Philippines

Philippines: Mining or Food?

Case Study 5: Nickel Mining – Mindoro
Island
by

Robert Goodland and Clive Wicks

for

The Working Group on Mining in the Philippines

Sustainable development is development that meets the needs of the present

without compromising the ability of future generations to meet their own
needs
The Brundtland Report, Our Common Future,
UN World Commission on Environment and Development, 1987

In a world overflowing with riches, it is an outrageous scandal that more than

826 million people suffer hunger and malnutrition and that every year over 36
million die of starvation and related causes. We must take urgent action now.
Jean Ziegler
UN Special Rapporteur on the Right to Food, April 2001

DEDICATION

The Working Group on Mining in the Philippines and the authors respectfully
dedicate this report to all the courageous and dignified people who have been
killed while protecting the environment and upholding human rights in the
Philippine archipelago.

Disclaimer

The views expressed in this report are those of the authors and not necessarily those
of the participating or supporting organizations. The authors have, however, done
their utmost to reflect the views of the many people they met in the Philippines and
the views and reports of the people and organizations who have commented on earlier
drafts if this report.
© Copyright Working Group on Mining in the Philippines 2008

First Published in 2008 by the Working Group on Mining in the Philippines,

28 Redington Road, London, NW3 7RB, United Kingdom
[email protected]

ISBN Number: 978-0-9560616-0-7

Report authors: Robert Goodland and Clive Wicks

Report editors: Cathal Doyle, Ellen Teague, Sarah Sexton and Frank Nally.

Report layout and cover design Frank Nally and Cathal Doyle

Front Cover Photos:

-Placer Dome Marcopper Mine Marinduque Island by Dr Catherine Coumans,
MiningWatch, Canada;
- Rice fields on Authors Field Trip to Midsalip
The Working Group on Mining in the Philippines
The Working Group on Mining in the Philippines was established in 2007, after the
publication in January that year of the report, Mining in the Philippines: Concerns
and Conflicts. Based in Britain and chaired by the Right Honorable Clare Short MP,
UK’s former Minister of International Development it includes representatives from
the Columban Missionary Society, the Ecumenical Council for Corporate
Responsibility, Philippine Indigenous Peoples’ Links and IUCN- CEESP.

The Authors

Robert Goodland is an environmental scientist specializing in economic

development. He advised the World Bank Group from 1978 through 2001. He then
became the technical director to H.E. Dr. Emil Salim’s independent Extractive
Industry Review (http://www.ifc.org/eir) of the World Bank Group’s portfolio of oil,
gas and mining projects. He was elected president of the International Association of
Impact Assessment, and Metropolitan Chair of the Ecological Society of America.
He was awarded the World Conservation Union’s Coolidge medal in October 2008.
([email protected])

Clive Wicks has 48 years of experience of working in engineering, agriculture and

environment, specializing in the impact of extractive industries on the environment.
He is a vice chair of IUCN-CEESP (IUCN’s Commission on Environmental,
Economic and Social Policy) and co-chairs SEAPRISE (IUCN-CEESP’s Working
Group on the Social and Environmental Accountability of the Private Sector). He
worked in the international environmental movement for the last 24 years, mainly
with WWF UK. He headed WWF UK’s African, Asian and Latin American
programs, and represented WWF at G8, World Bank, International Finance
Corporation, UNEP and UNDP meetings on extractive industries.
([email protected])

i
Acknowledgements

The Authors wish to thank all those who helped them, both during their trip to the
Philippines and in the last year, for the substantial information provided to help them
with their research. This report would not have been possible without the support of
many people in all the areas visited, including Indigenous Peoples, who opened their
hearts and shared their concerns with the authors about the environmental and human
rights abuses caused by mining. They are the real authors of this report.

However, in view of the vast number of extrajudicial killings that have taken place
since 2001, now believed to be over 1,000, including a Bishop of the Independent
Church, the authors are reluctant to name people or organisations in the Philippines.
The authors admire the many other people, including lawyers, some of whom have
also lost their lives while trying to protect their people from mining industry abuses.

The authors admire the courage of the politicians, bishops, priests, sisters and pastoral
workers of the Catholic Church and the leaders of many other faiths and none and
human rights lawyers who have the courage to speak out against the destruction that
mining is currently and will increasingly cause to their beautiful, fruitful and bio-
diverse archipelago. It has been a great honour and a humbling experience for the
authors to work with such brave and committed people.

They would like to thank the Local Governments Units, the Catholic Church,
especially the Columban Missionaries and the bishops, priests, sisters and
communities who welcomed them during their trip and provided accommodation,
transport and food for the team.

The best help the authors could provide was to apply their long years of experience
and professional knowledge of the extractive industry around the world and their
knowledge of environmental and human rights ‘best practise’, laws and conventions
in an impartial and professional way.

They would like to especially thank PAFID for their contribution to the mapping of
the areas visited in their February 2008 Field Trip, LRC-KSK-Friends of the Earth for
their expertise on the law and assisting Indigenous Peoples protect their rights,
Professor Arturo Boquiren, Professor Ernesto Gonzales for their contribution and
insights about the economics of mining versus environmental value and Cathal Doyle
of the Irish Centre for Human Rights for input on the rights of indigenous
peoples.Paul K.

From The Working Group on Mining in the Philippines (WGMP):

The Working Group would like to thank Robert Goodland and Clive Wicks for their
dedication and passion for human rights and environmental justice, which has led
them to generously give of their time and expertise to travel to the Philippines and
answer the call of an ever increasing number of communities to help them protect
their rights, their lands, their lives and livelihoods. We wish to thank Cordaid, the
Holly Hill Charitable Trust, Paul K. Feyerabend Foundation, the Columbans, the
IUCN-CEESP (Commission on Environmental Economic and Social Policy), for their
financial support to realise this report and maps.

ii
 Case Study 5: Nickel Mining – Mindoro Island

Table of Contents

Background 142
Mining Proposal 143
Opposition 144
Indigenous opposition 145
Visit to Mindoro 148
Company continues to plan 149
Governor Issues Order to Stop Mining Activities 156
Mindoro Conclusion, Recommendation and Map 161

ANNEX: Table of Contents for Entire Report Including Case Studies 172

iii
 Map of the Philippine Archipelago

Case Study Locations

5. MINDORO NICKEL
PROJECT 6. SIBUYAN
ISLAND

2. LIBAY SIBUTAD 3. TAMPAKAN

SAGITTARIUS
COPPER & GOLD

1. MIDSALIP
4. MATI DAVAO
ORIENTAL PUJADA
BAY

Report and Case Studies available in individual documents at:

http://www.piplinks.org/miningorfood
MAPS associated with these 6 Case Studies
are available at http://www.piplinks.org/maps

iv
 Provincial Map of the Philippines1

1
Source Wikipedia

v
Case Study 5: Nickel Mining – Mindoro Island
“… I welcome Intex to the Philippines for what promises to be one of the
world’s biggest, if not the biggest, nickel mining projects . . . and echo what
President Arroyo said, that nickel is to the Philippines as oil is to Norway.”

Philippine Ambassador to Norway, Victoria Bataclan,

speaking at Intex Resources’ shareholders meeting,
Oslo, 26th March 2008 2

“We, the Mangyan Indigenous People in Mindoro, are strongly opposing the
entry of mining in our land because we will be very much affected, our land
will be taken from us. We will be displaced and we have no other place to go.
We owned the land from time immemorial, given to us by our ancestors, and
we are determined to protect our land, because for us, land is life.”
Mangyan Leader

Background3

Mindoro Island is the 7th biggest island in the Philippine archipelago and is 200
kilometers south of Manila. It is one of the five bio-geographical zones that have been
identified in the country, and is considered the seventh most important of such zones
in the world. It is home to endangered species, such as the tamaraw (wild water
buffalo) and Mindoro crocodile. The Halcon-Baco forested mountain range runs
through the island, serving as a natural boundary between the island’s two provinces,
Mindoro Occidental and Mindoro Oriental.

Mindoro is considered to be the food basket for the nearby mainland and Metropolitan
Manila. In 2004, the Department of Agriculture ranked the Mindoro provinces as the
second and third largest food-producing provinces in the country.

The Mangyan Indigenous Peoples have lived on Mindoro for centuries, the generic
term Mangyan referring to eight ethnic groups. The legitimate Certificate of Ancestral
Domain Claim (CADC) of 1995 is in the process of being converted to an ancestral
domain title.

2
www.intexresources.com/_upl/Mindoro_nickel_march_2008.pdf see also
http://stockpro.no/Msg.asp?GroupID=25&Group=Oslo+B%F8rs&TopicID=7032&Topic=Intex+Resou
rces+ASA++-
3
This chapter was compiled from visits to the proposed site and the Manila Intex Resources office;
including a meeting with Intex Resources’s Senior Vice President Jon Peterson on 26th Feb 2008, at
Pasig City; workshops with the Mangyan Indigenous People and with government officials in the
municipalities of Calapan and Victoria. The most informative literature on the area and proposed
project is that of Gariguez 1992, 2001, 2003, 2005, 2006, 2007 & 2008, but also useful is that of
Almonte 2001, Bacudo 1999, Helbling and Schult 2004, Helle 1997, Javier 1987, Lopez 1976, Postma
1998, 2005, and Sayson 2004.

142
Mining Proposal

MINDEX Resources Development Inc., a Philippines subsidiary of a Norwegian

exploration company, Mindex ASA, was looking for gold in the mountains of
Mindoro in 1997 when it found deposits of the nickel-containing ore, limonite, some
4-10 meters from the surface. It (and another Mindex subsidiary, Aglubang Mining
Corporation) promptly lodged several claims.

Ten years later, after a checkered history of company takeovers and name changes
(from Mindex to Crew to Intex)4, mining permissions being granted, revoked and then
reinstated,5 and claims of deception from all sides, the Mindoro Nickel Project is (as
of early 2008) between the pre-feasibility and feasibility stage. The company’s 2007
Annual Report indicates that Intex Resources completed the Pre-Feasibility study in
December 2007; press releases posted on the company website mention the study, but
it has not been made available to the Mindoro Local Government Units (provinces,
municipalities and barangays). Intex Resources seems to assume, however, that the
project will be operational by the year 2011 and will produce 80,000 tons of nickel
per year once fully up and running. The estimated reserves would suggest any mine
would have a lifespan of some 25 years.

