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New World Economy - Tech Giants Go Into Mining
by Philippine Resources - September 24, 2020
BY: Fernando “Ronnie” S. Penarroyo
Late last year, the International Rights Advocates filed a lawsuit in a Washington DC court on behalf of fourteen (14) Congolese families against several companies, alleging that their children were killed or injured while mining for cobalt in the Democratic Republic of the Congo (DRC).
The lawsuit further alleges that the young children are being forced to work full-time jobs under extremely dangerous conditions at the expense of their educations and futures with the defendants knowingly benefiting from and providing substantial support to this artisanal mining system.
Cobalt extraction is beset with concerns of illegal mining, human rights abuses and corruption and this could be regarded as an ordinary suit lodged by human rights advocates and interests groups against erring mining companies operating in Africa. This is in fact a landmark suit in the annals of the mining industry.
More than 60% of the world’s supply of cobalt is mined in the ‘copper belt’ of the south-eastern provinces of DRC. Cobalt is a mineral used to produce lithium-ion batteries for electric cars, laptops and smartphones. What makes this case interesting is that among the defendants in the case are some of the world’s largest tech companies - Apple, Alphabet (which is the parent company of Google), Microsoft, Dell and Tesla. The tech companies are accused of aiding and abetting the deaths and serious injuries of children working in cobalt mines, a vital cog in the corporations’ supply chain in the manufacture of their products.
Digital Technology Drives Demand for New Economy Minerals
Digital technology is becoming a defining factor in the future of mining operations. Robotics and automation through drones, autonomous vehicles and remote-controlled operational systems will be rolled out more widely to enhance exploration efforts production. Cloud computing, information sharing and big data enable work to be performed remotely and more flexibly taking employees away from hazardous on-site events and improving health and safety conditions.
On the demand side, technology is also impacting the market for mining’s outputs. The rise of electric vehicles and the production of an ever-growing variety of high tech and green technologies, have also boosted demand and competition for new economy minerals. ‘New economy minerals’ is an umbrella term for a range of metals and mineral elements used in many emerging technologies including electric vehicles, renewable energy products, low-emission power sources, consumer devices, and products for the medical, defense and scientific research sectors. Technology have also expedited the dramatic rise of the ‘sharing economy’, where consumers use their smartphones to share goods and services such as accommodation, transportation, and finance, as well as streaming of entertainment and data.
According to a recent report by McKinsey, some 1.8 billion people are expected to “join the global consuming class by 2025”, a huge 75% increase from 2010. The mining industry will be hugely affected by this growth, with predicted shortages of a range of metals and minerals including copper, nickel, cobalt and lithium.
Tech Companies - Emerging Big Miners?
Flushed with capital and brand-savvy, technology companies who are major users of mining products, want to take full control of their supply chains and are out-competing incumbent conventional miners, who are struggling for the capital, skills and capacity to innovate. These new players have access to cutting edge technologies and a track record of success in highly regulated environments such as healthcare, finance or defense. They know they can do a better job and are free of legacy issues attached to the mining industry. These new entrants can take advantage of low valuations and asset fire sales from the conventional miners.
Technology companies have become direct or indirect investors as a way of shoring up and securing supply and are moving to control whole value chains from raw material sourcing up to product delivery of new economy minerals. Using blockchain technology, new technology entrants can engage in mining without owning any mines or distribution infrastructures in the same way that Uber does with no cars and Airbnb, with no real estate listings.
The transformation to digital technology and low-carbon clean energy was further expedited by the onslaught of the Covid-19 pandemic, which disrupted lives and operations but heightened the use of the app economy. Amazon, Apple, Facebook, Google and Microsoft are now aggressively placing new bets as the coronavirus pandemic has made them near-essential services, with people turning to them to shop online, entertain themselves and stay in touch with loved ones and business colleagues.
New investments by tech giants are transforming the landscape of the resources industry. Among those leading the charge are tech billionaires Bill Gates, Jeff Bezos and Richard Branson, who have all built their careers on innovation, thinking outside the box and pushing through disruptive change. They are backers of technology fund, Breakthrough Energy Ventures (BEV), which joined forces with hedge fund a16z to invest in mineral exploration company KoBold Metals and its search for ‘ethical’ cobalt. Google, on the other hand also entered into a partnership with a global consulting firm to boost productivity in mining in Kazakhstan.
Back in 2015, automotive and energy storage company, Tesla signed early stage agreements with junior mining companies, with no prior existing production, to supply their new ‘gigafactory’ in Nevada with lithium. The deal signaled to the world’s incumbent lithium miners that new customers like Tesla are not frightened to explore high-risk, high return alternatives when they find that current market conditions do not suit their needs. Tesla CEO Elon Musk is reportedly considering taking the company into the mining business to gain more control over its supply chain and the scalability of raw materials for its electric car and battery work.
Meanwhile lawmakers and regulators in Washington and Europe are sounding the alarm over the tech giants’ concentration of power and how that may have hurt competitors. Without any pushback from regulators, big tech companies would almost unquestionably come out of the pandemic more powerful.
Clean Energy Transition - Goodbye Fossil Fuels? Hello Minerals!
The pandemic has caused disruptions to the renewable energy industry in its supply chains, and slowdowns in permitting and construction have delayed projects. Still, analysts agree the renewable energy sector’s fundamentals are strong. Technologies have matured and prices dropped, to the point where renewables in most cases provide cheaper energy than fossil fuels. Policymakers are now starting to shift their focus from pandemic challenges to economic recovery and energy infrastructure plans.
The fossil fuel industry is among the hardest hit by the coronavirus crisis, with leading oil, gas and petrochemical companies losing an average of 45% of their total market value. The challenge from the coronavirus for oil & gas companies has been heightened by the oil price collapse and continuing price uncertainty because of weaker demand from the transportation and power industry. With the crisis also hastening a global shift to cleaner energy, fossil fuels will likely be cheaper than expected in the coming decades, while emitting the carbon they contain will get more expensive. These two simple assumptions mean that tapping some petroleum fields no longer makes economic sense.
