Industry

Industry

Marcelle P. Villegas - February 20, 2020

Resiliency and sustainability through geoscience

By Marcelle P. Villegas GeoCon was first organised in 1988 as a venue where the latest development in geosciences are shared and discussed. Each year, new ideas and fresh perspectives are presented through technical reports and exhibits. What is the importance of GEOCON in the Philippines? Since it is a conference where great minds in the field of geosciences gather to discuss, debate or collaborate for continued learning, the event then brings to light solutions to national problems that science can solve. Last December, the Geological Society of the Philippines (GSP) presented GEOCON 2019 with the theme “Geoscience for a resilient and sustainable Philippines”. The two-day conference was held at The Manila Hotel last 4-5 December 2019. Dr. Renato U. Solidum, Jr., Chairperson of GeoCon 2019, gave the welcome remarks on the Day 1 of the conference. He is also Department of Science and Technology Undersecretary for Disaster Risk Reduction -- Climate Change Adaptation. Dr Solidum is also the Officer-In-Charge of the Philippine Institute of Volcanology and Seismology. Although GeoCon 2019 took place a month before the Taal Volcano Eruption (12 January 2020), Dr. Solidum’s message was regarding readiness in case of natural calamities. “The theme of this year’s GeoCon… should jolt us and remind us of our collective obligation as geoscientists to convey to the most vulnerable sectors of our society the imminent dangers of geological hazards. This is a herculean task which all of us, because of our specialized training, can help achieve.” He said, “We should join hands and we must zero in our common efforts in educating and empowering our people so that they will become more resilient to natural disasters.” Dr. Carla B. Dimalanta, President of GSP, stated, “2019 has also been an extremely challenging one for our country, particularly on matters where the geosciences are central to the issues. Geohazards and resource use conflicts, most especially, continue to cause significant disruptions to the lives and livelihoods of Filipinos. From the water shortages in Metro Manila during the dry months, to the large-scale landslides and floods in Luzon and the Visayas in the rainy periods, and the unusual earthquakes in Mindanao, GeoCon 2019’s theme brings to focus what we, as geoscientists, have done and must further do to contribute to building a resilient and progressive country.” Dr. Dimalanta expressed that there are many changes in the regional and global perspectives which affect the decisions on natural resource use, environmental design and management, and geohazards risk reduction. She also mentioned the urgent need to achieve the Sustainable Development Goals (SDG). “[With] barely two years left for the current national government administration, we the country’s geoscientists must assert our relevance in delivering SDG targets. The Geological Society of the Phils., as a collegial body of experts in the various fields of earth sciences, is best poised to address concerns pertaining to the following SDGs: SDG 6: clean water and sanitation, SDG 7: affordable and clean energy, SDG 9: industry innovation and infrastructure, SDG 11: sustainable cities and communities, SDG 14 and 15: life below water and on land, and most importantly SDG 17: partnerships for the goals.” The keynote speaker for Day 1 was Undersecretary Rosemarie Edillon of the National Economic Development and Authority (NEDA). The Undersecretary discussed the three key points in her speech: 1) economic and social impact of the disaster on the country 2) the new ecosystems for science, technology, and innovation 3) the challenge with the science community, including the geoscience community. She stated, “The Philippine economy is currently on a high growth trajectory. So at the beginning of 2012, our growth rate has been upward by 6%. We could actually have grown much faster were it not for the damage and losses due to the typhoons and other natural calamities. The UN estimates that we lose about 0.8% of GDP every year due to the combined impact of disasters.” NEDA Undersecretary mentioned that the cost for evacuation and spending in managing an evacuation center is an added expense. When there are natural calamities, loss of productivity happens which in turn brings about the loss of income per day. Other factors that affect and hinder income and productivity are loss of lives, destruction of cultural heritage sites or buildings, and more. These events bring insecurities among Filipinos because during a natural calamity, they are subjected to various threats in their livelihood. In contrast, the Undersecretary presented some good news which is in light of “the new ecosystem for science and technology, innovation". “To be fair, we had been improving towards progress with regards to how we had been addressing climate shocks. In fact, we are the only country with an institutionalised response mechanism [or Institutional Mechanisms for Disaster Response] which includes preparedness measures.” "We have also completed a number of high-resolution geohazard maps." "For the last seven years, the economic growth remains above 6%. With our already released Q3 growth, the Philippines is actually second in terms of economic growth compared to Vietnam 7.3% and even higher than China 6.0%. So our economy has been steadily growing and it is our goal to sustain this momentum in the coming years, and uphold the Philippines' standing as one of the fastest growing economies in Asia.” Undersecretary Edillon added, “And to be able to sustain this growth, science, technology and innovation have been identified and prioritised not only as a catalyst to exponentially grow our economy but also as a solution to minimize environmental impacts, efficiently use our natural resources, and build our resilience.” “I've got a piece of good news. In 2019, the Global Innovation Index, which measures the performance of countries in terms of innovations like technological advancements, the Philippines jumped 19 notches, ranking 54th which marks the biggest leap amongst Southeast Asian countries and we ranked 5th behind Singapore, Malaysia, Vietnam and Thailand.” Later during the day, the other topics and studies presented were: “Re-opening new paths for the Philippines’ search for energy independence” by Arthur Saldivar-Sali, “Paving a new landscape in risk valuation: The GeoRisk Philippines initiative” by Mabelline Cahulogan, “The October 2019 earthquake sequence: Parameters and impacts” by Jeffrey Perez, and more.

