By Marcelle P. Villegas
On 14 June 2019, The Philippine Mining Club celebrated their 50th Luncheon Anniversary. Their special guest speaker for this luncheon was Mr Eulalio B. Austin, Jr. who is the President and CEO of Philex Mining Corporation. His presentation’s title is "The Future: Padcal and Silangan". With the many hurdles and challenges that the industry is facing today, what can we learn from a 60-year-old mining project like Padcal?
Mr Austin started his discussion with the World Happiness Report 2019 by the United Nations Sustainable Development Solutions Network. It states that the Philippines ranked 69th out of the 156 nations in the World Happiness Index. The Philippines also ranked as the 12th among the countries that showed the highest increase in level of happiness between the periods of 2005-2008 and 2016-2018.
Then, he showed a clipping from a newspaper article dated February 2008 with the statement -- "a Golden Age in Philippine Mining was coming" due to upcoming investments from the world's biggest mining and metals leaders. Generally, things look bright and promising for the Philippines. In the mining sector, we have the Philippine Mining Act of 1995 (RA 7942) which was declared valid and constitutional by the Supreme Court in 2005.
This Republic Act is "An Act Instituting A New System of Mineral Resources Exploration, Development, Utilization and Conservation".
However, he stated that by 2012, Executive Order 79 presented challenges for the industry all the way to 2016. He mentioned that the industry "has been highly injured because it was misunderstood". Mr Austin further noted that perhaps the boom years of mining were in the 1950s when gold and copper became the pillars of large-scale mining. That decade also ushered the introduction of new technologies in mining.
From his report, he expressed that Philex Mining Corporation has been reaching milestones for decades. Their Padcal Mine just turned 60 years old in 2018. "Turning 60 is the age of senior citizenship and the age of retirement or retiring. The once-hectic pace of life is replaced with a 'delicious sense of calm, confidence and clarity of purpose'. Our Padcal Mine is settling into that delicious sense of calm."
For the record, a total of 10 million trees were planted at Philex Padcal and other mining properties in more than 4,000 hectares of disturbed and undisturbed areas. Additionally, even before DENR mandated ISO 14001 certification in 2015, Philex Padcal Mine already secured IMS Certification (ISO 14001:2004, OHSAS 18001:2007) by TUV Rheinland. Philex has also taken the initiatives and introduced to the Chamber of Mines of the Philippines the "Towards Sustainable Mining" (TSM) commitment to promote responsible mining in cooperation with the Mining Association of Canada.
"Initial Padcal mine life was originally up to 2014... All in all, while interim prospects remain subdued, we are determined to maximize the remaining mine life of Padcal." Now, the projected end-of-mine life of Padcal is 2022. "The closure of Padcal will be an opportunity for us to showcase that closing mines can be done properly with dignity."
How did Philex Mining Corporation handle the TSF3 incident in 2012? It was on 1 August 2012 when Philex Mining suspended operations voluntarily as nontoxic tails and water discharge from the TSF3 spilled onto the Balog Creek. This was an effect of the destructive heavy rains brought about by Tropical Depression Ferdie (a.k.a. Typhoon Vicente) and Typhoon Gener which hit Benguet successively. The company resumed production only on 8 March 2013 due to the four-month temporary lifting order issued by the government which was extended indefinitely afterwards. Thus, the operations formally resumed on 27 August 2013. [1]
Philex Mining Corporation was allowed to resume operations after they implemented urgent remediation measures such as providing immediate assistance to the affected residents, cleaning up the Balog Creek, and ensuring the integrity of its TSF3 by building an open spillway. [1]
Regarding the hard lessons learned from the 2012 TSF3 incident, Mr Austin stated that they faced the challenge and "never ran away from our obligations". The first public consultation of its kind was conducted to address the problem. The company paid the government PHP1.34 billion for the tailings leak. This is the highest payment ever done by a single company. The spillway that the company constructed at the TSF3 is the first of its kind in tailings management in the Philippines.
Mr Austin recalled, "It was a humbling experience for us but we have to prove that we are advocates of right and principled mining."
His presentation also include the Silangan Project which is expected to generate 8,000 direct and indirect employment, raise PHP60 billion in investments, contribute PHP31 billion in taxes and will spend PHP6 billion for community development. "The project will proceed with underground sub-level cave mining method. Regulatory developments between 2016 - 2017 necessitated shift to underground mining from open-pit method. Sub-level caving presents itself to be a better method rather than block caving. Well-engineered solutions are now incorporated in our recent studies. Silangan Mindanao Mining is currently working on securing all necessary permits and approvals."
To conclude his presentation, he left the audience with an optimistic message. "We have the opportunity to make Silangan and all other pending mining projects to make it big for the Philippines in the global market. We have the opportunity to make this the Golden Age of Mining now. Believe that best to come for the mining industry."
Update on Silangan Project
Last 1 August 2019, Philex Mining Corporation reported that the definitive feasibility study for the first phase of the Silangan Project is finally complete.
The mine site is a development for high-grade copper and gold and is located at Surigao del Norte in Mindanao. Silangan is coined as one of the three major mining projects expected to push the Philippines as a regional copper producer.
The mine site is composed of three tenements, namely: Boyongan, Bayugo and Kalayaan.
On the first stage of the development of the Silangan Project, the Boyongan deposit is estimated to have a mine life of 22 years. Silangan is expected to produce high grade ores with 0.63% copper and 1.20 grams per tonne of gold. [2] Bayugo deposit is part of the second phase of the development and this is still under initial feasibility study for underground sub-level cave mining within the year.
Philex Mining Corporation will be adopting underground sub-level cave mining for ore extraction. They shall be using state-of-the-art milling facility that uses modern convention technologies for ore processing.
Mr Austin stated, "We are thrilled with the outcome of the study which reaffirms the immense potential and magnitude of the project. Over the next few months, we will be focusing our efforts on raising equity and financing for mine development."
Philex Mining Corporation will allocate USD750 million for the Boyongan ore body development. For fund-raising, Philex has appointed J.P. Morgan for equity investment and Mizuho for project financing. The international law firm White & Case and local law firm Sycip Salazar Hernandez & Gatmaitan will be the legal consultants for this development project. [2]
References:
[1] Philex Mining Corporation website. Retrieved from - http://www.philexmining.com.ph/2017/07/29/mine-firm-assures-integrity-of-storage-facility/
[2] Ison, Lilybeth. (1 Aug. 2019). "Philex completes feasibility study on Silangan project". Philippine News Agency. Retrieved from - https://www.pna.gov.ph/articles/1076750