British Petroleum announced that it would no longer do any exploration in new countries. The pandemic will likely discourage exploration and about 10% of the world’s recoverable oil resources—some 125 billion barrels— is expected to become obsolete and stranded assets. Some larger companies would evaluate its portfolio of discoveries and leave some undeveloped. Complicated projects could be shelved in favor of fields that are quicker to develop.
Less than a decade ago, Exxon Mobil was the most valuable company in the world. On the last working day of August this year, it was taken out of the Dow Jones industrial average after nearly a century of inclusion in the index. Exxon and other oil giants mostly missed out on the fracking boom, and on the move away from fossil fuels. Apple which became a US Dollar Two Trillion company in market capitalization is now the world’s most valuable company. Today the personal wealth of Jeff Bezos of Amazon is worth more than Exxon. Exxon and the oil industry is giving way to a dominant tech industry with Exxon’s spot in the stock exchange being taken over by a tech company: Salesforce.com.
One will ask, what is the role of mining in the clean energy transition. A new World Bank Group report, “Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition”, analyzes how the clean energy transition will impact future mineral demand. The report finds that the production of minerals, such as graphite, lithium and cobalt, can increase by nearly 500% by 2050, to meet the growing demand for clean energy technologies. It estimates that over 3 billion tons of minerals and metals will be needed to deploy wind, solar and geothermal power, as well as energy storage, required for achieving a below 2°C future.
The report also finds that even though clean energy technologies will require more minerals, the carbon footprint of their production—from extraction to end use—will account for only 6% of the greenhouse gas emissions generated by fossil fuel technologies. The report underscores the important role that recycling and reuse of minerals will play in meeting increasing mineral demand. It notes that even if the recycling rates for minerals like copper and aluminum is scaled up by 100%, recycling and reuse would still not be enough to meet the demand for renewable energy technologies and energy storage.
Amidst the pressure to continue or even increase the use of clean energy and electric cars, a report by the Manhattan Institute entitled “Mines, Minerals, and ‘Green’ Energy: A Reality Check” postulated issues that were left out in the discussions of the environmental and supply-chain implications in renewable energy technology.
According to the report, no energy system is actually ‘renewable’, since all machines require the continual mining and processing of millions of tons of primary materials and the disposal of hardware that inevitably wears out. Compared with hydrocarbons, green machines entail, on average, a ten-fold increase in the quantities of materials extracted and processed to produce the same amount of energy.
This means that any significant expansion of today’s modest level of green energy will create an unprecedented increase in global mining for needed minerals and radically exacerbate existing environmental and labor challenges in emerging markets. Among the material realities of green energy cited by the report are:
Building wind turbines and solar panels to generate electricity, as well as batteries to fuel electric vehicles, requires, on average, more than ten times the quantity of materials, compared with building machines using hydrocarbons to deliver the same amount of energy to society.
A single electric car contains more cobalt than a thousand smartphone batteries; the blades on a single wind turbine have more plastic than five million smartphones; and a solar array that can power one data center uses more glass than fifty million phones.
Replacing hydrocarbons with green machines under current plans will vastly increase the mining of various critical minerals around the world. For example, a single electric car battery weighing a thousand pounds requires extracting and processing some five hundred thousand pounds of materials. Averaged over a battery’s life, each mile of driving an electric car “consumes” five pounds of earth. Using an internal combustion engine consumes about 0.2 pounds of liquids per mile.
Oil, natural gas, and coal are needed to produce the concrete, steel, plastics, and purified minerals used to build green machines. The energy equivalent of a hundred barrels of oil is used in the processes to fabricate a single battery that can store the equivalent of one barrel of oil.
By 2050, with current plans, the quantity of worn-out solar panels—much of it non-recyclable—will constitute double the tonnage of all today’s global plastic waste, along with over 3 million tons per year of non-recyclable plastics from worn-out wind turbine blades. By 2030, more than ten million tons per year of batteries will become garbage.
Green machines mean mining more materials per unit of energy. Since clean tech is about supplying energy in a more ‘sustainable’ fashion, one needs to consider not just the physical mining realities but also the hidden energy costs of the underlying materials themselves. Finally, in any full accounting of environmental realities, there is the disposal challenge inherent in the very large quantities of batteries, wind turbines, and solar cells after they wear out.
Ethical Sourcing of Minerals for Tech Companies - Smarter and Greener?
Ethical supply chains and ‘green’ practices will be on the agenda for tech giants with mining ventures, a brand promise that the minerals that go into their products are produced in the most responsible way and meeting the changing expectations of their consumers.
A poll completed by Forbes in 2018 showed that 88% of consumers would like brands to be more environmentally friendly and ethical. As such, it is unsurprising that companies are increasingly starting to investigate not only their sustainability but also that of their supply chain. One condition that can slow a company’s growth is poor sustainability performance, as measured in environmental and social impact, as well as permission from consumers, investors, and regulators to do business.
While tech companies may declare their deep commitment to the responsible sourcing of ‘ethical’ minerals that go into its products, how can a company ensure the sustainability of its supplier? With supplies of metals like nickel becoming depleted, companies may have to broaden their supplier pools if they wish to expand but doing so will increase the risk of having to rely on suppliers that do not meet sustainability standards.
Elon Musk promises a ‘giant contract’ with the miner that can supply nickel for Tesla batteries at low cost with minimal environmental impact. However, the nickel projects expected to supply a large part of the demand being built in Southeast Asia will rely on coal, fuel oil or diesel to run their operations leaving a very large carbon footprint. In Indonesia which holds about a quarter of all nickel reserves, companies operating there are investing in projects that will use acid to process low-grade nickel ore and produce high-quality battery chemicals. The diluted byproducts will be piped out to the sea using a process known as deep-sea tailings disposal.
Apple, recently has been accused of abetting child labour and environmental damage. In recent years the company has sought to clean up its act by collaborating with suppliers to increase their usage of renewable energy and altering designs to reduce its usage of key aspects like aluminium.