The proposed mine is in the Mindoro mountains,

overlapping the island’s two provinces, Oriental
Mindoro and Occidental Mindoro (two-thirds of the
proposed mine area are in Occidental, but many of
those who would be affected live in Oriental
Mindoro)

The nickel ores on Mindoro island are within the

ancestral domain of the Mangyan Indigenous
Peoples. Three of the eight ethnic groups, the
Alangan, Tadyawan, and Bangon, would be
affected by the Mindoro Nickel Project if it goes ahead. The mining concession
overlaps with the Certificate of Ancestral Domain Claims of both the Alangan and the
Tadyawan Mangyans (Gariguez 2008).

4
MINDEX Resources Development Inc was a Philippines subsidiary of Mindex ASA, a Norwegian
company engaged in exploration and development of mineral resources. In 2000, a Canadian company,
Crew Development Corporation, acquired 97.7% of the shares of Mindex ASA. MINDEX became
Crew Minerals Philippines Inc. (CMI); it was directly managed, however, by Crew Minerals, non-gold
division of Crew Development Corporation. Crew Minerals and was based not in Canada but in
Norway. In December 2007, Crew Minerals was replaced by Intex Resources, stating that it is a new
Norwegian company with a new board and shareholders.
5
14th March 1997: an exploration permit issued to MINDEX Resources Development Inc. (a
subsidiary of Mindex ASA) for 9,720 hectares; 12th July 1998: A Mineral Production Sharing
Agreement (MPSA) for exploration for 2,290 hectares issued to another Mindex subsidiary, Aglubang
Mining Corporation, covering the same areas being explored by Mindex; 1999 (March): MINDEX’s
1997 exploration permit was renewed. 2000: MPSA granted to Aglubang. 1st July 2001: DENR
Secretary Heherson cancelled the Mindoro nickel MPSA. 10th March 2004: The MPSA cancellation
was revoked by the Office of the President (OP). 10th November 2005: DENR Secretary Michael
Defensor reinstated the MPSA.

143
Mag-asawang Tubig River

The proposed mining area is also at the

heart of a once-proposed Mangyan
Heritage Park. It is densely forested,
raising concerns of deforestation and
increased flooding from siltation of the
rivers. It is inhabited by many endemic
and endangered species of flora and
fauna. The proposed site encroaches on
the Mag-asawang Tubig Watershed,
which is the largest source of irrigation
water for the 40,000 hectares of
collective riceland downstream. The
watershed supplies four major rivers that provide water to 70% of Oriental Mindoro’s
rice fields. Further downstream, siltation and sedimentation would threaten
mangroves, sea grasses, and coral reefs

The mine would produce some 4 million tons of waste, which would need to be
disposed of somewhere somehow.

Under Philippine law, before any mineral exploration can begin, a company must
submit for approval a detailed Environmental Work Program to the Mines and
Geosciences Bureau (MGB) of the Department for Environment and Natural
Resources (DENR). Intex Resources says it has complied with these requirements by
continuously submitting and updating its environmental work programs during its
exploration activities. These activities, they claim, include protection of waterways
and full restoration and replanting of drill sites and all other areas affected. Mining
exploration has already begun, despite the Provincial Government of Mindoro
Oriental passing a moratorium against mining (see below). The Mines and
Geosciences Bureau reported in January 2008 that 92 mining applications had been
submitted on Mindoro Island.6

Opposition

Intex Resources claims that “the benefits [of the Mindoro Nickel Project] are
endless.” The majority of Mindoreños have the reverse opinion. Indigenous Peoples,
local government officials, mayors and many local people all oppose the Mindoro
Nickel Project, and have built up one of the strongest, most sustained, collective
oppositions to mining in the country. In May 1999, a broad coalition of civil society
groups, Roman Catholic and Protestant church leaders, NGOs, peoples organizations,
schools, teachers and students, mountaineers and environmentalists, peasant groups,
human right advocates, Mangyan federations, and elected officials at various levels of
government and villages formed ALAMIN – Alliance opposed to the mine.

6
See Box: Position paper on ecology, food security and the threats of large-scale mining in Oriental
Mindoro.

144
There are many clear current statements and position papers from indigenous and civil
society organizations rejecting the project. There are countless resolutions and
moratoria from local government units. There have been numerous popular rallies,
attended by thousands of people, and huge signature campaigns. Even the Norwegian
Ambassador to the Philippines, Ståle T. Risa, who visited Mindoro in October 2007,
concluded in a report to the Norwegian Ministry of Foreign Affairs “that Crew
Minerals [Intex Resources’ previous name] may encounter great difficulties in
receiving EEC approval due to . . . massive local opposition to the project” (emphasis
added)7.

Indigenous opposition

The Mangyans have rejected the project, having already suffered major impacts of
environmental degradation on their lands since the late 1990s, especially as a result of
logging of the forests. Respect for their human rights – or rather lack of – is one of the
main issues regarding the proposed mining. The Provincial government in Mindoro
Oriental intimates that the company has been behind the deracination of some
Indigenous Peoples’ communities, and the subversion of others. During the
exploration phase, for instance, indigenous burial grounds were desecrated in a clear
violation of Indigenous Peoples’ rights.

Map by
UNEP
WCMC

7
“Crew Minerals meets the Norwegian Ambassador in the Philippines”, 11th December 2007
http://www.intexresources.com/news.cfm?id=48

145
The fact that the mining concession overlaps with the Certificate of Ancestral Domain
Claims should have been enough to stop the project going any further, according to
both the 1995 Mining Act and the 1997 Indigenous People’s Rights Act. The prior
claims of the local communities, particularly Indigenous Peoples, are recognized in
mainstream legal discourse as the “native title” claim. In a celebrated case before the
US Supreme Court nearly a century ago (when the Philippines was under the
administration of the USA), 8 the court recognized the long occupancy of land by
indigenous communities as being as valid and legitimate as one of private ownership.
Many foreign mining companies, however, with the blessing of the Philippine
Government, have claimed that their legal rights are prior to the claims of local
communities. Such legalized land grabbing is endemic and has become a specialty of
corrupt lawyers and powerful élites.

US engineering corporation Dames and Moore carried out a scoping report for the
company in 1999, which identified several potential impacts that the subsequent
Environment and Social Assessment (ESIA) would have to address. These included
that “Mangyans’ sacred places will be affected or destroyed by the construction
activities . . . and by the project operation.” Attending to sacred sites, spiritual areas,
cultural patrimony and burial grounds is a critical part of the ESIA. A formal
submission to the United Nations Special Rapporteur on Freedom of Religion or
Belief addressing widespread failure to protect Indigenous Peoples’ spiritual areas,
including those of the Mangyan, is currently being compiled.

As part of the Indigenous Peoples’ opposition to the Mindoro Nickel Project, a

Mangyan indigenous leader, whose farm is right in the middle of the projected mine
area, visited Britain and Norway in 2006. 9 He was accompanied by Father Edwin
Gariguez, a priest who acted as translator and is active in the local alliance against the
project.

In the view of the authors, the beliefs of Indigenous Peoples cannot be dismissed by
the Government, the Department of the Environment and Natural Resources (DENR),
the National Commission on Indigenous People (NCIP), or by mining companies. We
advocate full respect for the beliefs of Indigenous Peoples and for their sacred sites,
burial grounds and spirit abodes, as reflected in their oral traditions and practices.
Indigenous People often take the view that disturbing an ecosystem will result in their
own destruction and death.

Watershed area
Even if the proposed mine did not overlap with Indigenous Peoples’ areas, another
aspect of the Mindoro Nickel Project should have stopped the plans going further: the
1995 Mining Act prohibits mining in declared watersheds. The mining concession for
the Mindoro Nickel Project covers the Mag-asawang Tubig Watershed, which is
identified in Mindoro Oriental’s Physical Framework Plan (1995-2025) as the largest
source of irrigation water for 40,000 hectares of collective rice land in the Calapan

8
Carino vs. Insular Government (212 U.S. 449 of 1909, No. 72, argued 13th January 1909; decided
23rd February 1909.
9
The parent company at the time, Crew Development Corporation, is registered at the UK Companies
House as an overseas company. Crew Minerals that was directly responsible for the Mindoro Nickel
Project is based in Norway.

146
area. The mining concession threatens combined rice production of nearly 170,000
metric tonnes in 2006 – about 50 percent of total provincial production, which is
enough to feed more than 783,000 people for a year.10

This was one of several reasons why the then Secretary of the Department of the
Environment and Natural Resources, Heherson Alvarez, ruled in July 2001 that the
Mineral Production Sharing Agreement (MPSA) that had been granted to the
company in 1998 violated Philippine laws. He stated:

“What does it gain the nation to be short sighted and merely think of money,
when an irreparable damage to the environment will cost human lives, health
and livelihood capacity of our farmers and fisherfolks endangering the food
security of our people.”11

Investigations conducted by the DENR’s Mines and Geosciences Bureau came to the
same conclusion. Even the President’s Office has stated that the mine encroaches onto
a watershed in the Mindoro uplands, which is specifically a “No-Go” zone under
Philippine law.

Moratoria
On 28 January 2002, the Provincial Board (Sangguniang Panlalawigan) of Mindoro
Oriental passed an Ordinance declaring a moratorium on all mining activities in the
province for the next 25 years. It stated that:

“it shall be unlawful for any person or business entity to engage in land
clearing, prospecting, exploration, drilling, excavation, mining, transport of
mineral ores and such other activities in furtherance of and/or preparatory to
all forms of mining operations for a period of twenty-five (25) years.”

