DEEPER INTO THE DEEP HOLE

What’s in store for the massive Tampakan Project in South Cotabato, once touted to be the largest single foreign direct investment in the country? What benefits do mines bring elsewhere in the world and how do we feel about the industry right on our soil? Veteran reporter Neilwin Joseph L. Bravo takes time off from his sojourn Down Under to file this exclusive for Resurgent.

For the past five months, I have spent my life here in Western Australia, in the harbor city of Fremantle in Perth.

Although my interests are vastly diverse from the subject of, say, the mining industry, I cannot help but be immersed in the matter for the simple reason that mining is the biggest source of WA’s economy.

Perth, WA’s capital, is one of the most remote cities in the world. Thousands of miles from the nearest like-sized city, it's actually closer to several other countries' capitals than its own. 

The money from this part of the country, though, comes from the land. Or more specifically, under it.

I could say that a good portion of WA’s population is in the mining sector and if you drive around upscale residential areas in suburbs like Dalkeith, Applecross, Mount Claremont and Cottesloe, you know which industry the rich belongs to.

If you are familiar with some WA terms, you would come across CUBS which means Cashed Up Bogans, awash with cash from mining jobs, buying jet skis and other boy’s toys—that is exactly how you describe the boys who bite the red dirt. 

If you wanted to land a high-paying job here in WA, you must find your way into all mining jobs available. However, this makes me relate things back home to some Pinoy hugot line like walang forever. In recent months, numbers have gone down.

As it is, even mining is not forever. But let’s talk about that somewhere later.

The undeniable fact is that the mining boom of the last decade has done many things for the state and for Australia, most notably being the economic factor that stopped Australia dipping into negative economic growth during the Global Financial Crisis.

Just how big is mining in the WA? I went to Google and found this: The world’s sixth biggest open pit mining project is located here in WA.

In Kalgoorlie, you will find a massive open pit mine they call “The Super Pit.” Wonder why it is called such? It is the largest open-pit gold mine in Australia, and one of the largest in the world. It’s been described as “a canyon-size hole dug by house-size machines, it's large enough to be visible from space.”

I have never been to Kalgoorlie, but judging from the images I have seen in researching this mega mining hole, the description says down there sits a gaping maw, wider and deeper than many canyons and worth millions of dollars a day. Read again...a day.

Now, why did it ring a bell in my mind? It brings me back to the Sagittarius Mines Inc. (SMI) project in Tampakan, South Cotabato. 

The controversial $5.9 billion project is yet to take off from its exploration stage despite having secured certificates and permits from the Department of Environment and Natural Resources (DENR).

The project has already secured a Declaration of Mining Project Feasibility and what remains to be a hurdle for the project is South Cotabato's ban on open-pit mining.

And then there’s the new DENR secretary Gina Lopez.

"I really don't like Tampakan at all. Not a little, but you can put that in capital letters – AT ALL."

That was Lopez’s straightforward statement on July 27 when she met the media covering the DENR beat for the first time. News of Lopez’s appointment had earlier caused mining stocks plummeting and business writers rightly described all kinds of horror stories unfolding across the Philippine minerals landscape.

Lopez describes the Tampakan open pit mining project as “a 700-football field open-pit mine on top of rice fields and agricultural lands affecting 4 provinces and 6 rivers.” 

She reiterated that she will "never, ever allow" the open-pit mine as it is "immoral."

If that is the standpoint of Lopez, what would she tell Australians about the Super Pit?

I may not have the figures but I have Filipino friends working in mines in WA and they say there are a considerable number of OFWs in WA’s mining sector including the Super Pit. And yes, they are the highest-paid Pinoy OFWs here. You see them around with company uniforms soiled with red dirt, but they drive luxury cars and SUVs.

In reference to the Tampakan mining exploration, the description is relatively the same as with the Super Pit. The open pit mining site in that South Cotabato town is like any other open pit project; there is going to be a gaping maw (if it is not yet) that’s wide and deep as a massive basin.

The definition of an open pit mine is "an excavation or cut made at the surface of the ground for the purpose of extracting ore and which is open to the surface for the duration of the mine’s life." 

To expose and mine the ore, it is generally necessary to excavate and relocate large quantities of waste rock. The main objective in any commercial mining operation is the exploitation of the mineral deposit at the lowest possible cost with a view of maximizing profits. The selection of physical design parameters and the scheduling of the ore and waste extraction program are complex engineering decisions of enormous economic significance. 

