Mindanao miners unhappy with foreign partners
By EDWIN G. ESPEJO, Newsbreak in Davao City | 12/28/2008 10:49 PM
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Local mining firms operating in Mindanao and their foreign partners are locked in boardroom battles that are reportedly turning out to be more challenging than investors talking to anti-mining activists.
Disagreements go beyond clashes over management style and cultural sensitivities, says Vicente Jayme Jr., president of Asiaticus Management Corporation (Amcor), a local mining firm that recently rescinded its joint venture agreement with Australian mining giant BHP Billiton to explore ore deposits at the Pujada Nickel Project in Davao Oriental.
BHP Billiton, which acquired a 40-percent stake in Amcor in 2002, is the world's biggest diversified mining company. It holds varying amounts of stakes over scores of mining claims all over the world.
"We have been waiting for them (BHP Billiton) over the last seven years to make good of their commitment to pour in investment for the project exploration," Jayme said.
This has delayed the exploration activities of Amcor.
The spike in the world prices of metals in the recent years—due to the increasing demands for construction in developing countries—has resulted in a worldwide mining boom.
With the country’s rich metal reserves and a law that allows foreign corporations to wholly own mining firms and claims in the country, the mining giants flocked to the Philippines.
Republic Act 7942 or the Philippine Mining Act of 1995 was meant to revive the mining industry to its heydays during the pre-martial law era, when it was Asia’s biggest and most developed. Although the law was widely questioned for violating the constitutional provision limiting foreign ownership to 40 percent, it was later upheld by the Supreme Court.
Amcor vice president Lauriano Barrios said he is getting the impression that big foreign mining companies are in the Philippines for the wrong reasons, however. He accused some of them of engaging in “mine banking.”
In claiming stakes in Philippine mining projects, Barrios said, these mining giants are already amassing huge profits in the stock markets. "They are building up their capital at our expense."
With so many interests in mining sites all over the world, exploring nickel at the Pujada project has become the least of BHP Billiton’s priorities, Barrios added.
"What about us? We cannot wait for them forever. Ginugutom nila ang mga (They are starving) Filipino investors," he rued.
Jayme refers to the boardroom battles between local and foreign firms as “birthing pains” of the Philippine Mining Act. He believes there’s a need for government to review the policies. The government should “support what is Filipino that belongs to the Filipinos,” he said.
Jayme said some global mining firms are using their “proprietory rights” over mining technologies and stacks of cash to hold Filipino mining interest hostage. But he argued that technologies are no longer the private domains of these foreign mining firms.
For the Pujada Nickel Project in Davao Oriental, Jayme said, Amcor has sought other possible investors to push through with the exploration of the Pujada Nickel Site.
"We have made several consultations with Chinese and Japanese mining firms and they are willing to help us out," Jayme said.
A corporate war is also brewing at the Sagittarius Mines Inc. in Tampakan, South Cotabato.
Australia-based mining company Xstrata Copper in 2007 assumed management control of Tampakan through its Philippine affiliate Sagittarius Mines Inc. It is engaged in a bitter and costly war to hold off a bid of a group of Filipino investors to take control of over 34 percent stake currently held by its partner, Indophil Resources Ltd., also an Australian mining company.
This is the second takeover attempt in a year against Xstrata Copper, which succeeded in stopping the Hong-Kong Based Stanhill Consortium to get into the corporate picture.
In 2006, Xstrata Copper, one of five commodity business units of Xstrata Plc (the world’s fifth largest mining company), acquired 62.5 percent of controlling interest in Tampakan.
With ore deposits of over 12.8 million tons of 0.6 percent copper and 15.2 million ounces of 0.2 grams per ton of gold, the site is reportedly the biggest of its kind in Asia.
The site’s big potential has sent the share prices of Indophil Resources Ltd. at the Australian Stock Exchange from Aus$0.35 to $1.32 per share at the time Stanhill made its offer in June this year.
Xstrata’s takeover of Sagittarius Mines supposedly heightened the opposition to the mining operations of the company.
Filipino partners of Philex Gold in Surigao del Norte are also moving to buy out 50-percent interest in Anglo American Plc. following divergent views with the foreign mining firm "on a number of assumption and conclusions made in its feasibility studies such as metal prices, treatment and refining charges, engineering and owner's costs and capital contingency."
Anglo American Plc is among the world's leading mining giants.
