List of Figures xii
Acronyms xiii

Chapter 1: Overview of the Mining Industry 1

Global Mining Trend 1
Domestic (Metallic) Mining Industry and Trends 3
Mineral Resources 6
Markets for Philippine Minerals 8
Contribution to the Economy 8
Chapter 2: Overview of the MICC Mining Review 13
Rationale of Mining Operations Review 13
Scope and Coverage 13
Goals and Objectives 15
General Framework and Methodology 15
Economic Efficiency 16
Scoring Procedure and Overall Rating Index 17
Chapter 3: Legal Aspect of the Review 21
Framework and Methodology 21
Method of Data Collection 23
Analytical Approach 24
Key Results/Findings 24
Ease of Access and Availability of Information 26
Report Delivery, Compliance Team and General Compliance 26
Substantial Compliance 26
Beyond Compliance 28
Summary and Recommendations 28
iv Table of Contents

Chapter 4: Technical Aspect of the Review 31

Framework and Methodology 31
Method of Data Collection 32
Analytical Approach and Scoring Method 32
Key Results/Findings 33
Summary and Recommendations 35

Chapter 5: Environmental Aspect of the Review 37

Framework and Methodology 38
Method Data Collection 38
Analytical Approach 38
Key Results/Findings 39
Mined out Areas Rehabilitation 41
Rehabilitation with Food Production Objectives 42
Good Environmental Practices and Progressive Rehabilitation 42
Summary and Recommendations 42

Chapter 6: Social Aspect of the Review 45

Framework and Methodology 45
Method of Data Collection 46
Analytical Approach 46
Key Results/Findings 46
Sustaining the SDMP during CMP 48
Formalized and Engaged Community Relations Office During Operations Phase 48
Key Stakeholders Participation in SDMP Organization 49
Use of Assessment Studies in SDMP Formulation 49
Other Notable Special Practices and Projects 49
Summary and Recommendations 50

Chapter 7: Economic Aspect of the Review 53

Framework and Methodology 53
Method of Data collection 53
Analytical Approach 54
Key Results/Findings 55
Financial Sustainability 57
Contribution to National and Local Economy 58
Economic impact on the community and household 60
Table of Contents v

Natural Capital Sustainability 61

Summary and Recommendations 61

Chapter 8: Summary & Conclusion 64

Rating of Mining Operations and Performance Index 64
On the Legal Aspect 66
On the Technical Aspect 67
On the Environment Aspect 69
On the social aspect 69
On the Economic Aspect 70

Chapter 9: Summary of Recommendations 73

References 76
Annexes 79
Foreword
The mining industry plays a huge role in stimulating the national economy and contributing to the
country’s socio-economic development. With the opportunities and risks it poses to the people and
the environment in the medium and long term, the industry needs to be scrutinized, reviewed, and
monitored. In 2012, the Philippine government issued Executive Order No. 79 (EO 79) to institutionalize
and implement reforms in the mining sector. The Mining Industry Coordinating Council (MICC), an
inter-agency body, was created to carry out the order. The MICC is mandated to assess and review
all mining operations concerning their compliance with existing laws and regulations. It also reviews
mining-related laws, rules, and regulations, and provides corresponding policy recommendations to
improve their effectiveness and relevance.

Pursuant to Section 3 of EO 79, the MICC has implemented a multi-stakeholder review on the performance
of existing mining operations from February 2018 to December 2020. The Review was conducted in two
phases and covered a total of 45 large-scale metallic mining operations. A total of 29 local experts were
engaged to undertake the review, ensuring that it is objective and based on facts and science.

This paper is designed to present the technical perspective of mining based on the results of the MICC
review, particularly on the legal, technical, social, economic, and environmental aspects. The paper also
highlights the good mining industry practices and those that need improvement. Its intended audience
includes the academe, legislature, judiciary, and the business sector.

With this paper, the MICC aims to guide mining companies in improving their mining operations and
business practices. For the government, the paper offers valuable and relevant insights to better inform
policies and decisions towards improving the regulation of the mining sector and ensuring its contribution
to the country’s sustainable development agenda.
Executive Summary
The Mining Industry Coordinating Council (MICC), through the Development Academy of the Philippines
(DAP), has engaged a multidisciplinary team composed of legal, technical, environmental, social, and
economic experts to conduct a review of mining operations across the country starting with large-scale
metallic mining. The Mining Review aimed to (a) identify gaps, issues, and concerns that limit the
industry’s contribution to national and regional development; (b) ensure a more responsible mining
sector considering the commonly held perception of the destructive effects of mining operations; and
(c) recommend effective interventions and policy measures toward contributing to the sustainable
development goals. In meeting these objectives, the frame of the Review combined substantive
regulatory compliance, technical and economic efficiency, environmental quality management, local
economic growth, and community welfare improvement.

The legal Review was done in two stages. The first stage examined mining companies’ procedural compliance
with regulatory and corresponding documentary requirements. The second stage looked into actual
implementation activities and substantive compliance beyond mere documentary review. On the other
hand, the technical review framework was jointly developed by mining engineers, metallurgical engineers,
and geologists. It covers the review of production, mineral resources, comparison with global standards of
mining operation, infrastructure support for mining, auxiliary facilities, mine management, capitalization,
safety, and working environment. The environmental management review considers mining activity as
environmental perturbation or disturbance of the natural pattern that affects ecosystem functions and flow
of ecosystem services. The review carries the premise that laws and regulations are designed to minimize
mining’s impacts on the environment and to ensure the sustainable management of other natural capital—
renewable or non-renewable. With that frame, a mining company is obliged to put in place preventive and
mitigation measures, and restore damaged ecosystems. The social aspect of the review, meanwhile, takes
on the perspective of social development, which means improving the well-being of every individual in
society to attain their full potential. Therefore, the social development review is focused on the attainment
of improved quality of life or well-being of people and communities in mining sites. The economic aspect
of the Review is anchored on the concept of sustainable economic growth and development. This concept
includes the notion that future generations should have at least the same level of stock of resources or
capital, regardless of kind, so that the level of assets available is non-declining over time to support
basic needs of the present and the future. In addressing the key tasks prescribed by the MICC, each expert
followed the standards of their respective discipline. Each expert has specific terms of reference and key
questions to answer that was agreed upon by the entire panel of experts identified by NEDA, the agency
acting as Secretariat of MICC, the Department of Environment and Natural Resources (DENR), and the
Department of Finance (DOF). The results of the Review were discussed and presented in a series of
meetings and workshops led by the over-all team leader. The summaries of the Review begin with legal
compliance followed by technical, environment, social and economic findings, and recommendations,
respectively. Chapter 3 details the legal compliance review, including summary recommendations for each
mining company and future direction related to mining policy. Chapter 4, 5, 6, and 7 provide details of
Executive Summary ix

the Technical, Environment, Social, and Economic review. Chapters 8 and 9 summarize the results and
recommendations by experts.

The Review covered 43 large-scale metallic mining companies. There are 45 mining sites or operations,
but two nickel mine sites operated by one company in Dinagat Island were considered as one operation. Of
the 43 companies, 11 produce gold, 5 copper, 9 silver, 4 chromite, 2 magnetite, and 27 nickel (see Table
4). These are located in 17 provinces in 10 Regions (see Figure 6). Of those reviewed, 19 were under the
Care and Maintenance Program (CMP), either voluntarily due to the sudden drop in mineral ore prices
worldwide or involuntarily due to suspension following a DENR Audit. Thirteen of these are nickel mining
operations, while the rest are magnetite and chromite. Ten gold mining operations were operating at the
time of the review, while one is under CMP. Owing to the lack of a national policy on care and
maintenance program at the time, companies employed different methods of maintaining their mining
area. Some companies could not keep up with the required activities, notably social development and
management. Nevertheless, several companies were able to sustain their social management programs and
even drive innovation to address specific social issues they have encountered.

Four mining operations showed excellent benchmarks for future mining entrants whether open-pit or
underground mining. One gold mining operation has a state-of-the-art, fully mechanized underground
system that yields higher ore production. Three nickel mining demonstrated several innovations in mining
operations and environment management, leading to recognition and awards at local and international
levels. However, 14 companies must address some regulatory issues as reported by the DENR audit reports
in 2016. In the two phases of review, these are the mining operations that had about 2.0 average overall
score. All gold mining operations located in Luzon have varying levels of performance. One had the
potential for sustaining development where it performs significantly in the five aspects of sustainability,
namely technical, environmental, social, legal, and economic aspects. Except for the old gold mining in
Benguet, the other mining operations have a steady production.

Other mining operations, particularly those engaged in nickel mining in Zambales and Loreto, Dinagat
Islands, need to further examine their technical and environmental aspects and consider increasing
environmental protection expenditures. These nickel companies must carefully balance investments for
socio-economic development with community development. It must consider building up other forms of
capital e.g., renewable natural or manufactured capital that can be sustained beyond the mine life. This
type of metallic mineral mining is spread across a wider area. Extraction is limited to only a few months
in a year, and highly dependent on global demand and market cycles. Volatility in the global market and
activities are price fluctuation encourage perverse incentives towards intensifying production during peak
demand and disregarding the environmental damage.

Four nickel laterite mines in Zambales are concentrated in a mountain range and are adjacent or with
shared boundaries in the upper sections of the major river systems in the area. These four mines employ
the same mining method, which involves the complete removal of vegetation and strip-excavation of wide
and extensive step-like benches to remove the soft nickel-bearing weathered rock and the overlying clayey
material that are directly exported to foreign buyers as unprocessed material known as Direct Shipping
Ore (DSO). On the other hand, nine mining companies have Mineral Production Sharing Agreement
(MPSA) in the municipalities of Basilisa, Libjo, Tubahon, Loreto, and Cagdianao in the Dinagat Island
Province. These are the AAM-Phil Natural Resources Exploration and Development Corp., Wellex Mining
x Executive Summary

Corp. Mine, Krominco, Inc., Libjo Mining Corp., Oriental Synergy Mining Corp., Oriental Vision Mining
Phil. Corp., Sinosteel Phil, N.Y. Mining Corp., Cagdianao Mining Corp., Century Peak Corp. - Rapid City.
Of the 11 mining sites, only Cagdianao Mining Corporation and Century Peak Corporation are operating.
The rest are on CMP. Compared to some gold mining with a century of history, most nickel laterite mining
comapanies are relatively recent. The government offices directly dealing with the permitting, regulation,
and monitoring of the nickel laterite mining operations need substantial improvement and modification
of its implementing rules and regulation to better address this type of mining’s inherent impact on the
environment and affected communities.

For some mining operations, there are sufficient grounds to justify the closure orders issued by the DENR.
Some of these mining companies are performing poorly, and others need interventions for key reforms.
Such performance required a detailed review. Table 16 on page 63 presents a summary of the ratings
of large-scale metallic mining operations included in Phase 1 and 2 of the Review. Started in 2018 and
completed in May 2019, the Phase 1 covered mining operations that failed the 2016 DENR audit. Phase 2
was started in 2019 and was completed in May 2020, involving those that passed the 2016 DENR audit.

On the social and economic aspects, Social Development and Management Program (SDMP) evaluation,
social impact assessment, and stakeholder satisfaction surveys are recommended at a specified period of
its implementation. Also proposed are process evaluation, project-specific impact evaluation, institutional
and governance assessment, and sustained funding for social development even while under CMP. On the
environment aspect, regular accounting of dependencies and impacts of mining operations on the overall
environment and within and adjacent ecosystems impacted by the mining operations are needed. The use of
remote sensing, artificial intelligence tools, and Internet of Things (IoT) technologies can help accomplish
these tasks. On the legal aspect, a review of policy, standards, and regulatory mechanisms for CMP are
needed to improve the welfare of the host and neighbor communities. In addition, in the same manner
as SDMP evaluation, the Environmental Protection and Enhancement Program (EPEP) and Final Mine
Rehabilitation and/or Decommissioning Plan (FMR/DP) require evaluation at specified intervals
emphasizing measurable targets. The goals of these two programs must match and ensure specific and
appropriate indicators of success that can be measured during and after the end of mine life in view
of sustaining development in the host and neighbor communities. Combinations of nature-based and
infrastructure solutions to control sedimentation and major environmental threat in mining operations,
must be sufficiently funded. Solutions include climate-proofing, such measures, acknowledging that mine
sites are at significant risk of damage from typhoons and related hazards.
List of Tables
Table 1. Summary Statistics for Mining and Quarrying Establishments by Industry
Sub-Class: 2018 CPBI 3
Table 2. Summary of Export Data, per Commodity and Destination, 2017, PHP ‘000 8
Table 3. Disaggregation of Payments Paid by the Metallic Mining Sector Per Government
Agency, 2018 11
Table 4. Summary of Mining Companies Covered by the Review 13
Table 5. Distribution of the 45 Mining Operations (43 mining companies), Operating
or Under Care and Maintenance Program by Region and Province as of
November 2020 14
Table 6. Scoring Index Applied to Each Mining Operations 17
Table 7. Evaluation Criteria or Indicators per Aspect of the Review Used in Calculating the
Score of a Mining Operation 18
Table 8. Titles of Laws and Rules on Mining in the Philippines 23
Table 9. Summary of A Average Scores on the Legal Aspects by Status of Mining Operations 25
Table 10. Summary of the Scoring on the Technical Aspect of Mining Operations by Companies
Reviewed in Phase 1 and 2 34
Table 11. Summary of the Scoring on the Environmental Aspect of Mining Operations by
Companies Reviewed in Phase 1 and 2 40
Table 12. Summary Scorings of the Social Aspect of Mining Operations by Companies
Reviewed in Phases 1 and 2 47
Table 13. Summary of Scoring of the Economic Aspect of Mining Operations by Companies
Reviewed in Phase 1 and 2 56
Table 14. Number of Mining Operations Reviewed in Phase 1 and 2 by Type of Commodity
and Status of Operation 57
Table 15. Number of Mining Operations Reviewed in Phase 1 and 2 by Type of Commodity
and Status of Operation with Corresponding Score on “ Revenue from taxes, fees
and royalties” 59
Table 16. Summary of Mining Operation Rating Index in Phase 1 and 2 of the Mining
Operations Review 63
Table 17. Summary Rating of Mining Operations by Phase of the Review and by Commodity 64
Table 18. Distribution of Mining Operations by Range of Average Score 65
Table 19. Performance Index Based on Individual Mining Operations by Region 66
List of Figures
Figure 1. Historical Trend of Nickel Prices 1
Figure 2. Upward Swing in Steel Production at the Beginning of the 1900s 2
Figure 3. Actual Guide and Comparison with 2019 Capital Expenditure in the Mining
Industry as Reported by S&P Global Market Intelligence 2
Figure 4. Trend of Mining Operations in the Country Between 1930 and 2020 4
Figure 5. Overview of Mining Tenements 4
Figure 6. Spread of Current Mining Operations (Operating and Under Care and Maintenance
in the Country 5
Figure 7. Physical Asset Account from 2021 6
Figure 8. Trend of Nickel Resources and Extraction, 2013-2020 6
Figure 9. Physical Account of Gold Resources in the Philippines from 2013 -2020 7
Figure 10. Additions and Reductions in Stock of Gold Resources, 2013-2020 7
Figure 11. Twenty-year Trend from Years 2000 to 2020 of Real Regional GDP by
Political Region 9
Figure 12. Gross Production Value in Mining, 2017 to 3rd Q 2020 9
Figure 13. Trend of Mineral Resource Rent for Period 2013 - 2020, PSA Report July 2021 10
Figure 14. Volume and Value of Extraction of Class A Nickel Between 2013-2020 10
Figure 15. Combined Contribution of Mining and Quarrying to Total Employment
2018-2021Q1 11
Figure 16. Process Flow of the Legal Aspect of the Review: Newton’s Cradle 22
Figure 17. Minimum Requirements for Large-Scale Mines 22
Figure 18. Analytical Guide to Determine Compliance 24
Figure 19. Simplified Framework of the Technical Review of Mining Operations 31
Figure 20. Summary of Analytical Approach in Reviewing Mining Operations 33
Figure 21. Consolidated Framework of Environment Experts 37
Figure 22. Analytical Approach in the Assessment of Environment Management of
Mining Operations 39

Figure 23. Mine sites images (a) Upper photo, from drone (b) visible flumes of likely pollutants
into coastal waters of Dinagat Islands. 41
Figure 24. Vitiver grass used for slope stabilization is likely unstable and has limited economic value 42
Figure 25. Siltation of Riverbeds Resulting from Insufficient Control Measures 44
List of Figures xiii

Figure 26. Framework for Social Aspect 45

Figure 27. Estimate of Annual Average Revenue of Top 10 Mining Companies Reviewed
by MICC 58
Figure 28. Number of Mining Towns by Poverty Incidence Levels in 2015 Poverty
Incidence Levels 60
Figure 29. Contrasting Configuration of Mining Operations in Dinagat Island Province 68
Acronyms
ADSDPP Ancestral Domain Sustainable DOF Department of Finance
Development and Protection Plan
DOLE Department of Labor and
AEPEP Annual Environmental Protection Employment
and Enhancement Program
DSO Direct Shipping Ore
ASDMP Annual Social Development and
EA Environmental assessment
Management Program
ECAN Environmentally Critical Areas
ATL Atmospheric Tank Leach
Network
BCA Benefit-Cost Analysis
ECC Environmental Compliance
BCR Benefit-Cost Ratio Certificate
BIR Bureau of Internal Revenue EIA Environmental Impact Assessment
BNMI Benguet Nickel Mining Inc. EIRR Economic Internal Rate of Return
CAPEX Capital expenditures EIS Environmental Impact Study
CAR Cordillera Administrative Region EITI Extractive Industries Transparency
CBMS Community–based Monitoring Initiative
Survey EMB Environmental Management Bureau
CES Corporate Exploration Strategies EO Executive Order
CMP Care and Maintenance Program EPEP Environmental Protection and
COG Cut-off grade Enhancement Program

CRMP Community Royalty Management ESRI Environmental Systems Research

Program Institute

CSR Corporate Social Responsibility FDI foreign direct investment

DAO Department Administrative Order FGD focus group discussion

DAP Development Academy of the FIRR financial internal rate of return

Philippines FMRDP Final Mine Rehabilitation and/or
DCF Discounted Cash Flow decommissioning plan

DENR Department of Environment and FPIC Free, Prior and Informed Consent
Natural Resources FS Feasibility study
DFS Detailed/definite feasibility study
FTAA Financial or Technical Assistance
DHNC Development of Host and Agreement
Neighboring Communities
GIS Geographic Information System
DMPF Declaration of Mining Project
GRC Greenstone Resources Corporation
Feasibility
HSS Health, Safety, Security
DMTG Development of Mining
Technology and Geosciences ICC Indigenous Cultural Community
Acronyms xv

IEA International Energy Agency NPVR net present value of revenue

IEC Information, Education and OAMDC Ore Asia Mining and Development
Communication Corporation
ILO International Labor Organization OHSAS Occupational Health and Safety
Assessment Series
IP Indigenous People
OP Office of the President
IPRA Indigenous People’s Rights Act of
1997 PHP Philippine peso
ISO International Organization for PMC Philsaga Mining Corporation
Standardization PPAEMTG Promotion of Public Awareness
KII Key informant interview and Education on Mining
Technology and Geosciences
LGU local government unit
PRA participatory rapid appraisal
LPAL Low Pressure Acid Leach
PSA Philippine Statistics Authority
MGB Mines and Geosciences Bureau
RA Republic Act
MICC Mining Industry Coordinating
Council RHNC Representatives of the Host and
Neighboring Communities
MMT Multipartite Monitoring Team
RTNMC Rio Tuba Nickel Mining Corporation
MOA Memorandum of Agreement
SDMP Social Development and Management
MPSA Mineral Production Sharing Program
Agreement
SEP Strategic Environmental Plan
MRE mineral resource estimate
SIA Social Impact Assessment
NCIP National Commission on Indigenous
Peoples SRMI SR Metals Inc.

NDVI Normalized Difference Vegetation TESDA Technical Education and Skills

Index Development Authority
TRT Technical Review Team
NEDA National Economic and Development
Authority TSP Total Suspended Particulates
NGO non-governmental organization USD United States dollars
NIGS National Institute of Geological USLE universal soil loss equation
Sciences
ZDMC Zambales Diversified Metals
NPVB net present value of benefits Corporation
CHAPTER 1:
Overview of the Mining Industry
Global Mining Trend
The global mineral industry is largely influenced by high-priced metal commodities in the world market.
economies’ gradual shift towards low carbon and Gold prices increase amid crises because gold is
the increasing cost of access to resources. The rise regarded as an investment haven from risks. Gold
of artificial intelligence, diversifying financing and is also considered the most stable currency in the
investment options available, mining workforce long term. However, the country is globally ranked
competition, geopolitics, and demand for creating 27th in reserves of gold and 30th in gold production.
sustained benefits to communities are affecting the In recent years, local production has dropped
industry’s evolution, which can be seen in the rapid significantly from 197 tons in 2019 to 156 tons in
expansion of mining operations in the country between 2021 (Trading Economics 2021). Such a trend is likely
2006 and 2016. This growth was boosted by the an indication of slow modernization and restricting
increase in global demand for steel and the rise in regulatory mechanisms.
nickel price (See Figure 1). A shift towards low carbon Dominating nickel, which is largely dictated by the
will increase demand for other non-common metals, construction and steel industries, are Australia, Russia,
such as graphite, lithium, indium, and cobalt, may New Caledonia, and Brazil. In 2020, the Philippines
increase with several highly advanced countries shifting ranked sixth in nickel reserves, following Indonesia,
to renewable energy (IBRD/World Bank 2020). These Australia, Brazil, Russia, and Cuba (Statista 2021).
market trends, the direction of global investments, Figure 1 shows a highly volatile market for nickel. The
production in other countries, demand by highly local response is to rapidly extract in order to meet the
influential markets, such as China and the United demand. Thus, environmental protection, which is one
States, and climate actions will greatly influence of the subjects of the MICC review, is afforded less
investment and mineral extraction, and indirectly impact attention. It is worthy to note that the Philippines
on local communities’ welfare, and the environment. produces Direct Shipping Ore, which is exported
without local processing. Processed nickel is a tiny
Shifts to renewable energy require the modernization proportion of the total extraction. The small window
of local mining operations. Based on commodities of favorable weather dictates the rapid extraction or
production, gold, silver, and copper are among the production of nickel.

Figure 1. Historical Trend of Nickel Prices

Source: Federal Reserve Bank of St. Louis (2021)
Nickel

90000
80000
70000
60000
50000
40000
30000
20000
10000

1996 2002 2008 2014 2020

2 Chapter 1: Overview of the Mining Industry

Kesler (2007) assembled some historical data on metals, so fluctuations such as those caused by the
steel consumption starting in the 1700s. Data showed COVID-19 pandemic influence trade and have an
a rapid rise in steel consumption from the early impact on markets and production.
1900s to the 2000s, matching the rapid increase in
population in the same period (see Figure 2). Apart According to the S&P Global Market Intelligence’s
from the effects of population growth, the transition World Exploration Trends 2021, the global exploration
to renewable energy and the dramatic change in the budget for nonferrous metals decreased by 11 percent
living standards put upward pressure on the demand to an estimated USD8.7 billion in 2020 from $9.8
and supply of metals in the world market (Kesler billion in 2019 (S&P Global Market Intelligence
2007). This is consistent with the upward swing 2021 and Manalo 2021). The post-pandemic recovery
in nickel prices between 2006 and 2007, as shown efforts is projected to have a positive effect on the
in Figure 1 above. It was notable from published global mining industry. In addition to the surge in
data that China has a large influence on prices of demand from China, emerging economies, such as
Thailand, South Korea, Taiwan, and India, have
Figure 2. Upward Swing in Steel Production at the increased their per capita consumption of copper.
Beginning of the 1900s The promotion of the circular economy likewise
Source: Kesler (2007). ushers in changes in the metal industry. The circular
economy promotes a move from linear business
models, in which products are manufactured from
raw materials and then discarded, to circular business
models where products or parts are repaired, reused,
returned, and recycled. Analysts believe that this shift
must be considered in making investment decisions
in the industry (World Economic Forum 2014).

In the last five years, the industry’s investment or

capital expenditure declined consistent with global
market trends (see Figure 3). The American Chamber
of Commerce of the Philippines reported that the

Figure 3. Actual Guide and Comparison with 2019 Capital Expenditure in the
Mining Industry as Reported by S&P Global Market
Source: Manalo (2021).
 3

pending foreign direct investments (FDI) for mining The COVID-19 pandemic caused work stoppages,
in the Philippines amounted to USD23 billion in disrupting the global mining industry’s supply chains in
2016. These investments are higher than the 2017 2020. According to the International Energy Agency,
FDI of USD10.26 billion, 2018 FDI of USD9.95 as stated by Manalo (2021), government action is
billion, and 2019 FDI of USD7.65 billion. These needed to ensure adequate supplies of nickel, cobalt,
figures indicate that access to capital is becoming and rare earth elements given the “looming mismatch”
increasingly challenging for metal companies between expected demand from energy and planned
considering the emphasis on financing institutions mining investments. In this scenario given other
on Environment, Social, and Governance (ESG). constraints and the scale of operation and source of
Consequently, modernization and shift to local nickel raw materials, investment in post-mining processing
processing remain a challenge for local companies. in the country will take time to progress.