In their view, large-scale mining is incompatible with the provincial sustainable

development plan. The island’s Physical Framework Plan specifically rules out the
development of the mining industry and stresses instead environmental-related
strategies for sustainable land use. The island’s beauty, natural resources,
biodiversity12 and tourism, all of which have great potential for development, can be

10
http://newsinfo.inquirer.net/breakingnews/regions/view/20081016-166764/Respect-mining-
moratorium-in-Mindoro
11
Quoted in Philippine Star, 13th November 2001.
12
Significant numbers of endangered species, such as the Tamaran (Bubalus mindorensis) live in the
region, some protected in the following conservation units: Key Biodiversity Area (KBA) No. 61. Mt
Calavite Wildlife Sanctuary (Proc # 292), municipality of Paluan in Occidental Mindoro with 18,016
hectares. KBA No. 62. Puerto Galera, municipalities of Abra de Ilog, Puerto Galera, San Teodoro,
Santa Cruz, in Mindoro Oriental and Mindoro Occidental with 37,306 hectares. KBA No. 63. Mt
Halcon, municipalities of San Teodoro, Baco, Calapan, Naujan, Sablayan, Santa Cruz in Mindoro
Oriental and Mindoro Occidental with 48,660 hectares. KBA No. 64. Lake Naujan National Park,
municipalities of Naujan, Pola, Socorro, Victoria in Mindoro Oriental with 21,655 hectares. KBA No.
66. Iglit-Baco Mountains, municipalities of Sabalayan, Bongabong in Mindoro Oriental and Mindoro
Occidental with 56,300 hectares. KBA No. 65. Siburan, municipality of Sablayan in Mindoro
Occidental with 11,569.
KBA No. 65. Malpalon, municipality of Sablayan in Mindoro Occidental with 14,093 hectares. KBA
No. 68. Bogbog, Bongabong and Mt Hitding, municipalities of Gloria, Bansud, Bongabong, Mindoro

147
sustained long-term, while the mining industry is seen as short-term and ultimately
destructive of the long-term benefits stemming from environmental protection.

In addition, Victoria, one of Mindoro’s municipalities, has expressed its strong

opposition both to the current exploration and to the proposed mining project. The
Department of Interior and Local Government (DILG) Opinion No. 39, series of
2007, also favors the moratorium promulgated by the Provincial Board of Oriental
Mindoro.

Visit to Mindoro

The authors visited Mindoro Island in February 2008 where they met the Deputy
Governor and Provincial Council, the Mayor and Council of Victoria District Council,
many Government and church officials, and representatives of the Mangyan people.
They visited a small part of the proposed mining area, but could not visit most of it
because of river flooding, a result of previous deforestation. While they were there,
the flooding covered many towns and villages and destroyed the province’s main
agricultural lands and rice paddies.

During the visit, the very strong

objections to the proposed nickel mine
from the local government, the Mangyan
Indigenous People and the majority of
the people were obvious. The District
Council of the Victoria municipality had
just passed its resolution against mining
(see above).

The vast majority of Mangyans are

opposed to the mine. The authors did
meet, however, a small group of
Mangyans from two villages who were
in favor of the mining. The company had given them a water supply and was
employing them in tree nurseries, which appeared to be the only development activity
in the area. The attempts to divide-and-rule the Indigenous Peoples, and to
manufacture their consent to the mine, required under Philippine law, has become a
highly contested issue in this project.

In addition, the military was already guarding the proposed mine site, and stopped and
questioned the authors during the visit.

Almost all those the authors met told them that they lacked information about Intex
Resources’s plans and thus about the potential impacts on their lives and livelihoods if
the project goes ahead. The absence of information naturally raises concerns and

Oriental with 17,768 hectares. KBA No. 69. Mt Hinunduang, municipalities of Bongabong, Rosas,
Mansalay in Mindoro Oriental and Mindoro Occidental with 8,223 hectares. KBA 293. Apo Reef
Marine Natural Park, (Proc #868) municipalities of Sablayan, Calintaan in Mindoro Occidental with
15,792 hectares.

148
suspicions. For instance, the December 2007 pre-feasibility study has been completed
but not disclosed by Intex Resources on the grounds that it contained proprietary or
confidential information. Intex Resources issued some press releases based on this
study, some of which are available on its website,13 but most Mindoreños have no
ready access to the Internet. Plans and agreements with the national Philippine
Government and its agencies are often shrouded in secrecy. As a result, however,
Intex and its predecessors have been accused of deception. 14
Intex Resources’s shareholders and financial institutions considering supporting Intex
should recognize that the company does not have a social license to operate, which
could well impact on their investment.

Mindoro and the Mangyan Indigenous Peoples

From: Gariguez 2008

Company continues to plan

Although Intex Resources clearly lacks widespread support in Mindoro for its nickel
mine, it continues to plan as if it had social acceptability and a social license to
operate, filling in the details of its proposals and seeking finance for them. Of the five
current projects that Intex Resources is pursuing internationally, the Mindoro Nickel
Project is the largest and most far advanced. “Our ambition”, stated Intex Resources

13
Intex Resources ASA of Oslo, Norway; website: http://www.intexresources.com/news.cfm?id=381
14
Anabelle E. Plantilla, “Deception in Mindoro”, Manila Times,
http://www.manilatimes.net/national/2008/aug/16/yehey/opinion/20080816opi5.html

149
Chair Kjell Almskog at the company’s 2007 Annual General Meeting, “is to prepare an
operation which is up and running with normal production by 2011 to 2012”.15
Managing Director Hans Christian Qvist has said, “This project will be carried out.
Sure thing.”

Intex Resources anticipates that the mine would, during an initial first stage, produce
40,000 tons of nickel metal and 3,000 tons of cobalt metal per year (from an estimated
75,000 tons of mixed sulfide products). The amount of nickel would double in the
second stage to 80,000 tons and 6,950 tons of cobalt metal per year (from 150,000
tons of mixed sulfide products). The project would also produce 4 million tons in
tailings each year.

It is not just the strip mine itself that would have social and environmental impacts,
but also the processing of the extracted ore. Having been extracted, the ore would be
transported to a processing plant 50 kilometers away near the coast. Here it would be
processed with sulfuric acid to produce nickel sulfide, which would either be shipped
overseas for refining into nickel metal, or refined on Mindoro. The residue from the
acid process needs to be neutralized with alkaline limestone before being put
somewhere. Intex has stated that the project would provide regular employment for
some 2,500 workers, a figure that would double for the construction phase to some
5,000 workers (after which 2,500 would presumably be laid off).

When the authors met with Intex Resources senior Vice President and chief geologist
Jon Peterson in Pasig City on 26th February 2008, he stated that the company16 intends
to follow Norwegian social and environmental standards for mining fully, unless
international standards (such as those of the World Bank’s International Finance
Corporation and the Equator Principles17) are higher, in which case it will follow
these. Intex Resources says it will not follow double standards – have lower standards
in the Philippines than it follows in Norway. On transparency, Intex Resources
proposes to familiarize itself with the Extractive Industries Transparency Initiative
(EITI),18 and the UN Global Compact. The authors suggest that Intex Resources and

15
Intex Resources ASA 2007 Annual Report
http://www.intexresources.com/_upl/annual_report_20071.pdf
16
Intex states that it is a new Norwegian company with a new board and shareholders, and has replaced
Crew Mining Co.
17
The Equator Principles are voluntary international investor standards governing environmental and
social issues in development project finance. Since the Principles were launched in 2003, they have
been adopted by more than 60 banks and investors. The Principles are derived from the social and
environmental safeguard policies of the World Bank Group. Signatories to the Principles commit to
refrain from financing projects that do not follow the Principles. Although their adoption is voluntary
and there is little or no monitoring of violations, the Equator Principles have become a de facto
standard for banks and financial investors for major development projects around the world.
http://www.equator-principles.com/index.shtml
18
The Asian Development Bank (ADB), on 29th February 2008, reiterated its support for the
Extractive Industries Transparency Initiative (EITI) aimed at improving transparency and
accountability in extractive sectors. EITI’s website notes that 3.5 billion people live in countries rich in
oil, gas and minerals. With good governance and equitable sharing of profits with host community
governments, the exploitation of mineral resources can generate large revenues that can foster growth
and reduce poverty. However when governance is weak, it may result in environmental degradation

150
their stockholders should also consider liabilities that could arise from the adoption in
September 2007 of the UN Declaration on the Rights of Indigenous Peoples.

Intex Resources volunteered the comparison of a “best practice” nickel plant as

Sumitomo’s Coral Bay plant in Palawan, an island several hundred kilometers to the
south-west of Mindoro. The Coral Bay plant, like that proposed for Mindoro, recovers
nickel from low-grade nickel oxide ore, using high-pressure acid leach technology
(HPAL). This technology permits the metal to be extracted from low-grade laterite
ores containing just 1% nickel that used to be uneconomic to mine. The Mindoro
limonite ore contains slightly more than 1% nickel. Despite Mr. Peterson’s favorable
description, the Coral Bay plant has come in for criticism (see Chapter 4 Box 1:
Nickel Mining in Palawan Province: Some Bad Experiences).

The Intex Resources website states that, in 2008, the company will put more effort
into informing and educating local stakeholders as to how the project will contribute
to building sustainable communities. The Equator Principles mandate transparency
and disclosure of information, especially on impacts potentially affecting people’s
livelihoods. Information about plans should be disseminated in a readily accessible
and understandable form. Brochures, pamphlets, posters, and radio and TV spots are
all well-known methods of reaching Filipinos. The Governor of Mindoro, Arnan
Panaligan, however, has stated in public forums that it is a waste of time to listen to
Intex Resources’s presentations because the Provincial Council is resolved to reject
the project through the Mining Moratorium the Council passed in March 2002 (see
above).

Having completed its Pre-Feasibility study, however, Intex Resources expects to

complete its Definitive Feasibility Study (DFS) in 2009: this should contain
agreements with affected communities; location details of processing sites; a full
environmental and social impact statement (EIS); a completed strategic impact
assessment (SIA) including cumulative and regional impacts; all permission
requirements; and an assessment of major contracting strategies. All of these are
required for operation permits and for an environmental compliance certificate (ECC)
to be issued.

Some of the challenges the company has already encountered cast doubt on whether it
will meet its 2009 target.

Agreements with affected communities?

Despite the forests and land providing livelihoods for many people, both directly and
indirectly downstream, Intex Resources Vice President and chief geologist Jon Steen
Petersen was reported in March 2008 as saying:

compounding poverty, increasing corruption and conflict. EITI aims to strengthen governance by
improving transparency and accountability in the extractives sector.

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 “There is no conflict between the mining plans and the population. Only 180
families live in the area, and they are all nomadic. They don’t live where the
mining operations will take place.”19

He has said that all meetings the company has had with tribal leaders have been
positive.

