mining 101 the basics of mining and the philippine mining ... 101.pdf · world’s largest single...

Mining 101: The Basics of Mining And the Philippine Mining Industry

Atty. Ronald S. Recidoro Vice President, Legal & Policy

Chamber of Mines of the Philippines

The Chamber of Mines of the Philippines.

Working for responsible mining.

SOME QUESTIONS WE SHOULD ASK OURSELVES: • What is mining?

• Why is it relevant in my life?

• Should the Philippines encourage mining?



We need mining. Mining affects all of us.

This baby will use some 3.7M lbs of minerals, metals and fuels in his lifetime.

911 lbs of lead

773 lbs of zinc

1,398 lbs of copper

5,417 lbs of aluminum

32,654 lbs of iron ore

20,452 lbs of clay

31,909 lbs of salt

578,956 lbs of coal

1.72M lbs pounds of stone, sand, gravel and cement



Mining makes modern life possible.



PRODUCTION

Pro

gressive rehab

ilitation

from

explo

ration

to m

ine clo

sure

PRODUCTION

Pro

gre

ssive

reh

ab

ilitatio

n fro

m e

xp

lora

tion

to m

ine

clo

sure

Exploration.



Exploration Stage

Soil sampling and analysis

Geochemical Surveys

Drilling Mineral Analysis

PRODUCTION

Pro

gre

ssive

reh

ab

ilitatio

n fro

m e

xp

lora

tion

to m

ine

clo

sure

Development Stage

Mine Open Pit Development

Development Stage

Mill Development and Construction

Development Stage

Construction of Ancillary Facilities

PRODUCTION

Pro

gre

ssive

reh

ab

ilitatio

n fro

m e

xp

lora

tion

to m

ine

clo

sure

Types of Mining: Open Pit

The Kennecott Open Pit copper mine in Bingham Canyon Utah is the largest man-made excavation on Earth.



Types of Mining: Opencast



Hibbing Taconite Company

The world’s largest open-pit iron ore mine.

The Fimiston Open Pit, aka The Super Pit

The Largest Open-Cut Gold Mine in Australia.



The Argyle Diamond Mine

World’s largest single producer of diamonds.



The Diavik Diamond Mine



Types of Mining: Underground





Mponeng - South Africa

PRODUCTION

Pro

gre

ssive

reh

ab

ilitatio

n fro

m e

xp

lora

tion

to m

ine

clo

sure

Final Mine Rehabilitation and Decommissioning

NURSERY PRODUCTION


REFORESTATION


SLOPE STABILIZATION AND EROSION CONTROL

After mining: Reclamation/Rehabilitation.



Mining does not stop when all the minerals are extracted. Under Philippine law, mines are not "closed" until rehabilitation and reclamation is complete.



PRODUCTION

Pro

gre

ssive

reh

ab

ilitatio

n fro

m e

xp

lora

tion

to m

ine

clo

sure

Other countries have used their mineral wealth to jumpstart their economies.

• The United States of America; • The United Kingdom; • Australia; • Canada.

Why can’t we?



The Philippines: A Poor Man Sitting on a Pot of Gold?

3rd in GOLD;

4th in COPPER;

5th in NICKEL.



PHILIPPINE MINERAL POTENTIAL

• Rich diversity in both metallic and non-metallic minerals:

• Metallic: i.e. Gold, Copper, Nickel, Chromite, Iron

• Non-metallic: i.e. Limestone, Silica, Marble, Clay

• Among the world’s top producers of gold, copper and nickel

Our country’s mineral resource



GOLD

NICKEL

COPPER

CHROMITE

IRON

Our Total Land Area: 30 million hectares

Our Mining Potential

High-Potential: 9M hectares

Only about 600,000 has. (2% of total PHL territory) are covered by mining contracts/ permits;



Our Estimated Inventory



Mineral Commodity Volume of Resource (MT)*

Ore Content**

1. Copper 8.0 Billion 74.7 Million

2. Gold 4.9 Billion 6,734.5

3. Nickel 811.6 Million 10.2 Million

4. Iron 480.3 Million 177.8 Million

5. Aluminum Bauxite 433.9 Million 119.7 Million

6. Molybdenum 306 Million 244,865.0

7. Chromite 39.7 Million 8.8 Million

8. Mercury 18.3 Million 1.1 Million

9. Zinc 13.3 Million 327,496.1

10. Manganese 2.7 Million 1.2 Million Source of Data: MGB

Notes: (*) MT – Metric Tons. 1 MT = 1,000 Kilograms (Kgs.)

