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Government Finalizes FTAA Renewal for Oceanagold

by Philippine Resources - April 26, 2021

Nearly two years after the previous Financial and Technical Assistance Agreement (FTAA) with Australian-Canadian miner OceanaGold Corporation (OceanaGold) expired, the Philippine government has already finalized the new FTAA.

The FTAA will then be sent to the Office of the President (OP) for signature by President Rodrigo Duterte.

FTAA is a deal that permits a foreign-owned mining company to work in the Philippines and discover and explore the country's mineral resources.

The government would also receive a pre-determined share of the mining project under the terms of the agreement.

OceanaGold's 25-year free trade agreement with the Philippine government expired in 2019, a year after it applied to extend it.

“Oceana Gold’s renewal is still with Secretary Cimatu for his signature on the recommendation made by the Philippine Negotiation Panel comprised of the DENR [Department of Environment and Natural Resources], MGB, and DOF [Department of Finance],” MGB Director Wilfredo Moncano said.

“Once signed by the DENR Secretary, this will be forwarded to the OP,” he added.

He further said that “the negotiation on the new terms and condition on the FTAA renewal was done already and Oceana agreed to it”.

The new FTAA, once signed by Duterte, will enable OceanaGold to reopen the Didipio gold and copper mine in Nueva Vizcaya, which is one of the country's largest gold and copper mines.

OceanaGold had to perform the first round of permanent layoffs in October of last year when 496 workers and miners lost their employment due to the prolonged closure of Didipio.

OceanaGold said that about 400 workers working for vendors were also affected, in addition to direct staff.

Nonetheless, the government re-started talks on OceanaGold's FTAA renewal in December, following the company's receipt of a Certification of Non-Overlap (CNO) stating that the location of its mining activities is outside of an ancestral jurisdiction.

Despite the central government of Nueva Vizcaya's opposition to the proposal, the project was approved.

Governor Carlos Padilla of Nueva Vizcaya issued an order in 2019 ordering the company to cease operations as soon as its FTAA expired and the construction of a barricade around the Didipio mine site.

OceanaGold's motion to reopen operations was also dismissed by the Court of Appeals (CA) in July of last year.

Although OceanaGold questioned the validity of the order issued by the Governor of Nueva Vizcaya to restrain the company's activities pending the renewal of its FTAA, the petition asked CA to impose an injunction as a temporary measure to enable interim operations of the Didipio Mine.

At the time, however, the company maintained “authority over the Didipio Mine” and said that “the Local Government Code of 1991 (Republic Act No. 7160) does not grant the power or authority to the Provincial Governor or any local government officer to restrain any aspect of the Didipio Mine operations”.

Meanwhile, according to a document obtained from MGB, OceanaGold recently received a government "Stay Order."

This means that, amid pending environmental concerns posed by former and late Environment Secretary Regina Paz Lopez, it will be able to run as soon as the new FTAA is signed.

“OGPI [Oceana Gold Philippines Inc.] appealed to the OP by reason of the suspension order of former Secretary Gina. If not for the expired FTAA, OGPI could have resumed operations,” Moncano further explained.

“The only constraint [to its resumption] is the renewal,” he further said.

According to a recent news article, the government has agreed to issue a "Stay Order" on several mining firms that Lopez suspended and shut down in 2017.

The "Stay Call" was the government's interim measure to allow these mining firms to continue operating pending the OP's ruling on Lopez's suspension and cancellation orders.

Other firms that issued a "Stay Order" according to the MGB paper include Lepanto Consolidated Mining Company and Far Southest Gold Resources Inc. for their gold mines in Benguet; Citinickel Mines and Development Corporation for its nickel mine in Palawan; Benguet Corporation for its gold mine in Benguet; Hinatuan Mining Corp. for its nickel mine in Surigao del Norte; and Marcventures Mining and Development Corporation for its gold and copper mine in Surigao del Sur. 

Adnama Mining Resources, Inc., Libjo Mining Corporation, Oriental Vision Mining Philippines Corporation as authorized operator of Norweah Metals and Minerals Co., Inc., Sinosteel Philippines H.Y Mining Corporation, and LNL Archipelago Minerals Inc. as authorized operator of Filipinas Mining Corporation were also served with the same request.

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