Domestic (Metallic) Mining Industry and Trends1

The local mining industry includes both metallic and revenue for that year. Of this group, 57 percent is
non-metallic minerals that can either be large-scale or contributed by nickel ore mining companies that
small-scale. The 2018 Census of Philippine Business largely export direct shipping ore (DSO) without
and Industry shows that Sector B, or mining and further processing. Among the group, nickel ore has
quarrying industries, has 15 subsectors, five of which the largest footprint in terms of area in hectares. Mining
are metallic minerals and employ 56 percent of 37,630 of hard coal and “support activities for other mining
paid employees (Table 1). This metallic mineral group and quarrying” are significant contributors to revenue
accounts for only 45 percent of the PHP189 billion in the mining and quarrying industry.

Table 1. Summary Statistics for Mining and Quarrying Establishments by Industry Sub-Class: 2018 CPBI
Industry Description Number1 Employment as of 15 Workers2 Total Expense
November 2018 Revenue (in Thousand PhP)
(in
Total Paid Thousand Total Compensation Other
Employees PhP) Expense

(1) (2) (3) (4) (5) (6) (7) (8)

Mining and Quarrying 278 37,721 37,630 16,625 189,755,087 148,241,226 20,604,182 127,637,044
Mining of hard coal 6 3,281 3,265 728 33,393,056 21,654,736 1,676,321 19,978,415
Extraction of crude petroleum 3 37 37 4 2,985,114 2,337,399 73,831 2,263,568
Extraction of natural gas s s s s s s s s
Mining of iron ores s s s s s s s s
Gold ore mining 18 11,210 11,197 5377 37,017,790 39,038,212 8,046,799 30,991,413
Copper ore mining s s s s s s s s
Chromite ore mining s s s s s s s s
Nickel ore mining 27 9,905 9,902 9,902 48,909,567 36,882,399 5,731,017 31,151,381
Marble quarrying s s s s s s s s
Limestone quarrying 23 726 718 140 3,004,645 2,772,710 160,716 2,611,994
Stone quarrying, except limestone and marble 14 428 426 24 563,409 496,421 49,080 447,341
Sand and gravel quarrying 139 2,878 2,833 124 5,751,684 4,909,514 497,246 4,412,269
Silica sand and silica stone
s s s s s s s s
quarrying
Stone quarrying, clay and sand pits, n.e.c. 5 101 101 241 1,353,134 992,890 54,367 938,523
Extraction of salt 18 237 233 74 64,366 48,900 12,924 35,976
Support activities for other mining and
16 3,959 3,959 10 10,092,296 8,557,804 2,063,659 6,494,145
quarrying
1
Number of Establishments; 2Workers on Sub-Contract Agreement or Under Manpower Agencies as of 15 November 2018

1 This paper focused on large-scale metallic mining which was the scope of the review. This group of mining operations has the largest
revenue of the three major industry groups.
4 Chapter 1: Overview of the Mining Industry

Figure 4. Trend of Mining Operations in the Country Between 1930 and 2020
Source: Data sources compiled by authors.

Figure 4 shows a summary of mining operations of mine operations between 1990 and 2010 cannot
by major commodities and their projected growth be ascertained, but a recent report indicates there
drawn from historical data from 1930 up to 2029. were likely 20 to 50 mining operations. A more
More than 30 mining operations existed between recent report from the Mines and Geosciences
1930 and 1950. The number declined and settled at Bureau (MGB) indicated 50 sites in operation as of
about ten mines between 1950 and 1970. The number May 2021.

Figure 5. Overview of Mining Tenements

Ultramatic rocks
Volcanic rocks Potential Areas and Deposits:
Volcanic rocks
Au (155) 1. Luzon Central Cordillera – Au, Cu,
Cr
Cu
(96)
(219) Fe, Mn
Fe (62)
Mn
Ni
(85)
(34)
2. Northern Sierra Madre – Cr, Ni, Cu
3. Zambales – Cr, Ni, Co, Pt, Cu, Au
4. Vizcaya-Aurora – Cu, Au
5. Bicol – Au, Fe, Cu
6. Southern Tagalog – Cu, Au, Ni, Co
7. Central Visayas – Cu, Au, Mn
8. Samar-Eastern Mindanao – Au, Cu,
Fe, Cr, Ni, Co, Pt, Mn
9. North Central Mindanao – Cr, Cu, Au
10. Zamboanga Peninsula – Au, Cu, Cr,
Fe
11. Southern Mindanao – Cu, Au
12. Palawan – Cr, Ni, Co, Pt, Au,
REE

Data provided by MGB as of December 2020 and 50 operating metallic mines that are mostly nickel
(See Figure 5) show extensive areas in the country mines. Data from the first and second phases of the
considered as mining tenements. The spatial extent MICC Review indicated that more than a third of those
of mining tenements is 769,900 hectares, 3,970 small- supposedly operating mines are presently under CMP,
scale mining operations, 55 non-metallic operations, which implies that they are not actively producing.
 5

Figure 6 shows the large-scale metallic mining among the major nickel producers showing
operation distribution under review by MICC. consistent performance in production and trade.
The largest concentrations are in Surigao del Norte, Geographically, Palawan leads all nickel-producing
Surigao del Sur, and Dinagat Islands in Northeastern provinces with consistently high production,
Mindanao, where transportation is less developed. followed by Agusan del Norte, Surigao del Norte,
These sites are mostly nickel mining operations. Surigao del Sur, Dinagat Island, and Zambales.
Rio Tuba Nickel Mining Corp., Adnama Mining Mining operations in Dinagat Island are persistently
Resources, Inc., SR Metals, Inc., Agata Mining affected by weather interruptions. During good
Ventures, Inc., Carrascal Mining Corp., and weather, mining operations are rapid in some cases,
Marcventures Mining and Development Corp. are and environmental protection is given less attention.

Figure 6. Spread of Current Mining Operations (Operating and Under Care and
Maintenance in the Country)
Source: Mining Industry Coordinating Council.

A final note by Brimo (2021), current chair of the on new mining permits in place since 2012 under
Chamber of Mines in the Philippines, in his recent Executive Order 79 and the ban on open pit mining,
“Mining Outlook” presentation to the MICC, argues stymie the industry’s growth and its ability to further
that policy roadblocks, principally the moratorium contribute to the economy.
6 Chapter 1: Overview of the Mining Industry

Figure 7. Physical Asset Account from 2021

Source: Philippine Statistical Authority.

Mineral Resources
The Philippine Statistics Authority (PSA) regularly Philippine produce has gradually declined. Figure 7,
reports information on mineral resources in the on the other hand, shows the physical account trend
country, including, more recently, estimates on indicating that gold resources increased significantly
resources, production, export, and resource rent. The starting in 2018, which could be brought about by the
key minerals are nickel, gold, copper, and chromite. opening of the mining operation in Nueva Vizcaya
The rest, such as iron, silver, and magnetite, are of and other new explorations.
insignificant quantities. In the past, iron was among The PSA recently released the mineral accounts of
the top export of the country. With the opening of the country for the period 2013-2020. Figure 8 shows
new mines in other countries, the foreign market for a steady trend of discovered nickel resources and

Figure 8. Trend of Nickel Resources and Extraction, 2013-2020

 7

the extraction trend in the same period. The shaded extraction in the period, also reflects the rapid
background shows the extraction trend in metric expansion of nickel mining sites in various parts of
tons (secondary axis). Significant resources are still the country. Peaking in 2014, the high extraction rate
available relative to extraction. The trend shows more indicated high global demand and rising commodity
discovered resources in 2018 were likely resulted prices. What is not reflected in the present account
from further exploration by mining companies in their is another nickel price increase in 2008, where nickel
respective tenements and from new applications. The mining operations started but not as extensive as
gray-shaded background, representing the trend of those in 2014.

Figure 9. Physical Account of Gold Resources in the Philippines from 2013 -2020

Specific information on gold resources showed a A nickel export ban in Indonesia introduced in 2020
steady flow between 2013 and 2020. Figure 9 indicates was expected to boost the Philippines’ prospects of
a good outlook for such resources. However, it is becoming the world’s top producer, a title the latter has
notable that, as indicated in the previous section, it previously held. However, despite being the world’s
is simply a sustaining value, as dictated by limited second-largest nickel producer, the Philippines has
production capacity. The total gold resources would significantly limited its capacity to participate in
even increase if the existing ten operating gold mines establishing a global supply for the shift to renewable
ramp up their production with the upswing of energy due to the lack of facilities. Further, while
total additions to the stock of gold resources in 2019. the Philippines is a top nickel ore producer, it only
Furthermore, the lifting of the moratorium on has two existing nickel and cobalt processing plants
new permits implies increased production of other that produce nickel and cobalt sulfide concentrates
metallic minerals. (intermediate products further processed to make
electric vehicle batteries).

Figure 10. Additions and Reductions in Stock of Gold Resources, 2013-2020

8 Chapter 1: Overview of the Mining Industry

It was noted that the upswing in the Total Additions changes in the flow of gold to the economy despite the
was mainly due to the reclassification. The volume huge resources shown in Figure 10.
of extraction is relatively flat, implying no dramatic

Markets for Philippine Minerals

The Philippines’ trading partners of metallic minerals value, followed by Japan at 34 percent. In terms
are China, Japan, Korea, Australia, Hong Kong, of commodity expert value, copper and nickel are
India, Switzerland, and Singapore. China is the the highest, with China mostly sourcing from
main buyer capturing 44 percent of the total export Philippine producers.

Table 2. Summary of export data, per commodity and destination, 2017, PhP ‘0002

Destination Chromite Copper Gold Nickel Total % of Total

China 254,977 6,637,454 2,764,323 24,433,768 34,090,521 44

Japan 21,055,188 5,756,318 26,811,506 34
Korea 3,694,877 3,694,877 5
Australia 3,137,082 3,137,082 4
Hong Kong 7,034,751 180,430 7,215,181 9
India 1,996,704 1,996,704 3
Switzerland 1,151,729 1,151,729 1
Singapore 180,430 180,430 0.2
Total 254,977 31,387,519 16,084,590 30,550,946 78,278,031
% of Commodity 0.3 40 21 39

The demand for major metals, such as iron, aluminum, Contribution to the economy
copper, zinc, lead, and nickel will increase six-fold
until 2030 (Watari, Nansai, & Nakajima 2021), and Gross Value Added and GDP from
that supply-side constraint is physical availability. Mining
The top five constraints are energy requirements,
Figure 11 shows a 20-year trend of real regional GDP
greenhouse gas emissions, aquatic toxicity, land-use
contribution of mining and quarrying industry from
and abiotic resource depletion. In 2020, metallic
2000 to 2021. The range of regional contribution is
mineral production fell to 14.4 percent by value from 1.8 percent to 2.9 percent, and the overall
because of disruption caused by the COVID-19 contribution to the national GDP is less than 1
pandemic. As expected in periods of crises, the global percent. It is likely that in those regions where
market price of gold rose by 26 percent from USD the contribution exceeds 2 percent of the regional
1,307 in 2019 to USD1,647 in the first half of 2020. GDP, metallic mining is the dominant industry that
The country’s mineral product receipts totaled USD provides a greater contribution to employment.
4.22 billion in 2020 – about 5.3 percent higher than
the USD4.01 billion these exports generated in 2019
(Philippine Statistics Authority, 2020).

2 The values per country were approximated from an aggregated data report in the 2017 EITI report.
 9

Figure 11. Twenty-year Trend from Years 2000 to 2020 of Real Regional GDP by Political Region
Source: Philippine Statistics Authority, 2021.

Regional Mining & Quarrying as % of Real RGDP

20
19
18
17
Regional Mining & Quarrying as % of Real RGDP

16
15
14
13
12 Region IV-B - MIMAROPA, 9.68

11 Region XIII - Caraga, 9.15

10 Region VI - Western Visayas, 3.17

Cordillera Administrative Region, 2.81
9
Average of all Regions, 2020, 1.82
8
Region V - Bicol Region, 1.40
7 Region II - Cagayan Valley, 1.28

6 Region VII - Central Visayas, 0.69

5 BARMM, 0.74
Region XI - Davao Region, 0.72
4
Region X - Northern Mindanao, 0.32
3 Region III - Central Luzon, 0.23

2 Region I - Ilocos Region, 0.23

Region IV-A - CALABARZON, 0.17
1 Region XII - SOCCSKSARGEN, 0.12
Region IX - Zamboanga Peninsula, 0.11
0
Region VIII - Eastern Visayas, 0.10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
National Capital Region, 0.01
Year

As shown in Figure 12, statistics provided by the The country’s most productive region is Surigao del
PSA indicated that more than two-thirds of the gross Norte in Caraga, while key nickel mining operations
production value in the mineral industry comes from are in Taganito, Rio Tuba, Cagdianao, Carrascal, and
large-scale metallic minerals, and about a third comes Adlay Cagdianao Tandawa mines. Mining companies,
from non-metallic minerals. Small-scale gold mining such as Nickel Asia and Global Ferronickel, operate
operation contributes less than 1 percent. extensively throughout the country (NS Energy 2021).

Figure 12. Gross production value in mining, 2017 to 3rd Q 2020.

Gross Production Value In Mining, PhP billion

140 130.3 132

121.8
120
100
80 65.1
57.6
60
40 28.7

20
0.6 0.6 0.7 0.2 nya nya
0
Large Scale Metallic Mining, Small Scale Gold Mining, Non-metallic Mining, PhP
PhP billion PhP billion billion

2018 2019 2020+ Q1 2021+

10 Chapter 1: Overview of the Mining Industry

In the same mineral account reported by the PSA relatively small, at the mercy of world market
in 2020, the resource rent trend (see Figure 13) demand, local capacity, and extraction sources. Data
shows that among all metallic minerals, the largest on silver, iron, and magnetite, which are among the
resource rent contribution comes from nickel mining products of mining companies reviewed, are not
operations, followed by gold. Chromite has the least covered by the statistics. Iron, a significant export of
contribution. The total resource rent from these the country during the last century, appears to have not
four metals ranges from 0.139 percent to 0.297 contributed significantly to the resource rent in recent
percent, which is almost insignificant. Resource years. However, the PSA’s data from 2018-2020 do
rent from gold appears steady before 2015, not include figures on iron’s contribution to resource
increasing in 2016 and remaining steady thereafter. rent. Estimates on the state of production of this
The trend for copper is the opposite: from commodity can only be obtained from reports of
as high as PHP6.3 billion, it went down to PHP mining companies. Still, these are not sufficient to
2.5 billion in 2020. The contribution of chromite is draw conclusions on the sustainability of production.

Figure 13. Trend of mineral resource rent for period 2013 - 2020, PSA report July 2021

Despite the large contribution of nickel to resource market prices, but its value drops more rapidly
rent, and the GDP, its production is largely hinged than the production volume. This price volatility
on global market prices. Figure 14 provides a glimpse should prompt greater attention to incentives for local
of the trend in revenue from nickel. The nickel processing to capture more value-adding processes
production, mostly DSO, tracks the trend of global that will further increase the value of nickel exports.

Figure 14. Volume and value of extraction of Class A nickel between 2013-2020.
 11

Government Share from Mining Sector

Based on the available data for 2018, payments Revenue in the form of excise and other taxes, 10.7
by metallic mining companies to the government percent to the MGB, and 6.9 percent to the Bureau of
amounted to PHP 11.09 billion. Seventy-four percent Customs (BOC).
of the payments went to the Bureau of Internal

Table 3. Disaggregation of Payments Paid by the Metallic Mining Sector Per Government Agency, 2018

Agency Reconciled Metallic mineral % of Total Reconciled % of Total

Non-metallic Mineral
BIR 8,216,004,549 74.05 8,572,403,076 82.20
BOC 768,267,384 6.92 1,537,942,020 14.75
DOE NA 0.00 NA 0.00
LGU 645,337,734 5.82 317,968,879 3.05
MGB 1,187,312,323 10.70 - 0.00
PPA 219,837,318 1.98 - 0.00
NCIP 58,010,632 0.52 - 0.00
Total 11,094,769,940 100.00 10,428,313,975 100.00
BIR = Bureau of Internal Revenue, BOC = Bureau of Customs, DOE = Department of Energy, LGU = local government unit, Mines
and Geosciences Bureau, PPA = Philippine Ports Authority, NCIP = National Commission on Indigenous Peoples.

The main taxes levied on the mining sector are the main body responsible for collecting taxes paid
corporate income tax, excise tax on minerals, and to the national government, while the MGB and the
royalties on mineral reservations. The major oil Department of Energy collect sector levies for mining
and gas levies are the government’s share in oil and coal, oil, and gas. Local government units (LGUs)
and gas revenues, apart from corporate income are responsible for collecting subnational payments
tax and withholding tax on profit remittance to the (Extractive Industry Transparency Initiative 2021).
principal. The Bureau of Internal Revenue (BIR) is

Figure 15. Combined Contribution of Mining and Quarrying to Total Employment 2018-2021 Q1
Source: Philippine Statistics Authority (2021).
12 Chapter 1: Overview of the Mining Industry

Mining Employment Contribution to Local Communities

Like its value to the country’s GDP, the contribution Mining contributes to the local economy through
of mining and quarrying to total employment is less increased economic activities and additional
than 1 percent. Based on the March 2021 Labor employment from new businesses. Implementing the
Force Survey (LFS) estimates released by the PSA, the Social Development and Management Program is
full-year mining and quarrying employment levels in mandatory; it obliges a mining company to develop
2019 and 2020 are 177,000 and 184,000, respectively. programs to promote the development of human
Its share in the total employment in 2019 and 2020 is and social capital in mining sites. These include
0.42 percent and 0.47 percent, respectively. Notably, human resources development through scholarships,
the aggregate employment of mining and quarrying livelihood and enterprise development, health services
includes metallic and non-metallic minerals. and other public services, such as roads and other
infrastructures, and fostering cultural development.
An impact evaluation is needed to ascertain the
improvement of the communities’ welfare.
CHAPTER 2:
Overview of the MICC Mining Review
Rationale of Mining Operations
Review
Executive Order No. 79, which was issued in 2012, experts consisting of legal, technical (Mining/Geology/
granted the MICC the mandate to conduct an Metallurgy), environmental, social and economic, and
assessment and review of all mining operations in mining experts to conduct an “Objective Fact-Finding
the country and determine their compliance with and and Science-Based Review of the Performance of
continued efficacy of existing mining laws, rules, 26 Mine Operations.” This was the Phase 1 of the
and regulations. In particular, the Review seeks Review, while the Phase 2 of the Review covered 17
to (a) know whether the mining companies are large-scale metallic mining operations.
compliant with the provisions/conditions of their
contracts, particularly those related to environmental
safety and quality, payment of taxes, duties and
Scope and Coverage
fees, guidelines for operation, corporate social Table 4 summarizes the number of mining companies
responsibility (CSR), and other obligations to the covered by the two phases of the Review, covering
State and host/neighboring communities; (b) assess large-scale metallic mining operations. In Phase 1,
whether the compliance with the terms and conditions experts were grouped into five Technical Review
of the mining contracts has caused disadvantage to Teams (TRTs), each consisting of five experts in the
any stakeholder (e.g., mine workers, communities, disciplines mentioned and a designated Team Leader
and indigenous cultural communities and indigenous (TL) to coordinate the TRT activities, strategies,
peoples) or resulted in conflict in land use (i.e., meetings, field visits, and report writing. The 26 mines
encroachment in ancestral domains, protected areas were then distributed among these five TRTs. NEDA
and ancestral lands); (c) know if there is a need to also acquired the services of an Overall Team Leader
revise the existing pro-forma mining contracts, (OTL) to coordinate the general flow of work and
including provisions on mining fees, penalties, and
sanctions; (d) know the gaps and weaknesses in Table 4. Summary of mining companies covered by
existing mining and environmental laws, including the review
contradictory provisions; and (e) strengthen or make Commodity MICC Review Phase Grand
Group Total
such laws more effective. Phase 1 Phase 2
CMP 16 2 18
The cancellation or suspension of the MPSAs of 26 Au, Ag 1 1
Chromite 3 3
mines by then Environment Secretary Regina Lopez on
Magnetite 2 2
2 February 2017 prompted the concerned companies Ni 11 1 12
to file an Appeal or Motion for Reconsideration to Operating 10 15 25
the Office of the President (OP) and the DENR, Au, Ag 5 5
Au, Ag, Cu 1 2 3
respectively. The President ordered the MICC to
Au, Cu 2 2
conduct a thorough review of the mines to guide the Chromite 1 1
OP and the DENR in responding and deciding on the Ni 7 7 14
companies’ petitions. Following this directive, MICC, Grand Total 26 17 43

through NEDA and DAP, organized a team of 25 CMP = Care and Maintenance Program.
14 Chapter 2: Overview of the MICC Mining Review

integrate all the reports coming from individual Table 5 shows the distribution of mining operations
experts and each TRT’s consolidated report. The by region and type of mineral product. The Review
original duration of the Review was three months, did not cover mineral processing operations that
from March to May 2018. However, the economic were not integral to the existing extractive operation.
experts sought to conduct household surveys in The teams of experts recommended that another
communities of selected mine operations, requiring review must cover them. Overall, the Review
an additional three months in Phase 1. This phase of covered only 43 mining companies or 45 mining
the Review was completed in June 2018. Included operations. It should be noted that Wellex 1, Wellex
in Phase 2 were 17 large-scale metallic mining 2, Century Peak Casiguran, and Century Peak Rapid
companies that were not subject to suspension or City operations were scored separately. The MGB
termination. Completed in September 2020, Phase 2 recently reported ongoing 50 mining operations as
engaged 20 of the experts from the Phase 1 Review. of May 2021.

Table 5. Distribution of the 45 Mining Operations (43 mining companies), Operating or Under Care and Maintenance
Program by Region and Province as of November 2020
Commodity
Region/Province Au, Ag Au, Ag, Cu Au, Cu Chromite Magnetite Ni Grand Total
CAR 1 2 3
Benguet 1 2 3
Region II 1 1 2
Nueva Vizcaya 1 1 2
Region III 1 4 5
Bulacan 1 1
Zambales 4 4
Region IVB 3 3

Palawan 3 3
Region V 1 1
Masbate 1 1
Region VII 1 1
Cebu 1 1
Region VIII 3 1 4
Eastern Samar 3 3
Leyte 1 1
Region XI 2 1 3
Agusan del Norte 1 1
Agusan del Sur 1 1
Davao de Oro 1 1
Region XII 1 1
South Cotabato 1 1
Region XIII 1 1 20 22
Agusan del Norte 1 1
Dinagat Islands 1 10 11
Surigao del Norte 1 6 7
Surigao del Sur 3 3
Grand Total 6 3 2 4 2 28 45
*Wellex 1, Wellex 2, Century Peak-Casiguran and Century Peak-Rapid City operations were scored separately in the two phases
of the Review.
 15

Goals and Objectives are normal for metal market cycles. It also needs to
exercise financial responsibility by setting aside part
The Review was conducted in accordance with of the windfall gains during periods of high prices to
the legal mandate in the Philippine Mining Act finance activities, such as rehabilitation, maintenance
of 1995 or RA 7942. Chapter X: Development of of equipment, and keeping the mining complex safe
Mining Communities, Science and Mining Technology during downswings. On the governance side, local
of the law states that each mining company must “help government authorities and the host communities
create responsible, self-reliant, and resource-based need to set measures to avoid such problems.
communities capable of developing, implementing,
and managing community development programs, Substantive compliance with regulations
projects, and activities in a manner consistent
designed to benefit society
with the principles of people empowerment and
sustainable development.” Regulation through rules and imposition of incentives
and disincentives maximize the net benefits that go
Further, Section 134, Chapter XIV of DENR AO No. to society over and beyond the investment period.
2010-21, requires the contractor, permit holder, and Regulation is implemented through a combination
lessee to assist in the development of the host and of rules on meeting technical standards, undertaking
neighboring communities and promote the general environmental measures and engaging responsibly
welfare of the inhabitants living therein. with society, and through penalty for faulty actions
and reward for good practices. Adherence to standards
The overall objective of the Review is to identify
is expected to minimize costs from the negative
the gaps and issues that limit the mining sector from
impacts incurred not only during mining activities but
contributing effectively to national and regional
also after the decommissioning of the mines. These
development; and recommend interventions and
standards include measures on pollution mitigation
policy measures that will ensure a more responsible
and land rehabilitation to restore the landscape’s
mining sector.
ecosystem services that were impaired during mining.