(**) Content volume is computed using the ore volume multiplied by the average Philippine Grade for each commodity.

US$1,000,000,000,000.00

(Yes, that’s TRILLION, with a T.)



Philippine Mining Now

• Operating metallic mines = 46* Nickel processing plant = 2 Gold refinery = 2 Copper smelter = 1

• Approved/registered tenements = 730

• Some 1,818 mining and exploration applications are currently under process.

-------------------------

* Based on MGB data as of August 2014.


Working for responsible mining. The Chamber of Mines of the Philippines.


Copper

Gold

Chromite

Polymetallic

1 Chromite Mine •Redondo Project (Krominco, Inc.)

6 Gold Mines

• Victoria/Teresa Gold Project (Lepanto)

• Maco Gold Mine (Apex Mining)

• Banahaw Gold Project (Philsaga Mining)

• Masbate Gold Project (Filimera/CGA)

• Acupan Gold Operations (Benguet Corp)

• Paracale Gold Project (Johnson Gold)

3 Copper Mines • Padcal Copper Mine (Philex)

• Carmen Copper Project (Atlas/CCC)

• Canatuan Sulphide Phase Project (TVI)

1 Polymetallic Mine

•Rapu-Rapu Mine

OPERATING MINES

Nickel Processing

Plant

Nickel Mine

Copper Smelter

• 11 Medium-Scale Nickel Mines

• 2 Nickel Processing Plant • 1 Copper Smelter • 16 Cement Plants and Quarries • 2500+ Non-metallic

Mines/ Quarries & small scale mines

• CRAU Mineral

Resources - Sta. Cruz

Nickel Proj., Zambales

• Berong Nickel Corp. -

Quezon, Palawan

• Rio-tuba Nickel Mining

Corp. - Bataraza,

Palawan

• Cagdianao Mining -

Dinagat Province

• Hinatuan Mining -

Tagana-an Project,

Surigao del Norte

• CTP Cons. & Mining

Corp. - ACT Project,

Surigao Sur

• Taganito Mining Corp. -

Claver, Surigao Norte

• Platinum Group Metals –

Cagdianao Nickel

Project, Surigao Norte

• SR Metals Inc. - Tubay,

Agusan del Norte

• CTP/CNC - Carrascal Ni

Project, Surigao Sur

• Oriental Synergy -

Urbiztondo Ni Project

OPERATING MINES

Mining’s Contribution to the Economy

Mining’s contribution to GDP: 2013: Php77.8 Billion (0.7% of GDP)

Mineral Exports 2013: US$ 3.4 Billion (6.3% of Total Exports)

Direct Employment in Mining & Quarrying 2013: 258,000 (0.7% Contribution to total employment)

Taxes, Fees & Royalties from Mining 2013: Php21.480 Billion



Other Contributions of Mining: It’s not just the money.

NON-FISCAL FISCAL



Mining’s Non-fiscal Contributions

• Social Development Management Programs.

• Environmental Protection and Enhancement Programs.



Mining’s Contribution to Community Development (2010)

SDMP IP ROYALTIES TOTAL

2010 368.57 191.08 559.65

2009 268.16 247.11 515.26

2008 187.73 170.33 358.06

2007 127.54 74.37 201.90

2006 82.82 31.94 114.76

2005 76.48 14.02 90.50

TOTAL 742.72 537.76 1.280B



Community Infrastructure Support



Schools and Educational Programs



Health Services and Facilities



Enterprise development



Environmental protection & enhancement



• Maintenance of sustainable environmental conditions at every stage of the mining operation;

• Establishment of a functional post-disturbance land use capability;

• Preservation of downstream freshwater quality;

• Preservation of sea water quality and natural habitats for marine life;

• Prevention of air and noise pollution; and

• Respect for the traditional and/or sustainable management strategies concerning natural resources of ICCs and other communities

ENVIRONMENTAL PROTECTION OBJECTIVES

MANDATORY DOCUMENTS

• Certificate of Environmental Management & Community Relations Record (CEMCRR);

• Environmental Work Program for Exploration (EWP);

• Environmental Protection and Enhancement Program (EPEP);

• Social Development and Management Program (SDMP);

• Final Mine Rehabilitation and Decommissioning Plan (FMRDP).