Industry

Philippine Resources - November 06, 2019

Harnessing hydropower potential in the Philippines

Together with its client, Cordillera Hydro Electric Power Company’s (COHECO), GHD’s renewable energy capabilities were in the spotlight at the Asian Power Awards, recently announced in Malaysia. Dubbed as the “Oscars of the power industry,” the awards recognize cutting-edge innovation and sustainable development with COHECO’s 60 MW run-of-river hydro project named Hydropower Project of the Year. GHD is the owner’s engineer for the project, which will generate reliable, low-cost electricity and boost socioeconomic growth in the communities of Kapangan and Kibungan in Benguet province, Philippines. Run-of-river hydro schemes do not require reservoirs, reducing cost and complexity and minimizing social and environmental impacts. “It’s a proud moment for GHD and COHECO to be recognized by an esteemed jury of leaders from the energy industry,” shares Darren Shrives, GHD’s General Manager, Philippines. “This award reflects our commitment to create value for our clients, our employees, and the communities that benefit from our work.” “We thank GHD for the nomination and we are one with them in bringing development opportunities and uplifting the living conditions of local communities to propel economic growth,” states Jose Xavier Gonzales, President and Chief Executive Officer, COHECO. “This international recognition affirms the way GHD leverages its global expertise to support us in achieving our business goals.” The project, in development since 2015, involves the construction of a 22-km access road, about 8 km of tunnel, powerhouse, switchyard, surge tank and 24 km of 69 kV transmission lines. In the early stages of the project, GHD undertook an extensive hydrology study to estimate the potential annual energy output for the consideration of potential lenders. The construction of the hydroelectric power plant is estimated to take three years with GHD as owner’s engineer providing technical advisory, project management, construction monitoring and supervision services. This project is a cornerstone in increasing the region’s competitiveness and reinforcing the country’s commitment to increase the share of renewables in its total energy mix, with energy consumption expected to nearly double by 2040.

Industry

Marcelle P. Villegas - August 20, 2019

Hitting A Hole in One at the 4th Rocks and Forests Golf

By Marcelle P. Villegas 5 July 2019, Villamor Air Base Golf Course, Pasay City: The 4th Rocks and Forests Invitational Golf Tournament was held, organised by the UP Geology Alumni Association (UPGAA) and the Society of Filipino Foresters Inc. (SFFI). This annual golf tournament is one UPGAA’s major projects which aims to generate funds for the different projects of the group. Part of the proceeds of the tournament this year will be used to purchase equipment for National Institute for Geological Sciences (NIGS). UPGAA is a non-stock, non-profit organisation. Its main objective is to provide a forum for the members of the UP Geology Alumni Association. Here, there can interact through mutually beneficial contacts and “to provide avenues for drawing upon the knowledge and expertise of the alumni for furthering the cause of UP NIGS as a School of Excellence”. UPGAA is headed by its Chairman, Joey Nelson Ayson while SFFI is headed by its President, Tom Valdez. Both UPGAA and NIGS work together to further develop the geological profession. SFFI is an independent, democratic, non-profit, non-political and non-partisan professional organisation of the foresters in the Philippines. They actively promote and support sustainable management of forest resources. Their vision is to be “committed professionals for the advancement of forest technologies, practice and biodiversity in the country essentially contributing to the sound environmental management, social justice and economic development”. With UPGAA working for the advancement of the geological profession and SFFI is doing the same for the advancement of the forestry profession, their partnership further led in addressing the climate change problem. In 2016, UPGAA and SFFI started a collaboration and worked together on the Carbon Neutral Program (CNP). This program “joins the global call for climate change mitigation in view of the dreadful impacts that can change the world’s landscape as we know it today”. For more information: UP Geology Alumni Association (UPGAA) - https://upgaa.com/ Society of Filipino Foresters Inc. (SFFI) - https://sffi.org.ph/ _ _ _ _ _ Acknowledgement: UP Geology Alumni Association (UPGAA) for the photos and golf tournament updates