General Framework and Beneficiaries invest earning from mining

Methodology to assure future incomes.
The framework for the two phases of the Review Mining beneficiaries invest their returns in assets to
applies the key principles of sustaining development increase productivity and generate continuing incomes.
from exhaustible resources. Five aspects, covering Income from mining should eventually be replaced
both performance and impacts, were examined at by income from other sources once the mines have
the firm, local economy, and landscape levels — been depleted. Even when mining is no longer
whichever is relevant. Each aspect was described physically sustainable, income from mining can still
in terms of the principles and the corresponding be sustained. It is important that all beneficiary entities
indicators operationalizing these principles. who receive income from mining in various forms
prepare for the inevitability of an exhausted mine.
Averting financial risk and strategy
against uncertainty Maintaining level of assets for sustaining
Among the various types of risk, the most economic growth
relevant for this section, is the financial risk that Economic growth is sustainable when minimum
mining companies face because of fluctuations in levels of all assets in various forms — human, social,
metal prices. The firm needs to be sufficiently institutional, man-made, natural, and financial — are
capitalized to withstand periods of low prices that secured assuming that the services these assets
16 Chapter 2: Overview of the MICC Mining Review

generate are not fully substitutable even in the long- remains useful and continues to provide ecosystem
term.3 Thus, attaining economic growth necessitates services in the post-mining phase. Among the
utmost efficiency when continuing to draw down key practices are restoring the vegetation,
minerals, which are depletable natural resources. minimizing damages from dust and erosion,
and putting appropriate covers for the transported
Sustaining environmental assets ore and stockpile.
Different types of mining pose varying levels of Risks from disasters and climate change
risks to the environment. Considering the size of the are adequately addressed. When risks and
mining area relative to the surrounding landscapes, the uncertainties are present due to knowledge gaps
duration of mining, and the available technologies for and climate change, actions need to be undertaken
extraction, beneficiation, transport, and processing,
to prevent serious, irreversible damage, following
measures to minimize negative impacts are warranted.
the Precautionary Principle. This principle rules in
These measures must abide by the following principles
precautionary measures when scientific evidence
for environmental sustainability:
about an environmental or human health hazard
Pollution is mitigated and residual damage is uncertain and the stakes are high. These may
is managed. Specific practices in managing the include avoiding precarious locations of siltation
anticipated air, water, and land pollution to levels ponds, such as near the coast or at the edge of a
according to environmental standards were cliff, and the required payments to the Contingent
identified during the Environmental Impact Study Liability and Rehabilitation Fund and Final Mine
(EIS). The study is a requirement in obtaining Rehabilitation Fund.
the Environmental Compliance Certificate (ECC)
and serves as an accompanying formulation of Economic Efficiency
the Environmental Protection and Enhancement
The economic efficiency framework’s application
Program (EPEP). An annual EPEP allows for
is often limited to a mining firm maximizing the net
adjustments based on the results of regular
present value of financial returns over the investment
environmental monitoring.
period subject to technical standards, environmental,
Scarce inputs, water, and soil (silt) are recycled. and social safeguards. While mining provides profits
Recycling scarce inputs, such as water and to its investors and incomes to the firms’ employees,
soil, usually saves costs and generates internal it may, inadvertently or not, cause externalities. On
benefits for the mining company. Thus, the systems the one hand, negative externalities, such as impacts
for managing pollution and recycling scarce of environmental damage by exposure to dust,
inputs become part of “good housekeeping.” decreased productivity of irrigated farms from silt,
These practices are usually reported when a and lower fish catch from damaged coral reefs,
mining company applies for accreditation for result in costs to certain economic sectors. On the
ISO 14001. But while these are necessary for other hand, positive externalities, such as indirect
sound environmental management, continuous employment and road infrastructure, can benefit
monitoring of environmental performance, quality other sectors. The scope and methods of economic
of air and water, and land through the inspection efficiency review of mining operations are as follows:
of facilities and regular audits remains essential.
Societal Concerns on Efficiency and Equity.
The landscape is rehabilitated appropriately. Equity concerns include the incidence of benefits
Rehabilitation activities during the mining and and costs among various mining stakeholders
the decommissioning processes are expected to within the same generation (intragenerational
restore the affected ecosystem so that the landscape equity); and how gains are earned, and costs

3 Weak sustainability depicts the situation where some assets are used up because of the belief that they can be fully substituted by the other
assets; strong sustainability is achieved when a minimum level of all assets is maintained because of imperfect or even zero substitutability.
 17

are shared across generations (intergenerational Mining may be improved as a rating system for each
equity). Intragenerational equity in mining means mining company in the future. The scoring procedure
equitable sharing of benefits among the current was developed in Phase 1 and adopted in Phase 2
stakeholders when it raises the incomes of its with some changes given the differences in the status
beneficiaries without unduly hurting the welfare of mining operations. Those in Phase 1 were subject
of others. Intergenerational equity in mining means to suspension or termination, while those in Phase 2
mineral resource extraction and depletion for the were continuing operations except for two under CMP
benefit of the present generation do not compromise that were not subject to suspension or termination.
the welfare of future generations. The following are summaries of scoring: (a) each
Social Benefit Cost Analysis (SBCA). SBCA mining operation was rated by the specialists based
is a modification of economic analysis. It involves on their findings with respect to the MICC guide
two steps: (a) financial analysis, which is first questions for each of the five aspects; (b) the simple
conducted to examine the viability of the mining averages for that aspect of the operation were
company under business-as-usual conditions. computed; (c) indicators without basis for rating are
This analysis is important for mining companies not included in computing the simple average; and (4)
in which investments are privately sourced and the legal rating is used in order to proceed to the next
public funds do not directly underwrite them; process of analyzing the other four aspects’ rating.
(b) economic analysis, following the financial
analysis, examines the benefits and costs of options Table 6. Scoring Index Applied to Each Mining Operations
of mining operations from the perspective of
external stakeholders who are not employed by Description Index Level Range
the company nor located within its premises. A Acceptable/Good 3 ≥2.8
key principle of benefit-cost analysis is its Minor Corrections 2 2 -2.8
stepwise nature. An account of the status quo or no Major Reforms 1 Bet 1 to 2
improvements (without intervention) in practices Not Acceptable 0 <1
is first conducted, followed by the analysis of the
alternative technology or management option
In classifying the mining operations by its indexes,
(with intervention). The values derived for each
the experts applied a range of average scores to
efficiency criterion are then compared, i.e. “with”
represent those indexes e.g., good, needing minor
versus “without “option. Alternative technology or
corrections, major reforms, or poor. A score level
management option is always compared with the
business-as-usual scenario. greater than 2.8 means good or acceptable
performance; those between 2 and 2.8 need only
minor correction; those with scores between 1 and
Scoring Procedure and Overall 2 require major reforms in operations; and those
Rating Index obtaining a score less than 1 are considered
performing poorly or demonstrating a not acceptable
A scoring system was introduced to provide a tool performance. (See Table 6).
for making decisions on the status of mining
operations. Each expert provided a score for each Table 7 lists the criteria and indicators used for
criteria by discipline. The scores were aggregated by evaluating and scoring mining operations. At the
simple average for each discipline with the underlying start of the Phase 2 review, the legal and technical
assumption of equal weight for each criterion. An experts decided to modify the criteria for scoring
overall score for each mining operation was then bearing in mind that the next set of mining operations
presented and labeled Sustainable Development are considered good performing based on the
(SD) Scorecard for Mining. The SD Scorecard for DENR audit.
18 Chapter 2: Overview of the MICC Mining Review

Table 7. Evaluation Criteria or Indicators per Aspect of the Review Used in Calculating the Score of a Mining Operation

Phase 1 Phase 2

Legal
1. Completeness and compliance with contract 1. Mining tenement
2. Compliance with ECC 2. Safety and health management
3. Compliance with other NR and 3. Environmental management
environmental laws
4. Compliance with CLRF and FMR/DP 4. Social development and management
5. Compliance with taxes, fees, royalties
Technical
1. Design and appropriateness to site 1. Production rate
conditions
2. FS and DMPF 2. Reserves (Life of Mine)
3. Production 3. Parity with global standards of mining
4. Transport and stockpile 4. Mining support infrastructure
5. Management and capitalization 5. Auxiliary activities and other infrastructure
6. At par with global standards 6. Management and capitalization
7. Occupational health and safety practices 7. Standard safety factors
8. Working environment

Environmental
1. Pollution and mitigation practices 1. Pollution mitigation practices
2. Reuse of water and soil 2. Reuse of water and soil
3. Rehabilitation of landscape 3. Rehabilitation of landscape
4. Toxic and hazardous waste management 4. Toxic and hazardous waste management
5. Impacts 5. Impacts
6. Risk managed 6. Risk managed
Social
1. Intra-generational equity: target 1. Intra-generational equity: target
beneficiaries identified and reached beneficiaries identified and reached
2. Inter-generational equity services provided: 2. Inter-generational equity services provided:
SDMP, CSR SDMP; CSR
3. Reduction of poverty/inequity; improved 3. Reduction of poverty/ inequity; improved
access to basic services access to basic services
4. Perception of local community and 4. Perception of local community and
community relations community relations
5. Conflict present 5. Conflict present
 19

Phase 1 Phase 2

Economic
1. Direct benefits to the company 1. Direct benefits to the company
2. Apparent sufficiency of capital during slump
2. Sufficiency of capital in slump years to meet
years to meet environmental and social
environmental and social safeguards
safeguards
3. Direct and indirect employment and income 3. Direct and indirect employment and income
4. Revenue from taxes, fees, royalties 4. Revenue from taxes, fees, royalties
5. Use of revenues by recipients to sustain 5. Use of revenues by recipients to sustain
income after closure income after closure

The next sections provide details of the Review. framework applied, method of data collection,
The sequence begins with the legal review, followed analytical approach, results or findings, and summary
by technical, environmental, social, and economic recommendations.
reviews. Each aspect reports on the component
CHAPTER 3:
Legal Aspect of the Review
This aspect of the MICC Review was aimed at Indigenous Peoples (NCIP), the Protected Area
determining whether the mining operations have Management Board (PAMB), the Biodiversity
complied with all the applicable laws and rules. Management Bureau (BMB), formerly the Protected
In case of violations, reference was made to the Areas and Wildlife Bureau (PAWB), the National
applicable legal provision. Another purpose of the Water Resources Bureau (NWRB), the Department
Review was to determine the adequacy of government of Interior and Local Government (DILG), and
regulatory provisions to recommend policy or the local government units (LGU), among others.
institutional reforms. For monitoring mines operating in Palawan, a
specialized agency called the Palawan Council for
Framework and Methodology Sustainable Development (PCSD) is in charge. Each
agency or instrumentality has a set of requirements
The key question is, “What would be a picture of with which a mining company has to comply. These
a mining company meeting the legal aspects of its requirements may or may not arise from the same
operation?” Each mining operation must comply law or statute and may be the subject of a specific
with minimum requirements to begin and continue
administrative order or implementing rules and
their operations. These requirements were met
regulations. The legal review will attempt to
by performing recommended standards, which were
evaluate the procedural and substantive compliance
proven through submission of reports or securing
made by the companies to determine their sufficiency
permits, registrations, or licenses. The standards were
or insufficiency.
divided into four major groups: Mining Tenement,
Safety and Health Management, Social Development The second key question is, “What is the legal review
and Management, and Environmental Management in relation to other reviews?” Consider this Newton’s
and Compliance. Each group was further divided cradle (see Figure 16). A mining company will not
into subgroups governed by different laws, rules, be able to operate without a mineral agreement,
or administrative orders. These requirements are typically an MPSA, as prescribed under RA 7942.
administered by different governmental agencies, The MPSA is an agreement where the government
mostly bureaus within the Department of Environ- grants the contractor exclusive right to conduct
ment and Natural Resources (DENR). This is the mining operations within a contract area and shares
benchmark for which the Mining Review proceeds. in the gross output. The contractor shall provide the
Consistent with the state policy on ownership of financing, technology, management, and personnel
natural resources, the extraction of valuable minerals necessary to implement the agreement. If a company
is subject to regulation. Certain requirements must is not qualified to apply for an MPSA, they may
be complied with before, during, and after the actual opt to apply for Financial Technical Assistance
mining operation. While the primary law governing Agreement (FTAA). A contractor and the government
large-scale mining is RA 7942 and overseen by may enter into an FTAA for large-scale explorations,
the MGB, several other agencies and bureaus play development, and utilization of gold, copper, nickel,
pivotal roles in the legaloperation of mines. These chromite, lead, zinc, and other minerals except for
agencies include the Environmental Management cement raw materials, marble, granite, sand, and
Bureau (EMB), the National Commission on gravel, and construction aggregates.
22 Chapter 3: Legal Aspect of the Review

Figure 16. Process Flow of the Legal Aspect of the Review: Newton’s Cradle

These main documents (MPSA or FTAA), which the four groups of conditionalities. Each group is
serve as contracts between the mining company further divided into subgroups governed by different
and the government, contain conditionalities on laws, rules, or administrative orders. Table 8 shows
mining tenement, safety and health management, the minimum laws and rules relevant to the legal
environmental management, and social development compliance review of large-scale mines. There are
and management. These conditionalities would also several other requirements, but these are deemed
translate to the review’s different aspects: technical, more important in determining legal compliance.
social, environmental, and economic. Figure 17 shows

Figure 17. Minimum Requirements for Large Scale Mines

RA 7942
RA 7942
DAO No. 2010-21
DAO No. 2010-21
DAO No. 2000-98
Safety &
Mining Health
Tenement Management

Social
Environmental
Development &
Management &
Management
Compliance
PD 1586 DAO 1992-29
RA 7942 RA7942 DAO 2005-27
DAO No. 2010-21 DAO 2007-23
DAO No. 2010-21 DAO 2004-52 MAC 2003-11
RA 8371 PD 856 RA 9275
DAO 2015-02 RA 8749
AO 3 Series of 2012 RA 6969 DAO 2004-26
DAO 2004-36 RA 9003

The legal review determined compliance with laws, other hand, the technical, social, environmental,
rules, or regulations, as identified in Table 8. It pinpoints and economic experts would show how those rules
violations of particular law, rule, or regulation. On the were violated.
 23

Table 8. Titles of Laws and Rules on Mining in the Philippines

Law or Rule Title

RA No. 79-42 Philippine Mining Act of 1995
DAO No. 201021 Revised Implementing Rules and Regulations of RA 7942, Otherwise Known As The
Philippine Mining Act Of 1995.
DAO No. 2000-98 Mine Safety and Health Standards
RA No. 8371 The Indigenous Peoples’ Rights Act of 1997
AO 3 Series of 2012 The Revised Guidelines on Free Prior, Informed Consent (FPIC) and Related Processes
of 2012
PD No. 1586 Establishing an Environmental Impact Statement System, Including other Environmental
Management Related Measures and for Other Purposes
DAO No. 2004-52 The Revised Guidelines in the Issuance of Cutting/Harvesting Permits in Private
Titled Lands
PD No. 856 Code on Sanitation of the Philippines
DAO No. 2015-02 Harmonization of the Implementation of the Philippine Environmental Impact Statement
System and the Philippine Mining Act of 1995 in Relation to Mining Projects
RA No. 6969 Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990
DAO No. 2004-36 Revising DENR Administrative Order No. 29, Series of 1992, to further strengthen the
implementation of Republic Act of 6969 (Toxic Substances and Hazardous and Nuclear
Wastes Control Act of 1990) and Prescribing the Use of the Procedural Manual
DAO No. 1992-29 Implementing Rules and Regulations of Republic Act No. 6969
DAO No. 2005-27 Revised Priority Chemical List
DAO No. 2007-23 Prescribing Additional Requirements for the Issuance of the Priority Chemical List (PCL)
Compliance Certificate
MC No. 2003-11 Clarifying the 1997 Rules for the Administrative Adjudication of Illegal Forest Products
Under DENR Administrative Order No. 97-32
RA No. 9275 Philippine Clean Water Act of 2004
RA No. 8749 Philippine Clean Air Act of 1999
DAO No. 2004-26 Amending Rule XIX of DENR Administrative Order No. 2000-81 (Implementing Rules and
Regulations of RA 8749)
RA No. 9003 Ecological Solid Waste Management Act of 2000

Method of Data Collection

Legal experts conducted a preliminary research on DENR through MGB were based on a Memorandum
recent policies of the DENR, MGB, EMB, and other Circular No. 2016-01 dated July 1, 2016, issued by
relevant government agencies, followed by a review former Secretary-designate Regina Paz L. Lopez.
of documentary submissions by mining companies. The audits were carried out until September 27,
Company records were reviewed with particular 2016. The results were released on February 2, 2017.
attention to submitted reports as required under
RA 7942, DAO 2010-21 (Implementing Rules and The legal team supplemented the Review with
Regulations of RA 7942), DAO 2000-98 (Safety, searches of online resources and government data
Health and Sanitation Standards), and other related portals, such as the EITI and the PSA, respectively,
agency administrative orders and circulars, as well as along with maps contributed by independent
environmental and other special laws. Achievements providers and interactions with colleagues. Details
and good practices connected to legal compliance from the suspension order of some of the mining
were also noted. companies were also scrutinized. Experts visited
sites to see firsthand the actual operations of the
Secondary data were also secured, such as results companies to validate key observations from the
of the latest audits, including ISO 14001, MGB, audit reports. It also allowed face-to-face interviews
Multipartite Monitoring Team (MMT), and other and dialogue with respective compliance personnel
third-party audits conducted. The audits by the and company officials.
24 Chapter 3: Legal Aspect of the Review

Analytical Approach
Figure 18 shows a summary of the analytical compared contract content with the stakeholders’
guide used to determine compliance. A checklist views and experiences. Indicators beyond what
for the procedural compliance was developed. was required of the mining companies were also
Mining companies were asked to accomplish the documented. As a guide in scoring the mining
checklist and provide supporting documents to prove companies, parameters were set by which the
compliance. Permits and licenses were verified mines were evaluated. The scoring criteria used
to check the completeness of documents. Experts for Phase 1 are different from Phase 2. For Phase
also took note if they were secured within the time 1, five major groupings were handpicked for being
allowed. A fact-based or document-supported the most recurring issues. Table 7 on page 18 shows
explanation for non-compliance was secured. While the legal scoring parameters used. Document
the legal experts usually look into violations and completeness and compliance were based on
non-submission of reports, they also try to rationalize several important reportorial and documentation
why certain practices, contrary to the law or requirements prescribed by RA 7942 and DAO 2010-
warranting a penalty, have been approved or 21. The legal experts narrowed the requirements
tolerated. Substantial compliance was determined based on what applies to the mines reviewed. They
by looking into the performance quality and have set a minimum number of common indicators
achievements of the mining companies. The legal across all review teams. Some TRTs used more
experts validated the absence or presence of depending on the details found with their respective
contractual/ permit/ license violations. They also mines reviewed.

Figure 18. Analytical Guide to Determine Compliance

Key Results/Findings
Scoring for each mining operation was done in presents the number of mining operations reviewed
agreement with the legal experts from the other in Phase 1 and 2 classified according to performance
technical review teams. Each legal expert from the levels. A score level greater than 2.8 suggests good
technical review teams may assign weights to each performance; those between 2 and 2.8 need only
requirement to affect the overall score. Table 9 minor corrections; those with scores between 1 and
 25

2 require major reforms in their operations; and and management. Some 15 mining operations were
those scoring less than 1 are considered companies reviewed in Phase 1, and one in Phase 2 needs major
performing poorly. In Phase 1 of the Review, the reforms in terms of legal performance; 13 of which
key measures scored were (a) completeness and are under CMP, and three were operating at the
compliance with the contract, (b) compliance with time of review. Shown in Annex Table 1 are mining
ECC, (c) compliance with other natural resources and companies that obtained a rating between 1 and 2
environmental laws, (d) compliance with Contingent on the legal aspect of the review. Two⁠ — Mt. Sinai
Liability Rehabilitation Fund (CLRF) and Final Mining Exploration and Development Corporation
Mine Rehabilitation and Decommissioning Program in Guiuan, Eastern Samar, and Claver Mineral
(FMRDP), and (e) compliance with taxes, fees, Development Corporation in Claver, Surigao del
royalties. In Phase 2, the key measures, also associated Norte — received failing marks (“Not acceptable or
with documentary and substantial compliance, were: (a) poor”), which means companies may be subject to
mining tenement, (b) safety and health management, further scrutiny if not suspended.
(c) environmental management, (d) social development

Table 9. Summary of A Average Scores on the Legal Aspects by Status of Mining Operations

CMP Operating Grand

Total
Au, Ag, Cu

Score Levels/Index
CMP Total

Operating
Magnetite
Chromite

Chromite

Total
Au, Cu
Au, Ag

Au, Ag
Ni

Ni
Phase 1 0 3 2 12 17 0 1 2 0 7 10 27
Acceptable or Good 0 0 0 0 0 0 0 0 0 0 0 0
Needs minor correction 0 1 0 1 2 0 1 1 0 6 8 10
Needs major reforms 0 1 2 10 13 0 0 1 0 1 2 15
Not acceptable or poor 0 1 0 1 2 0 0 0 0 0 0 2
Not scored 0 0 0 0 0 0 0 0 0 0 0 0
Phase 2 1 0 0 2 3 5 2 0 1 7 15 18
Acceptable or Good 0 0 0 1 1 2 0 0 0 5 7 8
Needs minor correction 1 0 0 0 1 2 2 0 1 2 7 8
Needs major reforms 0 0 0 0 0 1 0 0 0 0 1 1
Not acceptable or poor 0 0 0 0 0 0 0 0 0 0 0 0
Not scored 0 0 0 1 1 0 0 0 0 0 0 1
Grand Total 1 3 2 14 20 5 3 2 1 14 25 45
CMP = Care and Maintenance Program.
Note:
>2.8 = Acceptable or Good >1 and <=2 = Needs major reforms >0
>2 and <=2.8 = Need minor correction <=1 = Not acceptable or poor
26 Chapter 3: Legal Aspect of the Review

Ease of Access and Availability of required applications, plans, and programs; secured
Information all required permits and licenses; paid all taxes,
duties, and fees; and promptly submitted all required
For mining companies scoring high in legal reports. Deficiencies pointed out in the first DENR
compliance, TRT experts found it easy to access audit were also quickly addressed.
documents and other information needed for the
review. This can be attributed to some factors, such as
Substantial Compliance
the creation of compliance teams. In several mining
companies, competent compliance teams have been Mining companies also need to translate documentary
formed and trained to timely secure the necessary compliance into concrete actions based on standards
requirements. This helped them successfully manage set by law, rules, and regulations. Mechanisms like
the permitting and licensing processes for the company. establishing legal compliance teams are also set up
With these teams, in cooperation with the department to help attain tangible accomplishments. With the
heads and staff, they created systems that enabled important documents secured and in place, the
them to comply with the requirements and follow the appropriate processes can be facilitated to ensure
regulations set by the government. continuous operations of the mining firms. In addition,
problems or issues that may arise can be addressed or
Another commendable practice cited was the record- dealt with accordingly.
keeping and documentation protocols, that brought
transparency and receptivity to audits, not to mention Substantial compliance means having clear and
efficiency in the processing of necessary permits. definite goals or targets. Without such, strategies are
Companies were willing to open their books for mere approaches and purposes are vague. Therefore,
further scrutiny, as indicated in the report of the there is the likelihood that the evaluation is confined
2016 audit team. Furthermore, the presence of the to mere compliance. In this regard, submitted
top management down to unit heads and staff who requirements need to have the approval of the
have become sources assisting the team enhanced governing bodies to ensure that targets and goals
information accessibility. are checked and validated. This means government
agencies have a role to play in contributing to the
substantial compliance of the mining firms. For
Report Delivery, Compliance Team the mines reviewed, many have complied in terms
and General Compliance of document submission. However, upon closer
inspection, they were found to have pending approvals.
Apart from verification of documentary requirements,
For instance, all the gold mining companies passed
another determinant of compliance is the companies’
the Review in Phase 1. But there was a common
preparedness to execute, manage, and sustain
observation that while the companies submitted a
these requirements.
Final Mine Rehabilitation and Decommissioning
Most operational mining companies were found to Program, they were not approved seasonably. The
have been legally compliant or highly compliant, as companies attribute this to the delayed response of
evidenced by complete documentation on-site. Aside the Mine Rehabilitation Fund Committee (MRFC),
from the major requirements, such as acquiring an which is composed of representatives from the
MPSA/FTAA and ECC, compliant mining firms also MGB, DENR, EMB, the Provincial Environment
ensured that they are ISO 14001 and OHSAS 18001 and Natural Resources Office (PENRO) of the local
certified, showing their commitment to adhering to government unit, non-government organization
environmental, health, and safety regulations of the (NGO), and the mining permit holders themselves.
government. This can be attributed to a good and The delays may have arisen because of the difficulty
dedicated legal compliance team, who keeps track of to convene all the MRFC members. For most mines,
submission deadlines and completes documents for the submitted requirements have yet to be approved
submission. They have submitted most, if not all, of by the MRFC.
 27