MANDATORY DOCUMENTS (con’t)

• Annual Environmental Protection and Enhancement Program (AEPEP);

• Establishment of Mine Environmental Protection and Enhancement Office (MEPEO);

• Designation of Community Relations Officer (CRO);

• Formation of the Mine Rehabilitation Fund Committee (MRFC);

• Formation of Multi-Partite Monitoring Team (MMT).

ENVIRONMENTAL PROTECTION – EXPLORATION STAGE: POLLUTION CONTROL

Secure mixing tank at drill site

Bonded fuel storage

Use of low impact drill machines

Prohibition on cutting of trees

ENVIRONMENTAL PROTECTION – EXPLORATION STAGE: DRILL SITE REHAB

Drill Hole

ENVIRONMENTAL PROTECTION – EXPLORATION STAGE: CAMP SITE REHAB FUEL STORAGE AREA

Before After

ENVIRONMENTAL PROTECTION – EXPLORATION STAGE: CAMP SITE REHAB CLINIC AREA

Before After

• Environmental Impact Assessment (EIA);

• Environmental Compliance Certificate (ECC);

• Environmental Protection and Enhancement Program (EPEP);

• Annual Environmental Protection and Enhancement Program (AEPEP);

MANDATORY DOCUMENTS DURING EXPLORATION PHASE

ENVIRONMENTAL PROTECTION – DEVELOPMENT STAGE: SILT MANAGEMENT

Gabions, silt fences,

Sediment traps with geotextile

Shotcreting Cocomatting

ENVIRONMENTAL PROTECTION – Development Stage

Vetiver Planting Coco Logs

At Rapu-rapu Minerals, Albay

ENVIRONMENTAL PROTECTION - Production Stage

Progressive Rehabilitation at Cagdianao Mining Corporation, Surigao Del Norte

ENVIRONMENTAL PROTECTION - Production Stage

Various Plant Species Planted along Slopes of Mined-out Areas (I.E. Carabao Grass, Acacia Mangium, Etc.) at Taganito Mining Corporation, Surigao Del Norte

ENVIRONMENTAL PROTECTION - Production Stage : Dust Management

Water spraying to minimize airborne dust at Bacnotan Cement, La Union

ENVIRONMENTAL PROTECTION - Production Stage: Chemical / Hazardous Waste Management

Hazardous Waste Storage

Used Oil and Lubricant Storage

ENVIRONMENTAL PROTECTION- PRODUCTION

STAGE: CHEMICAL / HAZARDOUS WASTE MANAGEMENT

Chemical Storage at Philex Mines, Benguet

ENVIRONMENTAL PROTECTION – Production: Multi-partite Monitoring Team

Air Quality Monitoring Water Quality Monitoring

MANDATORY DOCUMENTS FOR FINAL MINE RAHABILITATION/DECOMMISSIONING STAGE

• Final Mine Rehabilitation and Decommissioning Plan (FMRDP);

ENVIRONMENTAL PROTECTION - MINE DECOMMISSIONING STAGE: REHABILITATION OF MINED AREAS

Siltation Pond of Philex Bulawan (Negros Occidental) Converted into rice paddies Rehabilitated area converted to farmland

ENVIRONMENTAL PROTECTION - MINE DECOMMISSIONING STAGE: MINING AS A TEMPORARY LAND USE

Quarry Site in Antipolo City (Rapid City) Converted into a Luxury Subdivision

Q: How do we ensure that everything is paid for?

