Supreme Court asked to stop bidding for mining in Diwalwal

A mining firm has asked the Supreme Court to stop the Department of Environment and Natural Resources (DENR) and the Philippine Mining Development Corp. (PMDC) from proceeding with the Dec. 3 bidding for mining development of a 1,620-hectare area in Mt. Diwalwal in Davao.

The area is part of the 8,100-hectare Agusan-Davao-Surigao Forest Reserve or the Mt. Diwalwal gold rush area believed to have the richest gold deposits.

In a six-page urgent motion, the Southeast Mindanao Gold Mining Corp. (SEMGMC) said the High Court should exercise its injunctive power and prohibit the DENR and its corporate arm, the PMDC, from prematurely putting up bidding for the development of the Upper-Ulip Paraiso site in Mt. Diwalwal until the court resolves the case the firm had filed against the two agencies.

Several Chinese-owned corporations have pre-qualified for the bid. Local officials in the area have denied that the mining concession has been awarded to Chinese firm ZTE Corp.

“In defiance of the Court’s authority, the PMDC has committed and is continuously committing a contumacious act in bidding out the development of a portion of the 8,100 hectares covered by Presidential Proclamation No. 297,” the SEMGMC stressed.

Presidential Proclamation 297 issued in 2002 excludes an area of 8,100 hectares in the Agusan-Davao-Surigao Forest Reserve and proclaimed it as a mineral reservation.

The SEMGMC, however, argued that Executive Order 318 issued on June 9, 2004 mandates that the reclassification of forest reserves should be done through an act of Congress and not by presidential proclamation.

“The act of PMDC of bidding out mining operations within the area covered by Presidential Proclamation No. 297 is an affront to the Court’s judicial authority over the issues raised in the instant petitions.

“The validity of Presidential Proclamation 297 is still sub judice before this Court,” it said.

The firm declared that so as not to render the case moot and academic, a TRO or a writ of preliminary injunction should be issued enjoining the DENR and the PMDC from taking any action that would preempt the resolution of the issues raised in the case.

“In the event that the bidding is conducted on Dec. 3, 2008, respondent SEMGMC further prays that said bidding and any award as a result thereof be nullified, there being no valid subject of the bidding as long as the present petitions remain unresolved,” it added.

The SEMGMC said the DENR is undermining the authority of the High Court when it initiated the bidding process for the portion of the 8,100 forest reserve, which was subsequently declared as a mineral reservation through Presidential Proclamation 297, whose constitutionality is one of the issues raised before the SC.

“Thus, not only is it premature to bid out the area for development, it is presumptuous to say the least, considering that the Court may declare unconstitutional Presidential Proclamation 297. What then of the contract for the development offered for bidding by PMDC,” the mining firm added.

The exploration and development for mining of the Mt. Diwalwal area is one of four projects covered by a memorandum of understanding (MOU) between the Philippine government and ZTE International Ltd. signed on July 12, 2006.

Partner disputes

Meanwhile, Environment Secretary Jose Atienza said the DENR plans to enter into joint ventures with potential investors instead of partnering them with existing mining operators.

Atienza noted that one reason the local mining sector is being stalled is due to quarrels between the investor and local partners.

He cited the cases of BHP Billiton and Peter Tan, Oceana Gold and Benguet to name a few.

Such disputes, Atienza said, have affected the local mining industry, scaring off potential investors.

The DENR, Atienza said, also plans to offer more of its existing mines being held by the PMDC but which are not in operation.

The government is prioritizing the revival of inactive mines that still have high prospect for mineral deposits as part of its effort to attract more investments in the mining sector.

Some of these inactive mines that the government is trying to revive are the Amacan copper-gold mine project in Mabini, Compostela Valley; Batong Buhay copper-gold project in Pasil, Kalinga-Apayao; and the Diwalwal Direct State Development in Diwata, Monkayo, and Compostela.

The DENR said at least 65 projects have been “reclaimed” by the government and have been offered for public bidding.

He had previously announced that the DENR would review all mining claims and tenements to “re-own” dormant claims and tenements so that it can be reallocated to other investors who will actively pursue the projects.

He noted that claimants for the purpose of land banking are unproductively holding thousands of claims and tenements.

Atienza has already ordered the Mines and Geosciences Bureau (MGB) to “review and clean up the list of all mining claims and tenements so that we can cancel claims for dormant mines and declared them ‘re-owned’ by the government.”

However, mining industry analysts point out that before the DENR cancels addi-tional existing claims and tenements, it should first dispose of the previous mining projects that have been turned over to the PMDC.

Atienza had argued “those who file a claim have an obligation to develop their claims.”

Instead, what is happening, he noted, is that “thousands file claims for the purpose of land-banking.”

Such practice, he said, has a “negative effect on investors.”

“When investors come, they cannot find any available land anymore because all have been previously claimed,” Atienza admitted.

The Philippine government, he said, wants to attract local and foreign investors who are really interested in developing and operating the claim.

The first to be reviewed, he said, are claims and tenements of 10 years and over, followed by five years and over and then three years.

Claimants, Atienza said, are normally given about two years to start development.

Thus, Atienza said, the DENR wants to review first those with the longest claims who up to now have not done any development.

Those with claims of just three years of less, he explained, may just be slapped a penalty initially for their failure to start development of the claim rather than seeking an immediate cancellation of their claim or tenement.

– With Marianne Go