On the other hand, some mines have passed the legal Environment Impact Statements, which inevitably led
review but have violations cited against them. Once to faulty environmental programs. These programs
more, upon closer scrutiny, many factors contribute do not stand a chance to comply with the conditions
to the score given to them. In the case of the gold in the resultant ECC. A good environmental study
mining companies reviewed in Phase 2, the legal would consider the peculiar qualities of the area
experts noted violations of the Mining Act itself. where the mining activities are conducted. Any
They noted that the area indicated in the MPSA or generic plan would result in a hit-or-miss situation,
FTAA overlapped with proclaimed reservations or often to the detriment of the environment and to the
watersheds. Section 19 of RA 7942 prohibits mining people in and out of the mines.
inside proclaimed watersheds and other reservations.
On the other hand, different indicators and mechanisms
However, most of the old mines acquired vested
are in place for mining companies to achieve substantial
rights before the proclamation that established the
compliance. The development and submission of the
reservations. These mines may have gotten mineral
FMRDP, and the provision of funds to cover mine
patents over portions of the reservations. By law,
closure costs at an early stage considered a best
mineral patents are superior tenurial instruments
practice, as exhibited by Adnama Mining Resources
as they were issued before the enactment of the
Inc. Filminera has complied substantially with all its
Philippine Constitution.
documentary requirements following several changes it
Another issue affecting the substantial compliance underwent after the 2016 DENR audit. Its ECC
of mining companies, particularly with nickel mines and permits are in order, and all audits are properly
in Phase 1, is the lack of a Special-Tree Cutting and managed, an exemplary achievement as the company
Earth-balling permit. Ideally, no mining can proceed answered and rectified deficiencies based on the
without this permit, given that the first stage of the audit findings. Several mining companies also
operation is to clear the vegetation. Unfortunately, it achieved substantial compliance by striving for and
was observed that some nickel mines still proceeded maintaining good relations, specifically with the
with the clearing of trees despite not having a permit IPs. For one, Taganito Mining Corporation has
to do so. It may have been difficult for the regulators acknowledged the presence of Manobos in their
to enforce this requirement due to the delays in mining tenement area and complied with the
the issuance of permits attributed to them. Nickel obligation to provide them royalty equivalent to 1
companies in Phase 2 fared better, with their percent of its gross sales. Platinum Group Metals
average scores higher than those in the first review. Inc. has also faithfully complied with its obligation
However, the experts agree that this translates to to provide royalties to Manobos and Mamanwas and
mere paper compliance because of major violations assisted them in plans on utilizing the said royalties.
noted in their reviews. There seems to be a flaw in the Another good practice is establishing a good
usual evaluation processes being made by regulatory community relations team, that will help prevent legal
agencies. The current system focuses on quantity or problems. This team will be able to address community
the number of check marks on the list versus quality, concerns even before these ripen into legal disputes.
which is actual compliance. Policy recommendations It can de-escalate complaints, a win-win approach for
were made to revisit the evaluation tools so that both the community and the mining operation.
companies may go beyond paper compliance.
In terms of dealing with illegal small-scale miners,
Proper adherence to requirements leading to the Apex Mining Corporation does a “big brother-small
crafting of the environmental impact statement was brother” approach, which absorbs illegal miners into
the challenge faced by the chromite mines. The legal the company operation to give them a legitimate
review noted that several companies used Pro forma source of livelihood.
28 Chapter 3: Legal Aspect of the Review

Beyond Compliance Internationalization

Model companies go beyond legal compliance. They Participation and cooperation of several companies
suggest improvements on Free, Prior and Informed in the Extractive Industries Transparency Initiative
Consent (FPIC), taxes, LGU support, and law (EITI) are regarded as good legal practices. The EITI
enforcement. They are competent partners and are is an international standard promoting open and
concerned about the industry as a whole. accountable management of oil, gas, and mineral
resources. According to the EITI website, “the EITI
Awards Standard requires the disclosure of information along
A good practice that can be considered beyond the extractive industry value chain from the point of
compliance is the participation of mines in extraction, to how revenues make their way through
international competitions and going global in their the government, and how they benefit the public.”
operations. Going global means compliance with Therefore, cooperation and participation in the
international standards, such as ISO principles. EITI are regarded as good legal practices. They are
In the Review, awards achieved by some of the indicators that the company operates with the highest
mining companies, both local and international, standard as it is willing to subject itself to public
were recognized and commended. These mining scrutiny. They also indicate that a company is at
companies that are multi-awarded locally and par with national and international standards. Other
internationally also have very high to perfect numerical companies also participate actively in Sustainability
scores for compliance with the minimum legal Reporting Initiative (SRI) by ECC International
requirements. For example, Rio Tuba Nickel Mining and Global Reporting Initiative (GRI). Aside from
Corporation (RTNMC) won the first ASEAN Mineral the international awards earned by RTNMC, it
Awards for “Best Practice in Minerals Mining” in also participates actively in the EITI and the SRI by
2017. The ASEAN Mineral Awards was established ECC International.
to honor ASEAN mining companies, that have
contributed to promoting sustainable minerals Sharing of Best Practices by Good
development in the ASEAN region. Cagdianao
Performing Companies
Mining Corporation bagged the 2019 Presidential
Mineral Industry Environmental Award (PMIEA), Numerous science and technology information
specifically the Presidential Achievement Award for could be generated in the development of mining
Surface Mining. Under EO No. 399, series of 1997, the technology and geosciences (DMTG) activities.
PMIEA is given to “recognize the exemplary efforts If shared, this information will contribute greatly
of the mining groups and companies in the country in to the mining industry. Knowledge products from
achieving environmentally and socially responsible these activities, particularly from the research
mining operations.” Moreover, Agata Mining Ventures works, are important. While companies are already
Inc. bagged the 2018 and 2019 PMIEA Safest Surface accommodating visits from other companies, the
Mine awards for implementing a Legal Obligations sharing of best practices may be further refined and
and other Requirements Procedure and assisting made more targeted. In addition, benchmarking
indigenous peoples in investing royalties received for the environmental performance of RTNMC with
sustainable projects. OceanaGold Phil Inc. also won international standards is a prudent way towards a
the First ASEAN Mineral Awards by bagging the more sustainable mining industry.
Best Practices in Sustainable Mineral Development
under the Mineral Processing Category. The mine
is also PMIEA awardee for consecutive years from Summary and
2015 to 2017. Other awards were bestowed by the Recommendations
Pollution Control Association of the Philippines Inc.
(PCAPI) and the Philippine Chamber of Commerce The main advantage of highly compliant mining
and Industry (PCCI). companies was setting up a dedicated legal
 29

compliance team to check if the firm adheres to all be made to ascertain compliance with the specific
the requirements under Philippine law. Access to requirements. For example, a company can have the
information and reports about the mining company requisite ECC but could be violating the terms and
did not become a challenge, with the legal compliance conditions embodied therein.
team tasked to respond accordingly. The team
completes the documents for submission and keeps Restrict audit within current operations. The
track of the deadlines. Also, they closely coordinate issues surrounding the planned expansion of RTNMC
with the organization structure in keeping up with marred the 2016 DENR audit on the company. The
the requirements of the different aspects of the parallel report given by an NGO member delved
mining company. heavily on the pending Application for Mineral
Agreement, which was not related to the operations
Fast response and action on the deficiencies pointed being audited. This created confusion and vilified
out by the different audits, primarily by the MGB led the otherwise compliant operations. This may create
to the substantial compliance of mining companies. instability in the mineral industry because legitimate
Another good practice under substantial compliance is operations may be disrupted by speculative findings
having a good community relations team. The team made available to the public.
helps prevent legal problems since they can address
community concerns before they escalate into legal Conduct a separate review of mineral processing
disputes. Limiting the achievement of substantial plants. The presence of a mineral processing plant
compliance are the delays in the approval of submitted (MPP), which is owned by a separate entity, creates
documents, lack of some permits, and challenges in a problematic situation, as in the case of RTNMC.
complying with proper adherence to crafting of First, the MPSA provides that the MPSA holder should
studies and documents, such as the environmental exclusively undertake the mining activities in the
impact statement. Policy recommendations were tenement area. Second, the MPP is a stand-alone
made to revisit the evaluation tools, so they transcend plant that could source its ore from other mine sites.
paper compliance. Finally, the responsibilities assumed by the MPSA
holder may not have also been assumed by the MPP.
The participation of mines in international competitions In the case of RTNMC, the MPP is also using a
can be considered a good practice that goes beyond tailings pond that the former is using. A separate
compliance. By going global, mining operations are review should be conducted to check if the MPP
compelled to comply with international standards, complies with its obligations under pertinent laws
such as ISO principles with minimum requirements and if its presence is legally permissible in the
prescribed by international standards. Mining tenement area.
companies that got high to perfect numerical scores
for compliance with the minimum legal requirements Harmonize the Mining Act, the IPRA, and the
were also the ones who have reaped different kinds SEP Law. Mineral Agreements have been issued
of awards. Cooperation and participation in the EITI even prior to the passage of the IPRA (1997) and the
are also regarded as good legal practices that go SEP Law (1992). Under the Mining Act, a contractor
beyond compliance and are good indicators that the will be given an area open for extraction. However,
company operates with the highest standard and is the PCSD can have a different classification based
willing to subject itself to public scrutiny. on the Environmentally Critical Areas Network
Environmentally Critical Areas Network (ECAN)
An audit should go beyond the checklist. Any Map and may restrict mining within certain areas
regular or special audit conducted by government or elevation.
regulators must go beyond checking permits, licenses,
or documents. Quantitative data should only be a The IPRA requires the conduct of FPIC and has
preliminary evaluation of the compliance of mining mandated it as a requisite before the issuance of a
companies. After determining the presence of the license or permit within an ancestral domain. There
permit, license, or document, earnest efforts must was a concern about whether FPIC should be
30 Chapter 3: Legal Aspect of the Review

required as an additional condition even if the unnecessary conflict and deter proponents from
MPSA, which was issued prior to the passage of applying or seeking exemptions.
the IPRA, explicitly provides that renewal shall be
under the same terms and conditions as in the Include NCIP as a member of the MMT. For mines
original agreement. operating within ancestral domains, a representative
from the NCIP should be made a member of the
Delineate no-go zones: The government must MMT to determine if the FPIC MOA provisions are
identify and strictly enforce no-go zones to avoid being followed.
CHAPTER 4:
Technical Aspect of the Review
In this Review, the experts’ group synergized the sustainability, in which the highest standards of
expertise of mining engineers, metallurgists, and mining and environmental protection are employed.
geologists, in collaboration with legal, social, and These three principles are translated into the six
economic experts to devise the processes and tools technical aspects of the mining operation. These
of evaluation that can be used at a broader scale in are: (a) general knowledge of the ore deposit or
the mining industry. The technical review teams used economic geology; (b) using benchmarks of the
slightly different methods for those under the care and mining operation in determining mining operation;
maintenance phase and those currently operating. (c) implementation of the mine plan, diagrams, and
For mines under CMP, the focus is on assessing mine surveys; (d) assessment of the production
housekeeping and maintaining the physical assets as history; (e) assessment of the resource reserve;
good measures of responsible mining. This is followed (f) and consistency of the operation with reports to
by assessing the perception of mining stakeholders, government agencies, such as the MGB and other
more importantly, the residents of the host and DENR entities. The three mining areas, namely
neighbor communities, on how they are affected by geology, mining, and processing, are evaluated. Their
the shift to CMP. For continuing operation, much of relationship to each other is shown in Figure 19.
the review focused on the local practice compared
Technical experts reviewed documents, such as
with the accepted and world-class standards.
mining plans, maps, and production history, and
conducted field visits and interviews with
Figure 19. Simplified Framework of the Technical Review
professionals working on site. The technical experts
of Mining Operations
believed that experimentation and actual verification
measurements of, for instance, the volume of ore
Geology deposits, are not needed since most of the relevant
gy
llur

data and information are certified by professionals

eta

and competent persons. In production, the rate

om

or the mill throughput as indicated in the DMP

Ge

Metallurgy Mining and ECC serves to set the limits and prevent
runaway production. The mineral reserve to annual
Technical - resource/reserve, mining method, recovery process, cost
production ratio serves as the upper limit.

Framework and Methodology For continuing operation, much of the Review

focused on the local practice compared with the
Mining’s objective is to maximize the gains of accepted and world standards. The experts covered
metallic and non-metallic values on the ground. The the following: (a) general knowledge of the ore
bottomline framework is centered on three principles: deposit being mined, also known as economic
(a) efficiency and economic growth, in which geology; (b) technical design and appropriateness to
disposition and use of minerals are adequately site conditions; (c) management and capitalization; (d)
managed to attain economic development; (b) equity at par with global standards; (e) occupational health
or the assurance that mining results in poverty and safety practices; and (f) Certified Management
alleviation and improving the quality of life in host Systems as best practices; ISO 2015 Integrated
communities; and (c) environmental protection and Management Systems, ISO 14001 Environmental
32 Chapter 4: Technical Aspect of the Review

Management Systems, ISO 9001 Quality Management For mines under CMP, the focus is on assessing
Systems series, ISO 45001 Occupational Health and housekeeping and maintaining the physical assets
Safety (replacing BS OSHAS 18001, Occupational as good measures of responsible mining. This is
Health and Safety Assessment Series). followed by an assessment of the perception of
mining stakeholders, more importantly the residents
Benchmarking: Evaluating the technical performance of the host and neighbor communities on how they
of the mining operations under review would require are affected by the shift to CMP.
industry-acknowledged criteria, standards, or existing
benchmarks. The current regulatory requirements
during mining operations are not performance-
Method of Data Collection
enhancing. These are reportorial obligations and The process started with reviewing company
there are no standards or guidelines against which the documents and government reports. All these
mining activity or performance level can be assessed provided a background for the experts prior to the
(e.g., Land Use Reports, Annual Mineral Ore Reserve field visits. The important documents reviewed were
Reports, and even Self-Monitoring Reports that the Mine Feasibility Study, Mine Technical Reports,
include Water Quality Standards, Safety and Health, Life-of-Mine Plan, production history, FMRDP, and
standards for water quality coming out of a sediment financial documents.
settling pond discharges; Erosion and Siltation Onsite interviews of field personnel supplemented
Control, Progressive Rehabilitation; mining production the field visits. The exploration visits and field
efficiency, labor productivity, energy efficiency, land observations were conducted to compare company
use efficiency, sediment transport control, and reports with actual field implementation. Field visits
progressive rehabilitation). were complemented with photo documentation
The key questions: (a) Are the specifications, design, provided by mining companies. At the end of the
methods, and regulations on company infrastructure, field visit, the team conferred with the different field
facilities, equipment, and human resources, at different units in charge of production, geology, bioassay,
phases of mining compliant with the national engineering, safety and security, including a conference
standards and suitable to the area’s physical conditions? with the site manager and mining engineers. These
(b) Are these comparable with the current global conferences sought to assess the competency of
benchmark of mining technologies? The Efficiency personnel and their level of adherence to mining
Comparison Indicators are production cost, labor protocols and standards. When necessary, the technical
efficiency, safety, energy, land productivity, and expert assists the environment expert in the sampling
land-use efficiency. in different mining operations, such as ore feed, mill
tails, waste rock, river discharges, mine water and
General knowledge of the ore deposit being mined, other mining activities that are dependent on and
also known as economic geology. This includes have an impact on different environment media, such
mineral resources and mineral reserve management. as air, water, and earth.
The key question is: How well are mining companies
managing the mineral resources in their mining
Analytical Approach and Scoring
tenement. Are decisions on extraction dictated by
the foreign demand? Other aspects include: (a) Method
adequacy of mine plans, mine diagrams, and mine The technical experts agreed on three stages in
surveys; (b) continuing assessment by experts of ore reviewing mining operations applied to those
resource and reserves; (c) mining operation efficiency under CMP and operating during the review.
and safety; (d) mining operation productivity; and Figure 20 summarizes the three stages of the
(e) innovation and technological advancement in analytical approach. These are explained in the
mining operation. succeeding paragraphs.
 33

Figure 20. Summary of Analytical Approach in Reviewing Mining Operations

The first stage is an analysis of ore resources and (health, environmental, security, and safety) system
reserves, which includes (a) production rate and mill in place. Two metrics measure safety performance:
throughput, which is approved based on Declaration frequency rate defined as the number of incidents
of Mining Project Feasibility (DMPF) and EEC; (b) per million person-hours rendered and severity rate
mineral reserves to annual production ratio, which defined as the number of days lost per million
includes declared mineral reserves (proved and person-hours worked. Safety performance is an
probable), and mineral resource (measured, indicated immediate symptom of the effectiveness of the HSES
or inferred), required review of a mining operation system. Apart from health and safety performance,
to see where the controllable factors are; and (c) a conducive working environment ensures that
determination of break-even price, mining cost, and workers are motivated and productive even if seldom
production capacity. supervised; hence, good housekeeping is a necessary
condition for efficient mining operations.
The second stage is an analysis of the mining system
applied. In this evaluation process, the expert group
refers to a global standard of mining operations. Key Results/Findings
Being at par with global standards is a measure of the
Table 10 presents the number of mining companies
appropriateness of mining (and milling) technology
reviewed in Phases 1 and 2 and their classification
in developing and producing mineral deposits. This
according to their performance levels. Of the 20
includes equipment application, human resources, and mining operations under CMP, only three received
methods to produce at the designed tonnage or grade. a good performance score; four needed minor
In implementing modern mining processes, the corrections; six were for further re-evaluation
company is expected to have reviewed and adopted considering that these will need major reforms; and
the best practices in mining. one received a failing score on the technical aspect of
The third stage is an analysis of production operating mining. The company receiving the failing score is
Oriental Synergy Mining Corporation, which operates
parameters, which include (a) infrastructure support
in Loreto, Dinagat Island province. Having such
of mining (and milling), such as amenities of
performance on the technical aspect are indications
modern living, residential, religious, cultural, sports,
of similar performances in all other aspects, including
recreational and modern facilities, schools, and
the legal aspect. Six of those currently operating
markets; (b) auxiliary facilities and infrastructure,
mining companies scored below the desired level or
which includes office, storage, training facilities,
were marked as companies that need major reforms.
depots for fuel, motor pools, bodegas, stockyards,
scrap yards, timber yards, explosives plants, and Annex Table 1 column H shows the companies scored
magazines; (c) management and capitalization, which between 2 and 1. These are Benguet Corporation gold
includes analysis of the organization, financial operation in Itogon, Benguet, Lepanto Consolidated
resources of the company, and mineral resources; Mining Corp in Mankayan, Adnama Mining
(d) safety performance, where a mine operating Resources Inc. in Claver, Surigao del Norte, Century
continuously and profitably must have an HSES Peak Corp Rapid City operation in Loreto, Dinagat
34 Chapter 4: Technical Aspect of the Review

Islands, SR Metal in Tubay, Agusan del Norte, and to determine the continuance of mining operations.
Tribal Mining Corp in T’Boli, South Cotabato. The six Nonetheless, ten need minor corrections on the
operations should be subjected to a thorough review technical aspect of operations.

Table 10. Summary of the Scoring on the Technical Aspect of Mining Operations by Companies Reviewed in
Phase 1 and 2

CMP Operating Grand

Total

Score Levels

Au, Ag, Cu
CMP Total

Operating
Magnetite

Chromite
Chromite

Total
Au, Cu
Au, Ag
Au, Ag

Ni
Ni
Phase 1 3 2 12 17 1 2 7 10 27
Acceptable or Good 1 1 2 1 1 3
Needs minor correction 1 3 4 6 6 10
Needs major reforms 1 1 4 6 2 1 3 9
Not acceptable or poor 1 1 1
Not Scored 1 3 4 4
Phase 2 1 2 3 5 2 1 7 15 18
Acceptable or Good 1 1 2 2 4 8 9
Needs minor correction 1 1 2 1 1 4 5
Needs major reforms 1 1 1 2 3 4
Not acceptable or poor
Not Scored
Grand Total 1 3 2 14 20 5 3 2 1 14 25 45

CMP = Care and Maintenance Program.

Note:
>2.8 = Acceptable or Good >1 and <=2 = Needs major reforms
>2 and <=2.8 = Need minor correction >0 and <=1 = Not acceptable or poor

Four gold mining companies, namely Oceana Gold as it performs significantly in the five aspects of
Philippines (OGPI), FCF Minerals, and Filminera, sustainability, namely technical, environmental, social,
received an average score of 3.0 on the technical legal, and economic. Thus, except for the old gold
aspect. Getting a perfect score in terms of the mining in Benguet, the other mining operations
global standard of mining operation means excellent have steady production. The productivity of Benguet
infrastructure support, auxiliary infrastructure and Corp.’s mining operation in Itogon had declined
management and capitalization, design, appropriateness over the years, thus requiring re-configuration of
of production system, and occupational health and its contractual arrangement. A proposed alternative
safety. These mining operations serve as a benchmark is to increase corporate-level production instead of
in setting new entrants to gold mining in the country. the greater proportion allotted to the contractual
However, gold mining operations located in Luzon arrangements with small-scale miners applying
reflect varied performance. The gold mine operation low-level technology. Lepanto’s mining operation,
of OGPI in Barangay Didipio in Kasibu, Nueva the other older generation gold operation, may
Vizcaya has the potential for sustaining development also improve its productivity by automating its
 35

production and improving its underground safety Maintaining health, safety, and security is necessary
measures, such as providing breathing apparatus to for ensuring productive but safe mining. Personal
underground miners. protective equipment (PPE), personnel trained in mine
rescue and firefighting, and disaster preparedness
The mineral resource endowment, mining technology, are required in this phase.
investment, especially for nickel mining, are keys to
the longevity and profitability of mining operations. Accessibility for regular monitoring must be ensured
This was exhibited in the performance of RTNMC in during the entire CMP phase. Experts found that the
Palawan. All told, RTNMC should be classified as the use of drones proved to have a lot of applications,
“model” for all nickel mines in the country, including especially in periodic monitoring of progressive
its township building that helps sustain the company rehabilitation. It saves resources and is an economical
in the long run. way to gather information. A significant and common
observation among experts during field visits was
It is further recommended that RTNMC, in coordination the need for all mining operations to give equal
with the MGB and the academic community, undertake importance to the FMRDP to ensure the sustainability
comprehensive documentation of the company’s of any mining community beyond the mine life.
overall mining evolution from its inception up to its
status in the present. From this documentation, a Mechanization, especially for nickel mining operations,
“mining operations audit” system or methodology can deserves to be given attention and investment. The
emanate, which the MGB may find useful in future goal is the integration of mining and processing
work on monitoring surface nickel laterite mines. operations, thereby adding value towards maximizing
the benefit from extracting non-renewable mineral
Human resources capability, complementation, and resources. The recent declaration of scandium being
organizational structuring were proven worldwide recovered in the nickel laterite processing in a local
to improve the efficiency of mining operations. mine signals the need to determine if other valuable
The Cagdianao Mining Company, having a well- elements like Platinum Group Elements could be
structured organization for a mine of this size, a pool recovered and their presence confirmed in the
of human resources of more than 1,000, and a senior nickeliferous laterite profile.
staff with a wealth of combined working experience,
was rated as one of the best-managed open-cast Summary and
mining operations in the country today. Their mine
operations alone boast a team of 30 seasoned mining
Recommendations
engineers and geologists. Geology is a critical and primary consideration
in mine development and operation. Ore deposits
Nonetheless, experts found key issues on the technical
and various geologic factors, such as topography,
aspect, especially for those mine operations that are
mineral inventory, soil characteristics, structural
under CMP. These key issues include exploration,
geology, and hydrology, are vital inputs in extracting
underperformance in production targets and site
the ore (mining) and processing it (metallurgy)
rehabilitation, poor mine engineering, and inadequate
and rehabilitation.
waste disposal system and technical capability.
For instance, mining operations in Zambales have DSO should be discouraged, and processing of
inadequate measures on controlling sedimentation nickel or iron ore locally should be required.
and siltation, thereby aggravating the condition Processing nickel/iron ore requires larger investments
of streams. Such lack of measures has impacted but may have greater economic benefits in the
downstream economic activities in the lowlands and long term and more so with the retrieval of other
coastal ecosystems. high-valued metals. This is recommended so that
the timing and phasing of mineral extraction and
Maintaining adequate and full personnel safety processing will ensure that rehabilitation efforts can
complement is essential during the CMP phase. keep up.
36 Chapter 4: Technical Aspect of the Review

Restoration of ecological functions and reestablish- Collaborative effort of government regulators

ment of biodiversity is a protracted process. Since and other stakeholders in planning and project
the mined-out areas will take a long time to recover implementation. Government regulators, together
their ecological balance due to massive earth with other stakeholders, including academic
movements, mining operations and rehabilitation institutions, should play an active role in conducting
efforts should be properly timed. Efforts should research and monitoring. They should employ
not only focus on revegetation but also on holistic adaptive planning with local planners to harmonize
restoration of the natural land and water landscapes large-scale mining, agriculture, and fishery, and
or configuration that maximizes restoration of flora settlement planning with other land- and marine-
and fauna biodiversity. These efforts are recreating based economic activities.
corridors and areas conducive for connectivity,
spawning, growth, and refuge of species.
CHAPTER 5:
Environmental Aspect of the Review
Sustainable development is the DENR’s governing initiatives. The environmental experts based its review
principle for the enforcement of RA 7942, as stated on the stipulation of Section 167 of the IRR of RA
in Section 3 of its Implementing Rules and Regulations 7942, which states that for mining activities to be
(IRR). This means realizing the needs of current sustainable, it must protect the environment by: (a)
generation without sacrificing the ability of the future maintaining sustainable environmental conditions at
generations to meet their own needs. Its trajectory every stage of the mining operations; (b) establishing
is to improve the total quality of life of both present functional post-disturbance land use; (c) preserving
and future generations. One of the pillars of sustainable the downstream freshwater quality; (d) preserving
development is environmental sustainability, which seawater quality and natural habitats for marine
as Thomsen (2013) stated, is achieved “when life; (e) Preventing air and noise pollution; and (f)
governments, corporations, and other organizations respecting the traditional and sustainable management
adopt sustainable development initiatives to address strategies concerning natural resources of Indigenous
concerns about climate change and the depletion Cultural Communities (ICCs) and other communities.
of natural resources. Consumers and activists are The following review framework and methodology
pushing for large corporations to be part of these attempts to capture these requirements.