A significant proportion of cobalt and tantalum, both used in handheld gadgets, is produced by artisanal miners in countries where regulations can be lax or non-existent. In addition, data of origin from the mine site passes through seven stages from mine to manufacturer and can be changed along this process, thus data credibility is endangered by unscrupulous traders and middlemen.
Monitoring by tech companies of their raw materials suppliers would be increasingly complicated. While companies have no real power to make their suppliers pursue sustainable practices, some tech companies are joining forces with the purpose of helping suppliers guarantee the ethical sourcing of such minerals. These companies share secured information using enterprise-grade blockchain middleware in solving the mineral sourcing problem faced by technology companies. Others are creating platforms that provide technology companies transparency on the origin of the minerals they use to avoid funding conflict or child labour, while also giving them the control to make contracts with the miners directly.
From Trade War to Tech War
The world’s largest economies obviously the most voracious users of new economy minerals are also involved in securing the commodities owing to its economic and strategic value. Rare earth metals, a suite of 17 elements, are crucial to important technological applications ranging from electric cars and smartphones to satellites, lasers, fighter jet engines and missiles. China owns 36.7 per cent of global reserves and is the world’s largest producer and exporter. Its output last year accounted for 62.8 per cent of the world’s total, according to the US Geological Survey. Because rare-earth elements have essential uses in a range of civil and military technologies such as weapons guidance systems, China’s control of supply is a powerful commercial and diplomatic bargaining chip.
China supplies the US about 80 per cent of its rare earths requirements from 2015-2018. However, exports of rare earth elements decreased down to 1,620 tonnes in July 2020, a drop of 69.1 per cent from a year earlier and down 44 per cent from June, according to Chinese customs data. Earlier threats to cut-off supplies of the elements, especially the two most important heavy rare earths, neodymium and praseodymium, have caused short-term disturbances in the market.
Part of the decline can be attributed to the risks of relying on China for rare earth supplies and the US restarting operations last year at mines in California. As the US is launching sanctions against Chinese technology companies and threatening to punish Chinese financial institutions, there are voices in China saying the country can take countermeasures by restricting rare earth exports to the US. The rising calls on rare earth trade came as the escalating rivalry between the world’s two largest economies has fueled concerns over a trade war turning into a technology war. Whether China intends to proceed with a trade embargo on rare earths is unclear but the threat itself has sparked a reaction which involves the U.S. government and several allies in pushing ahead with plans to develop non-Chinese supplies of rare earths.
The rollout of fifth generation, or 5G, network technology would be a battlefield in the US-China tech war. The upgrade from 4G to 5G is expected to exponentially increase internet-connectivity in industries that require big data, improve off-load computing to the cloud, and enable huge advances in automation and artificial intelligence. The 5G infrastructure will intertwine factories, power plants, airports, hospitals and government agencies.
Huawei Technologies, a Chinese company which is the world’s biggest telecommunications company and also the largest manufacturer of smartphones, has all but cornered the market for the roll out of 5G networks. The US has security concerns over the company and has accused it of rampant theft of intellectual property and selling U.S. tech to hostile states like Iran and North Korea. The advent of 5G using Huawei’s technology and network infrastructure brings with it enormous geo-strategic implications to the defense and security of the US and its allies.
The US is doing everything it can to slowdown Huawei’s technological advance not only in the US’ domestic market, but also putting intense pressure on allies around the world to ban Huawei from their 5G networks on national-security grounds. So far, the UK government has heeded the call to ban Huawei from participating in its 5G mobile network. Australia, New Zealand, Japan, and India have imposed similar bans while numerous countries alleged that the company’s products may purposely contain security holes and malware that China’s government could use for spying purposes. Huawei also faced numerous supply chain, chip and software partner challenges amid new U.S. regulations against the company. Google, Intel, Qualcomm, Xilinx, and Broadcom are cutting supplies to Huawei, according to multiple reports. However, industry executives and experts warned that U.S. restrictions on Huawei are likely to choke the Chinese company’s access to even off-the-shelf computer microchips ultimately disrupting global tech supply.
TikTok, a popular video-streaming app and social media platform developed by China’s ByteDance, is similarly accused of data privacy violation by the Trump administration. Trump issued an executive order forcing ByteDance to sell or spin off its U.S. TikTok business. Under the order, ByteDance is expected to destroy all its copies of TikTok data attached to U.S. users.
There are two stark realities arising from the digital and clean energy transformations - the mining industry is here to stay and tech money is flowing into the industry. There will also be disruptions in the way that mining is done as the industry migrate to a digital core. Not only will digital technology be an integral part in the mining value chain but companies will also need to address the sustainability and ethical challenges demanded from them not only by direct stakeholders but from consumers as well. The tech sector, bereft of legacy issues, offers to innovate and improve operational efficiency, reduce costs, enhance productivity, and improve safety and environmental performance. Let’s see if they can live up to their promises. As the cliche goes, “Go ahead, put your money where your mouth is”.