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Industry

Marcelle P. Villegas - August 20, 2019

Green Solutions at the 7th PH Electric Vehicle Summit 2019

By Marcelle P. Villegas Is the Philippines coping with the global trend for green solutions in transportation? A lot of electric vehicles are out now in the international market. With this wave in green technology, the Electric Vehicle Association of the Philippines (eVAP) organised and hosted the 7th Philippine Electric Vehicle Summit 2019. This was held last 17 - 18 July 2019 at the SMX Convention Center, Pasay City. The eVAP is the Philippines’ main voice of the electric vehicle industry and for the past 7 years, they had been hosting the Philippine Electric Vehicle Summit. This year’s theme is “Modernizing the Transport Landscape: Driving Sustainable Growth”. [1] “Infrastructure and government support to sustain the growth of the EV industry are now being set up. The 3,000 Bemac eTrikes of the Department of Energy (DOE) [which are] now being deployed nationwide are becoming more visible in various LGUs,” according to Mr Edmund Araga, EVAP President. He stated that the e-vehicle industry has become mainstream in the Philippines. He also said that more e-Jeepneys are being deployed in Metro Manila, Visayas and Mindanao regions as part of the PUV Modernization Program. Mr Agara also noted that the program is planning to upgrade some 200,000 public utility jeepneys for the next six years with modern public utility vehicles powered by either a Euro 4-diesel engine or an electric motor. He also stated that retail financing is available for PUVMP via Landbank of the Philippines and the Development Bank of the Philippines (DBP) [1] The summit featured car manufacturers like Nissan, Mitsubishi and Hyundai to showcase their electric vehicles. The summit also had technical sessions where transport officials, local government representatives, members of the academe and electric vehicle and automotive industry players were present. During the summit, Atty. Dante Bravo, President of the Philippine Nickel Industry Association (PNIA) emphasised the role of nickel in the growing e-vehicle industry. He said that the nickel industry is poised to supply the growing demand for nickel in lithium ion batteries that are used to provide power to electric vehicles. [2] Mr Bravo said, “We want the nickel industry to be able to rise to the challenge of globalization, and in the process we would need a long-term strategic approach. This can be embodied through collaboration with our partner industries as well as the private, public and academic sectors. Thus, I would like to enjoin our friends in the EV sector to join us in the pursuit of an industrialised and sustainable economy.” [3] References: [1] Manahan IV, Ruben. (5 June 2019). “‘Green Light’ for PH EV Summit 2019”. Retrived from - Carmudi Philippines - www.carmudi.com.ph/journal/green-light-for-ph-ev-summit-2019/amp/ [2] {18 July 2019). “Briefs: Nickel, EVS moving forward together”. Daily Tribune. [3] (19 July 2019) “Nickel Industry’s Role in Growing The EV Industry”. Philippine Nickel Industry Association website. Retrieved from - https://www.philippinenickel.org/news-and-updates/press-release/ nickel-industrys-role-in-growing-the-ev-industry/