Figure 21. Consolidated Framework of Environment Experts

Mining
operations
38 Chapter 5: Environmental Aspect of the Review

Framework and Methodology evaluation of erosion control, water and sediment

management, waste management, rehabilitation
Figure 21 brings together different approaches efforts, nursery management, climate-proofing, and
adopted by environmental experts in their respective environmental projects and programs implemented.
reviews of the mining firms in Phase 2. These Towards the end of site visits, all experts conducted
mining operations are evaluated against the standards exit conferences to provide the company with a
on environment management, mitigation and “preliminary assessment of the findings.” The
rehabilitation measures, and environmental monitoring experts maintained constant communication with the
and evaluation. The baselines are defined in laws, company’s focal person on environmental concerns
policies, and regulations that are put in place to for the required data and other needed clarifications.
achieve certain goals and safeguard the welfare The field visits include meetings with concerned
of various stakeholders. These environmental government agencies, mainly from MGB and LGUs.
standards in management, mitigation, rehabilitation, Such visits helped validate and get feedback from
and monitoring must address climate change stakeholders on issues and challenges related to
scenarios and increase effectiveness and efficiency. mining operations.
In turn, efficiency and effectiveness are assessed
in view of established best practices, environment
management benchmarks, and consistent with Analytical Approach
policies and regulations. Mining operations are The environmental conditions of the subject mine
evaluated against key environmental management site were assessed and documented, starting with
indicators and biophysical indicators of efficiency the available documents from the MGB and the
and effectiveness. mining company. The pre-mining operations, such
as documentation of flora, fauna, soil, water, and air,
Method of Data Collection among others, were also examined to have baseline
information on the pre-existing ecosystems goods and
A checklist of data and document requirements
services prior to mine development and commercial
was sent to mining companies prior to site visits.
operation. The environmental impacts of mining
The environmental reports examined were EIA
operation were likewise evaluated against these
report, annual EPEP, FMRDP, minutes of
baselines, which the EIS report presumably described.
MRFC meetings, and CMVR, to name a few. The
consolidated information was organized and Similarly, the corresponding mitigating measures
analyzed to determine compliance with existing as stipulated in the EIS, EPEP, and AEPEP reports
local environmental standards and compared with are compared with observed conditions in the field.
global standards. Mining companies were requested It was presupposed that the measures had been
to provide drone shots of sites where visits were sufficiently addressed, and the predicted environmental
not possible. These drone shots helped visualize impacts adequately mitigated. Prior to the field visit,
the extent of mining operations in relation to the a compliance checklist on the relevant environmental
watershed and off-site conditions affected by mining safeguards was sent for the company to fill out
operations. Historical data from Google Earth were together with the appropriate documentary evidence
also obtained for assessing vegetation changes in the to establish compliance. The checklist includes
last 20 years. The Normalized Difference Vegetation monitoring and evaluation reports, biodiversity
Index (NDVI) was generated. monitoring, and aquatic, or marine assessments after
Visits to mining sites, offices, yards, storage facilities, the start of the mining operations. The environmental
nurseries, and rehabilitation sites were done, along impacts attributed to the mining operations, such
with off-site areas, such as water sources, reforestation as soil erosion and sedimentation, were spatially
sites, NGP sites, streams, rivers, deltas, ports, examined in the context of a watershed and its
especially outlets of streams originating from a drainage system starting at the source until the
mining operation. Environment assessments include discharge outlet. However, a complicating scenario in
 39

assessing the impacts on a watershed is the presence climate-proofing of practices and facilities or design
of two or more mining operations, which creates of environmental protection measures. The assessment
a dilemma in the attribution of the impacts. Such outcome includes identifying best practices, gaps in
cases would require a more detailed data collection environment management, and needed improvements
and analysis. in policies and operations. The key criteria for
The environmental review was likewise framed in determining benchmark practices are innovations
the context of climate change, which drives changes above and beyond mere compliance, healthy and
that complicate the attribution of damage brought sustainable ecosystems based on pre-identified
about by mining operations. It is expected that indicators. Figure 21 summarizes the analytical
mining companies have accounted for the impacts approach in assessing the environmental management
of climate change on rehabilitating and restoring of mining operations.
disturbed ecosystems. Thus, the Review looks for

Figure 22. Analytical Approach in the Assessment of Environment Management of Mining Operations

Pre-mining
Laws, policies, Mitigating
environment Environmental
regulations measures
Impacts (Flora,

Monitoring & Evaluation

fauna, biodiversity,
soil air water etc)
Environmental
Pre-mining management
ecosystems good Reduction/Loss of
and services ecosystems good
Mining Operations
& services Restoration of
ecosystem good &
services

Best practices in Benchmarks in

Climate change; environmental
Assessment/evaluation environmental Sustainable
changing management;
of compliance, management mining industry
environment
efficiency, effectivity, that is
environmentally
Healthy, safe, & socially
Improvements in resilient responsible
policies and sustainable
regulations environment

Key Results/Findings
Table 11 presents the number of mining companies Eramen Minerals, LNL Archipelago Minerals, Inc.,
reviewed in Phases 1 and 2, and their classification Zambales Diversified Metals Corp., AAMPHIL Nat.
according to performance levels. Like in the other Res. Exploration 2B, Mt. Sinai Mining Exploration
aspects of the Review, a score level greater than and Dev’t., and WELLEX Mining Corp. Mine 1), and
2.8 implied good performance, while those between eight (8) were given poor performance scores (Ore
2 and 2.8 needed only minor correction. Those with Asia Mining & Dev’t. Corp., Krominco, Inc., Libjo
a score between 1 and 2 required major reforms in Mining Corp., Oriental Synergy Mining Corp.,
their operations, and those scoring less than 1 Oriental Vision Mining Phil. Corp., Sinosteel Phil,
are considered to be performing poorly. In the N.Y. Mining Corp., Claver Mineral Development
environmental aspect of the review, of the 20 mining Corp., and Century Peak Corp. - Casiguran). Annex
operations under CMP, seven required major Table 1, column (I) shows largely nickel mining
corrections (Benguet Corp. Nickel Mines, Inc., operations in Regions III and XIII evaluated in Phase
40 Chapter 5: Environmental Aspect of the Review

1 and were among the mining operations subject to Copper/ Atlas CMDC, and Philex Padcal). These are
suspension or termination resulting from the DENR five (5) gold, one chromite and six (6) nickel mining
Audit in 2016. Of the 25 continuing mining operations operations, reviewed in Phase 1 and 2, respectively.
another twelve (12) mining operations needed major Eight (8) mining operations which performed poorly
reforms; seven (7) were reviewed in Phase 1 (Benguet on the environmental aspect are Ore Asia Mining &
Corp, Berong Nickel Corp, Citinickel Mines and Dev’t. Corp., Krominco, Inc., Libjo Mining Corp.,
Development, Lepanto Consolidated Mining Corp., Oriental Synergy Mining Corp., Oriental Vision
and five (5) in Phase 2 (Adnama Mining Resources Inc, Mining Phil. Corp., Sinosteel Phil, N.Y. Mining Corp.,
Carrascal Nickel Corporation, Marcventures Mining Claver Mineral Development Corp., and Century Peak
and Dev. Corp.), Century Peak Corp. - Rapid City, Corp. – Casiguran.
TechIron Resources Inc., Tribal Mining Corp., Carmen

Table 11. Summary of the scoring on the environmental aspect of mining operations by companies reviewed in
Phase 1 and 2.

CMP Operating
Grand

Au, Ag, Cu
CMP Total

Operating
Score Levels
Magnetite

Chromite
Chromite

Total
Au, Ag

Au, Ag

Au, Cu

Total
Ni

Ni
Phase 1 3 2 12 17 1 2 7 10 27
Good 1 1 1 1 2
Needs minor reforms 1 1 2 2 2 4
Needs major reforms 1 6 7 2 5 7 14
Poor 1 1 5 7 7
Not Scored
Phase 2 1 2 3 5 2 1 7 15 18
Good
Needs minor reform 1 1 2 4 6 10 12
Needs major reform 1 2 1 1 5 5
Poor
Not Scored 1 1 1
Grand Total 1 3 2 14 20 5 3 2 1 14 25 45

CMP = Care and Maintenance Program.

Note:
>2.8 = Acceptable or Good >1 and <=2 = Needs major reforms
>2 and <=2.8 = Need minor correction >0 and <=1 = Not acceptable or poor

The more common issues were improper hazardous shown exemplary performance. One was the gold
waste storage, inadequate sedimentation, or siltation mine operation of Oceana Gold Phil Inc, and the
control (see Figure 23), poor environmental monitoring other was magnetite mining by Strongbuilt Mining
system, steep mining bench slopes, and lack of tree Development Corp.
cutting permits. Several sites also fell short in annual
targets in rehabilitation, thus requiring closer scrutiny Nickel mining companies are particular interest in
of the incentive or regulatory mechanism that would this Review. More than half, or 27 of mine operations
ensure that mining operations accomplish their reviewed, are nickel mining operations spread out in
programs. Nonetheless, two mining operations have different parts of the country. Region XIII in the
 41

Surigao provinces, Dinagat Island, and Agusan del immediate rehabilitation. These are typically one or
Norte has the most number of nickel mine sites. two orders of magnitude lower than those of the earth
During the review, 14 are continuing operation, and layers. These depths are iron-rich hardpan, red, and
the same number are under CMP. The performance of yellow laterite (limonite and saprolite). In low-lying
these mining operations ranged from extremely poor areas rehabilitation may include re-contouring
to exemplary in terms of environmental management; (flattening) of the land surface, which can be very
and from almost zero innovations in mined-out area irregular, especially if the saprolite layer material
rehabilitation to model sites with complementary was dug out to “peel off” the garnierite-rich boulders.
research and development. In steep areas, benches are left for stability and
siltation control.
Mined Out Areas Rehabilitation
Once digging has reached the bottom of the saprolite
layer and the grades go back to the original values of
the parent rock, mine sites are considered ready for

Figure 23. Mine sites images (a) upper photo, from drone (b) visible flumes of likely
pollutants into coastal waters of Dinagat Islands.

(a)

(b)
42 Chapter 5: Environmental Aspect of the Review

Revegetation of mined-out areas requires returning Still, caution is given, considering its impact on the
the flora that can thrive in the lateritic material. habitats of unique species at the site. Further, judging
However, clayey and iron-rich material will enable by its growth rate, mangkono, though native at the
the growth of only a limited number of plant species. site, may not be a suitable species for rehabilitation.
The conventional way of revegetation is by introducing Soil-enriching plants like the mani mani (Arachis
fast-growing species, such as Acacia mangium, A. sp.) will hasten the productivity of the land. There are
auriculaeformis and Casuarina species. Driven by areas where acidity and salinity are not tolerable for
demand for improving biodiversity and promoting most species unless the soil is treated using lime.
endemic and indigenous species, rehabilitation is
increasingly shifting towards planting native species
which have a higher chance of survival, thus improving Good Environmental Practices and
biodiversity. On the Dinagat and Homonhon Islands, Progressive Rehabilitation
the native mangkono (Xanthostemon verdugonianus)
was used to rehabilitate mined-out areas. However, Several good practices were observed in the Phase
this species is slow-growing and will require 2 of the Review. Firstly, some companies’ robust
large quantities of saplings that are not readily rehabilitation practices included high rehabilitation
available. These types of species can be supplemental investments running up to more than PHP 1 million
planting material. per hectare, wide use of native species, mangrove
reforestation, and a good pit rehabilitation program.
Figure 24. Vitiver grass used for slope stabilization is Complementing the rehabilitation programs were
likely unstable and has limited economic value biodiversity conservation initiatives like the
establishment of an ecological park. There were
also observations on the continuous pit monitoring
systems using radar and good waste rock dump
management with acid mine drainage encapsulation
program. Soil erosion in some areas was reduced
significantly through an extensive network of settling
or sediment ponds. Lastly, various technologies were
adopted to reduce water pollution.

Water recycling is practiced by conserving surface

water resource. Some companies have endeavored
to employ third-party audits to manifest their
company’s transparency to the public. Noteworthy
environmental management practices were given
recognition, nationally and internationally, for
Rehabilitation with Food Production conducting the following activities: (a) intensive
Objectives rehabilitation practices; (b) water recycling; and (c)
third-party audits. Some of these companies have
In some sites, with livelihood taken into account,
also obtained ISO certifications.
agroforestry areas and crops production, such as
paddy and corn, were established. While it is desirable
to use perennials, the ecological restoration expert Summary and
recommends taking advantage of natural ecological
succession, such as the use of grasses and shrubs (Figure
Recommendations
24). However, such scheme shows inconsistency in The low rehabilitated-to-disturbed-area ratio plus
different site conditions. Planting bananas, papaya, the altered ecosystem in operations areas certainly
coffee, camote, and cucumber is commendable because have impacts on the capacity of ecosystems to
it supports the food needs of local communities. provide services, including sediment transport control
 43

(or sediment control), soil erosion control, water flow important ecosystem functions and provision of
regulation, water quality regulation, air filtration, climate ecosystem services. Having these accounts and prior
regulation (e.g., carbon storage and sequestration). information on vegetation will avoid the practice
Hence, the restoration of lost renewable capital shall of planting and growing exotic or non-indigenous
be the target of the FMRDP. Any related research species in mined-out areas. Mining companies are
should be fed into enhancing the FMRDP and shall advised to reconsider using exotic species as planting
guide the AEPEP. material in declared mined-out areas. This accounting
work can be funded using the allocation for DMTG,
Develop specific quantified outcome targets for which is appropriately used for research related to the
annual (EPEP). Operationalizing the annual EPEP development of mining technology and geosciences.
requires specific quantitative outcome targets to
measure the success of environmental protection and Control sediment flows in water bodies. Controlling
ecosystem restoration efforts, along with investments. sediment flow in water bodies is an important
A specific recommendation to guide rehabilitation obligation not to be ignored during mining operations.
efforts is to define post-mining land use rather than The mining operation leaves many open, disturbed,
pronounce motherhood statements such as “…land is and easily eroded areas during rainy periods. The
suitable for agreed post-mining land use...” Likewise, situation in most mine sites is aggravated during
the Annual EPEP shall be the instrument for monsoon and heavy rain brought about by tropical
measuring the quantified targets and standards set depressions or cyclones. Although chemically inert,
in the EIA. Based on those, the FMRDP shall be the clayey material remains in suspension for an
evaluated based on specific targets i.e., desired extended period and joins the main drainages, thereby
rehabilitation or restoration outcomes. Such targets covering the riverbed, banks, and likely damaging
shall be the bases for measuring success during the infrastructure located on the floodplains. The location,
relinquishment period. the density per unit area, and the design of silt
dams, impounding dams, ponds, traps, and canals
Conduct regular accounting of ecosystem services. are critical in maintaining the water regulating
A regular accounting of ecosystem services directly functions of such bodies.
or indirectly affected by mining operations shall
be component activities of the environment unit of Despite this, several mining operations were found
the mining company. This includes accounting of to have fallen short of the standard, reducing streams’
provisioning services (i.e., food and fiber), regulating water regulation capacity. Thus, assessing the
services (i.e., amount of carbon sequestration, sediment watershed sediment yields that will help determine
retention, soil erosion, carbon sequestration), and appropriate vegetative measures, infrastructure, and
cultural services (recreational sites, cultural sites other sediment control measures, with or without
maintained or develop). The accounting needs to mining operations, is advised. The capacity and
consider vegetation cover information before capability of the silt traps and siltation ponds system
developing the site. This reference forest shall be need to be studied in-depth, particularly during
the baseline of the rehabilitation efforts to restore heavy rainfall and typhoons. (See Figure 25)
44 Chapter 5: Environmental Aspect of the Review

Figure 25. Siltation of Riverbeds Resulting from Insufficient Control Measures

(a) (b)

Enhance dust and sediment control. Dust is among Conduct and incorporate scientific research about
the prominent concerns of communities. It intensifies nickel laterite material. Incorporating more scientific
during extraction periods, typically in dry months. research on the nature of nickel laterite material is
Thus, it is suggested that mining companies explore encouraged to establish a metal inventory and
conducting suppression studies to enhance dust identify nickel-bearing mineral species. The result
control. Though driven by financial objectives, of this research is vital in the design of any future
mining operations must consider environmental on-site processing of this commodity. The challenge
and health impacts. Apart from sediment control and is to design a structure or system that will address
dust mitigation, a bigger challenge is harmonizing the clayey water run-off. The current design of
large-scale mining, agriculture and aquaculture, impounding dams and ponds cannot control the
progressive and active community, and urban living clayey water from joining the river tributaries causing
with coastal and marine activities. In Zambales, siltation along the way. Employing scientific tools
mines have negatively impacted lowland fishponds, in examining and addressing several environmental
rice production, and marine ecology through stream management concerns is a formidable advantage for a
discharge. This aspect is addressed mostly by mine company. RTNMC and the DENR can continue
the country’s gold mining operations but hardly a partnership in research towards better environmental
undertaken in nickel mining operations except as management of the mining site.
part of the SDMP and CSR.
CHAPTER 6:
Social Aspect of the Review
The social aspect of the review is focused on the self-reliant, and resource-based communities capable of
impact of mining activities on their hosts and developing, implementing, and managing community
neighboring communities. Social development is development programs, projects, and activities in
about improving the well-being of individuals, so a manner consistent with the principle of people
they can attain their full potential to enhance the empowerment (DENR 2010). The objectives of the
quality of their lives and their communities. SDMP are anchored on the principles of sustainable
development, alternatively expressed as: “improvement
Framework and Methodology of the human being over time, and equity in access
to the opportunities and the distribution of costs and
The diagram in Figure 26 shows a representation benefits” (DENR-MGB). Investing in renewable
of the social aspect of the MICC Review. The primary natural capital and man-made capital, developing
target of the review is the implementation of the SDMP. human assets, and enhancing social capital effectively
The SDMP refers to the comprehensive five-year plan ensures future income for the beneficiaries. The
of the contractor or permit holder for the sustained desirable condition is that communities will not only
improvement in the living standards of the host and experience improvement in welfare during the mining
neighboring communities by creating responsible, operation but even beyond.

Figure 26. Framework for Social Aspect

SDMP has three major components, which receive DHNC’s six mandatory components. These are: (a)
1.5 percent of the operating cost. Development of human resource development and institution building;
Host and Neighboring Communities (DHNC), DMTG, (b) enterprise development and networking; (c)
and Promotion of Public Awareness and Education assistance to infrastructure development and support
on Mining Technology and Geosciences (PPAEMTG) services; (d) access to education and educational
are allocated 75 percent, 15 percent and 10 percent support programs; (e) protection; and (f) respect of
of this share, respectively. Socio-cultural values and use of facilities/services
Communities and representatives from the mining within the mining camp or plant site. The DMTG funds
firm decide on projects, including their funding, through aim to advance technology and geosciences, and
46 Chapter 6: Social Aspect of the Review

resources and mineral discoveries; operational Development and Protection Plan (ADSDPP),
efficiency; resource recovery; and enhance environ- SDMP Reports, Community Royalty Development
mental protection and mining safety. On the other Plan (CRDP), and CSR Reports. Data sources to
hand, PPAEMTG supports information, education, determine changes used in the analysis of the impact
and communication for greater public awareness and of mining activities are as follows: demographic
understanding of responsible mining and geosciences and education profile, health sector profile, livelihood
(MGB 2018). The participatory approaches of and employment, access to other basic services
engagement with the community, LGUs, mining (water, power, food housing, transportation,
companies, and other stakeholders have complemented communication, and other facilities and services),
the integrated process of the SDMP, which is access to safety; peace and order, cultural heritage;
envisioned to sustain the improvement of welfare preservation of cultural values, important heritage
and community stakeholders’ equitable access. sites, ancestral domains.

Method of Data Collection Analytical Approach

During the review process, data collection activities The Review identified and examined the implement-
were done to capture evidence of mining operations’ ation of SDMP projects and related activities and
social and cultural impacts and companies’ development assessed their sustainability and contribution to
interventions for the affected communities. Primary the welfare of the communities. Qualitative data
information was collected from host municipalities from the FGDs and the KIIs were analyzed against
and impact communities, including IP and non-IP reports of compliance and adherence to the SDMP
communities, neighboring communities, LGUs, framework. In addition, desk review and analysis of
and the mining companies through focus group existing documents were performed. The technical
discussions (FGDs), consultation meetings, and key review team counted the emoticons used by FGD
informant interviews (KIIs) with the assistance of participants to assess identified programs during
the Community Relations (ComRel) Officers. FGDs the consultation meeting. Impact was evaluated by
and KIIs were done with significant stakeholders, whether target beneficiaries were appropriately
including representatives of local government units, identified and engaged: the SDMP and CSR are in
community and peoples’ organizations, cooperatives, place; communities have improved access to basic
and other sectoral groups in the impact communities services; local communities have a positive perception
such as the farmers, fisherfolk, women, youth, and of the companies; and companies have good
the elderly. A questionnaire focused on the community relations. A social performance assessment
companies’ knowledge of and experiences with score was used to measure the contribution of the
SDMP implementation was formulated for the focus mine to sustainable development vis-à-vis other
group discussions (FGD) and the key informant aspects of a mine. A five-point criteria were set for the
interviews (KII). These served to validate and verify social review. The criteria covered intergenerational
the information indicated in secondary materials. equity, intragenerational equity, poverty reduction,
Subsequently, community visits and observations community perceptions, and the presence or absence
were likewise done to validate and support the of conflict. The highest possible score was 3, which
information gathered from FGDs and interviews. denoted acceptable practices; a score of 2 was given
for mines for minor corrections had to be done; 1 for
The reviewed secondary materials included official mines where major reforms were necessary; and 0 for
reports of the mining companies, MGB, LGUs, and mines with unacceptable practices. The higher the
related national agencies. Key sources of data are score, the more acceptable the practice.
Community-based Monitoring Systems (CBMS)
report, census of population, socio-economic and Key Results/Findings
ecological profile of the municipalities, municipal and
barangay development plans, Municipal Comprehensive Table 12 presents a summary of the ratings of
Land Use Plan, Ancestral Domain Sustainable mining companies in Phases 1 and 2, classified
 47

according to levels of performance on the social Corp., Century Peak Corp. - Rapid City, SR Metal,
aspect. A score level greater than 2.8 indicates Tribal Mining Corp., Carmen Copper/ Atlas CMDC,
good performance; those scoring between 2 and Masbate GP Filminera, and Apex Mining Company
2.8 needed only minor correction; those with scores Inc.). Six mining companies performed poorly based
between 1 and 2 required major reforms in their on the social review. Three are nickel mining
social accountability; and those getting scores less operations (AAMPHIL Nat. Res. Exploration 2Bm,
than 1 are considered to be performing poorly on WELLEX Mining Corp. Mine 1, and Claver Mineral
the social aspect. In Annex Table 1, Column J, Development Corp.), two magnetite mining (Ore
Claver Mineral Development Corp.’s nickel mining Asia Mining & Dev’t. Corp. and Strongbuilt Mining
operation scored zero. Nonetheless, 19 or a third of Dev’t. Corp.), and one chromite operation (Mt. Sinai
the 45 mining operations needed major reforms; nine Mining Exploration and Dev’t.)
were under CMP (Benguet Corp. Nickel Mines, Inc.,
Eramen Minerals, LNL Archipelago Minerals, Inc., These indicate that several companies either had
Zambales Diversified Metals Corp., Emir Minerals issues with the communities or did not have a
Corp., WELLEX Mining Corp. Mine 2, Century significant impact on communities’ welfare. Fourteen
Peak Corp. - Casiguran, Greenstone Resources based of those are nickel mining companies (or 16 mining
on the social review. Pacific Nickel Philippines, Inc.) operations), of which ten are under CMP. Five gold
and ten were in operation (Adnama Mining Resources mining companies (Greenstone Resources, Tribal
Inc, Carrascal Nickel Corporation, CTP Construction Mining Corp., Carmen Copper/ Atlas CMDC, Masbate
and Mining Corp., Marcventures Mining and Dev. GP Filminera, and Apex Mining Company Inc.)

Table 12. Summary Scorings of the Social Aspect of Mining Operations by Companies Reviewed in Phases 1 and 2

Grand
CMP Operating
Total

Operating Total
Score Levels
CMP Total

Au, Ag, Cu
Magnetite
Chromite

Chromite
Au, Cu
Au, Ag

Au, Ag
Ni

Ni

Phase 1 3 2 12 17 1 2 7 10 27
Good 1 1 1 1 2
Needs minor reforms 1 3 4 1 2 2 5 9
Needs major reforms 1 5 6 4 4 10
Poor 1 2 3 6 6
Not Scored
Phase 2 1 2 3 5 2 1 7 15 18
Good 3 3 3
Needs minor reform 2 1 1 2 6 6
Needs major reform 1 2 3 3 1 2 6 9
Poor
Not Scored 1
Grand Total 1 3 2 14 20 5 3 2 1 14 25 45

CMP = Care and Maintenance Program.