Indeed, a Memorandum of Understanding has been signed between some indigenous

peoples in the license area who have claimed to represent and speak for all the mine-
affected communities. In the late 1990s, an unrepresentative Indigenous Peoples’
group, Kabilogan, was created by a company employee, Salomé Yedel, and it granted
Free and Prior Informed Consent (FPIC) to the project, although its validity has been
questioned. The group gave this consent in clear breach of the law. Salomé Yedel no
longer belongs to this group, but went on to set up another organization called Sadaki.
The majority of Mangyan, however, are totally opposed to the project.

Moreover, when then DENR Secretary Heherson Alvarez cancelled the Mineral
Production Sharing Agreement (MPSA) (see above) in July 2001, he also noted the
defective process of obtaining Indigenous Peoples’ consent:

“The MPSA area is covered by ancestral domain claims of not only the
Kabilogan tribe but of other Mangyan tribes. The pertinent rules and
regulations of the Indigenous People’s Rights Act of 1997 provide that where
a project affects a whole range of territories convening two or more ancestral
domains, the consent of all affected Indigenous Cultural Communities
Indigenous Peoples shall be secured. Aglubang has not secured such
consent.” (Gariguez 2005: 13)

The company has said that some (as yet unspecified) Indigenous Peoples may receive
1-2% of an unspecified royalty, an offer it regards as reasonable compensation for
exploiting the nickel ore.20

Location of processing sites

The topsoil, which would have to be
removed to access the ore, would be
stored and covered for later
rehabilitation of the mined-out area.
The sites for these overburden dumps
have not yet been decided upon.
According to some documents, settling

19
Norwegian Nickel Publicity on the Philippines, Norwatch (March 2008).
http://www.norwatch.no/20080330618/english/mines/norwegian-nickel-publicity-on-the-
philippines.html
20
In September 1999, MINDEX became the second company in Philippine history to sign an
agreement on the extraction of minerals with the Indigenous Peoples. The agreement was signed by 25
Indigenous Peoples’ leaders from the Alangan tribe, represented by the Kabilogan organization
according to Intex. http://www.intexresources.com/_upl/white_book_eng1.pdf
but see also Norwatch view at http://www.philsol.nl/pir/v2/Mindex-99b.htm

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ponds21 will be placed at the mine to catch run off from the mine.

Beneficiation – the process whereby extracted ore is reduced to particles that can be
separated into mineral and waste so as to process the mineral further or to use it
directly – would take place at the mine processing plant.

The current proposal is to crush and wash the limonite so as to separate stones bigger
than 2 millimeters from the fine laterite. The waste material separated out would be
placed along drainage channels and escarpments. Submarine Tailings Disposal (STD)
was at one stage considered, but has now been abandoned, not least because the sea
coast around Mindoro Oriental is too shallow, which was pointed out by the Working
Group on Mining in the Philippines.

To separate out the nickel, the

company is proposing to use high-
pressure-acid-leaching. The company
is studying four as yet undisclosed
potential sites where it would do this;
the site would be about 5 kilometers
upstream from a delta or estuary.22
The residue depository or tailings
dam for the waste left over after
crushing and processing would need a
site 1,000 hectares in area and 20
meters in height.

Intex Resources has short-listed four

potential sites in both Mindoro
Occidental and Mindoro Oriental for
its port from which to export the
nickel. The Silonay Delta, about 4
kilometers east of the city of Calapan,
is the main candidate, as disclosed by
Intex Resources consultant Ben de los
Reyes to a meeting with Calapan’s
city council. The livelihoods of Calapan’s population of some 3,000 people rely on
fishing for Dunpilas, Manamsey, Tamban, Tawillis and Pulambuntot (red tail), and
productive mangrove swamps containing nipa palms. The Calapan City Government
sought approval for the mining project and infrastructure in late 2007, but all residents
and barangay captains refused to give their consent.

21
A settling pond is an integral part of any processing plant that washes aggregate. Settling ponds can
be permanent or semi-permanent structures, dugouts, impoundments or raised tanks.
22
A port site in the vicinity of Lake Naujan (81.25 square kilometer) would be unwelcome. The Lake
is a UN Ramsar Protected area, the fifth largest lake in the Philippines, a National Park, a migratory
bird flight path, has important fisheries, and may still support the endangered Mindoro crocodile
(Crocodylus mindorensis). The tributary rivers from the proposed mine site drain to the lake.
http://www.jawgp.org/anet/ph001ea.htm

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Social and environmental and impact assessment

Exploration
Intex Resources insists that it has a legal exploration permit, but acknowledges that it
still needs a mining permit that it will seek after the environmental and social impact
assessment (ESIA) is complete. Golder Associates of Australia has been contracted to
conduct the ESIA. Norwegian standards, however, require an ESIA for the
exploration phase and approval from the local government.

In addition, the cumulative impacts of the many other mining permits on the island
have not yet been assessed. The original MPSA contained 9,720 hectares, which was
granted to Aglubang Mining Corp. and was first approved for exploration in 1998.
The approved MPSA No. 167-00-IV now covers 2,290.67 hectares, with the major
stock holder being Shapa and Alagag Mining with foreign partner Crew Minerals AS
Norway. 23

Transport
An assessment of the environmental and social impact of the access and exploration
roads into the mountain has not been completed or has not been made available.

Intex Resources’s contractor would deliver an estimated 3.8 million tons of limonite
ore each year from the mine to the preparation plant some 50 kilometers away near
the coast. The company has not yet decided whether to opt for road, rail, aerial/cable
conveyor belt, or pipeline as the means of doing so. Road and rail have not been ruled
out, but the company seems to favor a ski-lift type conveyor belt system. All the
options have different pros and cons; an aerial conveyance system could reduce
transport costs by 25%, but the impacts of dust on rice and other agriculture, aquatic
resources, and humans would need to be assessed.

Processing Plant
Before the high-pressure-acid-leaching process, the ore is first crushed and washed. It
is then “pressure-cooked” with 98%-strength sulfuric acid, producing a mixture of
nickel and cobalt sulfides. Sea water would be abstracted and used in the process.
Developments and tests on the ores over the last few months suggest that more nickel
metal can be extracted than previously thought and from a wider range of ores.

The company could then send the sulfides to Japan or elsewhere to be refined into
nickel and cobalt. But it might consider carrying out the refining process in Mindoro.
Refining involves adding ammonia to the mixed sulfides, a process that separates out
the metals leaving a residue of ammonium sulfate, which is used as an agricultural
fertilizer. The anticipated volumes of ammonium sulfate from the Mindoro Nickel
Project, if it goes ahead, would roughly equal current Philippine current imports of
ammonium sulfate.

To produce the sulfuric acid, Intex Resources proposes to import sulfur pellets bought
on the international sulfur market and convert them to sulfuric acid on site. This
chemical reaction is strongly exothermic: it would generate sufficient heat to power

23
http://www.mgb.gov.ph/rppriorityminingprojects.pdf

154
steam turbines that would in turn generate 80 MW of electricity. The processing plant
would use most of this electricity, but some might be available for public/civil use
(although less if metal refining were added.)

The ESIA would need to analyze the risks and occupational safety of importing
sulfur, converting it to sulfuric acid, emissions of sulfur dioxide, and eventually
neutralizing it.

Treatment of Residues and Tailings Pond

Large volumes of ore result in similarly huge volumes of tailings or slag that need to
be disposed of safely, while occupying a substantial land area for many decades, if not
in perpetuity. The residue depository or tailings dam would need a site about 1,000
hectares in area and 20 meters in height.

Vast amounts of alkaline limestone, approximately 630,000 dry tons each year, would
be needed to neutralize the acidity of the residues before they could be stockpiled.
The company has yet to identify where its limestone would come from. The
environmental and social impacts of opening or expanding a local limestone quarry
and transporting these massive volumes to a stockpile near the port site would need to
be assessed.

Intex Resources believes that its tailings pond would be harmless as, having been
treated with limestone, it would consist only of inert iron oxides and hydroxides,
mainly hematite with about 35% iron content. During the authors’ meeting with the
Intex Vice President, he postulated that this iron-rich residue could become a source
of iron in the near future, if appropriate extraction technologies were developed. The
main risk of the tailings pond would be siltation of fine particles into fish ponds,
mangroves, fisheries, shell-fish, sea grass beds, corals and marine life; thus, even
though its contents may seem harmless, care would have to be taken to ensure it
would never leak. Intex Resources was adamant, however: No exchange of the
residue materials with any surrounding environment will be allowed “if chemical or
physical effects are above environmental threshold values”. The Environment and
Social Impact Assessment (ESIA) would need to verify this claim.

Use of Water
Intex Resources is not proposing to use any water whatsoever at the mine extraction
site. It would, however, use large volumes of sea water and possibly river water at its
processing plant, but has stated that it would not release water back into the river and
sea that was of a lower quality than it took into the plant. The Environment and Social
Impact Assessment (ESIA) would need to verify this claim. Intex Resources has also
said it would not take out river water in such large quantities that it would either cause
saltwater to intrude or significantly lower river flows. This is one reason why Intex
Resources is looking for a processing site about five kilometers upstream from a delta
or estuary.

The ESIA would also need to consider the port expansion necessary to accommodate
the increased shipping traffic of importing sulfur and exporting sulfides or metals.

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Mine Site Rehabilitation
Intex Resources has already begun to plan the rehabilitation of the mined areas as
soon as the ore is mined-out using coco-netting techniques. Biotextiles, especially
coco-netting, are already widely used in the Philippines, and are recommended for use
in land restoration on site. The University of the Philippines at Los Baños is advising
Intex Resources on scientific aspects of biodiversity and forest research, possibly
related to rehabilitation. Intex told the authors that WWF Philippines had been
contacted to advise on wildlife restoration, but as WWF has denied this, we cannot
corroborate. The company has established tree nurseries where various hardwood
(mahogany and narra Pterocarpus indicus) and fruit tree species are being grown for
its extensive replanting program (more than 100,000 plants have been replanted to
date as part of its exploration, according to Intex Resources). The company says it
will eventually fully restore all the areas affected by its exploration activities (as
exploration is only an investigation-stage activity, it must provide full restoration with
respect to the environment). International good practice is to plant a multiple of trees
to replace those cut during exploration.