Industry

Marcelle P. Villegas - August 20, 2019

Oil and Gas PH 2019 and PhilMarine 2019

By Marcelle P. Villegas 18 - 20 June 2019 - Oil and Gas Philippines is co-located with PhilMarine 2019 at the SMX Convention Center, Pasay City. This is an annual three-day event that features products in the oil and gas sector, fire protection systems and materials, flare systems and equipment, electromechanical equipment, ships, boats, vessel equipment and services, and more! Maritime Industry Authority (MARINA) hosted the PhilMarine 2019 and their theme is “Continuous Quality and Productivity Improvement in the Shipbuilding and Ship Repair Sector.” On day 1 at the 6th PhilMarine 2019 International Maritime Exhibition, the Maritime Industry Authority Technical Conference was held. Also on this day, the MARINA signed an agreement with a Japanese association to adopt Japanese technology in the manufacturing of resources for the Philippine shipbuilding and ship repair industry (SBSR). The cooperation agreement was signed by Vice Admiral Narciso Vingson, Jr (MARINA Officer in Charge) and Chairman Shinzo Yamada of Japan Ship Machinery and Equipment Association (JSMEA). [1] “With Japan’s latest technologies and expert strategies, it has sufficient machinery and technical skills to discover and provide solutions to challenges. We hope that this cooperation agreement between the MARINA and JSMEA will aid us in building a solid ancillary industry for SBSR sector, which will generate jobs for millions of Filipinos... Together, let us achieve a mutual progress of having a flourishing Philippine maritime industry.” he stated. [1] Vice Admiral Vingson said that this agreement will open new opportunities for partnership in investments between the Japanese and Filipino businesses. This will give local shipbuilders an easy access to good quality shipbuilding and ship repair materials. He also stated that the objective of the Maritime Industry Development Plan (MIDP) will be more feasible now since locally manufactured resources are already within reach. “So, in 10 year, hopefully, the programs under the MIDP are no longer plans, but tangible results.” Mr Yamada said, “We believe that with the MoU (memorandum of understanding), it would bring a solid relationship between MARINA and JSMEA and a good relationship between the Philippines and Japan.” He noted that the Southeast Asian maritime market is important to JSMEA. Thus, he hopes that his company will be able to provide progress in the maritime industry in the Philippines. [1] PhilMarine 2019 is the only specialised event in the Philippines that brings together an international array of maritime, shipbuilding, offshore, oil and gas naval defense, and other supporting industries to showcase the latest developments in the maritime industry. The objective is to improve the current shipbuilding, technology and equipment and to maintain the Philippines’ ranking as the world’s 5th largest shipbuilding nation. On day 2, “The Philippine’s Domestic Shipping Modernization Forum and SONAME General Assembly and Election” was held. This was hosted by the Society of Naval Architects and Marine Engineers, Inc. (SONAME). Welcome Remarks were given by Engr. Sammuel T. Lim, Chairman of SONAME. Some of the topics presented were: - “Philippine Domestic Shipping & Shipbuilding Situation: by Engr. Ramon C. Hernandez (Director, Shipyard Regulations Service, Maritime Industry Authority) - “High-Speed Craft Technologies for Philippine Shipping” by Ms Julie Zhu, General Manager, Pio-Ship Design & System Integrate and Harbin Engineering University Ship Equipment & Technology Co. Ltd. - “Probabilistic Damage Stability - Case Studies for Philippine Ferries” by Engr. Jerome M. Manuel (Pres., PRS Tech) - “The Shipbuilding Cooperation between Philippines and China” by Mr Wang Xiaohal (Vice General Manager, China Shipbuilding Trading, Co. Ltd. - Shanghai) On day 3, the 146th Maritime Forum and Exhibitors Night were held. The PhilMarine 2019 had attendees from 20 countries. There were 152 companies/exhibitors who participated at the 6,500 square meter exhibition space. Of note, 60% of the companies in the exhibit have already renewed their participation for 2020. The event was organised by Fireworks Trade Exhibitions and Conferences Philippines, Inc. This company is a part of Fireworks Trade Media Group, one of Asia’s largest independently owned trade media companies. Reference: [1] Factao, Genevi. (19 June 2019). “Pro-ship sector agreement signed”. The Manila Times.