Note:
Good or acceptable means <2.8 Needs major reforms means >1 and <=2 =
Needs minor corrections means >2 and <=2.8 Not acceptable or poor means >=0 and <=1
48 Chapter 6: Social Aspect of the Review

needed significant reforms in their social engagement managed by Wellex. This arrangement enables
and development, one of which was under CMP. A members to plant vegetables, fruit trees, and other
cursory review shows that those having an average crops like coffee beans and cacao. Income and
score of less than two in the social aspect operate in profit from selling the produce were considered
Region XIII and Region III. as income of the cooperative. In Dinagat Island,
Oriental Vision Mining Philippines Corporation
Out of the 45 mining operations reviewed, 25 were
helped organize a Women’s Cooperative, now
operational at the time of the review while 20
registered under DOLE.
were under the CMP. Their operational status directly
impacts SDMP because the budget is derived from • Focus on Specific SDMP Component During
the 1.5 percent of the operating cost. Nonetheless, the CMP Phase. Strong Built Mining Development
mining firms can glean best practices and learnings, Corp. continued implementing social development
whether they are in operational mode or under care programs though limited to health and sanitation,
and maintenance education, and socio-cultural values. Oriental
Vision Mining Philippines Corporation supported
the distribution of farm inputs, provision of fishing
Sustaining the SDMP during CMP
boats, an ambulance, motor vehicle transportation
Mining companies reviewed had different methods services, and bridges. It provided scholarships and
of maintaining their mining areas during CMP turned over water facilities to the community after
mainly due to a lack of established standard. construction. Mt. Sinai Mining Exploration and
Some companies could not keep up with the Development Corporation continued its scholarship
required activities, especially social development support for selected community members. A
and management. There was a concern that, unless public school teacher in one of the impact
regulated, CMP may be used as a subterfuge to barangays was a product of the scholarships
terminate employees and reduce cost for the from the mines.
implementation of the SDMP. Hence, the lesser the
operation, the lesser the operating costs, and the lesser Formalized and Engaged Community
the cost for SDMP. But there were several companies
that despite their condition, continued their social
Relations Office During Operations
management programs and innovative approaches to Phase
address emerging issues. The Community Relations Office (CRO) facilitated
Among those are: the implementation of projects and activities when
mining companies, such as Oceana Gold Phil, Rio
• Providing Alternative Livelihood Programs Tuba Mining Operations, and Cagdianao Mining
during CMP. Alternative livelihood programs,
Corp., followed the hiring qualifications for a
such as growing cash crops, skills training, and
Community Relations Officer. Through a participatory
other activities that harness native products or
approach, selecting the right partner-beneficiaries
even culture and traditions, were sustained. Most
and identifying priority needs were ensured. The
large-scale mining companies have adopted these
mining company and the community members also
livelihood programs as a strategy to sustain a
observed good community relations, owing to the
post-mining economy, which will inevitably
community organizers’ familiarity with local culture.
affect their employees.
Furthermore, regular conduct of quarterly meetings
• Formation of Cooperatives for Displaced and consultations of CRO with community stake-
Workers. To help its displaced employees, Wellex holders allowed participation, good communication,
Mine 1 formed a cooperative called Dinagat and resolution of conflicts if there were any. Monthly
Island Pure Organic Farmers Association internal and onsite monitoring is also conducted
(DIPOFA), which received a portion of the land together with community representatives.
 49

Key Stakeholders Participation in people and integrate their knowledge, experiences, and
opinions in the planning and managing development
SDMP Organization
programs and projects. On the other hand, SIA
In ensuring the success of SDMP, key local estimates the likely social consequences in advance of
stakeholders should be identified, along with their a planned change (Neuman 2014). With the knowledge
specific roles and functions. Mining firms approached generated from these processes, identifying appropriate
stakeholder participants in SDMP differently, while programs, projects, and activities (PPAs) was more
some simply followed the minimum requirements specific and responsive to the communities’ needs.
as indicated in the mandate. In many nickel mining The budget allotted was targeted and well-spent.
operations, the Representatives of the Host and Furthermore, the mining companies enhanced their
Neighboring Communities (RHNC), a multi-sectoral SDMP strategies and methods in addressing the local
body with broad stakeholder membership and working poverty situation. The RTNMC and the CNBC further
closely with the mining company on SDMP, is a improved the SIA by including poverty profiling,
common set-up in Mindanao mine sites. For instance, which provided important information in identifying
the RHNC includes community, civil society appropriate PPAs and developing the five-year SDMP
organizations, LGU, and NGA representatives in the with partners-beneficiaries. With this perspective, all
CARAGA region. PPAs are considered essential elements that can help
reduce poverty among community residents within
In Nueva Vizcaya, OceanaGold Philippines Inc. had
the host and neighboring communities. An important
sustained coordination with the Barangay Development
element in this poverty reduction strategy is fostering
Council, BLGU, and the municipal LGU, in close
active community participation in the planning and
engagement with the MGB. A Community Monitoring
implementation of all PPAs.
and Evaluation Team (CMET) was formed to check
and assess if SDMP plans and projects are effectively
implemented. Similarly, in Nueva Vizcaya, the FCF Other Notable Special Practices and
Mineral Corp., improved communication between the Projects
company and the community by assigning one liaison
SDMP Monitoring and Evaluation. Project
or focal person per host and neighboring barangay.
monitoring is typically done according to area, but
The Barangay Focal Person served as their contact for
Platinum Group Metals Inc. introduced an innovation
any SDMP-related concerns. Another innovation by
by assigning a personnel per specialization (e.g., focal
both FCF Mineral Corp. and OGPI was the institution
person for livelihood support services; social services;
of a Technical Working Group (TWG) composed of
and networking and partnership). This structure
provincial and municipal government agencies and
aimed to better implement and monitor programs
a CRO representative tasked with formulating
and projects in the communities.
and implementing policies and guidelines for the
SDMP. Other mining companies such as RTNMC, Information, Education, and Communication
TechIron, and Philsaga have not only reached the (IEC). Beyond typical IEC projects promoting
target beneficiaries but have also covered those not awareness on such issues on health and sanitation,
originally identified. capacity building seminars, part of the budget was
also directed to maintaining satellite ComRel offices.
Use of Assessment Studies in SDMP
Scholarships and Employment Packages. Some
Formulation good practices in terms of employment for many of
Apart from community immersion, some companies the mining companies involved hiring locals and
conducted assessment methods, such as the Parti- graduates of SDMP scholars and partnering and
cipatory Rapid Appraisal (PRA) and Social Impact cooperating with government institutions such as
Assessment (SIA), as part of the SDMP formulation TESDA and private institutions in capacity develop-
processes. PRA was conducted to learn from the ment. A notable example of a private partnership
50 Chapter 6: Social Aspect of the Review

was OGPI’s collaboration with Site Skills Training of Agreement between ICCs/IPs, CBNC, RTNMC,
(SST) Center for intensive work readiness training Rio Tuba Nickel Foundation, Inc., and NCIP
for miners in Nueva Vizcaya at the USD 2-million under SDMP. Agata Mining Ventures Inc. launched
underground metalliferous mining simulator of SST the Mabakas Techno-Demo Farm School, a
Center in Clark Field, Pampanga. TESDA-accredited organic farm school to assist the
Mamanwa and Manobo tribes. AMVI also rolled out
Community Network and Social Capital Enhance the Trainers’ Training Program for Cacao farmers
ment. Different organizations and cooperatives to invest their royalties in such crops to ensure
have been formed and organized, involving farmers, sustainable development.
fisherfolk, women, and IPs, among others, for sustained
livelihood projects. For instance, FCF Mineral Corp. Contribution to COVID-19 response. In support
supported IP women in using their skills in of the government’s COVID-19 pandemic response,
weaving textiles. This project ensured the continuation mining companies realigned funds of SDMP to assist
of this heritage craft among the women in the the host and neighboring communities, as well as the
host communities. AAMPHIL Natural Resources non-impact barangays in implementing enhanced
Exploration and Development Corp. has assisted in community quarantine, provision of relief goods,
establishing a community cooperative for elderly support for transport of Locally Stranded Individuals
community members by providing initial capital for (LSIs), provision of medical supplies and facilities,
the members to use to purchase goods to be sold. providing livelihood, and other activities, such as
IEC campaign on pandemic awareness and prevention.
Continuing Corporate Social Responsibility (CSR)
Programs. CSR is the continuing commitment
by businesses to behave ethically and contribute Summary and
to economic development (WBCSD Stakeholder
Dialogue on CSR 1998). Aside from enacting the
Recommendations
legally mandated SDMP, several companies have ComRel staff members who underwent training in
continued to carry through their CSR as a supplement Community Development possess the needed skills
for SDMP projects. Notable examples are Cagdianao to engage with community members. It was also
Mining Corp.’s annual medical missions and Taganito noted that having a good relationship with the
Mining Corp.’s provision of assistance and scholarships community helped facilitate operations. Some of the
to students is one of the high-impact programs, apart mines had established good rapport through frequent
from hospital services, housing, drilling of water consultations with the community members.
sources, and community relations assistance program.
The conduct of a social impact assessment (SIA)
IP Relations and Support Programs. While there helped identify relevant SDMP PPAs and assess
were issues related to royalty payments and the their value in improving people’s lives. When
uneven distribution of benefits among IP community necessary, the SIA provided a basis for adjustments
members, there are notable successes, such as the in the SDMP. The steady sources of income
IP programs of Philsaga Mining Corp., Berong Nickel significantly benefitted the communities. The mining
Corp., RTNMC, and Agatha Mining. Philsaga Mining operations provided not only employment, but
Corp. has forged a Memorandum of Agreement also an alternative livelihood for the agricultural
between the company and the Manobo tribes on the communities and small-business enterprises. The
royalty payments for SDMP-like projects on health, augmenting role of CSR projects and the formation
education, livelihood, and small infrastructure. of community-based organizations and cooperatives
Berong Nickel Corp. assisted the IP communities in greatly enhanced the SDMP implementation.
developing a Community Royalty Management Furthermore, strengthening IP relations is also crucial
Program (CRMP). Rio Tuba Mining Operations for greater ease of fulfilling the SDMP. The contribution
also helped strengthen the implementation of social of the mines to the COVID-19 efforts of the
development programs by making a Memorandum government was deemed helpful. This may be done
 51

to respond to particularly damaging calamities are thus advised to promote inclusive engagement
brought about by natural hazards like typhoons or with all stakeholders, so no one feels excluded in the
volcanic eruptions in the future. benefit sharing.
Counter dependence of HNCs to SDMP. One Provide funding for training on community
challenge encountered regarding sustainability is organizing or hiring a community organizer. Given
the barangay residents’s dependence on the mining the success of innovative community engagement, it
company, especially its SDMP and different is recommended to include funding for hiring a
community projects. The regular provision of funds community organizer or a similar arrangement
for projects in the communities through the SDMP with host and neighbor communities to help develop
should not make the municipality and the host and implement their respective social development
barangays dependent on the assistance of the programs. The cost can be partially taken from the
mining company. Local governments have the SDMP funds depending on the size of the mining
accountability to implement programs for the welfare firm. In like manner as the OGPI scheme, the BLGU
of their constituents and must initiate and fund may hire a coordinator to support and facilitate
projects that can help develop their communities. the SDMP projects. The SDMP Coordinator
In addition, preparing the host and neighboring undergoes orientation and training with the CRO
communities in the event of mine closure should of the miningcompanies in various processes of
also be incorporated in the SDMP. Some of the SDMP implementation and participates in training
recommended activities are the development of activities on community organizing.
sustainable enterprises, values orientation or
reorientation regarding financial management, and Conduct SDMP comprehensive impact evaluation.
better management of personal and family finances. Finally, it is recommended that mining companies
that have long implemented SDMP should conduct
Promote inclusive engagement of all stakeholders a comprehensive impact evaluation of their SDMP.
regarding benefit sharing. The conflict on benefits It is vital to determine what interventions should be
from the mining among various stakeholders carried out to prepare the community beneficiaries
remains a concern. Mining projects trigger conflict to cope with the challenges of life after mine.
between impact areas versus non-impact areas, direct Among the recommended indicators for inclusion
and indirect impact areas, IPs and non-IPs, and other in the evaluation are employment rates, enrolment,
stakeholders. Various groups want to enjoy benefits completion rates, the proportion of births attended
from these projects, and jealousy may arise between by skilled health personnel, and other similar or
groups over who gets more benefits. Companies related variables.
CHAPTER 7:
Economic Aspect of the Review
This chapter summarizes the economic experts’ operation. The contribution to the economy is
reports following the Review of the performance anchored on financial sustainability of the
of 26 mine operations in Phase 1 and 17 mine company and its operations. The third goal,
operations in Phase 2. The Review is grounded on improved welfare and human capital, in this
the concept of sustainable development, which review, means apart from increased household
means sustaining the well-being of the economy, income includes access to credits and basic services,
affected communities, and households. One of the reduction in poverty, enhanced human capital, such
core concepts of sustained well-being is that future as literacy, school enrolment and change in income
generations are bequeathed with at least the same of host and neighbor communities of the mining
level of stock of resources or capital level. Their operation. Fourth is sustained level biophysical
level of capital, regardless of type, is non-declining capital, which means that the economic well-being
over time to support future basic needs. This of households and communities in host and neighbor
so-called weak sustainability concept assumes that it communities of mining operations includes safe,
is possible to substitute one capital with another so clean, healthy, and sustainable environment that
long as the level of capital, measured using the same contributes to their economic and other human
metric, is maintained. The socioeconomic literature activities. Thus, mining companies must maintain
has identified five different classes of capital, namely, the environment in host and neighboring communities
financial, physical, human, social, and natural. Of of the mining operation. The fifth goal is sustaining
the five classes, natural capital is the most negatively natural capital, which includes abiotic and biotic
affected by mining operations. capital, such as habitats, species, air, soil, water,
oceans, minerals, and natural processes considered
Framework and Methodology as stocks from which ecosystem services flow
as inputs to economic and human activities. In
The goal of the review from the economics viewpoint,
this review, the experts assessed the extent and
apart from its contribution to national economy,
quality of these stocks and the changes in its capacity
is sustained growth of local economy and that the
to deliver ecosystem services as affected by mining
welfare of the communities at present are improved
operations. The aim was to ensure that natural capital
and can be maintained when mining operation
is sustained even beyond the mining operation.
eventually ceases. In the context of mining,
Extraction of minerals, which are non-renewable
economic welfare can be evaluated in terms of four
type of resources, affects other forms of natural
key goals. The first goal, financial sustainability of
capital, such as soil, surface ecosystems — forests,
mining operation, as earlier defined in the technical
inland waters, coastal and marine ecosystems. Of
aspect of review means sufficient capitalization,
interest from a weak sustainability standpoint is the
stable sales revenue, cost efficiency, and sufficiency
substitutability of natural capital with other forms
of mineral resources. The second goal, contribution
of capital if these are diminished, lost, or damaged
to the economy, includes revenue to national and
because of the mining operation.
local government in the form of excise and other
taxes, fees, and royalties, and to local economy, which
includes employment, local taxes, local expenditure
Method of Data Collection
of employment income, added business, enterprise Assessing financial sustainability and contribution
and household income resulting from mining to the economy of mining operations required
54 Chapter 7: Economic Aspect of the Review

review of company outputs, financial reports, citizens, peace and order, non-government or civil
markets, and mineral resources. Many of these society organizations, schools, credit and finance,
reports are submitted in compliance with government and other key representatives participate in these
regulatory requirements. At the minimum, key on-site discussions and dialogue. For detailed
documents needed for this review are audited or information, a sample of households and mine
unaudited financial reports, Annual EPEP, SDMP employees were interviewed using a computer- or
Expenditures, Final Mine Rehabilitation Plan, an android-aided survey. The computer-aided or
Mineral ProductionReports submitted to MGB, android-based employee survey was intended to
Contingent Liability Rehabilitation Fund (CLRF), elicit information on the following: (a) comparison
Sustainability Reports, the Mineral Production of income of non-mining and mining employment;
Sharing Agreement document, EIS, and the (b) distribution of expenditures on mining income
DMPF. Other reports, such as the five-year SDMP that will help determine local capture of income; (c)
Impact Assessments, carbon audit and greenhouse indirect contribution to improving local enterprises;
gas inventories, and other related studies were (d) comparison of assets of mining and non-mining
also examined. households; and (e) analysis of employment by
To estimate a mining operation’s contribution to vulnerable groups. Key informant interviews with
the local economy, reports on the payments of fishers, farmers, barangay health workers, barangay
local taxes, royalties, allocation, and expenditures nutrition scholars, teachers, and youth sought to
on Social Development and Management Program to elicit information on the mining operations’
and Corporate Social Responsibilities are assessed. qualitative and quantitative impacts.
Employment data that detail the origins of Spatial data analysis using GIS and remote sensing
employees (i.e., local or outside the host and neighbor data accessed through Google Earth Pro and
communities) and financial statements provide an
Google Earth Engine for site of mine operation and
estimate of the mining operation’s share in the
supplemented by GIS information provided by the
employment income. Municipalities’ poverty statistics
company. These data are used as proxy measure of
provided by PSA, and the Community-based
the impact of mining operation on ecosystems its
Monitoring System (CBMS) of the DILG, LGU
resources mostly plant resources, and other abiotic
data on local revenues from taxes, and other mining-
resources such as surface and ground water. Overlay
related activities are reliable sources of information.
of the mining tenement, boundary of the existing
Other sources included national statistics, such as
MPSA and proposed expansion would show which
gross domestic product, regional domestic product
resources were and will be affected by past, present
from PSA, and income and expenditure data of
and mining operations.
LGUs from the Bureau of Local Government
Finance of the Department of Finance, and share of
national wealth. The Ancestral Domain Sustainable
Analytical Approach
Development and Protection Plan and Community Three evaluation frameworks commonly used in
Royalty Development Plan of IPs were also reviewed evaluating the economic contribution of mining
in some mine operations. operations are benefit-cost analysis (BCA), economic
impact assessment, and impact evaluation. Economic
The review of improvement in household and efficiency suggests that given current constraints, all
community welfare required the conduct of FGDs capital or resources are employed to maximize the
among host and neighbor communities. FGDs returns to society. These are briefly described below.
are intended to elicit information from local
stakeholders on the contribution of the mining Economic Impact Assessment. Economic impact
operation to sustaining local economic growth and analysis traces direct, indirect, and induced impact
sustaining livelihood of households. Representatives of an investment in one industry on other industries
from local government, trade and business sector, through its backward and forward linkages. In this
farmers, fishers, health workers, women, senior review the focus is on review of contribution to the
 55

local and national economy in the form of taxes, covers other types of costs from the perspective
royalties, fees, and share from natural wealth, of the economy. These costs include: (a) direct
and review of geographic/spatial distribution of mining – personnel, mobile equipment, processing,
employees and their pattern of expenditures or use of camp and travel, labor, services, supplies; (b)
mining income. In some areas this was supplemented indirect mining; (c) externalities; and (d) damages.
with a review of regional input-output estimates For analysis purposes, the direct mining costs
on the direct, indirect, and induced effects on other are categorized into (a) unit-based costs, which
industries with link to the mining industry. include fuel, lube, gas and power, services and
Impact Evaluation. Impact evaluation, in the supplies, labor and salary; and (b) activity-based
case of mining operation, this includes assessing costs, which include drilling, engineering, truck
the welfare of host and neighboring communities haulage, and general administration, — technical
compared with either a baseline or a counterfactual. overhead, management.
This uses the information from household and Local economic growth analysis. Analysis of
employee survey. The aim is to measure the change secondary data from LGU, PSA, BIR, DOF and
in welfare of the community and household brought BLGF to include taxes from mining operations, fees
about by mining operation in the area. Ideally, and charges, land-use maps, poverty statistics,
baseline indicators on household welfare before and income, and expenditures of host municipality or city.
after the mining operation are compared. A significant
positive difference implies contribution of the Accounting of Ecosystems and Natural Capital.
operation in improving welfare. In the absence of This includes accounting of ecosystems extent,
baseline information before the mining operation condition and ecosystem assets, and the provision
a counterfactual site is compared with the host and of ecosystem services. The two major steps are
neighbor communities in terms of pre-identified physical accounting using various accounting tools
indicators of welfare. If both baseline before and modeling techniques. The outputs are matrices
the mining operation and the counterfactual graphs, and tables.
information are not available, the results of the FGD
serve as proxy, which imply that the result of the Key Results/Findings
analysis are just indicative figures that can be
verified with more detailed data collection. In the Table 13 presents the number of mining companies
present case, this evaluation uses indicative results reviewed in Phases 1 and 2, classified according to
of FGDs, KIIs and relevant data form both employee performance levels on the economic aspect. A score
and household surveys. level greater than 2.8 implied good performance;
those between 2 and 2.8 needed only minor corrections;
Benefit Cost Analysis. BCA evaluates the net those with scores between 1 and 2 required major
economic change or improvement in the welfare of reforms in their operations; and those scoring less
society when an intervention, investment, program, than 1 were considered to be performing poorly.
or project is undertaken. Using the BCA framework, The results of the social and economics reviews
economic benefits and costs of a mining operation have similarities in mining operations that were
are estimated. It was asserted that mining and deficient in performance. In Annex Table 1, of the
mineral processing provides the following benefits: 20 mining operations under CMP, eight needed
(a) providing livelihood to local communities; (b) major reforms on the economic aspect. These were
generating income for the local government, thereby Benguet Corp. Nickel Mines, Inc., Eramen Minerals,
directly contributing to its economy; (c) promoting a Mt. Sinai Mining Exploration and Development.,
more efficient use of energy, saving people money; Krominco, Inc., Libjo Mining Corp., Oriental Vision
and (d) promoting environmental awareness through Mining Phil. Corp., Sinosteel Phil, N.Y. Mining
rehabilitation programs resulting in more renewable Corp., Claver Mineral Development Corp., and
sources than ever. Apart from private investment Century Peak Corp.– Casiguran. Three companies
and direct operations costs, the BCA framework engaged in nickel mining, namely Ore Asia Mining
56 Chapter 7: Economic Aspect of the Review

& Dev’t. Corp., Zambales Diversified Metals Mining Ventures Inc., and Philsaga Mining
Corp., and Oriental Synergy Mining Corporation Corp. One company, Pacific Nickel Philippines,
were considered to be performing poorly on the Inc., was not given an overall score on the economic
economic aspect. Only four mining operations in aspect despite scoring on sufficient capitalization
Phase 2 Review were found to be showing good and provision of employment income because its
performance. These are Cagdianao Mining Corp., mine site is under re-exploration and presently, not
Rio Tuba Nickel Mining Corporation, Agata in a production stage.

Table 13. Summary of Scoring of the Economic Aspect of Mining Operations by Companies Reviewed in
Phase 1 and 2

CMP Operating

CMP Total

Au, Ag, Cu

Operating
Magnetite

Grand
Chromite

Chromite

Total
Au, Cu
Au, Ag

Au, Ag
Score Levels Total
Ni

Ni
Phase 1 3 2 12 17 1 2 7 10 27
Good 1 1 2 1 4 5 7
Needs minor reforms 1 3 4 1 3 4 8
Needs major reforms 2 6 8 1 1 9
Poor 1 2 3 3
Not Scored
Phase 2 1 2 3 5 2 1 7 15 18
Good 1 3 4 4
Needs minor reforms 1 1 4 2 1 3 10 11
Needs major reforms 1 1 1 1 2
Poor
Not Scored 1 1 1
Grand Total 1 3 2 14 20 5 3 2 1 14 25 45
CMP = Care and Maintenance Program.
Note:
“Good or acceptable means <2.8 “Needs major reforms means >1 and <=2 =
“Needs minor corrections means >2 and <=2.8 “Not acceptable or poor means >=0 and <=1

Four out of seven operating nickel mines in Phase 1 the nickel mines under CMP in Phase 1 needed major
review were found to have good performance. These reforms while three of them were poor performers.
are Carrascal Nickel Corporation, CTP Construction In Phase 2 of the Review, one (Century Peak Corp.
and Mining Corp., Hinatuan Mining Corporation, - Rapid City) out of seven operating nickel mines
and Marcventures Mining and Dev’t. Corp. Half of needed major reforms.
 57

Financial Sustainability
The technical aspect of this Review listed sustain- during slump years and when the world markets
ability indicators: sufficient capitalization, stable sales are depressed. Table 14 summarizes the scoring
revenue, cost efficiency, and sufficiency of mineral by economics experts on capitalization of mining
resources. Undertaking this Review required detailed operations reviewed in Phases 1 and 2. A score of 2
financial data from all mining operations. These and above means sufficient capitalization, while
data, however, are not complete for all the mining those scores below mean insufficient capitalization.
operations as some only had indicative information. Nine of those mine operations reviewed in Phases
Of those mining operations reviewed with available 1 and 2, have insufficient capitalization thereby can
financial data, their level of financial sustainability be considered having poor financial sustainability. All
is varied. A criterion adopted by the economics those are under CMP (six are nickel, one chromite, one
experts is “sufficiency of capitalization,” especially magnetite, and one gold and silver mining operators).

Table 14. Number of Mining Operations Reviewed in Phase 1 and 2 by Type of Commodity and Status of Operation

CMP Operating

Review Phase,
Au, Ag, Cu
Magnetite

Chromite
Chromite

Capital
Grand Total
Au, Cu
Au, Ag
Au, Ag

Sufficiency

Total
Total

Rating Level
Ni
Ni

Phase 1 3 2 12 17 1 2 7 10 27

3 2 1 3 6 1 1 6 8 14

2 4 4 1 1 5

1 4 4 1 1 5

0 1 1 2 2

NA 1* 1 1

Phase 2 1 2 3 5 2 1 7 15 18

3 2 4 6 6

2 .5 1 1 1 3 3

2 1 1 2 2 1 5 6

1 .5 1 1 1 1 1

1 1 1 1

Grand Total 1 3 2 14 20 5 3 2 1 14 25 45

CMP = Care and Maintenance Program.