Governor Issues Order to Stop Mining Activities

Intex Resources does not seem concerned that Mindoro’s provincial government
issued a 25-year moratorium against mining in 2002.

Intex Resources claims that its Mineral Production Sharing Agreement (MPSA) is not
covered by the moratorium. The company also argues that its exploration and mining
permits were granted before the moratorium was issued. They noted that in other parts
of the Philippines, such political decisions have subsequently been reversed and that
lawyers have advised the company that resolutions cannot be issued with retroactive
effect. This would seem to be a case of “Gaps between Law and Justice” raised by
Justice Antonio Carpio (2007). Intex appears to ignore the fact that the DENR had

156
issued a notice of cancellation of the MPSA prior to the enactment of the ordinance
providing for a 25 year mining moratorium. Therefore at the time of the enactment of
the ordinance the MPSA had already been suspended on a number of grounds. When
the Office of the President subsequently reinstated the MPSA the moratorium was
already in place. Furthermore none of the grounds for cancelation of the MPSA were
ever addressed.

There seems to be legal uncertainty about moratoria against mining at provincial

government level. Usually national government priorities override Local Government
Unit (LGU) powers and policy. In mining, provinces and municipalities have to be
consulted, but eventually it appears they have to give their consent by law. On
October 20th 2008 the Governor of Mindoro Oriental issued a letter to Intex and
Aglubang Mining Corporation stating that they were in violation of the ordinance
providing for a 25 year moratorium on mining. The letter ordered a halt to on-going
public scoping of the mining project and threaten criminal charges should the
company continue to proceed with this activity.

Assessment of major contracting strategies

Most or all of the actual mining will not be carried out by Intex Resources itself, but
by unknown, yet to be commissioned, contractors or subcontractors, which would
provide all the equipment, materials and labor for the operation. If mining goes ahead,
it would be essential that the contractors are adequately trained for the job. Special
contractual clauses would be needed to ensure that the contractors closely follow the
Equator Principles and National Commission on Indigenous People (NCIP)
legislation. Permanent on-site monitors equipped with reliable mobile phones and
video cameras would be essential to ensure that contractors do not ignore the well-
being of the Indigenous Peoples, and that they follow previously-agreed rules.
Performance bonds or industrial insurance must be in place before any mining takes
place, along with effective training for contractors’ personnel. Financial institutions
providing funding for these operations should be held liable for breaches in contracts.

INTEX Continue to Plan

Despite the unresolved controversy in relation to its failure to obtain the consent of all
of the impacted indigenous communities, the lack of clarity regarding the potential
downstream impact and the questionable legality of its activities as a result of the
mining moratorium, Intex appears to be intent on proceeding with its operations as
evidenced by extracts from its plans below.

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Residue Storage

• The solid residue after processing is neutralized and treated before final storage in a
permanent facility

• The residue has the appearance of a red colored toothpaste which can be stored in a
valley behind a dam or in a stacked impoundment, surrounded by impermeable dikes

• Final storage options depend on actual terrain features in a site near the plant.

• The storage facility will require careful engineering, geotechnical, and environmental
studies

• The annual amount of treated residue will be approximately 8 million tonnes

Mine plan showing proposed mine blocks

• Two blocks will be affected by operations per year and immediately replanted and
restored after operation.

• Initial area (see yellow Diagram below) will take 12 years to complete and provide
approximately 500,000 tonnes nickel ( 1,000,000 lb nickel metal )

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Mindoro Nickel Milestones and Tasks Mindoro Nickel Milestones and Tasks
2007 2008

• Desktop study of the economic • Definitive Feasibility Study

viability • Social and Environmental Impact
• Pre-feasibility Study Assessment
• Environmental Baseline data • Ongoing environmental
gathering enhancement
• Social end Environmental Impact • Prepare Mine closure plan
Assessment • Environmental Impact Statement
• Community development and for ECC
information programs • Location of plant site and
• Environmental enhancement (eg. transport route
reforestation) • Continued resource drilling and
• Permitting (National and Local) ore test work
• Continued resource drilling and • Test mining and pilot-plant
metallurgical test work testing
• Establish workgroups with LGU and • Information, Education and
stakeholders Communication (IEC)

Mindoro Nickel Milestones and Tasks Mindoro Nickel Milestones (2010-2012)

2009
• Prefabrication and Assembly of
• Environmental Compliance processing plant
Certificate • Preparation of mine site and plant
• Permitting (National and Local) site
• Coordinate development plans • Construction of infrastructure
with LGU’S facilities (harbour, roads)
• Development of local skills and • Preparation of residue storage
enterprises facility
• Appointment of main contractor • Ramp up of mine operation to
• Commence detailed engineering 15,000 tpd (4-8 mill tpy)
design • Ongoing mine site rehabilitation
• Award of local fabrication and replanting
contracts • Organizing environmental
• Ordering of long-lead items as e.g. monitoring committees
Titanium autoclaves • Ongoing community development
and personnel training
• Direct employment of over 4,000
nationals during construction

159
Mine closure (projected life time 20-50 years)
• Decommission of mine and plant site
• Finalize rehabilitation of mine and plant sites
• Transfer of sustainable infrastructure elements
• Monitoring of mine and plant site
rehabilitation

Environmental Safeguards (2)

Requirements during Commercial Production
• Setting up of a Contingent Liability and Rehabilitation Fund inclusive of
Mining Rehabilitation Fund and Rehabilitation Cash Fund
• Environmental Protection and Enhancement Program approved by
Government
• Organization and implementation of a Multi-Partite Monitoring Team
• Payments to the Mine Waste and Tailings Reserve Fund
• Adherence to the Industry’s Environmental Code of Conduct

Environmental Safeguards (3)

Requirements for Decommissioning and Final Mine closure
• Plan for decommission and mine rehabilitation to be submitted and approved prior to
start of any mine development
• The plan to be formulated in consultation and coordination with the national and local
Governments, as well as the host communities
• Responsibility and liability of the Company for maintenance and monitoring at least
ten (10) years after closure
• Provision for socio-economic measures to reduce impact of mine closure
Implementation of Environmental Protection Enhancement Program (EPEP)

Source : all above - INTEX

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 “Mining will expose areas to the risk of erosion and also the establishment
of overburden stockpiles will create additional areas prone to erosion.”
Kvaerner Metals, engineering consultants regarding the pre-feasibility studies of the
Mindoro Nickel Project in 1998.

Source: Official Website Province of Oriental Mindoro

http://www.ormindoro.gov.ph/

Mindoro Conclusion, Recommendation and Map

The authors recommend that Intex and all mining companies should comply with the
mining moratoria in place on the island and immediately cease all activities in line
with the order issued to it by Governor Arnan C. Panaligan of Mindoro Oriental. The
authors can sympathise with the mining moratoria as they can see little justification
for mining on the Island of Mindoro. The Vision and Eight-Point Development
Program of the Province is commendable. Mining is likely to damage the island’s
important food production capacity, its fisheries and its eco-tourism potential and is
clearly inconsistent with it’s sustainable development plan. In the light of other
factors, including seismic and climatic conditions, the proposed Intex Nickel project
has the potential to cause massive damage for the water catchment area, impacting up
to 40,000 hectares of rice producing lands and exasperating flooding of towns and
villages.

The Intex Mindoro Nickel Mining Project, and the other 91 mining applications being
considered for the tropical island, would damage most of the water catchment area
and the possibility of sustainable food production in the foreseeable future of
Mindoro.

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 Nickel: Implications for the Philippines
Until about 1998, most of the world’s nickel came from sulfide, which was highly polluting. Sulfide
nickel is declining while the extraction of laterite nickel is soaring. Laterite often contains limonite
(hydrated iron oxides), some of which contain 1-2% nickel. The rest of the laterite mainly consists of
iron, aluminum, clays and some quartz, and so is generally considered relatively harmless to the
environment and human health (for a discussion of the toxicity of nickel compounds, see Nieboer,
Evert & Nriagu 1992). Of all the world’s estimated land-based nickel contained in laterites, some 70%
have now become economic, although laterite nickel accounts for only 40% of the world’s nickel
production so far.

Global nickel resources plus reserves stood at 194 million tons nickel in 2002, of which Australia's
share was 25.1% (48.6 million tons), making it the world’s largest holder of nickel reserves/resources.
In second place is Russia with 12.7% (24.6 million tons) followed by Indonesia with 11.6% (22.5
million tons). Other countries reporting nickel reserves plus resources in excess of 5 million tons are
New Caledonia (7.1%), Canada (6.7%), Cuba (6.0%), Philippines (5.1%), Papua New Guinea (4.6%),
Brazil (3.6%) and China (2.8%).24

Nickel production is not keeping up with world demand, about 75% of which is used in the
manufacture of stainless steel and nickel alloys. Demand is growing for nickel-based battery cathodes,
especially in electric cars. Production in China accounts for some 70% of recent growth in nickel
demand. Nickel prices, historically less than $10/tonne, reached record highs of $30-$40/tonne in
2007.

In tropical areas such as the Philippines, nickel is typically found in laterites produced by intense
weathering of igneous rocks. The commonest limonite laterite occurs over saprolite. Limonite usually
lies not far below the ground’s surface, at a depth of around 2 meters, hence relatively little top soil and
vegetation (overburden) has to be scraped off to expose the ore. Compared with mining for
underground nickel-containing sulfide ores or deep ores, laterite mining is much less costly.

In 1998, a low-cost technology was developed to recover nickel (and cobalt) from limonitic laterite
ores: “high-pressure acid leaching” (HPAL). HPAL involves cooking the ore in sulfuric acid at high
temperatures (up to 270ºC) and under very high pressures (600 psi) in titanium-lined autoclaves
resembling large metallic cigars. The advantages over previous extraction technologies are that far less
fresh and sea water, and sulphuric acid are required, which means correspondingly less limestone is
needed to neutralize the residual acidity; and far less water is released to the environment once the
process is complete.