FINANCIAL MECHANISMS

• Contingent Liability And Rehabilitation Fund (CLRF);

• Final Mine Rehabilitation And Decommissioning Fund (FMRDF);

MONITORING TRUST FUND (MTF)

maintained at PhP 150,000/ quarter

CONTINGENT LIABILITY AND

REHABILITATION FUND (CLRF)

MINE REHABILITATION

FUND (MRF)

MINE WASTE AND TAILINGS FEE RESERVE FUND (MWTRF)

PHP 0.05/MT of mine waste

PHP 0.10/MT of tailings

REHABILITATION CASH

FUND (RCF)

10% of the total amount needed to implement the EPEP or PHP 5M whichever is lower

ENVIRONMENTAL TRUST FUND (ETF)

No fixed amount; minimum of PhP 50,000

FINAL MINE REHABILITATION and/or DECOMMISSIONING FUND (FMR/DF)

CLRF

Establishment of Mine Rehabilitation Fund Committee.

The MRF Committee shall be composed of the following:

• Regional Director as Chair;

• RED of the Department as Co-Chair;

• Regional Director of the EMB as Member;

• Representative of the Autonomous Regional Government, where this is applicable, as Member;

• Representative from the LGU as Member;

• Representative from the local NGOs and community organizations, including People's Organizations, church or civic organizations, as Member; and

• Representative of the Contractor/Permit Holder as Member.

Establishment of the Multipartite Monitoring Team MMTs serve as the monitoring arm of the MRFC and shall be composed of the following:

• Representative from EMB Regional Office as Chair (as per Section 6 of DAO No. 2015-02 released on 10 March 2015);

• Representative from Regional Office as Co-chair

• Representative from Department Regional Office as Member;

• Representative of the Contractor/Permit Holder as Member.

• Representative from the affected community(ies) as Member;

• Representative from the affected ICCs, if any, as Member; and

• Representative from an environmental NGO.



In summary:

Mining is an indispensable fact of modern life; Without it, we go back to

the Stone Age;

Modern mining now incorporates rehabilitation as part of the process;

The Philippines has tremendous mineral potential--Php50 TRILLION

worth!

Responsible miners protect the environment and uplift the lives of their

host communities;

If we can develop and use these minerals while ensuring the protection of

the environment, and improving the lives of host communities, shouldn't

we DO IT?

THANK YOU.



Potential Growth for 17 New Projects

Philippine Metallic Investments and Revenues

2011 2012 2013 2014 2015 2016 2017 2018

Total Investment

(Million $) 730 1,369 2,072 3,302 3,995 2,892 812

Total Revenues**

(Million $) 2,820 2,820 3,955 4,954 7,163 9,248 11,171 12,114

Total investments from 2011 to 2018: US$15.2 billion

Total Annual Revenue: US$2.8 billion in 2011, ramps up to $12.1 billion in 2018;

Mining contribution to GDP: 1.7% in 2011, increases to 5-6% in 2018.



COPPER PROJECTS

Far Southeast Project 2018 $1.5B

Philex (Operating)

Oceana Project 2013 $320m

Atlas Copper Project (Operating)

Maricalum Project 2016 $250m

Boyongan Project 2014 $1.5B

TVI (Operating)

Kingking Project 2016 $1.3B

Tampakan Project 2017 $5.9B

3 operating mines

6 large scale projects in the pipeline

GOLD PROJECTS

Victoria Gold Project (Operating)

Runruno Gold Project 2014 $150m

Masbate Gold Project (Operating)

RED5 Gold Project 2014 $83M

Philsaga Mining (Operating)

Apex Gold Project (Operating)

4 operating mines

2 gold projects in the pipeline

NICKEL PROJECTS

Eramen Nickel Project 2011 DSO/EAF

Sta. Cruz Nickel Project 2011 DSO

Mindoro Nickel Project 2015 $1b

Philnico Nickel Project 2016 $1b

Berong Nickel (Operating)

Coral Bay (Operating)

Nickel Asia Project 2013 $1.3b

Marcventures 2011 DSO

Pujada Nickel Project 2015 $500m

10 medium scale and DSO operations

and projects in the pipeline

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