Fernando “Ronnie” S. Penarroyo specializes in Energy and Resources Law, Project Finance and Business Development. He may be contacted at email@example.com for any matters or inquiries in relation to the Philippine resources industry. Feel free to follow Atty. Penarroyo’s professional blogsite at www.penarroyo.com
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Philippine Resources - November 06, 2019
Adding value to mining by driving the UN sustainable development goals
In 2015 the UN adopted a new set of aspirations for the next 15 years; the Sustainable Development Goals (SDGs). The UN defines 17 SDGs, which are broken down into 169 targets, for outlining an agenda for nations, NGOs and business leaders. These goals are intended to end poverty, protect the planet, and ensure prosperity. It is good to see some mining companies are already driving SDGs. However, others are still considering this. Most of the mining companies start to map these 17 SDGs to mining content in order to cover social, economic and environmental sustainability. Other mining companies use corporate social responsibility (CSR) reports as an item to check on their compliance checklist. Generally most mining companies unfortunately wouldn’t gain much value added in running social, economic and environmental initiatives in support of the SDGs for the following reasons:The lack of a clearly articulated sustainability strategy; no idea where to start Complexity, and a lack of priority, focus, and deliverable milestones Limited ambition, and a limited budget A lack of leaders in the organization, who are not brave enough to go the extra mile The lack of talented or motivated people in the organization A lack of cross-business activity and communication The absence of business and senior leadership in sustainability strategies, formulation, and execution Poor change control and lag A lack of skills and expertise to realize the sustainability strategiesTwo initiatives that help to drive the UN SDGs in mining are now further discussed. Circular economy in mining Apple has installed Liam, a line of robots that can quickly disassemble iPhone 6. Apple claims that with two Liam lines up and running, they can take apart up to 2.4 million phones a year. These types of recycling mechanisms can be used in other industries such as manufacturing, automotive, building and construction, chemicals and plastics. However, you need to modify your plant infrastructure to enable these capabilities. Even though there are upfront costs involved with building these capabilities, it pays off in the end. This raises the question; what would happen if other giant companies similar to Apple were to prioritize recycling and stop buying minerals from mining companies? Apple is one business model which could be followed by mining companies to drive concepts of circular economy, and to use secondary materials by re-smelting them. This would help to protect our environment by preventing the stacking of unwanted waste in waste yards. Figure 1 shows the mining value chain of a mining company that is driven by linear economy and circular economy. Having a recycling plant in a mine site would help to manage day to day waste that is generated in mining operations. Here are some of the quick wins that help to make an impact as a result of driving the circular economy in mining; recycling old tires from mining trucks & dozers, recycling waste lubricants, using mine waste for backfilling, refurbishing and recycling mining equipment. In the future, mining companies will be able to leverage 3D printing and additive manufacturing methods to reduce excess waste in production during mining operations. Renewable energy in mining There is a big push from the mining industry towards renewable energy for many reasons. Energy usually accounts for 33% of a mine’s operating costs. Therefore, a rapid fall in the cost of solar and wind power would be highly lucrative if a mining business were to use renewables. Not only that, the stability of renewable energy, which would reduce exposure to volatile diesel prices, is another reason why renewables are becoming popular in the mining sector. Most importantly, powering renewable energy sources in mining would help to reduce CO2 emissions to mitigate against the effects on climate change, reduce emissions from blasting explosive and diesel-powered generators, and help to minimize the carbon footprint and carbon tax payments. Finally, renewable energy predominately helps to drive SDG7 (affordable and clean energy) and SDG13 (climate action) under the UN SDGs. In short, there is a huge demand for renewables in the mining sector due to such things as cost reduction, environmentally friendly considerations and reliable power sources. Energy companies will help and support mining companies to facilitate this huge demand by having lucrative business models, such as investing in co-investor, build-own-operate-transfer and off-take agreement models. Here is what mining CEOs have to say about renewable energy in mining. “We are working on increasing our use of renewables at all of our operations at competitive prices.” (Iván Arriagada, Antofagasta CEO); “The use of solar energy will reduce Essakane’s carbon emissions by 255,000 tonnes over 15 years, will save on energy costs and will be our legacy long after we are gone, as the community will be left with a low-cost power source.” (Stephen Letwin, CEO of IAMGOLD).My prediction is that in the next decade, the mining industry will focus on reaching zero greenhouse gas emissions and will be heavily involved in driving the UN defined sustainable development goals (SDGs).In conclusion, driving concepts of a circular economy and renewable energy would positively impact on the sustainable development goals (SDGs) defined by the UN. Concepts of circular economy and use of renewables can be applied to any organization thinking about how to manage its own waste, how to build a recycling unit, and how to use green-power sources. Driving these concepts would be a step towards a greener economy and a better environment for the next generation. About the author:Kash Sirinanda has a doctorate in mine planning and optimisation from the University of Melbourne, Australia. During his PhD studies and post-doctoral work at the University, Kash developed algorithms for generating designs that maximise the NPV of a mining operation. That work provides the basis for software that assists mine planners to design more profitable mines. Kash was also a visiting scholar at the Colorado School of Mines, USA.He has worked on various mining projects which include due diligence, operation, analytics, optimisation and digital in different commodities around the globe. He is a keynote speaker and provides mining leaders with strategic direction, and visionary leadership.Kash´s vision is to engage, partner, and collaborate with leaders and decision makers to transform a business into a best-in-class, advanced digital and sustainable-enabled competency company.Founder of www.mineconnector.com & www.elitefuturists.comThis article is bought to you by www.secondchanceevents.com Mining Towards 2030, Applying the United Nations SDG’s to MiningReference https://www.ft.com/content/b3b7fe4a-a5fc-11e8-a1b6-f368d365bf0ehttp://worldcongress.energyandmines.com/files/Feature-Article-x-4-v3-ia-opt.pdf