Industry

Philippine Resources - May 29, 2019

Mine-Mouth power plant development to lower electricity cost in the Philippines

By: Guillermo R. Balce, Arnulfo A. Robles, Ismael U. Ocampo and Mars T. Ocampo ABSTRACT The development of coal-fired mine-mouth power plants in the Philippines is one measure that can address the country’s need for electricity cost reduction, energy supply security and a shift from coal to renewable energy. The use of mine-mouth power plants as a low-cost electricity development option in the USA, Thailand, Indonesia, Laos and Mongolia are cited as examples that can guide the Philippines. A review of coal resources in the country indicates 10 potential sites for mine-mouth power plants distributed in proximity to the electricity grid and HVDC substations. The estimated cost of generating electricity from these sites ranges from Php2.61/kwh to Php4.45/kwh, which is significantly lower than the average generation cost of Php5.425 in 2014. Because mine-mouth power plants use indigenous coal resources, they can reduce the Philippines’ exposure to coal price volatility and protect the country from coal supply disruption due to commercial and political risks. Coal-fired mine-mouth power plants utilizing circulating fluidized bed combustion (CFBC) technology and low calorific value lignite can be converted to biomass-fired plants, which can use agricultural waste or wood chips sourced from systematic management of forest areas near plant sites. Thus, coal-fired mine-mouth power development is a potential measure in the country’s quest to shift from coal to renewable energy. We therefore recommend that coal-fired mine-mouth power plants be given an incentive of priority dispatch similar to renewable energy plants. Benefits to host communities should be increased from 0.01 to 0.02 PhP/kWh (DOE 1-94) to encourage hosting of coal-biomass-fired mine-mouth power plants. COC holders and power plant investors should be encouraged to operate commercial biomass farms or industrial forest management areas in the vicinity of the plants to provide continuous fuel supply. The increment of 0.01 PhP/kWh may be shared among the barangays, municipalities and provinces to encourage the LGUs to host such power plants. Inclusive economic growth is further assured by organizing the nearby communities into forest management cooperatives to plant and grow appropriate fast-growing tree species to supply the wood chip requirements of the coal-biomass-fired power plant. For instance, planting rubber trees that would provide rubber sap to a nearby rubber factory after 5 years would be ideal. This would provide immediate income after only 5 years up to 10 years when the rubber trees would be fully mature for wood chipping as they no longer produce rubber sap. By planting specific areas in an organized manner, a continuous year-round supply of biomass wood chips is assured for the power plant, thereby extending the life of the mine-mouth coal reserves. Moreover, the biomass tree farm would ensure ecological balance within the surface/strip mine area. Once the coal reserves are exhausted or deemed expensive to mine, the biomass tree farm would ensure continued power plant operation, provide steady income to local communities and assure the supply of rubber sap to a nearby raw rubber factory. INTRODUCTION A mine-mouth power plant is a coal-fired electricity generating plant built near its source of coal, a coal mine. Its location is primarily dictated by water availability, as a 100-MW plant requires about 5 million liters of water per day for cooling and steam production. A run-of-river source with a discharge of 60 liters per second (0.06 cu. m. per sec.) is sufficient. However, water flow must be continuous all year round and ponding is necessary to store and conserve water and prevent warm water from the plant to merge with the cool water of the natural drainage system. The most widely used coal-fired generating technologies are CFBC and pulverized coal (PC). Table 1 shows the comparative parameters of the different CFBC and PC options. Before 1990, PC technology used turbine generating steam at a subcritical pressure of 16.5 mega pascal (MPa) and a temperature of 540°C. By 1990 the design had improved to a supercritical pressure of ≥ 22.1 MPa and temperatures of 540-560°C. In 1995-2000, this had been upgraded to pressures of 27.5-30 MPa and temperatures of 560-600°C. After 2000, the ultra-supercritical conditions of ≥ 30 MPa and ≥600°C became the most favored design for PC power plants. For mine-mouth power plants that use low-heating value lignite, the favored technology is the supercritical CFBC. MINE MOUTH AS LOW-COST ELECTRICITY DEVELOPMENT OPTION North America Advances in long-range electricity transmission in the 1990s enabled the construction of many mine-mouth power plants in the USA and Western Canada. These plants did not need long-distance rail transport and shipping, which reduced fuel costs by at least 50% and substantially reduced the cost of producing electricity. In 1995, Wyoming