The southern Philippine Surigao Region in north eastern Mindanao is now emerging as a major nickel
producer with at least eight nickel laterite projects, including those by Filipino companies SR Metals
and Agata Nickel. To date, the Surigao nickel laterite ores have been shipped unprocessed to Japan,
Australia and China. Local Bishop Juan de Dios Pueblos has reported the illegal exploitation of
minerals in his diocese and illegal shipments to Hong Kong. Cases have been filed by him in Manila
and with the Department of Justice (DoJ) and pleas for action by the Department of the Environment
and Natural Resources (DENR) to stop the illegal mining and exports. Despite much local concern and
fear of what will happen when heavy rains comes, local and national political interests supporting and
abetting the nickel mining are exacerbating the social and environmental problems

But HPAL plants are now starting up in the country to process the ore, such as that proposed at
Sumitomo’s Mitsui Coral Bay plant in Palawan (see Box: “Nickel Mining in Palawan Province”).
Value-added and domestic processing could bring more benefits to the nation if a nickel mine had a
long life expectancy and if all social and environmental costs had been fully internalized from the
outset.

24
http://www.em.csiro.au/news/facts/nickel/ni_prod_reserves.htm

162
Sumitomo/Mitsui’s mine at Coral Bay in Palawan is often portrayed as a good example of such cost
internalization, although its reputation is disputed. The Coral Bay mine has a capacity of 10,000
tonnes/year that is presently exported as mixed nickel-cobalt sulfide to Niihama in Japan to be refined
into electro-nickel. It is generally agreed, however, that Marinduque/Freeport Co’s nickel operation,
which began in Surigao 1974 and has a capacity of 35,000 tonnes/year, has a questionable reputation.

As limonite is widespread in the Philippines and if the nickel price stays high, nickel mining could
proliferate in the country. This is of concern, particularly when the limonite lies under forested land
where Indigenous Peoples live, because its extraction is bound to cause further deforestation and
damage rice and fisheries downstream from the excavations and processing. Moreover, if nickel-rich
saprolite becomes economic, the impacts would be greatly intensified.

Nickel Mining in Palawan Province

Some bad experiences

Abbreviated from: Grizelda Mayo-Anda and Katherine Mana-Galido, Ateneo de Manila University
School of Government and the Environmental Legal Assistance Center, 2008 (in press).

What are the likely impacts of the Index Mindoro Nickel Project? Consider the following data from
elsewhere in Palawan Province.

The Rio Tuba Nickel Mining Corporation (RTNMC) of Bataraza, Southern Palawan is 54% owned by
Sumitomo Corp. It was established in the early 1970s under a policy regime that gave it a virtual blank
check in amassing profit. However, Palawan Province – which includes Mindoro Island - is one of the
world’s biodiversity “Hot Spots”. Most of these areas are also populated by indigenous peoples (IPs) or
indigenous cultural communities (ICCs) who have lived on the land for generations.

The Strategic Environmental Plan for Palawan (special law RA 7611), was designed to protect
Palawan’s extraordinary biodiversity and IPs. Despite the law, most (73%) of the mining is inside non-
allowable areas (Core Zones or Restricted Use Zones of the SEP Law) and most of these are inside
ancestral domains. The mandatory Free and Prior Informed Consent (FPIC) process has been either
absent or questionable. There has been no successful rehabilitation program in eleven (11) abandoned
mining operations. Negative environmental and socio-cultural impacts have remained unresolved.
Endorsements given by local government units in early stages of mining projects have not conformed
to the social acceptability requirement of applicable laws.

From 1995 to present, RTNMC paid P76.2 million25 (~US$ 1,595,143 ) in excise taxes, but only P14.8
million (~US$ 309,817) has been remitted to the province of Palawan corresponding to the collection
for the years 1992-1994. The LGU’s pending share of P31 million (~US$ 648,942) is still to be
released to the municipality by the national government. In addition, real property tax assessment for
RTNMC (lands) and CBNC (structures and machineries) in 2006 are P1,775,871.00 (~US$ 37,175)
and P4,390,407.20 (~US$91,907), respectively. RTNMC has been delinquent in paying its real
property taxes for two years.

RTNMC has complied with its legal obligations to the government, in terms of excise tax payments
and real property taxes, but the host communities hardly benefited development of the municipality.
Current policies on mining provide more incentives for the investors such as tax holidays and
exemptions on anti-pollution devices. As for the RTNMC and CBNC, more tax exemptions were given
because of the proclamation of the HPP complex inside an Economic Zone.

25
$ equivalent based on http://www.xe.com/ucc/convert.cgi 12 October 2008 where 1 USD = 47.7700
PHP .

163
The RTN Foundation (RTNFI) coordinates the CRA and the Social Development Management
Program (SDMP). This P89 million (~US$1,863,094) 5-year plan covers 11 barangays and 12 ICCs
supporting basic needs and donating equipment and vehicles, and a useful scholarship program.
Creation of 586 jobs is one of the main benefits of the HP. But data at the beginning of 2008 show that
only 281 are the current employees of the HPP; the rest are migrants. Small salaries and lack of
benefits for the contractual and seasonal employees exacerbate relationships. Labour dispute cases have
been filed at the Department of Labour and Employment (DOLE).

The following are the negative impacts: (a) the surge in prostitution. (b) Deforestation and loss of
wildlife habitat the mined out areas and the Gotok limestone quarrying area. (c) Decrease in quantity
and quality of water supply. (d) Adverse impact on irrigation systems and decrease in agricultural
productivity. (e) Erosion and flashfloods. (f) Threats to coastal resources brought by erosion and
effluents. (g) Water and air pollution. (h) Health impacts such as skin lesions.

As the Bataraza municipality became dependent on mining incomes, traditional non-mining sectors
(fisheries, agriculture) have not prospered.

In 2001, the average annual income of a Bataraza family was lower than the average household income
in Palawan. In a poverty mapping exercise conducted by the Peace and Equity Foundation, Bataraza
was at the bottom of the list of the poorest municipalities in the province. Mining benefits in Bataraza
are not equitably and efficiently distributed, because the national government exercises discretion in
the release of LGU shares. RTNMC business incentives had not produced any positive impact on the
economy of Bataraza. While Bataraza has suffered the tradeoff, the company had more than recouped
its investments to the disadvantage of the country in general.

RTNMC’s corporate social responsibilities measures are not safeguards to ensure equitable direct
benefit to the communities. Identification of community projects did not undergo an effective review.
No criteria were developed to promote the standard of being sustainable and feasible for the
communities. The projects were identified based on the preference and judgment of few non-
representative leaders and do not represent the needs of the majority. Impacts to the environment are
not effectively monitored and the environmental costs are undervalued. The impacts to the environment
are evident but the communities lack the technical skills and resources to monitor the impacts. The
planned expansion of the mining operations to Mt. Bulanjao presents a conflict in the interpretation of
policies concerning natural growth forests. While it is clearly to be considered a protected area under
the ECAN zoning system of RA 7611,there have been compromises made in favor of the company and
in apparent contradiction with existing regulations.

These Recommendations following were made for Palawan’s Rio Tuba Nickel
Project. They are relevant for Index’s Nickel Project in Mindoro:
1. An assessment of the Strategic Environmental Plan for Palawan (SEP special law RA 7611) vis-à-vis
current mining policies should be conducted. Since the SEP prohibits the destruction of natural forests
as these areas have been declared as core zones or areas of maximum protection, the government must
determine to what extent commercial mining operations can still be allowed in Palawan.

2. Clear rules and regulations on the implementation of 1% royalty share for the affected indigenous
peoples (IPs) are needed. In the case of IPs/ICCs in Bataraza, the royalty payment was integrated in the
SDMP. Mining companies use the royalty payment as a strategy to influence the IPs and get their
consent. The payment and beneficial use of such royalty must be monitored and evaluated.

3. Transparent and participatory monitoring and evaluation of social development projects of mining
companies are needed. Identification of community development projects must be by a transparent,
representative and independent multisectoral group that will manage the funds.

4. The MMT (Multi-Sectoral Monitoring Team) must be strengthened and made as the main
mechanism for ensuring compliance of environmental laws, and ensuring the utmost beneficial
impacts.

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 Chronology of the Mindoro Nickel Project

1997 National Commission on Indigenous People (NCIP) began processing the claim of ancestral
domain in the watershed region between Mindoro Oriental and Occidental.
1997 14th March: MINDEX Resources Development Inc (a subsidiary of Mindex) was issued an
exploration permit by Mines and Geosciences Bureau (MGB) of DENR Region IV, for 9,720-
hectares.
1998 February: Certificate of Ancestral Domain Claim (CADC) application; Certificate of
Ancestral Domain Title (CADT) pending.
1998 12th July: A Mineral Production Sharing Agreement (MPSA) was issued to Aglubang Mining
Corporation (as Contractor) (another Mindex subsidiary) covering the same areas being
explored by MINDEX.
1999 17th February: MINDEX’s 1997 exploration permit was renewed but only for 2,290 hectares.
1999 29th June: Memorandum of Understanding (MOU) signed between Mindex/Aglubang Mining
Corp. and some of the Alangan and Tadyawan Mangyans with NCIP.
2000 29th February: Crew Development Corporation, a Canadian company, acquired 97.7% of the
shares of Mindex ASA; MINDEX became Crew Minerals Philippines Inc. (CMI).
2000 Crew Gold’s website reports MPSAs granted to Aglubang.
2001 18th March: Mindoro Bishop Warlito Cajandig letter to the President urging that the Mindoro
nickel MPSA be revoked
2001 21st March: NCIP office of the President of the Republic rules that the 1999 MOU is invalid
because it violates national legislation.
2001 11th April: DENR Secretary Heherson Alvarez writes a letter to President Macapagal-Arroyo
urging her to cancel the Mindoro nickel MPSA.
2001 1st July: DENR Secretary Heherson Alvarez revokes the Mindoro nickel MPSA.
2002 1st March: Provincial Ordinance declaring a 25-year moratorium on all mining in Mindoro
signed by Thaddeus Veenturanza and Secretary SP Elvin Matatangay.
2004 10th March: The July 2001 MPSA cancellation was revoked by Manuel Domingo, assistant to
the President.
2004 March: Bishop Cajandig, Provincial Governor, Mayors, Clergy & many other signatories
issue a position paper on the revocation of the cancellation of the Mindoro nickel MPSA.
2004 19th August: League of Municipalities, Calapan, strongly oppose reinstatement of the MPSA.
Signed by 14 municipal Mayors.
2004 5th October: House of Representatives Resolution proposed by Congressman Rodolfo
Valencia of Oriental Mindoro, urging DENR to uphold its cancellation of MPSA167-2000-IV.
2004 17th December: Jon Steen Petersen, Crew’s senior vice-president, issued a 9-page Memo on
the project’s social acceptability, including a section on “Aggressive anti-mining
misinformation, deception and misleading claims”. It repeats the “only 100 hectare” claim,
omits mention of impacts of access or other roads, of the major coastal processing plant and
terrestrial dumps.
2005 June: Memo by Crew CEO Jan Vestrum & 2 senior vice-presidents makes two striking
claims: (1) “Social acceptability has successfully generated public support for the project
locally”. (2) “Wildlife…. is limited due to immature forest growth in entire concession area”.
2005 10th November: The then DENR Secretary Michael Defensor reinstated the Mindoro nickel
MPSA by falsely claiming that the Mindoro Oriental province supported Crew/Aglubang
Corp.
2005 19th November: Lauron De Los Reyes law firm representing Crew Nickel wrote to Mindoro
Oriental Governor Arnan Panaligan claiming that the project is “outside the realm of its
efficacy considering that MPSA ante-dates the SP (Sangguniang Panlalawigan) moratorium”.
Offers PHP 27 million (US$ 565,200) to the impacted Indigenous Peoples, and PHP 570
million (US$ 12 million) to the local village Villa Cerveza in local taxes. States that the three
municipalities of Victoria, Socorro, and Pola will gain PHP 200 million (US$ 4.2 million ) to
PHP 600 million (US$12.6 million ) from local taxes, and the national government to gain
PHP 1 billion (US$21 million) to PHP 1.2 billion (US$25.1 million) from taxes.