Philippine Resources - March 12, 2019
Defending our territorial rights through historical facts
By Marcelle P. VillegasOn 7 May 2009, China submitted the Nine-dashed Lines Map to the United Nations. Their map gobbles up large areas of the Exclusive Economic Zone (EEZ) and Extended Continental Shelf (ECS) of the Philippines, Vietnam, Malaysia, Brunei and Indonesia. China’s Nine-Dashed Lines Map shows that China is claiming 85.7% of the entire South China Sea. Their claim covers 3 million square kilometers out of the 3.5 million square kilometers surface area of the South China Sea.  This is the root cause of the South China Sea dispute, because China did not provide a legal basis for the dashes. The dashes also had no fixed coordinates. With that, the Philippines, Malaysia, Vietnam and Indonesia protested against China’s claim. This story is more than about defending our territorial or maritime rights. It is also of geological significance and fighting for our own natural resources. In January 2013, the Philippines formally initiated arbitration proceedings against the PRC’s claim on the territories within the “nine-dash line” that include the Scarborough Shoal. Justice Antonio T. Carpio, Senior Associate Justice of Republic of the Philippines Supreme Court, defended the Philippines’ right of ownership of the little islands within our territory to the international Arbitral Tribunal. His strategy in explaining our claim was simple – pointing out our legal rights through legitimate historical records. In his presentation “The South China Sea West Philippine Sea Dispute”, he enumerates several important facts about our territory.To begin with, what is the significance of the South China Sea to the world? There are US$5.3 trillion of ship-borne goods that travel through the South China Sea annually. This is almost one-half of the world’s shipborne trade in tonnage. A great percentage of the petroleum imports of South Korea, Japan, Taiwan, and China pass through the South China Sea. The annual global fish catch from South China Sea is worth US$21.8 billion. Additionally, 2 billion people live in the 10 countries bordering the South China Sea where hundreds of millions of people depend on fish there for their protein. More importantly, maritime area that are close to the coast of the countries bordering the South China Sea are rich in oil and gas resources. South China Sea is also rich in methane hydrate which is a potential source of energy.  Over 250 small islands, atolls, shoals, reefs, cays and sandbars are located at the South China Sea. These small land area have no inhabitants. The features are grouped into three archipelagos namely, Macclesfield Bank, Scarborough Shoal, Pratas Islands, Paracel Islands and Spratly Island. How does the Nine-dashed Line Map affect the Philippines? The Philippines loses about 80% of its EEZ facing the West Philippine Sea. This includes the entire Reed Bank and part of the Malampaya gas field. This loss covers 381,000 square kilometers of maritime space and 100% of the Philippines’ ECS which covers an estimate of over 150,000 square kilometers of maritime space. In 2012, China seized Scarborough Shoal (Panatag) from the Philippines. It is a small ring of reefs that is located about 230 km from the Philippines, but 650 km from the nearest major Chinese land mass (southern island of Hainan province). Scarborough Shoal is rich in marine life where fishermen from the Philippines, China and Vietnam have been fishing for several years. It is in the Philippines EEZ. Martin Luther King, Jr. once said, “Learn a little about your past, and you may end up with a pretty nice future”. Looking back in our history was indeed the winning strategy on how the west was won in this dispute. Here are some of the historical proofs and legal basis presented by Justice Antonio T. Caprio before the Tribunal.1. Official and unofficial maps of China from 1136 during the Song Dynasty until the end of the Qing Dynasty in 1912 show that the southernmost territory of China has always been Hainan Island, and not the areas of the Nine-Dashed Lines. On the other hand, there are various official and unofficial maps of the Philippines from 1636 until 1933 that consistently illustrate that Scarborough Shoal has always been part of the Philippines. Centuries ago, the name of Scarborough Shoal was “Panacot” according to the Murillo Velarde Map in 1734. This was published in Manila while the Philippines was still a colony of Spain. 2. The Franciscans arrived in the Philippines in 1578. In 1695, the Coronelli Map of Southeast Asia (entitled Isloe dell’ Indie) shows the Spratlys as part of the Philippines. The map was illustrated by the Franciscan monk, Venetian Vincenzo Coronelli. The map was published in Venice in 1695. Coronellie is well-known for his accurate atlases and globes, and as the Father General of the Franciscan Order.3. In 1899, the map “Islas Filipinas, Mapa General Observatorio de Manila” was published in Washington, D.C. by the U.S. Coast of Geodetic Survey. This old map resembles the modern Philippine map that we use today.4. In 1898, when the Philippine Revolution was about to end in victory to end 300 years of Spanish rule, Spain secretly sold the Philippines to the United State of America under what is known as the 1898 Treaty of Paris between Spain and the United States. This agreement did not include the little islands surrounding the main islands of the country, thus another treaty was made called the 1900 Treaty of Washington. 