coal sent to Georgia, USA was sold for USD 29 per ton while it sold for only USD 13 per ton in Wyoming. The cost of converting coal to electricity in a mine-mouth power plant in Gillete, Wyoming was just a little over one US cent per Kwh. Thailand Located in the mountains of Lampang, Thailand, the Mae Moh Power Plant is Southeast Asia’s first mine-mouth power plant. It was built in four phases from 1978 to 1996 by the Electricity Generating Authority of Thailand (EGAT). The power plant at present consists of 10 units with a total installed capacity of 2,400 MW, accounting for 12% of Thailand’s installed capacity and generating approximately 18,000 gigawatt-hours of electricity per year. The nearby Mae Moh Coal Mine supplies 40,000 tons of lignite per day or approximately 16 million tons per year from a coal resource of approximately 864 million tons. The cost of power production is 60 satang per Kwh (1.6 US cent per Kwh). In March 2015 EGAT awarded Alstom Power Systems and Marubeni Corporation an EPC contract for the construction of a new unit with an installed capacity of 600 MW to replace the plant’s existing Units 4 to 7. The new unit is programmed to be commissioned in 2018 and will use the ultra-supercritical boiler and steam turbine technology. Indonesia The Indonesian government aims to make mine-mouth power plants as the main source of its 35,000-MW programmed additional capacity by 2019. To encourage coal mine license holders and operators to develop vast but inaccessible lignite deposits for mine-mouth power plants, the Ministry of Energy and Mineral Resources issued regulations (MEMR 10/14 and MEMR 9/16) providing for incentive pricing of coal from mines to mine-mouth power plants with assured margins of 15%-25% over production cost. The resulting minimum regulated price of coal sold to mine-mouth power plants, called “coal base price”, is USD 16.36 per ton at an assured margin of 15% and coal quality of less than GAR 3000 or higher. In response, PT Bukit Asam, Indonesia’s national coal corporation, has committed to build 4,400 MW within its coal concessions in Sumatra. Since May 2010 PT PLN, the national power corporation, has been bidding out approximately 6,510 MW of mine-mouth plants in Sumatra, with an estimated cost of USD 110.44 million per 100 MW. Independent power producers (IPPs) have committed 800 MW also in Sumatra. In East Kalimantan, Borneo Island, coal mining company PT Adaro is constructing a 600-MW mine-mouth plant within its license area. Laos In the Lao Peoples Democratic Republic (Lao PDR), the Hongsa Mine Mouth Power Project, a 2,504 MW (4 x 626 MW) mine mouth power plant complex, has been under construction since October 2010. The first two units of 626 MW each were commissioned in 2015, with the third unit commissioned in 2016. The fourth unit began operating this year upon expansion of lignite reserves from 370.8 million tons to 577 million tons with an average heating value of 2500 Kcal/kg. Coal cost averages Baht 300/ton or USD 8.10/ton. Power production is allocated mainly to Thailand’s EGAT under a 25-year power purchase agreement (PPA) with the Thai-Lao Lignite Company at 5.7 US cents per Kwh. Figure 1 is a layout of Hongsa Lignite Mine and Power Plant showing the water source for steam generation and cooling. Mongolia In Mongolia, the Chandgana Mine Mouth Power Project is in the last stage of negotiation for government guarantee of revenue requirement for international financing. The project consists of four units of 150 MW each totaling 600 MW licensed since 2010 to Prophecy Power Generation LLC (PPG). Coal source is the Chandgana Tal Coal Deposit of Chandgana Coal LLC, which is 100% owned by Prophecy Development Corporation of Vancouver, Canada, the owner of PPG. Coal supply is 3.6 million tons per year, backed up by measured resource of 733 million tons. The coal supply agreement between Chandgana Coal and PPG is pegged at a coal price of USD 17.70 per ton. Philippines In the Philippines, a mine-mouth power plant has been in operation since 2014 as a component of the coal mining operation of the Semirara Mining Corporation in Semirara Island, Caluya Municipality, Antique Province. The plant has a 15-MW capacity using CFBC technology. Production cost is Php 3.55 /Kwh (US cent 7.1/Kwh). In 2014, the Philippine National Oil Company – Exploration Corporation (PNOC-EC) was supposed to start the construction of a 50- to100-MW mine-mouth power plant in Cauayan, Isabela located beside a 25 million-ton lignite reserve. However, in August 2015, the Philippine government deferred approval of the plan pending proof of PNOC-EC’s financial capability to undertake the project. PNOC-EC is currently searching for a viable project partner. MINE-MOUTH POWER PLANT DEVELOPMENT IN THE PHILIPPINES The countries cited as examples clearly demonstrate the potential of mine-mouth power development to significantly reduce electricity cost in the Philippines. The 5.7 US cents per Kwh price of electricity sold to Thailand from the Hongsa mine-mouth power plant in Lao PDR is a viable target for mine-mouth power plants in the Philippines. If this cost is doubled to include transmission, distribution and other costs to deliver the electricity to Filipino consumers, the price would be only 11.14 US cents or just a little lower than the 12 US cents that the average American household pays for one Kwh of electricity. The foregoing explores the feasibility and benefits of mine-mouth power plant development in the Philippines. 