165
Chronology of the Mindoro Nickel Project Contd.

2006 29th January: Archbishop of Jaro, Angel Lagdameo, presents the Statement on Mining for the
Catholic Bishops Conference of the Philippines (CBCP), which demands the repeal of the
1995 Mining act; and states that mining is encroaching on 17 important biodiversity areas, 35
national conservation areas, and 32 national integrated protected areas. It reaffirms 1998
“Statement of Concern” and urges President Macapagal-Arroyo to recall all approved mining
concessions, and to support Indigenous Peoples by stopping 24 priority mining projects.
2006 1st August: The local group ALAMIN (Alyansa Laban sa Mina) writes letter to the UK
Ambassador appealing for the UK Government not to support Crew because it is violating
Philippines law.
2006 18th October: Mindoro Oriental Governor Arnan Panaligan and Bishop Warlito Cajandig write
letter to DENR Secretary Angelo Reyes urging cancellation of the Mindoro nickel MPSA,
because it is: (a) in a No-Go watershed, (b) in an Ancestral Domain, (c) opposed by both
Congressional Districts, 15 city/municipal Mayors and all provincial officials, including the
Governor and the Bishop; and (d) because Crew Minerals Corp “has not one iota of social
acceptability”.
2007 Crew Minerals creates Intex Resources which it lists as a separate company having Mindoro
Nickel Project as its main asset
2007 October 20th Letter of the Provincial Governor of Mindoro Oriental, Arnan Panaligan,
declaring that continuation of the scoping activity will cause the arrest of those involved and
the filing of criminal cases against them for violating the Ordinance providing for mining
moratorium in the province.

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 POSITION PAPER ON ECOLOGY, FOOD SECURITY
AND THE THREATS OF LARGE-SCALE MINING OF INTEX
RESOURCES/AGLUBANG IN ORIENTAL MINDORO

(Submitted to Her Excellency, President Gloria Macapagal-Arroyo, October 16, 2008)

We, pastors of different parishes, leaders of peoples organizations, together with our
partners in the civil society, are alarmed by the prevailing situation of ecological crises and
imminent destruction of the environment occasioned by a lack of respect for nature and the
plunder of our natural resources by large-scale mining, with Mindoro island having a total of
92 mining applications as reported by Mines and Geosciences Bureau (MGB) in January
2008.
We are particularly concerned about the continuing exploration of the Mindoro
Nickel Project of Intex Resources and Aglubang Mining, which critically threatens the
food security and ecological integrity of Oriental Mindoro since the mining concession covers
one of the province’s actual watershed areas as duly declared and identified in its Provincial
Physical Framework Plan. The mining site encroaches on the Mag-asawang Tubig Watershed,
which is the largest source of irrigation water for the 40,000 hectares collective rice land in
the city of Calapan, Municipalities of Naujan, Baco and Victoria, Oriental Mindoro. The
threatened municipalities and the City of Calapan have a combined rice production of
169,608 metric tons in 2006, which is 51% of the total provincial production, enough to feed
782,805 people for a year. In 2000, the estimated agricultural productivity of Oriental
Mindoro at farm-gate price is PhP 11,414,553,000.26 Assuming that mining will adversely
affect only 30% of the total productivity, the total loss of the province would be PhP 4.027
Billion!27
Admittedly, Intex will have to dispose 8 million tons of mine waste annually.
According to Jon Petersen, Senior Vice President of Crew (now Intex), land based storage is a
environmentally unsafe: “A concern for land based tailings deposit is the risk of erosion and
unwanted displacement of the materials as a result of natural hazards, as with all tailings
deposits . . .” However, land based tailings dam is now being considered to be constructed in
any of the targeted municipalities of Pola, San Teodoro, Pinamalayan and Calapan City.
The 9,720 hectare-mining area is within the ancestral domain claim of the Alangan
and Tadyawan indigenous Mangyan communities. The mining operation of Intex/Aglubang
will result to the displacement of several Mangyan communities. The Mangyan Indigenous
Peoples’ organizations of SANAMA and KAMTI, whose CADCs (Certificate of Ancestral
Domain Claims) fall within the mining concession, had expressed their written opposition.
However, the mining company, in collusion with some officials of the NCIP, organized a new
tribal group, the Kabilogan, from whom they maliciously manufactured the document of
consent to the mining activities.
The Mindoro Nickel Project threatens the extremely rich biodiversity of the province,
considered as the 7th most important biogeographic zones in the world. The 2002 Final Report
on Philippine Biodiversity Conservation identified Mindoro, particularly the mining site, as
extremely high conservation priority areas for plants and birds and terrestrial animals. In
terms of importance level, the area belongs to extremely high terrestrial and inland water
areas of biological importance.
In July of 2001, for all of the above reasons, the Department of Environment and
Natural Resources revoked the mining concession considering the environmental and social
impacts of the project. The rejection of the mining project on the premise of preventing
ecological destruction and socio-economic dislocation was articulated by the former DENR
Secretary, Heherson Alvarez himself: “The Mindoro Nickel Project is one case where

26
US$241,936,263.00: http://www.xe.com/ucc/ Live rates at 14 October 2008 1 USD = 47.2611 PHP
27
US$85,207,571.00: http://www.xe.com/ucc/ Live rates at 14 October 2008 1 USD = 47.2611 PHP

167
sustainability is bound to fail…President Arroyo is fully aware of the situation. …what does it
gain the nation to be short sighted and merely think of money, when an irreparable damage to
the environment will cost human lives, health and livelihood capacity of our farmers and
fisherfolks endangering the food security of our people.”

However, on March 10, 2004, the Office of the President revoked and set aside the
Notice of Termination/Cancellation earlier issued against the MPSA (Mineral Production
Sharing Agreement) of Aglubang Mining Corporation. The decision of promoting mining,
applauded by the foreign transnational corporation, had caused indignation and anguish
among our people. The present maneuvering of mining corporations to forcibly make their re-
entry by taking advantage of the national policy for the revival of the mining industry is
totally irreconcilable to the genuine welfare and interest of the people of Mindoro.
The people’s unified stand against the Mindoro Nickel Project and their opposition to
the entry of any mining operation in the province, for the time being, were clearly articulated
in the Ordinance promulgated by the Sangguniang Panlalawigan of Oriental Mindoro on
January 28, 2002, declaring a mining moratorium28 in the province. Since the economic
thrusts of the Provincial Government of Oriental Mindoro are anchored on food sustainability,
eco-tourism and the development of the agri-industry, the entry of mining operations is found
to be detrimental to the sustainable development agenda of the province. Oriental Mindoro’s
Provincial Physical Framework Plan specifically rules out the development of mining
industry.
We join our people in making an appeal to President Gloria Macapagal-Arroyo to
ensure that our mining moratorium is respected and to save our critical watershed presently
being threatened by the mining operation of Intex and Aglubang Mining.
The large-scale mining operations fail to bring genuine development to the poor
countries. The World Bank, in its commissioned report, Extractive Industry Review (EIR)
released in July 2004 confirmed that extractive industry contributes to greater poverty rather
than easing it! The report reveals that “countries relying primarily on extractive industries
tended to have higher levels of poverty, conflict and corruption than countries that had more
diversified economy.”
As Christians committed to our vision to promote life, justice and equity in an
ecologically sustainable and people-oriented communities, we believe that environment
should never be sacrificed - that “an economy respectful of the environment will not have the
maximization of profit as its only objective, because environmental protection cannot be
assured solely on the basis of financial calculations of cost and benefits. The environment is
one of those goods that cannot be adequately safeguarded or promoted by market forces.”
(John Paul II, Encyclical Letter Centesimus Annus, 40)

We entrust all our endeavors to God, our Creator, who gives us the mission to care
for the earth and all of creation, of which we are part (Gen. 1:28).

Signed this 14th and 15th day of October 2008,

Oriental Mindoro.

28
Provincial Ordinance No. 001-2002 declares that “it shall be unlawful for any person or business
entity to engage in land clearing, prospecting, exploration, drilling, excavation, mining, transport of
mineral ores and such other activities in furtherance of and/or preparatory to all forms of mining
operations for a period of twenty-five (25) years.”