5. The Treaty of Washington entails that Spain had given to the United States “all title and claim of title, which (Spain) may have had at the time of the conclusion of the Treaty of Peace of Paris, to any and all islands belonging to the Philippine Archipelago, lying outside the lines” of the Treaty of Paris. Therefore this agreement clarifies that Spain ceded Scarborough Shoal to the United States under the 1900 Treaty of Washington (or the Treaty between Spain and the United States for Cession of Outlying Islands of the Philippines, signed November 7, 1900).6. Additionally, Secretary Cordell Hull of the U.S. State Department mentioned in his Memorandum of July 27, 1938 to Harry Woodring, Secretary of War: “In the absence of evidence of a superior claim to Scarborough Shoal by any other government, the Department of State would interpose no objection to the proposal of the Commonwealth Government to study the possibilities of the shoal as an aid to air and ocean navigation.”Finally, on 4 July 1946, the Treaty of Manila has been signed granting the Philippines full independence from the United States of America.7. Scarborough Shoal was also used by the United States and the Philippine military as an impact range for their warships and warplanes from 1960s – 1980s. The International Maritime Organization of the United Nations was notified of such activities. During those years, there were no protests from any country about these activities.In conclusion, “The Philippines today is engaged in a historic battle to defend over 531,000 square kilometers of its maritime space (EEZ and ECS) in the West Philippine Sea, an area larger than the total land area of the Philippines of 300,000 square kilometers. This huge maritime space is part of Philippine national territory since the Constitution defines the ‘national territory’ to include ’the seabed, the subsoil, and other submarine areas’ over which the Philippines has ‘sovereignty or jurisdiction’. Under UNCLOS, the Philippines has ‘jurisdiction’ over this huge maritime space. Can the Philippines prevent China from gobbling up this huge maritime space? All citizens of the Philippines - both government personnel and private individuals – have a solemn duty to prevent the loss of this huge maritime space. It is a duty we owe to ourselves, and to future generations of Filipinos. The Historic Battle for the West Philippine Sea.”  (From the presentation of Justice Antonio T. Carpio)On 12 July 2016, the Permanent Court of Arbitration (PCA) tribunal in Netherlands agreed unanimously with the Philippines. They concluded that there is no evidence and "no legal basis for China to claim historic rights" over the area within the nine-dash line. The tribunal also judged that the PRC had caused "severe harm to the coral reef environment"  and had violated the Philippines’ sovereign rights in its EEZ by interfering with Philippine fishing and petroleum exploration (such as restricting the Filipino fishermen at Scarborough Shoal). PRC rejected this ruling. Their president Xi Jinping said that, "China's territorial sovereignty and marine rights in the South China Sea will not be affected by the so-called Philippines South China Sea ruling in any way", nevertheless the PRC would still be "committed to resolving disputes" with its neighbours. China afterwards sent more warships in the Scarborough Shoal. Disclaimer: Regarding “The South China Sea West Philippine Sea Dispute” by Justice Antonio T. Caprio – The views expressed in the presentation are the personal opinion of the author and do not necessarily represent the position of the Philippine Government.References: “South China Sea Arbitral Award” - https://www.slideshare.net/SamGalope/south-china-sea-arbitral-award South China Sea - https://en.wikipedia.org/wiki/South_China_SeaScarborough Shoal - https://en.wikipedia.org/wiki/Scarborough_Shoal Justice Antonio T. Carpio. “The South China Sea West Philippine Sea Dispute” - https://www.slideshare.net/SamGalope/lecture-the-south-china-sea-west-philippine-dispute-justice-antonio-t-carpio-philippine-social-science-center “5 facts on Scarborough Shoal” (8 Feb. 2017) by Agence France-Presse and ABS-CBN News - https://news.abs-cbn.com/news/02/07/17/5-facts-on-scarborough-shoal https://www.slideshare.net/7philippines/the-south-china-sea-west-philippine-sea-dispute Perez, Jane (12 July 2016). "Beijing's South China Sea Claims Rejected by Hague Tribunal". The New York Times. Tom Phillips, Oliver Holmes, Owen Bowcott (12 July 2016). "Beijing rejects tribunal's ruling in South China Sea case". The Guardian. "South China Sea: Tribunal backs case against China brought by Philippines". BBC. 12 July 2016.
Philippine Resources - March 18, 2019
GEOCON highlights the role of Filipino Geologists
By Marcelle P. Villegas Highlighting the achievements and challenges in the field of geology, The Geological Society of the Philippines (GSP) presented the 2018 Annual Geological Convention (GeoCon) last December 11-12, 2018 at The Manila Hotel. GSP is a duly accredited integrated professional organization for geologists. The theme for this event is “Building the Country, Securing the Future, The Role of Filipino Geologists”. The exhibit and convention was held at the hotel’s Fiesta Pavilion which had over 900 attendees from different parts of the country.The Welcome Remarks was given by Dr. Renato U. Solidum, Jr. who is the Undersecretary for Disaster Risk Reduction and Climate Change of the Philippines, Department of Science and Technology (DOST). Mr Alberto P. Morillo, 2018 President of the Geological Society of the Philippines, introduced the keynote speaker, Honorable Juan Edgardo “Sonny” M. Angara, Senator and Chairman of the Senate Committee on Local Government/ Ways and Means.Senator Angara’s speech highlighted many important and critical topics surrounding the mining industry and the country’s Science and Technology (S&T) status in general. He started by thanking the Filipino scientists and S&T professionals for the important role they play in powering our economy forward. Then he wished them to have a long life and an appeal for them to stay in the country. "Sadly, people like them are fast becoming a rare breed here in the Philippines," he states."We continue to lose our best and brightest… We may be exhibiting among the world's fastest economic growth rates but we remain among the world's top labor-exporters, with close to 10 million of our people working in greener pastures abroad."He said that these migrant workers may bring important dollar remittance to the Philippines which keeps our macroeconomic position stable, but their talents and skills are utilized by another country rather than here where they are much needed."A 2017 ADB report found that of all the 2.79 million tertiary-educated ASEAN nationals who migrated to OECD countries between 2010 and 2011, around 1.55 million or 55.3% were Filipinos. Among ASEAN countries, we sent abroad the biggest number of educated professionals comprising a significant brain drain. In fact, we sent to OECD (Organisation for Economic Cooperation and Development) countries a little more than three times as many as the second largest labor-exporting ASEAN country--Vietnam with 539,000."Additionally, he noted, "By some measure, I am sure that such brain drain is also felt in the industries and research areas where the members of the Geological Society of the Philippines are