1. AVAILABILITY AND DISTRIBUTION OF COAL RESOURCES IN RELATION TO THE NATIONAL POWER TRANSMISSION GRID Figure 2 shows the known coal deposits in the Philippines. The wide distribution of these deposits throughout the archipelago favors the distributed generation of base load electric power, an important factor towards minimizing transmission costs and losses. At least 10 of the deposits have accurate delineation of resources and coal qualities that can be used for mine-mouth power plant planning, as shown in Table 2a and Table 2b. Figure 3 shows the 10 potential mine mouth plant sites in relation to the existing transmission grid and planned upgrading until 2030. Although the Iguig and Semirara sites will not be connected to the grid until 2022, the other eight sites are within 30 kms of existing HVDC substations where the prospective plants can be connected to the grid. 2. PROJECTED INSTALLED CAPACITIES AND ELECTRICITY PRODUCTION COSTS The potential installed baseload capacities and electricity production costs are estimated from available data for each of the 10 sites using an investment cost of USD 1,200/KW based on 2014 Indonesian bidding estimates and a higher USD 1,850/KW estimate based on the CFB power plants recently constructed in the Philippines. The two scenarios are given in Table 3a and Table 3b. Table 3a (at 1,850 $/kW) and Table 3b (at 1,200 $/kW) show the estimated installed capacity, the planned capacity of various proponents and electricity cost from mine-mouth power plants based on planned capacity. The average costs of mine-mouth electricity nationwide are PhP 3.52 and PhP 2.74 /kWh based on USD 1,850 and 1,200 /kW of all-in (installed) capital cost of CFB plant. The formula for calculating the potential installed capacity from the coal reserves for a 25-year mine-mouth power plant is shown below which assumes a CFBC thermal efficiency of 34.39% (plant heat rate = 3412 / 34.39% = 9,921 Btu/kWh) and net capacity factor of 85%. MW = (Coal Reserve/25 x 10^6 x 10^3) x GHV x 2.2046 x (34.39% / 3412) / (365 x 24 x 85%) / 1000 The total potential installed baseload capacity is 1,828 MW or about 10.4 % of the existing installed capacity of 17,610.8 MW nationwide. The planned capacity addition from mine-mouth power plants from prospective developers aggregates to a higher capacity of 1,985 MW or 11.3% of existing installed capacity. 3. OVERALL REDUCTION IN AVERAGE ELECTRICITY RATES The following Table 4 shows the price breakdown of electricity in 2004 and 2014 and the average annual growth rate of each component (Final Report of Task Force on Reducing the Cost of Electricity Power, 2014). Generation cost is Php5.425/kWh in 2014 and is growing at an average annual growth rate of 4.6%, while total delivered electricity cost inclusive of transmission, system loss, distribution, subsidies, universal charge and government taxes aggregate to Php9.568 /kWh in 2014 with an average annual growth rate of 4.7% p.a. Table 4. Electricity Cost Components and Annual Average Growth Rates (2004, 2014). Reduction in electricity cost at USD1,850/kW Using the current Philippine all-in capital cost (overnight cost) for a mine-mouth CFBC of USD1,850/kW, the average price of electricity from these mine-mouth power plants is Php3.52 /kWh (7.49 US cents/Kwh). (see box below) The current grid rate average of Php5.425 /kWh (11.54 US cents/Kwh) at present can be substantially reduced and a lower weighted average grid rate from blending the two rates will be achieved at Php5.232 /kWh (11.13 US cents/Kwh) or a significant reduction of 3.56% relative to 2014 grid rates. Reduction in electricity cost at USD1,200/kW Using the all-in capital cost from winning bidders in Indonesia for mine-mouth CFBC of USD1,200/kW, the average price of electricity from these mine-mouth power plants is Php2.74 /kWh (5.83 US cents/Kwh). (see box below) The current grid rate average of Php5.425 /kWh (11.54 US cents/Kwh) at present can be substantially reduced and a lower weighted average grid rate from blending the two rates will be achieved at Php5.153/kWh (10.96 US cents/Kwh) or a significant reduction of 5.01% relative to 2014 grid rates. Major Assumptions for the Project Finance Model (DCF IRR) The DCF IRR model was converged to project NPV equal to zero at the target project IRR (100% equity, 0% debt) of 12% p.a. The model also computes the expected equity NPV, equity IRR and other calculated parameters such as project PAYBACK, equity PAYBACK and debt service cover ratio (DSCR – minimum, average, and maximum). The project finance model (discounted cash flow IRR method) used