Note: *This is an exception since no score was provided on this criterion for Emir Minerals Corp.
58 Chapter 7: Economic Aspect of the Review

It was observed that those with high production Mining Corporation, Filminera Mining, OceanaGold
capacity ranked higher in terms of financial Philippine Inc., and Lepanto Mining. Figure 27
sustainability. Among those with high scores in presents the top ten mining companies in terms of
financial sustainability in the nickel group were annual average revenue. These were based on available
Cagdianao Mining Corporation, Hinatuan Mining data provided to the MICC Review teams. Data on
Company, RTNMC (all four are part of the Nickel the financial sustainability of other gold operations
Asia Corporation group of companies), CTP were not available during the review period. Those
Construction and Mining Corporation, and Carrascal ranked higher in financial sustainability were found to
Nickel Corporation. For gold, these were Philex have sufficient ore reserves to sustain their operations.

Contribution to National and Local Economy

Reports of the contribution of mining and quarrying large urban center supplies most consumption
industries to the economy at the national level have goods. These urban centers get the most share of
been aggregated. At the municipal level, mining mining employment income. It is unclear if local
companies are contributing to the local economy revenues from mining are channeled back to
from employment income (majority for locals), local providing essential services in the host and neighbor
taxes and fees, SDMP and environmental protection communities. Table 15 presents a summary scoring
and enhancement program budget expenditures, and by economics experts on the contribution to local
locally established backward and forward linkages. revenue, taxes, fees, and royalties. A score below 2
Backward and forward linkages include businesses means that the mining operation has a less significant
and enterprises created to support direct mining contribution to the local economy, implying that local
activities. However, in many remote mining revenues from mining are not adequately captured in
communities, only small proportions of employment the local economy. Nine mining operations received
income are locally captured, especially if a nearby such poor ratings.

Figure 27. Estimate of Annual Average Revenue of Top 10 Mining Companies

Reviewed by MICC

Estimate of Annual Average Revenue, Php million

Oceana Gold Philippines 13,551

Carmen Copper 10,864

Philex Mining Corporation 10,379

Taganito Mining Corporation 6,209

Rio Tuba Nickel Mining Operations 4,544

Carrascal Nickel Corporation 3,405

Filminera Mine 3,195

CTP Construction and Mining Corp. 2,974

Hinatuan Mining Corporation 2,332

Marcventures Mining and Dev. Corp. 1,912

10,000 20,000
 59

Table 15. Number of Mining Operations Reviewed in Phases 1 and 2 by Type of Commodity and Status of Operation
with Corresponding Score on “ Revenue from taxes, fees and royalties”

CMP Operating

Au, Ag, Cu
Magnetite
Chromite

Chromite
Review Phase,
Grand Total

Au, Cu
Au, Ag

Au, Ag
Rating Level

Total

Total
Ni

Ni
Phase 1 3 2 12 17 1 2 7 10 27

3 1 4 5 1 5 6 11

2 1 1 5 7 1 1 2 9

1 1 1 2 4 1 1 2 6

0 1 1 1

Phase 2 1 2 3 5 2 1 7 15 18

3 1 1 4 1 5 10 11

2 .5 1 1 2 2

2 1 1 1

1 .5 1 1 1 1 2

1 1 1 1

N o t sco r e d 1 1

Grand Total 1 3 2 12 20 5 3 2 1 14 25 45

CMP = Care and Maintenance Program.

How the share of natural wealth is used requires government unit. The PSA data on real regional
further in-depth study. Long-running mining GDP showed the high contribution of mining and
operations, such as Lepanto, Benguet Corporation, quarrying in areas with high capacity and high
Filminera, RTNMC, have visible contributions to revenue mining operations (See Figure 11).
the development of infrastructures and support The economics experts recommended regular
services facilities, particularly mining towns. Mine compiling and reporting of information on the capture
operations that have existed longer than those and contribution of mining to the local economy.
relatively new have shown to contribute more Further, a detailed study is crucial since the input-out
annually to local economic activity through its put analysis only captures industry-level information.
sustained payment of excise, real estate, and business The conduct of a survey of income of mine-related
taxes both to the national treasury and the local employment would be the starting point of research.
60 Chapter 7: Economic Aspect of the Review

Economic impact on the community downward trend from 2003 to 2015, namely Narra
in Palawan, Doña Remedios Trinidad in Bulacan,
and household
Basilisa, Libjo, and Cagdianao in Dinagat Islands,
In place of a rigorous method of impact evaluation, Santiago in Agusan del Norte, Bunawan in Agusan
the process of discovering the impact of mining del Sur, Aroroy in Masbate, and Maco in Davao de
operations was done through structured FGDs, Oro (formerly Compostela Valley). The rest of the
household surveys (including both mining and non- 32 towns with mining operations had increasing
mining employees), and key informant interviews. or fluctuating poverty incidence in one or two
These FGDs and surveys of households and poverty assessment years, mostly 2012, which is
employees, which social and economic experts rather peculiar. Poverty incidence in towns with active
jointly or separately conducted in host and neighboring mining has a downward trend, indicating community
communities, revealed varying impacts of mining welfare improvement. Figure 8 summarizes levels
operations. Some key evaluation variables in both of poverty incidence in mining towns based on
the FGDs and household surveys, which were the 2015 PSA report, based on the 2015 PSA
considered as measures of economic impact, are report. Of the 32 mining towns where large-
increased income, increased asset ownership (e.g., in scale metallic mining companies operate, 20
both household and productive assets in agriculture or more than half have above 30 percent poverty
and other livelihoods), improved access to basic incidence in 2015.4 Of these 20 towns, poverty
household services (particularly health, sanitation, incidence decreased in five towns by more than ten
and pollution reduction), increased access to financing percentage points between 2012 and 2015. These
and credit facilities (micro credits and financing are Basilisa, Libjo (Albor), Tubajon, Loreto, and
institutions), and improved human capacity (e.g., Figure 28. Number of Mining Towns by poverty incidence
higher education, and skills training). On average, the levels in 2015 Poverty Incidence Levels
income of host and neighbor communities increased,
as well as the assets and access to credits for most
mining companies. In some mining operations
where household surveys were conducted, a test of
significant difference between host and non-host
communities in terms of assets and access to
services revealed different results. The result showed
significant differences for long-term mining
operations, except those in Benguet Gold Operation.
This likely outlier could be explained by the presence
of small-scale miners in non-host barangays in the
same municipality of Itogon.

Another macro indicator reviewed was the change in

the poverty level using the poverty assessment data,
particularly poverty incidence in years 2003, 2006,
2009, 2012, and 2015. Municipal level or small area
estimates for 2018 are not yet published by the PSA.
Overall, PSA's estimates of poverty incidence in
nine towns with mining operations show consistent

4 According to PSA (2019c), the official poverty incidence estimate of 21.6 percent in 2015 has been revised to 23.3 percent to reflect
rebased prices from a base year of 2006 to 2012, and to incorporate counts from the 2015 Census of Population .(Albert, Abrigo, Quimba,
& Vizmanos 2020).
 61

Cagdianao in Dinagat Islands. Therefore, it is Summary and

imperative to sustain this improvement in welfare
and that mining beneficiaries invest their returns or
Recommendations
income on assets that would increase productivity Mining revenues must be effectively used for
and generate continuing incomes. Income from improving community welfare. Mining provides
mining should eventually be replaced by income significant gains for the national government, but
from other sources once the mines have been the local government only receives up to 15 percent.
depleted. On access to basic services, in mine areas In this regard, it is suggested that there should be an
where SDMP were found to have been effectively increase in the mining revenue share at the local level.
implemented and appropriately allocated, the number Re-investing mining revenues received by the LGUs
of community organizations and cooperatives has to enhance basic services and human capital, such
grown and access to basic services have improved. as promoting the development of local businesses
A review of literature, analysis of FGDs, and to increase local capture of mining employment
household interviews conducted on-site show that expenditures, helps increase local economic activities
host communities of mining operations have higher and human resources development. Considering
cash and non-cash income relative to adjacent the findings by Albert et al. (2020), the major factor
non-mining communities. for non-participation in the labor market is the lack
of schooling. Depositing a certain percentage of this
Natural Capital Sustainability revenue in a trust fund to serve as social safety
nets and risk buffer, especially in calamities and
Before the enactment of the Mining Act of 1995, emergencies, such as the COVID-19 pandemic, is
maintaining the level of natural capital was not the likewise recommended.
focus of mining operations, as shown in the minimal
investment of companies to enhance vegetation. Substantive use of funds for social and environ-
Except in those good performing mine operations, mental programs to build up other forms of capital.
most on-site development activities were mere Most mining operations were found in communities
rehabilitation of mined-out areas. Only a few invested with high poverty incidence because of limited
in estimating their carbon footprint and measuring productive assets, basic services, and human
carbon sequestration of existing vegetation. There is capital. In those settings, mining companies must
much less effort in improving ecosystem conditions allot budget from their SDMP, EPEP, FMRDP,
and the provision of ecosystem services that should Mine Rehabilitation Fund, Contingent Liability
have been part of the AEPEP. Not one company had Rehabilitation Fund, and funds for the MMT to build
a complete estimate of the material balance, the productive and renewable capital that can substitute
number of residuals of mining operations, and the depletable minerals. Even part of the funds for their
waste-to-product ratio of mining operations. Corporate Social Responsibility projects can be
aligned with this the thrust of increasing such capital.
As mentioned in the report of environment review, Further, using the previous year’s operating cost as
some mining operations have impaired the capacity a basis for funding SDMP may be disadvantageous
of the ecosystems to produce goods and services to host communities when mining operations are
in their mining sites. With a low rehabilitated-to- suspended. It is recommended that an annualized
disturbed area ratio, including an altered ecosystem, budget be prepared up to the abandonment phase of
there is undoubtedly an impact on the capacity to the mining operations.
provide ecosystems goods and services. Hence,
restoration of lost renewable capital shall be the Commerce or businesses must increase in
target of the FMRDP and a regular component of communities to improve the local capture of mining
the AEPEP. Any related research should seriously employment expenditures. Mining companies must
be fed into the enhancement of the FMRDP and move beyond short-lived SDMP livelihood projects
shall guide the AEPEP. and instead promote long-term trades within and
62 Chapter 7: Economic Aspect of the Review

expand towards managing local enterprises and mining operators, such as those in Bataraza, Palawan,
private businesses. Activities under the SDMP and where RTNMC and CBNC are located, the SDMP
EPEP must ensure that local communities prioritize fund management through a single foundation appears
projects and provide incentives for establishing to align effectively with LGU’s plans and programs,
small- and medium-scale enterprises within both at the barangay and municipal levels. Such a
mining communities. scheme minimizes budget splitting and focuses on
priority projects with significant welfare contributions.
Invest in substitutes of depletable or non-renewable
natural capital (i.e., mineral ore) and renewing Account Local Natural Wealth, Natural Capital,
depreciated natural capital. Forests, coastal, and and Ecosystem Services. A comprehensive wealth
marine ecosystems are affected by mining operations accounting, beginning with ecosystem accounting,
to the extent that their original functions and may be undertaken to assess various assets’ current
ecosystem services to economic and other human and future potentials, such as ecosystem, human,
activities cannot be restored or duplicated in-situ social, and manufactured assets. It is important to
or through offsetting in different sites in a short determine the depletion and depreciation of such
period. The FMRDP must be planned and funded capital. Further, mining companies must invest
adequately to build this renewable and managed resources to improve their biodiversity and ecosystem
natural capital. Thus, “rehabilitation” and “restoration” accounting capacity within their mining tenements.
must approximate the loss in value of these
functions and ecosystem services that support local Improvement of Monitoring and Evaluation
economic activities. (M&E) and data management of mining companies.
Mining companies must invest in new data
Consolidate the implementation of SDMP within a management technologies and personnel to improve
single LGU jurisdiction. Some negative externalities their operations, M&E, and reporting systems. For
know no boundaries. In the context of integrated example, the integration of data generation and
ecosystem framework, the benefits and costs (including monitoring in the SDMP, which can be linked to the
externalities) are shared by all in the same watershed. Community-based Monitoring System (CBMS) of
Hence, it is suggested to review the selection process the LGU, can help facilitate M&E. Mining companies
of SDMP beneficiaries to include all those within the should exercise due diligence in preparing the reports
affected watershed/s and not based solely on political they submit to the MGB and other agencies to
boundaries. In municipalities or cities with multiple minimize data discrepancies.
CHAPTER 8:
Summary & Conclusion
This chapter summarizes the five aspects of large- was in Phase 1 and three mining operations were
scale metaling mining operations review. The ratings in Phase 2. More than half or 23 of those reviewed
and performance indices were summarized according needed minor corrections (i.e., 12 in Phase 1 and
to the type of commodity and status of mine operation 11 in Phase 2). 15 mining operations needed major
in Phases 1 and 2 of the Review. reforms, 12 of which were reviewed in Phase 1.
These were largely nickel mining operations, half of
Rating of Mining Operations which were in Region XIII and the other half
were spread in different regions. One nickel mining
and Performance Index company (Century Peak Corporation - Casiguran)
Table 16 summarizes the scoring results by commodity and a gold-silver mining operation, both currently
type of mining operations reviewed in Phases 1 and operating and passed the DENR audit in 2016, got
2, which were disaggregated by the operational status an index of “Needs Major Reform.” A cursory
and phase of the Review. Only four mining operations evaluation showed this largely scored poorly in the
were considered to have good mining practices; one environmental, social, technical, or economic aspect.

Table 16. Summary of Mining Operation Rating Index in Phases 1 and 2 of the Mining Operations Review

Index by Commodity Phase 1 Phase 2 Grand

Group CMP Operating Total CMP Operating Total Total

Acceptable 1 1 3 3 4

Au, Ag, Cu 1 1 1
Ni 3 3 3
Needs Minor Corrections 4 8 12 1 10 11 23

Au, Ag 1 4 5 5
Au, Ag, Cu 2 2 2
Au, Cu 1 1 1
Chromite 1 1 1 1 2
Magnetite 1 1 1
Ni 2 7 9 3 3 12
Needs Major Reforms 11 1 12 1 2 3 15
Au, Ag 1 1 1
Au, Cu 1 1 1
Chromite 2 2 2
Ni 9 9 1 1 2 11
64 Chapter 8: Summary & Conclusion

Index by Commodity Phase 1 Phase 2 Grand

Group CMP Operating Total CMP Operating Total Total

Not Acceptable 2 2 1 1 3
Magnetite 1 1 1
Ni 1 1 1 1 2
Grand Total 17 10 27 3 15 18 45

CMP = Care and Maintenance Program.

Note:
Good or acceptable means <2.8 Needs major reforms means >1 and <=2 =
Needs minor corrections means >2 and <=2.8 Not acceptable or poor means >=0 and <=1

The scoring summaries above were based on the during the Review. All of those needing major
consensus among expert groups to establish a set of reforms were reviewed in Phase 1. It must be noted
criteria based on the scope provided by the MICC. that this averaging method masked individual
performance but indicated that nickel, chromite,
Table 17 summarizes the average rating of mining
and magnetite mining operations are the ones
operations reviewed by commodity type. Nineteen
that needed major reforms. Hence, the regulatory
nickel mining, three chromite mining operations, two
agency should emphasize implementing these
magnetite mining operations, needed major reforms;
major reforms.
all are under the Care and Maintenance Phase

Table 17. Summary Rating of Mining Operations by Phase of the Review and by Commodity

Review Phase, Number of Average Rating by Status of Operations Overall Average

Commodity Mining Care and Operational during Rating
Operations Maintenance Phase the Review
Phase 1 27 1.7 2.4 1.9
Au, Ag, Cu 1 2.9 2.9
Au, Cu 2 2.0 2.0
Chromite 3 1.8 1.8
Magnetite 2 1.7 1.7
Ni 19 1.7 2.4 1.9
Phase 2 18 1.6 2.5 2.3
Au, Ag 6 2.4 2.5 2.5
Au, Ag, Cu 2 2.3 2.3
Chromite 1 2.5 2.5
Ni 9 1.4 2.6 2.3
Grand Total 45 1.7 2.4 2.1

Table 18 shows the scores corresponding to the score between 1.0 and 2.0. Poor (Not Acceptable)
indexes in Chapter 2 on the scoring procedure (see performing mining operations have an average
Table 6). Good or acceptable mining operations score of less than 1. These mining operations scored
have an overall average score greater than 2.8. Those just above 1 and below in all the five aspects of the
with “Minor Corrections” have an overall average Review, which suggested significant legal issues, poor
score between above 2.0 and 2.8. Those with technical accomplishment, environmental challenges,
“Major Reforms Needed” have an overall average limited community engagement at the site of mining
 65

operations, and limited economic contribution. In mining operation is in that category. The consensus
Phase 1 review, one magnetite and one nickel mining among the experts is that these companies must be
operations are at that level. In Phase 2, one nickel re-evaluated, if not suspended.

Table 18. Distribution of Mining Operations by Range of Overall Average Score Per Mining Operation

CMP Operating

Grand Total
CMP Total

Au, Ag, Cu

Operating
Score Levels

Magnetite
Chromite

Chromite
(Index Level)

Au, Cu
Au, Ag

Au, Ag

Total
Ni

Ni
Phase 1 3 2 12 17 1 2 7 10 27
Good 1 1 1
Needs minor reforms 1 1 2 4 1 7 8 12
Needs major reforms 2 9 11 1 1 12
Poor 1 1 2 2
Not Scored 0
Phase 2 1 2 3 5 2 1 7 15 18
Good 3 3 3
Needs minor reforms 1 1 4 2 1 3 10 11
Needs major reforms 1 1 1 1 2 3
Poor 1 1 1
Not Scored 0
Grand Total 1 3 2 14 20 5 3 2 1 14 25 45

CMP = Care and Maintenance Program.

Note:
>2.8 = Good <=2 and >1 = Required major reforms
<=2.8 and >2 = Needs minor correction <=1 and >0 = Poor performance

Table 18 shows that 12 firms under the Care and key players: 2 – most liable; 1 – indirectly liable; and
Maintenance Program and three currently operating 0 – no influence.
needed major reforms (overall score below 2); three
The initial assessment results indicated that
are not acceptable (red-colored, all under CMP
companies garnered 82 points (77 %) of the possible
included in Phase 1); all the rest were considered
total score of 106 (2 points x 53 identified issues).
to have acceptable operations or only needing Thus, the companies are viewed to be mostly the
minor corrections. root cause of the violations. However, DENR-
In addition to the current scoring, the technical review MGB’s score is not insignificant, as it garnered 63
team in Phase 2 conducted an initial General Root points or 59 percent. Expectedly, the LGU has the
Cause Analysis to determine the relative “weights lowest liability score, which was at 17-18 percent.
of liabilities” of three key players, namely the The results reveal that, although mines are mainly
government regulator, the mining company, and the the most liable among the three stakeholders, there
local government unit, with regards to the issues are, nevertheless, issues regarding the performance
related to the industry. These three specific key of DENR-MGB’s regulatory functions.
players were identified as the DENR-MGB, the These issues are confounded by the uneven
mining company, and the LGU (which manages the distribution of regular positions across all regional
host community). A simple scoring is given to these offices. Each office is given about the same number
66 Chapter 8: Summary & Conclusion

of technical positions, regardless of the number of distribution indicates that 75 percent of mining
regulated mines. Region XIII, which has the greatest operations in Region VIII (3 out of 4) needed minor
number of active mines in the Philippines, is the most correction; two out of three mining operations in
understaffed. To augment their technical staff, the CAR needed minor correction. Overall, 45 percent
MGB Region XIII office resorts to extended hiring of (10 of 22) of mining operations, 36 percent (8 of 22),
contractual personnel, which which has implications and 9 percent (2 of 22) need minor correction, and
to the performance of the agency’s technical staff major reform. These imply that 45 percent (10 of 22)
directly involved in actual regulation work. needed and major correction or have poor rating. All
Table 19 summarizes the number of mining operations the four mining operations in Region III need either
according to Scoring Index by region. The summary major reforms or failed substantially in the scoring.

Table 19. Performance Index Based on Individual Mining Operations by Region

Index by Region Phase 1 Phase 2 Grand % of

CMP Operating Total CMP Operating Total Total Operations
in Region
Acceptable 1 1 3 3 4
Region II 1 1 1 50
Region IVB 1 1 1 33
Region XIII 2 2 2 9

Needs Minor Correction 4 8 12 1 10 11 23

CAR 1 1 1 1 2 67
Region II 1 1 1 50
Region IV-B 2 2 2 67
Region V 1 1 1 100
Region VII 1 1 1 100
Region VIII 2 2 1 1 3 75
Region XI 3 3 3 100
Region XIII 2 5 7 1 2 3 10 45
Needs Major Reforms 11 1 12 1 2 3 15
CAR 1 1 1 33
Region III 4 4 4 80
Region VIII 1 1 1 25
Region XII 1 1 1 100
Region XIII 6 6 1 1 2 8 36
Not Acceptable 2 2 1 1 3
Region III 1 1 1 20
Region XIII 1 1 1 1 2 9
Grand Total 17 10 27 3 15 18 45

On the Legal Aspect

Overall, a general observation on the legal aspect Some current procedural practices, such as temporary
was that while the paper compliance was deemed permits or care-and-maintenance program, have
sufficient, except for a few, it was not matched by allowed companies to operate or hold on to their
actual performance. There are cases when companies are tenements even when global metal prices remain
compliant with operations or pollution requirements. depressed. These arrangements, especially the CMP,
Still, they do not use the most appropriate procedure have created a lot of idle mines where the economic
or anti-pollution technology and facilities to protect and social aspects are negatively affected; only
the environment. environmental maintenance remained as the main
 67

activities. These are discussed further below in this solving the abundance of low-grade stockpiles;
section’s social and economic parts. (c) do a cost-benefit analysis considering these two
possibilities. Further, the company may want to earn
Despite the time under operations, penalties were
other ISO Certifications like OSHAS 18001, and in
deemed not commensurate to the violations
addition, must update its 14001 certifications.
committed. Some violations, however, merit further
review, whereas some penalties require suspension Water is used extensively for dust control and
of the Environmental Compliance Certificate and nursery operations in most mine operations. These
non-issuance of Ore Transportation Permit and/or two areas take up 80 percent of the water needs, while
Mineral Export Permit until the ISO Certification the balance is made up of human consumption,
is secured. medical applications, and others. Mining companies
are advised to explore supplemental measures to
Contract with communities and IPs, where there regulate water use and explore the development of
are issues in the compliance or adherence to the a water account following United Nations System
current contract, must be further reviewed. The change of Environmental Economic Accounting (UN SEEA)
the company operating within a tenement under the guidelines. Second, the persistent issue is the substantial
former owner usually complicates the issues. Such volume of dust generated by the mining operation as
non-adherence to contractual arrangements creates well as by the roads and stockpiles. Runaway dust
conflicts with communities, negatively affecting the is a persistent issue, especially for sites with nearby
reputation and technical operations. communities dependent on mining operations. Clouds
Mining operations create externalities that are factored of dust affect daily activities and, most especially, the
in its cost, thereby transferring the burden to the health of the communities.
affected communities. In dealing with dust pollution, The favorable nickel price in the world market
a mining company conducts road watering. However, potentially triggers sales and increases the production
the frequency and coverage of road water are often of mines to take advantage of the good market price.
insufficient to cover areas and communities affected. This condition leads to a ramp-up in production, not
included in work plans, which leads to more areas
On the Technical Aspect being opened simultaneously, potentially affecting
the population and the environment. The desire to
Four gold mining operations in Luzon with operations sell more DSO resulted in the opening of extensive
spanning more than 100 hundred years employ areas without any rehabilitation and re-vegetation.
different stages of technology. The newer gold Overall, while providing quick revenues, DSO
operation of OGPI in Nueva Vizcaya is advanced does not optimize the value of soil resources.
and considered a global standard. With this as the Considering the ample nickel resource in the
benchmark, two gold mining operations in Benguet country, processing nickel/iron ore locally is value-
are relatively below this benchmark. The two nickel adding and generating further backward and forward
mining operations in Palawan included in Phase linkages, thus reducing the issue of timing and phasing
1 Review, namely, Berong Nickel and CitiNickel of mineral extraction that largely depends on export
Mining, should streamline their operations and demand. Nonetheless, processing locally nickel/
increase their efficiency. Both will require further iron ore requires larger investments but could be
improvement in its pollution management and reduce more profitable in the long-term, including retrieving
environmental impact. As with other nickel mining other high valued metals without compromising
operations, these companies can make use of its environmental protection.
DMTG to (a) conduct research on how it can operate
adequately during the rainy seasons; (b) fully Current nickel operating mines are those with grades
characterize their ores for future metallurgical around 1.8 percent. During the “nickel fever” years
processing options - this can open a product stream between 2006 and 2008 and between 2011 and
and hence another income stream and possibly 2015, nickel grades went as low as 0.9 percent.
68 Chapter 8: Summary & Conclusion

Depressed prices have led the companies to convert environmental structures if the planned production
to CMP. Although this is a good business decision, is exceeded.
their economic, social, and legal dimensions are not
The type of nickeliferous laterite deposit determines
desirable. Experts’ field visits proved that the CMP
the development and production and required
had become an easy way out during low metal prices.
rehabilitation activities. These nickel deposits are
On the other hand, it has created socio-economic
and legal problems. The opening of nickel mines in in mountainous areas where the deposit tends to be
the Philippines from 2006 to 2008, and then again worked in many separate pits (“pockets”) because
from 2011 to 2015, saw many marginal mines close the thick deposits are limited in extent5. The number
when demand slumped after said surges. Many of of mine pits matters in achieving mining efficiency.
these nickel mines produce around 1.8 percent nickel, It is normal to have at least two pits for tonnage
which is almost marginal in the market. Most red and and grade control purposes, but having more than a
yellow laterites are below this grade, and companies few producing pits will cause engineering challenges
are sometimes forced to sell the shallow material as and subsequent rehabilitation. Truck deployments,
iron ore (45-50% Fe) or saprolite (>1.8% Ni). MGB, haul roads, and other requirements will at least
through its Regional Office, should ensure that double, and siltation management will become a big
companies are strictly adhering to planned production. cost item. Figure 29 shows a contrasting image of
It should also strictly enforce the improvement of mining patterns.