involved."Sen. Angara discussed the following topics:1) Failure to create high-paying, S&T-driven jobs - He stressed the general inability of our economy to create high-paying jobs in the field of science and technology. For this reason, most professionals in the scientific field (like geologists, engineers, etc.) end up working in New Zealand, Australia, Canada or UK for more lucrative jobs.2) "But even government-research positions are unattractive." - The Senator stated that, "Our top scientists, engineers and researchers are forced to find opportunities abroad where their talents are well-compensated. A National Academy of Science and Technology (NAST) July 2014 press release said that since the Scientific Career System was institutionalized in 1983, only 147 career scientists have entered the system -- or little less than 5 new scientists each year for 31 years. Worse, out of the 147, only 47 were actually active in government."Sen. Angara mentioned that they worked to respond to the issue by co-authoring amendments to the Magna Carta for Scientists, Engineers and Researchers (still pending in the House of Representatives) to counter this. He says that this entails removal of limits on honoraria or additional salary that scientists can receive from grants-in-aid projects, expanding the coverage to include non-DOST S&T personnel (such as the R&D employees of the DA), and granting five-year extensions to those up for mandatory retirement. 3) “This needs to be rectified soon because the lack of attractive S&T jobs in the country dissuades many of our youth from pursuing S&T courses.”4) “Such situation is unfortunate especially when S&T can play such a big role in solving many of the challenges we face today. Geologists and Geoscientists in particular could help the nation in any number of ways.”Additionally, he emphasised the significant roles of geologists in addressing more issues in the country such as, disaster risk reduction (in preparation for “The Big One” earthquake), infrastructure build-up, responsible mining, and energy security. Sen. Angara also emphasised the importance of making education available to all to provide opportunities to more children so they will be encouraged to pursue a career in Science and Technology. Several technical papers and studies were presented for the two-day convention. “Landslides in Itogon, Benguet: The Triggers and Causes” was discussed by M. Madrigal et al. Another interesting topic presented was the “Typhoon Ompong-Induced Landslides and Debris Flows in the Mine Claims and Host Barangays of Itogon-Suyoc Resources Inc. in Itogon and Mankayan, Benguet Province: Emergency Preparedness Initiatives” by G. Rostata et al.The environmental issue in Boracay was discussed by R. Agot et al with their study titled “Ground Penetrating Radar (GPR) Investigation of Buried Pipes along White Beach and Bulabog Beach, Boracay Island, Municipality of Malay, Aklan Province.” Their presentation revealed photos which are striking evidence on how certain restaurants and resorts in Boracay have violated environmental rules and guidelines in managing their wastewater. For Session 5 of day 1 of GeoCon 2018, the special guest speaker was Ms Marites Danguilan Vitug, RAPPLER’s Editor-at-Large and author of the book “Rock Solid: How the Philippines won Its Maritime Case against China”. Atty. Fernando Penarroyo, moderator of Session 5 described the book, “‘Rock Solid’ narrates the complicated maritime dispute by providing previously unreported details on the developments before and after the July 2016 arbitral decision.” The author discussed her book during the event. Ms Vitug is a former editor of Newsbreak magazine. She won numerous awards such as the Philippine National Book Award in Journalism for her books “Power from the Forest: the Politics of Logging” and “Under the Crescent Moon: Rebellion in Mindanao” with Glenda M. Gloria. She also received the Courage in Journalism Award by the International Women’s Media Foundation (U.S.A.) for her work that exposes plunder of Palawan forests. Her book with Criselda Yabes titled “Jalan Jalan:A Journey through EAGA” was chosen by Asiaweek as one of the best books on Asia in 1999. Election for the 2019 GSP Officers and Trustees also took place during the GeoCon 2018. The induction of newly elected officers, trustees and committed chairs was held later in January 31, 2019 at PHIVOLCS Auditorium. This year’s GSP Officers and Trustees are the following: President: Dr. Carla B. Dimalanta (President), Dr. Teresito C. Bacolcol (Vice-President), Dr. Jillian Aira S. Gabo-Ratio (Secretary), Dr. Victor B. Maglambayan (Treasurer), Dr. Karlo L. Queaño (Assistant Secretary), and Trustees Mr. Ciceron C. Angeles, Jr., Dr. Rene Juna R. Claveria, Dr. Betchaida D. Payot and Atty. Marissa P. Cerezo.This year will be an exciting time for GSP as they prepare for the 75th year anniversary in 2020. GSP will also be hosting the GEOSEA conference on the same year. Acknowledgement:Thank you to Atty. Ronnie Penarroyo, Ms Marites Danguilan Vitug, Dr. Renato U. Solidum, Jr., and Ms Dianne Kay Orquina Namit.
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Philippine Resources - April 12, 2021
Masbate Companies Win PMIEA Awards
In the recently concluded 2020 Presidential Mineral Industry Environmental Awards (PMIEA), the Masbate Gold Project's two companies, Filminera Resources Corp. and Phil. Gold Processing & Refining Corp., won four awards in the Best Mining Forest and Safest Mine categories. PMIEA recognizes mining companies that demonstrate best practices in safety and health care, environmental conservation, and community sustainability. Filminera was awarded the Platinum Achievement Award in Surface Mining Operation Category by the PMIEA Selection Committee, as well as the Titanium Achievement Award in Mineral Exploration Category and the Safest Mineral Exploration – A Category. PHL Gold, on the other hand, won the PMIEA Titanium Achievement Award in the Mineral Processing Category from the PMIEA Selection Committee. Both organizations have active initiatives aimed at environmental protection, ecological sustainability, and advanced land use planning. The reforested and rehabilitated areas are now home to a wide variety of flora and fauna habitats as a result of these upland and coastal reforestation activities. Apart from promoting sustainability through conservation projects, the companies have also aided social growth in the local areas through a variety of livelihood initiatives. Fast-growing and natural forest tree species were used to revegetate the Syndicate Waste Dump, which was undergoing restoration.
Philippine Resources - April 12, 2021
Mining Industry Anticipates Receiving a ‘Passing Score' on the EITI's Transparency Validation.
