Foreign miners hopeful RP will keep pledge to open up industry

CANATUAN (AFP) — Foreign miners are hoping the Philippine government will stand by them and their investments here in any face-off with the hugely powerful Roman Catholic Church which opposes mining.

The stakes are potentially crucial for the country, impoverished and burdened by a fast growing population, with officials estimating the industry could generate export earnings of $5 billion to $7 billion annually and create thousands of desperately needed jobs.

"There’s a little bit of a pause because of the uncertainty but ultimately the government, we hope, will do the right thing," said John Ridsdel, corporate advisor to TVI Pacific of Canada at a ceremony here to top off a tailings dam.

The company, anxious to ensure that all the powers are mollified, called on the services of a local tribal priest to sacrifice a squealing pig to sanctify the operation on this Philippine mountain.

The bishops in this Southeast Asian Roman Catholic nation earlier this year demanded in a pastoral letter that President Arroyo impose a nationwide mining ban, claiming it was socially divisive and environmentally disastrous.

For its part, the government stressed that repealing the 1995 Mining Law, recently cleared by the Supreme Court, was a nonstarter due to its potential economic fallout.

The trouble is that no one in the industry is convinced that they have heard the last on the issue due to the influence the church wields on temporal matters in the world’s third most populous Catholic nation.

With metal prices running at record levels, the drive to mine is powerful in the Philippines, which boasts one of the world’s most generous mineral endowments. Mining firms are trying to borrow hundreds of millions of dollars from banks and other sources for some two dozen major projects.

TVI, which mills 600 tons of gold and silver ore each day two years into its operations, has had the smoothest sailing so far among the eight projects that have reached the production stage.

Others have run into serious trouble.

Australia’s Lafayette Mining has been forced to halt operations on Rapu-Rapu island, having been hit with fines after a waste spillage in October was blamed by residents and church officials for fish kills.

The public relations disaster has cost Lafayette’s Philippines managers their jobs. With no cash flow and with overhead costs piling up, its creditors are also circling.

Manuel Agcaoili, president of Lafayette’s Philippines processing unit, insists the mine has complied with all safeguard measures but Manila is withholding agreement for a test run while it evaluates the results of several independent fact-finding reports.

Regardless of the government pronouncements in support of mining, industry officials say the real test of its commitment would be what action it takes on the Rapu-Rapu case.

A fact-finding commission headed by the local Catholic bishop, Arturo Bastes, called last week for the cancellation of Lafayette’s mining contract as well as the review of the mining law, citing alleged pollution of the surrounding waters and other issues.

But Environment and Natural Resources Secretary Angelo Reyes told AFP that any review of the mining law would only be "for purposes of providing it more teeth to protect the environment."

Presidential spokesman Ignacio Bunye said "the Arroyo administration is for the full implementation of the Mining Act but always under strict implementation of environmental safeguards."

Chamber of Mines of the Philippines president Benjamin Philip Romualdez urged the government to take "specific actions relative to Rapu-Rapu" instead of punishing the entire industry.

"Individual companies have announced that their activities are moving forward," Romualdez added.

"As long as (investors) know up front what the rules are, then they’ll plan their investments accordingly," said Canadian ambassador to Manila Peter Sutherland, gritting his teeth as he watched the animal sacrifice here.

"What they don’t want to happen is any major change after they’ve made their investment," he added.