Figure 29. Contrasting Configuration of Mining Operations in Dinagat Island Province

Source (Online): Google Earth Pro Imagery Date: 6/4/2020, Dinagat Island Province

(a) Approximately 700 hectares (multiple and spread pits) (b) Approximately 300 hectares (compact area)

Without question, siltation is the leading environmental Phase 1 of the Mining Review revealed that guidelines
impact of nickel mining. Any digging of lateritic for mining operations under CMP are beset with
deposits loosens up the soil and underlying layers and issues. Through the CMP it is easier for mining
immediately mobilizes silt, especially during rainy companies to suspend their operations; force layoff
months. The traditional practice of leaving ore piles skilled rank-and-file, highly trained staff, and
in mine sites rather than hauling to a designated mine professional employees; and stop funding the
stockpile area increases the readily eroded material SDMP. The stockpiling of material, meanwhile,
transported to the river systems during heavy rains. increased environmental hazards. Thus, stockpiles
It becomes imperative to collect silt as soon as it must be maintained to prevent siltation from forming.
is mobilized.

5 Think of the weathering process in patches rather than area-wide

 69

On the Environment Aspect

Mining operations impair the capacity of the and canals are critical in controlling sediments. The
ecosystem to continue providing ecosystem goods capacity and capability of the silt traps and siltation
and services.The Review highlights the experts’ ponds system must be studied in-depth, particularly
findings on the low rehabilitated-to-disturbed-area during heavy rainfall and typhoons. Further, frequent
ratio, the need for ecosystem services accounting, storm hazards should prompt companies to undertake
the urgency of sediment control or retention, dust a more intensive climate modeling like in Dinagat
management, and the harmonizing of the FMRDP Islands, where the weather exhibits wide fluctuations
with the local development plans. of wet and dry periods.

Restoration of lost renewable capital shall not Though driven by economic objectives, the timing of
be taken for granted. Regulatory agencies and mining mining operations must consider its environmental
companies must ensure the development and impacts and health effects. Anecdotal information
implementation of specific, measurable targets and derived from key informant interviews, focus group
timelines for every annual Environmental Protection discussions and surveys indicated that mining dust is
and Enhancement Plan and its implementation. an important health concern raised by the communities.
Likewise, the FMRDP shall be evaluated based on the It is recommended that mining companies explore
company’s specific targets, which include the desired dust suppression studies.
rehabilitation or restoration outcomes. These specific
details are the bases for measuring the success of the Finally, the bigger challenge apart from ecosystem
EPEP and FMRDP implementation. accounting, sediment control, and dust mitigation is
harmonizing large-scale mining with agriculture and
A regular accounting of ecosystem services directly aquaculture, progressive and active community, and
or indirectly affected by mining operations should urban living with coastal and marine activities. In
also be included and implemented under the EPEP Zambales, mines have negatively impacted lowland
and FMR/DP. Ecosystem services accounting must fishponds and rice production, and the marine ecology
include provisioning services, such as food and fiber; due to the stream discharge. This aspect is addressed
regulating services like carbon sequestration, sediment mostly by gold mining operations in the country but
retention, and soil erosion control; and cultural hardly undertaken in nickel mining operations, except
services, including valuation of recreational and as part of the SDMP and CSR.
cultural significance. This accounting work can be
funded using the allocation for DMTG, and employing On the social aspect
internationally established guidelines, such as the
UN SEEA Ecosystem Accounting. This accounting A critical regulatory instrument for ensuring
process shall include reference vegetation or forest compliance by mining operations on its social
prior to the mining operation. obligation to the host and neighbor communities is
the SDMP. The implementation of SDMP differed
The mining operation leaves many open disturbed from one region or company to another. The findings
areas easily eroded during rainy periods. Hence, by experts on the implementation of this program
sediment flow in mining area, especially for nickel range from extremely poor to near ideal. The set up
mining caused by monsoon rains and intense rain that proved successful is (a) adequacy of Community
brought about by tropical depressions or cyclones Relations Office and human resources; (b) sustained
must be controlled. Mining companies are advised to engagement of CRO staff of the mining company
assess the watershed sediment yields with or without with the community with complementation of focal
mining operations to determine appropriate vegetative person in the community; (c) sustained engagement
measures, infrastructure, and other sediment control of the CRO with key leaders at the municipal
measures. The location, density per unit area, and and barangay level; (d) formulation of operations
design of silt dams, impounding dams, ponds, traps, manual +with the participation of communities
70 Chapter 8: Summary & Conclusion

in its formulation; (e), consensus on determining that involve farmers, fisherfolk, women, and IPs,
the allocation of SDMP fund among host and among others, specifically for SDMP; (b) partnerships
neighbor communities; (f) multi-sector engagement and agreements with IPs and the provision of
in project implementation including progress assistance, such as formation of the Community
monitoring and impact evaluation; (g) integrating Royalty Management Program, establishing techno-
the aspirations and plans of various sectors in demo farm; (c) pandemic financial assistance was
identifying projects for funding; (h) sustained provided to the LGUs such transport of Locally
support to cooperatives and enterprises, and Stranded Individuals (LSIs), food packages, and
indigenous communities; and (i) SDMP annual emergency responses.
evaluation and conduct of impact assessment. In some
ways, as observed by experts during field visits, the Other key recommendations include: (a) Implementing
identification of projects can be abused when there a participatory process to design the SDMP and
are uneven power relations in the community. The ensure representation of vulnerable and marginalized
political engagement of each representative that sectors (farmers, fisherfolks, women, and elderly,
decides on project implementation is a significant among others); (b) providing greater emphasis on
factor in the success of SDMP implementation. In capacity building for sustainable livelihoods and
some cases, a list of priority projects that passed enterprise development; (c) anchoring SDMP and
through the review by the Barangay Development CSR programs to development plans or community
Council, which have wider sector representations, needs assessment; and (d) establishing a baseline
may change when subjected to review by the Sanggu- and regular social acceptability or stakeholder
niang Barangay, composed of elected representatives. engagement study.

Operational companies and those under CMP

employ different approaches in implementing their
On the Economic Aspect
respective SDMPs. Operational mining companies A simple input-output analysis done as part of the
were able to showcase different approaches and Phase 1 Review showed that mining and quarrying
strategies in the delivery of SDMP and their good contributed significantly to the regional gross domestic
practices. Most of them were reviewed in Phase 2 product in regions where there are mining operations.
since Phase 1 involved suspended mining companies. There is no doubt that mining has contributed
Different aspects of mining with a highlight on good substantially to the local economy, as evidenced by
practices are expounded concerning the process and the economic progress of communities relative to
implementation of SDMP. On the other hand, those other non-mining communities in the same area.
mining companies under CMP had a different method It brought employment, and the demand for labor
of maintaining their mining area. Some companies helped increase the local population, which became
could not keep up with the required activities, the driver of the surge in economic activities. An
especially on social development and management. increase in services comes with rapid population
But several companies were able to continue with growth, promoting business growth, including
their social management programs and have become the backward and forward linkages of the mining
innovative in addressing issues that were experienced operation. However, growing consumption demand,
despite their condition and corresponding implications. theoretically, translates to additional pressure to
exploit natural capital. This scenario brings a
One of the most articulated benefits of the communities dilemma, which pits conserving biodiversity against
from the operations of mining companies was
land development. Otherwise, the communities will
employment, which has largely helped in solving
have to outsource their consumption demand.
unemployment problems in the community. Apart
from employment, other manifested and perceived While to some extent, mining contributes to
benefits are (a) social capital enhancement, such as regional GDP, experts saw initial indications of
the formation of community-based organizations slow local economic growth because most of the
 71

commercial transactions by residents or the use of companies to stop operation since the cost is higher
their factor income are often done outside the host relative to price, or (b) suspension by a regulatory
municipality. The expenditure of mining income is agency for non-compliance with certain requirements
captured by highly urbanized cities or municipalities Under CMP, company employees suffer loss of
that provide for the consumption needs of nearby income or livelihood, and backward and forward
host community residents. Thus, mining companies linkages of the mining operation are stopped.
are advised to invest part of their CSR in promoting Meanwhile, during those periods, fund allocation
enterprise development to promote local business for SDMP is significantly reduced or completely
development that will capture residents’ mining with held, thus, slowing or stalling SDMP projects,
income expenditures. Further, SDMP must also local employment, and the growth of the local
support local enterprises leading to sustained creation economy. It is recommended that an annualized
of local wealth or alternative manufactured capital
budget be prepared up to the abandonment phase
to substitute the depletion of non-renewable and
of the mining operations. Mining firms should
renewable capitals. Other non-traditional sources of
continue to fund their SDMP or EPEP and sustain
production must be explored.
the progressive rehabilitation of mined-out
In Phase 1 of the Review, 17 out of 27 mining areas with or without operations. Mined out areas
operations reviewed are under Care and Maintenance that remain open, without rehabilitation, likewise
Phase. Two reasons to go under CMP are (a) pose a threat or risk of damage that will affect
depressed global metal prices forcing mining local livelihood.
CHAPTER 9:
Key Recommendations
This chapter synthesizes recommendations collated of making realizable changes in the mining industry.
during the series of deliberation among experts, It was recognized that these recommendations would
discussions in fora participated by members of need steering by industry champions either in the
the MICC and other stakeholders, and analysis of mining industry, such as the Chamber of Mines or
spatial and temporal data provided during the by regulatory agencies of the government, such as
Review. These are brief summaries considered the MGB, Environment Management Bureau, and
for disclosure over and above those specific by staff bureaus such as the Forest Management
recommendations for individual companies apart Bureau and the Biodiversity Management Bureau of
from summary recommendations per aspect of the DENR, and by the DOF.
the review listed in previous chapters. Readers are
From the list of recommendations summarized by
advised to refer to summary recommendations by
experts, recommendations were were grouped by
aspect in the previous chapters.
actors and aspects of the Review to ensure the clear
These recommendations were also organized so that scope of each recommendation.
targets are clear and aligned with the overarching goal

Enhance Monitoring and Substantive Legal Compliance

Recommended Actions by Mine Operators
• Apply innovations in technology, such as the GIS will upgrade practices and restrict undertaking of
to improve self-monitoring and compliance with activities or operations without the necessary permits.
regulatory standards.
• Institutions with regulatory mandate in the mining
• Ensure that the undertaking of the care and industry must provide incentives and mechanisms
maintenance program will not unduly disadvantage to improve transparency.
mine personnel and drastically reduce employment
• Assessment of ownership of companies, especially
income of host and neighbor communities.
related to the proportion of foreign ownership.

Needed Government Actions • Review the mining operations adherence to

boundaries within or beyond mining tenements,
• Future audits by the DENR that are done by including mineral exploration.
a multi-stakeholder team can be improved by
covering beyond mere documentary compliance • Partial operation without duly approved Declaration
and clear coverage i.e. covering only the current of Mining Project Feasibility (DMPF) must not be
operations in the MPSA. allowed as this Review revealed accompanying
inappropriate practices in some mining operations.
• Improvement in enforcement, sanctions, and judicial
procedures are needed so that mining companies
74 Chapter 9: Key Recommendations

Improve Technical Efficiency the EMB and other water authorities along with
mining companies should actively and adequately
and Productivity engage with the communities in providing updated
Recommended Actions by Mine Operators information of status of water quality and supply.

• Considering the increasing global emphasis on • Considering the significant impact of mining
environmental and social governance (ESG), mining operations on the stock of assets and flow of
companies must invest or finance innovations ecosystem services within the MPSA or mining
that improve productivity, including promotion of tenement, the MGB should include natural capital
mineral processing and optimizing use of mineral accounting as part of the environment report
resources through value-adding processing beyond consistent with the global practices.
just DSO. • Mining companies should undertake landscape and
ecosystem function analysis and land suitability
• The mining operator must continually enhance its
human resources capability and regularly update its analysis, employ adaptive landscape restoration,
incorporate nature-based solutions and factor
DMPF considering the increasing environmental
in climate risk in improving the ecosystems of
and social concerns in mining operations.
mined-out areas.
Needed Government Actions • Mining companies should enhance the capacity
of environment management units in designing
• The MGB and the Chamber of Mines may establish
a knowledge- and practice-sharing mechanism appropriate biodiversity-enhancing rehabilitation
among mining companies and the public as an of mined-out areas with support from experts in
the field.
avenue to encourage modernization and efficiency
in mining operations.
Needed Government Actions
• The MGB and DOST with the participation
of the Chamber of Mines must collaborate towards
• The MGB and the EMB should institute a regular
review of the EIA recognizing the importance of
improving mining operations through industry
key components, such as soil erosion or sediment
benchmarking as a mechanism for improving
retention measurement, disposal of pollutants
productivity and using international standards,
and explore the use of Strategic Environmental
such as ISO 14001 and other related standards.
Assessment method.
• Feasibility studies must be improved by setting up • The EPEP and the FMR/DP standards must be
third-party review to include the 80-hectare limit
updated to include conduct of land suitability
of operations and integrating economic efficiency
analysis, using an acceptable reference forest as
assessments in different stages of mining operations.
baseline, climate proofing, and clearly stating
• The government and the mining industry stakeholders specific indicators of outcomes or success, and
should expand investment in integrated mining aligning rehabilitation plans with local zoning, land
and mineral processing to maximize the value- use and development plans.
adding benefits.
Improve Community and
Protect and Enhance the Household Human and Social
Capital
Environment and Natural Capital
Recommended Actions by Mine Operators
Recommended Actions by Mine Operators
• The mining company’s community relation
• Water quality remains a significant and sometimes personnel must undergo continuing capacity
contentious issue in areas even beyond the MPSA building to promote creative, adaptive and
or FTAA boundaries; regardless of its veracity, innovative SDMP implementation.
 75

Needed Government Actions • In support of the above recommendation, the mine

operators, CSR should move beyond development
• The MGB must design a system of promoting of small-scale livelihood and expand towards
and scaling up good and innovative practices on
community-managed local enterprises and private
SDMP implementation with active engagement of
business to increase local financial capital.
mining companies.

• The NCIP or other appropriate institutions must Needed Government Actions

help improve the capacity of indigenous peoples in
• The national government should consider reviewing
the judicious use of royalties, financial accounting, of the share of local communities from natural
benefit-sharing, and conflict resolution. wealth revenue i.e, mining excise tax, in view of
• Mining companies should enhance the consultation persistent poverty, inadequate household asset and
and partnership in SDMP implementation to limitations of the government transfers, such as
maximize representation of stakeholders in host Conditional Cash Transfer, Pantawid Pamilyang
and impact communities, include those off-site Pilipino Program Cash Assistance Program for
communities affected by mining externalities, and COVID-19.
increase the capacity of communities in project • The host LGU’s receipts of mining-related revenues
conceptualization, implementation and closure. must be re-invested in enterprise-enhancing basic
• MGB should review or update the 1.5 percent services, such as livelihood/enterprise assistance
of operations cost ceiling for SDMP budget and centers and in enhancing human capital, such as
consider an annualized budget even during care scholarships that promote development of local
and maintenance programs when there are no businesses to increase local capture of mining
mining operations. employment expenditures.
• Mine operators should consider the examples in
Prioritize and Sustain Local Bataraza, Palawan where both RTNMC and CBNC
operate, and of OGPI in Nueva Vizcaya which
Economic Growth Beyond the showed that establishing a local foundation or
Mine Life corporation to provide basic services and focused
on priority projects significantly contributed to
Recommended Actions by Mine Operators
local welfare.
• The company’s budgeting for SDMP, FMRDP, • The mine operator should invest in accounting
and EPEP should consider increasing human
of natural capital and biodiversity to assess
and social capital of local communities that will
current and future potentials of various assets in
increase household assets in view of the depletion
providing ecosystem services during and after
of mineral resources and depreciation of renewable
mine operation.
natural capital resulting from mining operations.
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Annexes
Annex Table 1. List of 45 mining operations of 43 companies included in Phase 1 and 2 of MICC Mine Review
with summary rating/scoring by aspect.
Rating1 Rating Index2
Review Phase

Average Score
Environmental
Company Location Province Region Status Commodity

Economic
Technical

Social
Legal
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K) (L) (M)
P1 Benguet Corp Itogon Benguet CAR Operating Au, Cu 1.60 1.60 1.50 2.4 1.6 1.74 Need Major
Reforms
P1 Berong Nickel Corp Quezon Palawan Region IVB Operating Ni 2.20 2.20 2.00 3 2.6 2.40 Needs Minor
Reforms
P1 Citinickel Mines Narra, Palawan RegionIVB Operating Ni 2.20 2.20 2.00 2.4 2.4 2.24 Needs Minor
and Development Sofronio Reforms
Espanola
P1 Lepanto Mankayan Benguet CAR Operating Au, Cu 2.40 2.00 1.70 2.6 2.8 2.30 Needs Minor
Consolidated Reforms
Mining Corp.
P1 Oceana Gold Kasibu Nueva Region II Operating Au, Ag, Cu 2.80 3.00 3.00 2.8 3.0 2.92 Good
Philippines Vizcaya
P1 Benguet Corp. Sta. Cruz Zambales Region III CMP Ni 1.60 NS 1.50 1.4 2.0 1.63 Need Major
Nickel Mines, Inc. Reforms
P1 Eramen Minerals Sta. Cruz, Zambales Region III CMP Ni 1.80 2.30 2.00 1.4 2.0 1.90 Need Major
Candelaria Reforms
P1 LNL Archipelago Sta. Cruz Zambales Region III CMP Ni 1.80 2.00 1.50 1.4 2.2 1.78 Need Major
Minerals, Inc. Reforms
P1 Ore Asia Mining & Dona Bulacan Region III CMP Magnetite 1.60 1.30 0.50 0.4 1.0 0.96 Poor
Dev’t. Corp. Remedios
Trinidad
P1 Zambales Sta. Cruz, Zambales Region III CMP Ni 1.40 NS 1.50 1.6 1.0 1.38 Need Major
Diversified Metals Candelaria Reforms
Corp.
P1 AAMPHIL Nat. Res. Basilisa, Libjo Dinagat Region XIII CMP Ni 2.40 3.00 2.00 1.0 3.0 2.28 Needs Minor
Exploration 2B Islands Reforms
P1 Emir Minerals Corp. Guiuan Eastern Region VIII CMP Chromite 2.40 2.80 2.70 1.3 3.0 2.44 Needs Minor
Samar Reforms
P1 Mt. Sinai Mining Guiuan Eastern Region VIII CMP Chromite 1.00 NS 1.70 1.0 2.0 1.43 Need Major
Exploration and Samar Reforms
Dev’t.
P1 Strongbuilt Mining MacArthur Leyte Region VIII CMP Magnetite 2.00 3.00 3.00 1.0 2.8 2.36 Needs Minor
Dev’t. Corp. Reforms
P1 WELLEX Mining Libjo, Dinagat Region XIII CMP Ni 1.80 2.80 1.30 1.0 2.6 1.90 Need Major
Corp. Mine 1 Tubajon Islands Reforms
P1 WELLEX Mining Tubajon, Dinagat Region XIII CMP Ni 1.80 2.80 2.30 1.3 2.6 2.16 Needs Minor
Corp. Mine 2 Loreto Islands Reforms
P1 Krominco, Inc. Loreto Dinagat Region XIII CMP Chromite 1.80 1.50 0.70 2.4 1.8 1.64 Need Major
Islands Reforms
P1 Libjo Mining Corp. Libjo, Dinagat Region XIII CMP Ni 1.70 2.00 1.00 2.6 2.0 1.86 Need Major
Tubajon Islands Reforms
P1 Oriental Synergy Loreto Dinagat Region XIII CMP Ni 1.40 0.50 0.20 2.4 0.8 1.06 Need Major
Mining Corp. Islands Reforms
P1 Oriental Vision Tubajon, Dinagat Region XIII CMP Ni 1.60 1.50 0.50 2.6 2.0 1.64 Need Major
Mining Phil. Corp. Libjo, Islands Reforms
Cagdianao
P1 Sinosteel Phil, N.Y. Loreto Dinagat Region XIII CMP Ni 1.80 1.20 0.50 3.0 2.0 1.70 Need Major
Mining Corp. Islands Reforms
P1 Adnama Mining Claver Surigao del Region XIII Operating Ni 2.80 1.80 1.80 2.0 2.8 2.24 Needs Minor
Resources Inc Norte Reforms
P1 Carrascal Nickel Carrascal Surigao del Region XIII Operating Ni 2.00 2.70 1.80 1.4 3.0 2.18 Needs Minor
Corporation Sur Reforms
P1 Claver Mineral Claver Surigao del Region XIII CMP Ni 0.40 NS 0.70 0.0 1.8 0.73 Poor
Development Corp. Norte
P1 CTP Construction Carrascal Surigao del Region XIII Operating Ni 2.60 2.70 2.20 2.0 3.0 2.50 Needs Minor
and Mining Corp. Sur Reforms
Annexes 79

Rating1 Rating Index2

Review Phase

Average Score
Environmental
Company Location Province Region Status Commodity

Economic
Technical

Social
Legal
P1 Hinatuan Mining Tagana-an Surigao del Region XIII Operating Ni 2.60 2.80 2.80 2.6 3.0 2.76 Needs Minor
Corporation Norte Reforms
P1 Marcventures Carrascal Surigao del Region XIII Operating Ni 2.40 2.30 1.80 2.0 3.0 2.30 Needs Minor
Mining and Dev. Sur Reforms
Corp.
P2 Cagdianao Mining Cagdianao Dinagat Region XIII Operating Ni 3.00 2.93 2.80 3.0 3.0 2.95 Good
Corp. Islands
P2 Century Peak Corp. Loreto Dinagat Region XIII CMP Ni 1.50 1.71 1.00 1.55 1.4 1.42 Needs Major
- Casiguran Islands Reforms
P2 Century Peak Corp. Loreto Dinagat Region XIII Operating Ni 2.17 1.57 1.20 1.5 1.4 1.57 Need Major
- Rapid City Islands Reforms
P2 Rio Tuba Nickel Bataraza Palawan Region IVB Operating Ni 3.00 2.93 2.80 3.0 3.0 2.95 Good
Mining Corporation
P2 TechIron Resources Guiuan Eastern Region VIII Operating Chromite 2.78 2.32 2.00 2.8 2.5 2.48 Needs Minor
Inc. Samar Reforms
P2 Agata Mining Tubay, Agusan del Region XIII Operating Ni 3.00 2.71 2.80 2.7 3.0 2.84 Good
Ventures Inc. Santiago Norte
P2 Greenstone Mainit Surigao del Region XIII CMP Au, Ag 2.80 2.14 2.80 1.8 2.4 2.39 Needs Minor
Resources Norte Reforms
P2 Philsaga Mining Bunawan Agusan del Region XI Operating Au, Ag 2.92 2.71 2.50 2.8 3.0 2.79 Needs Minor
Corp. Sur Reforms
P2 SR Metal Tubay Agusan del Region XI Operating Ni 2.60 1.86 2.17 1.9 2.6 2.23 Needs Minor
Norte Reforms
P2 Tribal Mining Corp. T'Boli South Region XII Operating Au, Ag 2.00 1.93 1.30 1.7 2.4 1.87 Need Major
Cotabato Reforms
P2 Carmen Copper/ Toledo City Cebu Region VII Operating Au, Ag, Cu 2.59 2.86 2.00 1.9 2.6 2.39 Needs Minor
Atlas CMDC Reforms
P2 FCF Minerals Corp. Quezon Nueva Region II Operating Au, Ag 2.22 3.00 2.80 2.2 2.8 2.60 Needs Minor
Vizcaya Reforms
P2 Masbate GP Aroroy Masbate Region V Operating Au, Ag 2.68 3.00 2.70 2.0 2.6 2.60 Needs Minor
Filminera Reforms
P2 Philex Padcal Tuba & Benguet CAR Operating Au, Ag, Cu 2.43 2.93 1.70 2.2 2.2 2.29 Needs Minor
Itogon Reforms
P2 Apex Mining Maco Davao de Region XI Operating Au, Ag 2.93 2.56 2.20 2.0 2.7 2.48 Needs Minor
Company Inc. Oro Reforms
P2 Pacific Nickel Surigao City Surigao del Region XIII CMP Ni 2.96 2.53 2.08 1.25 NS 2.21 Needs Minor
Philippines, Inc. Norte Reforms
P2 Platinum Group Claver Surigao del Region XIII Operating Ni 2.93 2.90 2.10 2.6 2.6 2.63 Needs Minor
Metals Corp. Norte Reforms
P2 Taganito Mining Claver Surigao del Region XIII Operating Ni 2.95 2.93 2.30 3.0 2.8 2.80 Needs Minor
Corp. Norte Reforms
1NS = No overall score computed because the criterion does not apply to the mining operation at the time of the review.
2“Good or acceptable,” <2.8| “Needs minor corrections,” >2 and <=2.8 | “Needs major reforms,” >1 and <=2 = | “Not acceptable or poor,” >=0 and <=1.