The Philippines' Chamber of Mines (COMP) expressed hope in completing the Extractive Industries Transparency Initiative (EITI) validation process, which began on April 1, 2021. The validation is an evaluation of adopting countries' willingness to follow EITI requirements, and it is the second to be completed since 2017. The countries will be graded on three aspects of the validation process: 1) stakeholder engagement—involvement of all government, business, and civil society stakeholders 2) transparency—requirements for accountability, such as a beneficial ownership registry; and 3) results and impact—addressing national interests in natural resource governance. The EITI Board is scheduled to report the final outcome of the validation in the fourth quarter of 2021. The Philippines was found to have made "satisfactory progress" in the first validation in 2017, making it the first EITI adopting country to reach such status, according to COMP. The industry remains committed to the EITI benchmark, with 95 per cent of active mines filing their accounts, according to COMP Executive Director Ronald Recidoro. “The Chamber of Mines of the Philippines looks forward to the validation. We hope to still be at the forefront of this transparency initiative just as we were in 2017 under the old standard,” he said. COMP member-companies, at the very least, had been doing disclosure monitoring on their own, according to Recidoro, even before it became mandatory. “We have done a lot to move transparency reporting in the Philippines, including reporting on gender, environmental protection, etc., which is only now being made mandatory under the new standard,” he said. The validation, according to Bantay Kita, a civil society delegate to the Philippine EITI Multi-Stakeholder Community (PH-EITI MSG), is an opportunity to address problems in adopting the EITI and how it can be more applicable at both the national and sub-national levels. “Over the past months, the PH-EITI MSG has been working to gather all evidence to show progress in the Philippines. All stakeholders, not only civil society, have contributed to communicating EITI data and initiated outreach activities from local communities to policy-makers,” Vincent Lazatin, national coordinator of Bantay Kita, said in a news statement. “Stakeholders involved in the validation process would be honest and able to articulate what really is happening on the ground with the transparency initiative of extractive industries in our country. Beyond aiming to be on top, the one of greater value is knowing the real score, the PH-EITI’s actual situation, and how we can perform better,” said Aniceta Baltar, a civil society representative to the PH-EITI MSG. “The validation looks at how it continues to execute its mandate, and at what level it does. It also gauges what positive impacts the initiative were able to bring across to its constituents and stakeholders,” she added. When pressed for more details, Recidoro stated that COMP, as a founding member of the PH-EITI, is committed to continuing to participate in the validation process. According to him, the 2019 EITI validation standard includes additional provisions such as documentation on gender and environmental spending, as well as the contentious question of beneficial possession (BO). “The PH-EITI has been reporting on gender and environmental expenditure since 2012, so we are ahead of the curve in that regard. We piloted beneficial ownership reporting last year,” Recidoro said. However, he said, “BO reporting will still need some work.” “We need SEC [Securities and Exchange Commission] to take the lead on this so that it doesn’t become redundant,” he said. “There are also concerns about data privacy,” Recidoro added. He clarified that the EITI requires businesses to report ownership information, but that this is already being done with the SEC. When it comes to BO news, Recidoro believes the SEC needs to establish a consistent policy or set of guidelines. “Beneficial ownership disclosure is already part of the annual general information sheet [GIS], but the issue now is publication. SEC does not make that beneficial ownership disclosure public because of data privacy concerns,” he explained. The GIS is an annual filing with the Securities and Exchange Commission (SEC) in which businesses report on their specific corporate details and shareholders, among other things. Every year, businesses must send a different GIS form containing their organizational results, according to Recidoro. “Since last year, that GIS now has a beneficial ownership report portion. The GIS is available for download with the SEC, but the BO portion is redacted. Because of data privacy concerns,” he said.
Philippine Resources - April 12, 2021
Miners, government outlook bleak on Philippines' role in EV metals supply chain
Despite being the world's second-largest nickel producer, the Philippines' capacity to engage in the development of a global battery metals supply chain is severely restricted due to a shortage of facilities and stringent policies, as the country's mines bureau and mining industry both agree. "While the Philippines is a top nickel ore producer, we only have two existing nickel/cobalt processing plants that produce nickel and cobalt sulfide concentrates — intermediate products that are further processed in Japan to make electric vehicle batteries," Rocky Dimaculangan, vice president for communications at the Philippines' Chamber of Mines, or COMP, said. Mines and Geosciences Bureau Director Wilfredo Moncano reiterated the view of COMP, saying the Philippines "can participate in the supply of battery metals but it will be limited to the capacity of two mineral processing plants in the country put up by Sumitomo Metal Mining Co. Ltd." "Although the country is a top supplier of nickel as export, most of these or about 70% are exported as raw, directly shipped ore and has not undergone mineral processing," Moncano said. According to Moncano, the bureau has sent a request to Congress that would require current and new players to construct mineral processing plants that would manufacture finished and semi-finished materials. Some gold and copper mines in the United States have already built processing plants, and Moncano said the bureau hopes to see nickel and iron ore mines follow suit. "This initiative needs legislation by Congress because MGB cannot obligate these companies to do it without a law. A resulting consequence to this one is the gradual and partial ban of raw nickel and iron ore exports as well as Congressional support for the needed infrastructure like additional electric power plants, and the reduction of power cost because it requires billion dollars to put up a medium size mineral processing plant," Moncano said, noting that electricity costs are very significant in mineral processing. Domestic power prices are among the highest in the ASEAN region, on par with Singapore, according to the Department of Energy's Power Development Plan 2016-2040, owing to the absence of government subsidies, which are present in Thailand, Indonesia, and Malaysia. Miners in the Philippines had planned to benefit from Indonesia's ban on nickel exports, which will take effect in 2020. However, current environmental constraints will preclude the Philippines from fulfilling China's nickel production requirements in the absence of Indonesia, according to Market Intelligence's Metals and Mining Research unit, driving Chinese primary capacity down from a projected 715,000 tonnes in 2020 to 490,000 tonnes in 2025. "Larger policy issues ... remain unresolved, particularly the ban on open-pit mining and the moratorium on new mining projects until a new mining tax scheme has been put in place," Dimaculangan said. A prohibition on open-pit mining remains in effect in the Philippines, as does a restriction on new mining licenses before a new tax system is enacted. "To encourage the building of extremely expensive mineral processing facilities and manufacturing plants for EV batteries as well as for clean energy and renewable power projects, the industry needs full government support in terms of stable mining and investment policies that do not change mid-stream," Dimaculangan said. If the obstacles are overcome, the mining industry may be a crucial sector in the country's post-pandemic recovery, according to the COMP and the MGB. "It stands to reason that if policy problems are not immediately resolved, the Philippines will remain an unattractive mining destination and will most definitely fall short of its tremendous potential to participate in this worldwide trend towards mineral-intensive renewable power generation and battery storage technologies," Dimaculangan said. "Otherwise, and this would be most unfortunate, the Philippines will, so to speak, miss the boat again." For the time being, COMP sees the Philippine government's decision to authorize at least 26 new mining ventures that had been shut down by former Environment Secretary Regina Lopez to restart operations as a positive move for the industry. Dimaculangan also expressed hope after the government decided to renegotiate the terms of its financial and technical assistance deal with OceanaGold Corp., the owner of the Didipio gold-copper mine in Quirino province. "Once they are onstream, these projects will undoubtedly help increase the country's exports and the industry's contribution to our GDP," Dimaculangan said.