168
169
 Sustainable Development and the Intex Nickel Mine and other proposed Mining Projects on
Mindoro Island, Philippines

Mindoro, “the Golden Island,” has a wild mountain terrain which was covered by forests that protected the ancestral domain of the Mangyan
indigenous peoples, watersheds and wildlife. In the 1950’s forest cover was 967,400 hectares and only about 50,000 remain today mainly due to
logging. Mining will increase the damage. The Philippine Biodiversity Conservation Priorities Report (2002) identified the Intex mining concession
area as “extremely high terrestrial and inland water areas of biological importance.” According to Mines and Geosciences Bureau, dated January
2008, there are a total of 92 mining applications. This information was received after the map opposite had been prepared. It only shows the
Intex, formerly Crew Mine. 92 mines would be a complete recipe for disaster for Mindoro and seriously damage its ability to produce food.

There is a world shortage of rice. Mindoro is acclaimed as the “Food Basket of Southern Tagalog.” Its fertile soils, good growing climate and
irrigation water from the mountains make it ideal for growing crops including rice, all season vegetables and for fish pond farming. Oriental Mindoro
produced 332, 000 metric tons of rice (2006). Communities likely to be affected by the Intex mine produced 51% of that total. Virtually all food
producing areas will be affected by 92 Mines.

Mindoro has vital fish breeding and fishing grounds and the Verde Island Passage is a global center for marine biodiversity. The island attracts
tourists to its sandy beaches, small islands, coral gardens and fishing. Easy access from Manila makes it suitable for eco-tourism development.

Oriental Mindoro’s Provincial Board’s Ordinance (2002) explicitly forbids all forms of large scale mining in the province for a period of 25 years.
Similar ordinances were promulgated by Municipal Councils including Victoria (April 2008) where Norwegian company Intex seeks to mine nickel.
Alamin (a Provincial-wide coalition of Civil Society, NGOs, POs, Church networks, individuals and local governments) oppose mining in the
Province.

National and International experts commissioned by the WGMP visited the area in 2008. They produced a report “Philippines: Mining or Food?” and
this map which clearly shows how the Nichel mine will overlay the watersheds and indigenous peoples’ land. The experts believe the Human Rights
of the Mangyans, already affected, will be further affected by mining on their ancestral domain. The mine will displace some communities and
adversely affect others. Flooding, due to deforestation, is already occurring. Mining in head waters of rivers is likely to make flooding worse. Siltation
and pollution is likely to damage crops, fish farming, marine fisheries and eco-tourism. Watersheds need immediate protection and reforestation not
mining..
Mag-asawang Tubig Flooding from proposed Mine area Miners drilling in mountain forest Protest against mining

170
171
ANNEX Entire Report Table of Contents

Foreword to Second Mining Report vii

Message from Senator Aquilino Pimentel Jr . viii
Message from Bishop. Zacarias C. Jimenez, DD ix

EXECUTIVE SUMMARY AND RECOMMENDATIONS xi

Summary recommendations to the Philippine Government xvi

Summary recommendations to Mining Corporations xxi
Summary recommendations to Development Agencies, NGOs, World Bank xxiii
Summary recommendations to the Investor Community xxv
Summary recommendations to Mining-Impacted Communities xxvii

INTRODUCTION 1

Chapter 1: Mining and Food Security 4

1.1 The Importance of Rice 4
1.2 The 2008 Food Price Frenzy 5
1.3 Peak Oil, Peak Food, Peak Phosphate, Peak Water & Peak Stable Climate 7
1.4 Why Does the Philippines Import Rice? 8
1.5 Reasons for Decreased Domestic Rice Production 9

Chapter 2: Mining and Forests 11

2.1 Deforestation Harms Rice and Fisheries 11
2.2 The Need for Watershed Conservation 13
2.3 Deforestation Increases Poverty 13
2.4 Indigenous Peoples and Forests 13
2.5 Rainforestation 14

Chapter 3: Mining and Marine Resources 15

3.1 Mining and Fisheries 15
3.2 Pollution From Mining 15

Chapter 4: Flawed Government Policy 18

4.1 Scale of the Mining Problem 18
4.2 Conflict of Interest 20
4.3 DENR Promotes Mining and Demotes Environment 20
4.4 Corruption in Environmental Governance 22
4.5 Philippine Mining Act, 1995 23
4.6 Separate Exploration from Exploitation 29
4.7 Post-Mining Rehabilitation Must Be Enforced 29
4.8 Government and Society Split on the Benefits of Mining 32

Chapter 5: Indigenous Peoples 36

5.1 Indigenous Peoples and the National Commission on Indigenous Peoples 36
5.2 The Role of the National Commission on Indigenous Peoples 37
5.3 Rights of Ownership and Ancestral Domain 38
5.4 Right to Develop Lands and Natural Resources 38
5.5 The Right to Benefits 38

172
5.6 Protections Afforded by Indigenous Peoples’ Rights Act 39
5.7 Free and Prior Informed Consent 39
5.8 FPIC and ESIA 41
5.9 Indigenous Peoples need Environmental and Social Impact Assessments 42

Chapter 6: Human Rights, Militarization and Mining 44

6.1 Human Rights and Mining 44
6.2 Official Reports Documenting Human Rights Violations 45
6.3 Human Rights, Civil Society and the Catholic Church 47
6.4 The Human Security Act 48
6.4 Further Militarization of Mining Projects and Investment Defense Forces 49
6.5 The Relationship Between DENR and NCIP 51
6.6 DENR Engulfs NCIP 51

Chapter 7: Philippine Mining Economics 53

7.1 Deficiencies in Mining Economics 53
7.2 Internalizing Currently Externalized Costs 54
7.3 Policy Options for Internalization 54
7.4 Benefit Allocation 55
7.5 The Resource Curse 55
7.6 Impact-Benefit Agreements 57
7.7 Assessment of Cost Externalization in Philippine Mining 59
7.8 Mining is the wrong Engine for Growth 61

Chapter 8: The Position of the International Agencies 70

8.1 The World Bank Group 70
8.2 International Development Assistance to DENR 72

FIELD TRIP CASE STUDIES 73

Case Study 1: Iron Ore & other Minerals, Midsalip, Zamboanga del Sur - Mindanao
Island 75
Background 75
Water, Food and Livelihoods 77
The Threat of Mining in Midsalip 79
Potential Impacts and Opposition 82
Midsalip Visit 84
Midsalip Conclusion, Recommendation and Map 85

Case Study 2: Copper and Gold Mining Zamboanga del Norte - Mindanao Island 94
Background 94
Mining damage 95
Future plans? 98
Sibutad and Libay Visit 99
Sibutad and Libay Conclusion, Recommendation and Map 100

Case Study 3: Copper and Gold Mining in Tampakan, South Cotabato – Mindanao
Island 106
Background 106
Threat of a huge open-pit copper and gold mine 108

173
Uncertainty Raising Fears 113
Visit to South Cotabato 118
South Cotabo Conclusion, Recommendation and Map 121

Case Study 4: Nickel and Cobalt in Davao Oriental – Mindanao. The Hallmark
Project 126
Background 126
Proposed Mining 127
Environmental and Social Impacts 129
Opposition and Deficiencies in Consultation 31
Visit to Pujada Bay / Mt Hamiguitan 134
Pujada Bay Conclusion, Recommendation and Map 135

Case Study 5: Nickel Mining – Mindoro Island 142

Background 142
Mining Proposal 143
Opposition 144
Indigenous opposition 145
Visit to Mindoro 148
Company continues to plan 149
Governor Issues Order to Stop Mining Activities 156
Mindoro Conclusion, Recommendation and Map 161

Case Study 6: Gold and Nickel Mining - Sibuyan Island 172

Background 172
Forest Resources Already Threatened 173
Proposed Industrial Mining 173
Opposition 175
Visit to Sibuyan 176
Sibuyan Island Conclusion, Recommendation and Map 177

Recommendations to the Philippine Government 181

Recommendations to Mining Corporations 191
Recommendations to Development Agencies, NGOs & the World Bank Group 196
Recommendations to the Investor Community 199
Recommendations to Mining-Impacted Communities 202

Annex A: Church Declarations and Position Papers on Mining 206

Annex B: Civil Society Reports on Human Rights Violations 212
Annex C: Strategic Environmental Assessment (SEA) 213
Annex D: Health Impact Assessment (HIA) 217
Annex E: Literature Cited and Guide to Further Information 221
Annex F: Mines and Communities (MAC): The London Mining Declaration. 246
Annex G: Geohazards and Earthquakes in the Philippines 251
Annex H: Philippine Biodiversity Conservation Priorities 260

174
 About the Authors
Robert Goodland is an environmental scientist specializing in economic development.
He advised the World Bank Group from 1978 through 2001. He then became the
technical director to H.E. Dr. Emil Salim’s independent Extractive Industry Review
(eir.org) of the World Bank Group’s portfolio of oil, gas and mining projects. He was
elected president of the International Association of Impact Assessment, and
Metropolitan Chair of the Ecological Society of America. He was awarded the World
Conservation Union’s Coolidge medal in October 2008. ([email protected])

Clive Wicks has 48 years of experience of working in engineering, agriculture and

environment, specializing in the impact of extractive industries on the environment. He
is a vice chair of IUCN-CEESP (IUCN’s Commission on Environmental, Economic and
Social Policy) and co-chairs SEAPRISE (IUCN-CEESP’s Working Group on the Social
and Environmental Accountability of the Private Sector). He worked in the international
environmental movement for the last 24 years, mainly with WWF UK. He headed WWF
UK’s African, Asian and Latin American programs, and represented WWF at G8, World
Bank, International Finance Corporation, UNEP and UNDP meetings on extractive
industries. ([email protected])

.. Perhaps reluctantly we come to acknowledge that there are also scars which mark the surface of our
earth: erosion, deforestation, the squandering of the world’s mineral and ocean resources in order to fuel
an insatiable consumption. Some of you come from island nations whose very existence is threatened by
rising water levels; others from nations suffering the effects of devastating drought. God’s wondrous
creation is sometimes experienced as almost hostile to its stewards, even something dangerous. How can
what is “good” appear so threatening? ...My dear friends, God’s creation is one and it is good. The
concerns for non-violence, sustainable development, justice and peace, and care for our environment are
of vital importance for humanity.
His Holiness Pope Benedict XVI, 23rd World Youth Day, Sydney, Australia, July 12-21, 2008

Photos if the fact-finding trip can be found on:

http://workinggrouponmininginthephilippines.blogspot.com

Working Group on Mining in the Philippines

(WGMP)
28 Redington Road, London, NW3 7RB
[email protected] 1