The planning of an open pit mine is, therefore, basically an exercise in economics, constrained by certain geologic and mining engineering aspects.

The main issue with open pit mining is the hit the environment will have to take from it as the operations commence, and the after-effects it will have to endure during the reclamation stage. It’s basically a process where you open and then you close. Open pit mining calls for careful planning in order to mitigate the effects to the environment.

And this is where Secretary Lopez is most afraid of.

The crackdown against irresponsible mining has been pushed forward under the Duterte administration with Lopez at the forefront of the campaign. Already, 20 mining firms are facing suspension following the DENR’s audit.

Despite the track record of the President on his firm stand against mining and the appointment of Lopez, the government could not shut its eyes on the impact of mining on the economy. 

“Mining has been very important to the economy. But its contribution to the economy now is less than 2 percent. If we expand the contribution of mining to the economy to 10 percent, we will have more revenues,” Budget Secretary Benjamin E. Diokno said.

Add to that the track record of SMI on sustainable mining, one can’t help but wonder about the cloud of doubt cast on its operations.

Based on its record, the firm has been a consistent recipient of the Presidential Mineral Industry Environment Award (PMIEA) in 2006, 2009, 2010, 2011, 2012, and 2013. 

SMI received the 2010 Award of Distinction from the Safety Organization of the Philippines (SOPI), and the 2010 Outstanding Stakeholder award from the Department of Education (DepEd) in Region XII. In 2014, SMI won the Platinum Achievement Award (Exploration Category) from the Presidential Mineral Industry Environment Award (PMIEA) Selection Committee. Also in the same year, it received a Plaque of Recognition for having been a recipient of the Presidential Mineral Industry Environmental Award for five consecutive years (2009 to 2013), an achievement regarded as unprecedented since the institution of the PMIEA in 1997.

Despite the impressive record, Lopez has placed SMI and two other big mining companies under her department’s environmental audit.

Also undergoing a review are Taganito Mining Corp. and Greenstone Resources Corp., both in Surigao del Norte.

Taganito is involved in nickel mining, Greenstone in gold processing and SMI in gold and copper mining.

The audit results would be the basis of a DENR decision whether to allow the companies to continue operating.

“It’s not only the technical [aspect] that is being audited, but also [the] social aspect, its effects on the water, health and the environment,” she said.

Which now focuses the debate upon the economic prosperity we are missing from the mining industry and the government’s shackling of mining irregularities and perceived dangers.

Take into account too, Secretary Diokno admitting we need mining to contribute at least 10 percent to the economy, not just a measly 2 percent.

Last year, the Wall Street Journal reported that when resources giant Glencore PLC’s decided to sell its controlling stake to the all-Filipino Alsons Group, it deepened the sense of gloom in the Philippines’ mining sector, which company executives claim is being throttled by government regulation.

While other resource-rich countries incentivized mining during the global boom, the Philippines took the opposite route.

And now, there is even more clampdown in the industry.

Whatever Australia abundantly enjoyed at the boom of the mining industry, we have missed completely. And at the rate things are going, we could end up being be a case of “too late the hero.”

Instead of reaping from the ‘cash-hole’, we are instead going deeper into a deep economic hole.

Experts say a mining boom happens once in a century.

Australia, for its part, has gone full circle. The boom is over and what is left now are but bits and pieces of the glory days.

The $600 billion investment in mining which had made WA the nation's wealthiest State is closing but not after leaving the economy 80 per cent bigger—wages have effectively doubled and many people have enjoyed a once-in-a-generation lift in wealth and the highest living standards in all of Australia.

At its peak, mining investments accounted for around two-thirds of economic growth in Australia between 2011 and 2012, when it represented around 8 per cent of Gross Domestic Product (GDP).

At the moment, it has gone down to 4.25 percent and thousands of jobs were shred in the past three years.

WA's decade-long mining boom is about to be replaced by jobs and wealth that will come from the State's farms, its pristine beaches and its people. 

Australians are now into a revolutionary shift from “mining to dining,” indicating a shift from mineral resources to agriculture—an aftermath of its optimal and timely use of resources through sustainable mining procedures.

In the meantime, the Philippines is still in the middle of this see-saw inner battle between giving the green light to open pit mining or permanently closing our doors.

By sheer pessimism, have we just missed the bus completely?