the following input assumptions in running each mine-mouth capacity of a given mine-mouth resource area. (see next box) 4. ADDITIONAL BENEFITS OF MINE-MOUTH POWER DEVELOPMENT Aside from the reduction of electricity generation cost, mine mouth power plant development in the Philippines could contribute tremendous benefits to the economy and provide sustainability in power development. These are: a. Savings in petroleum fuel use, b. Savings in foreign exchange for imported coal, c. Protection from coal supply disruption and coal price volatility, d. Potential to shift from coal to renewable energy, and e. Enhance inclusive growth and sustainability of power development. Reduction of transportation distance for supplying coal from mine to power plant should result in significant savings in petroleum fuel use. The minimum savings would be the amount of diesel oil to be used in transporting the coal to the nearest shore where a power plant may be located or a ship can carry the coal to a plant. Considering the 10 potential mine mouth plant sites above, the minimum savings in diesel oil is thus estimated to be about 469.8 million liters or 2.9 million barrels. Savings in foreign exchange for imported coal can be estimated from the present price of about USD30/ton-CFR of lignite from Indonesia that is imported by the newly installed CFB power plants in the Philippines. Assuming that this price remains as the average during the 25-year life of the power plants, the total avoided foreign exchange cost of the 450 million tons used during 25 years is about USD 13.5 billion. During the past five years (2009-2015), coal prices experienced steep fluctuations. Figure 4 shows the volatility of coal prices and the recent uptrend from a long period of declining prices. Mine-mouth power plant development would certainly protect the Philippines from the negative effects of coal price volatility and supply disruptions stemming from Indonesia’s moratorium on coal shipments to the Philippines due to hijacking and piracy of coal barges in the seas between the two countries. With the high fuel flexibility of CFBC technology, it is now possible for power plants to shift from lignite to biomass. A mine-mouth plant running on CFBC and coal fuel with heating value of 2500 Kcal/kg can be converted to a biomass-fueled plant with no drastic changes in turbine and boiler conditions. It is possible to plan the construction of a mine-mouth power plant that will run on lignite for the first 10 to 15 years and then switch to biomass or wood chips. A parallel development of commercial biomass-producing farms and/or industrial forest management areas in the plant’s vicinity can be implemented during the first half of the plant’s lifespan; the plant can subsequently function as a biomass-fired power plant for the remainder of its lifespan. This concept can address the clamor of climate change mitigation advocates for a shift from coal to renewable energy. Inclusive economic growth is further assured by organizing the nearby communities to forest management cooperatives that can plant and grow appropriate fast-growing tree species to supply the wood chip requirements of the coal-biomass-fired power plant. For instance, planting rubber trees that would provide rubber sap to a nearby rubber factory after 5 years would be ideal. This would provide immediate income after only 5 years up to 10 years when the rubber trees would be fully mature for wood chipping as they no longer produce rubber sap. By planting specific areas in an organized manner, a continuous supply of biomass wood chips is assured for the power plant, thereby extending the life of the mine-mouth coal reserves. Moreover, the biomass tree farm would ensure ecological balance within the surface/strip mine area. Once the coal reserves are exhausted or deemed expensive to mine, the biomass tree farm would ensure continued power plant operation and provide a steady supply of rubber sap to a nearby raw rubber factory. Mine-mouth power plant development contributes to inclusive growth because it requires indigenous fuel sources and local labor. Moreover, the potential for mine-mouth plants to convert from coal to renewable biomass-fired plants ensures sustainability. CONCLUSIONS Mine-mouth power development can greatly reduce the cost of electricity and provide many additional benefits to the Philippine economy, namely: a. Savings in petroleum fuel use, b. Savings in foreign exchange for imported coal, c. Protection from coal supply disruption and coal price volatility, d. Potential to shift from coal to renewable energy, and e. Enhance inclusive growth and sustainability of power development. POLICY RECOMMENDATIONS 1. Priority dispatch for mine-mouth power plants. 2. Priority supply of electricity to host communities. 3. Upgrading benefits to host communities of MMPPs. 4. Develop commercial biomass farms for producing wood chips to replace coal once it is mined out or becomes economically non-viable to extract due to high strip ratio. The initial coal mining operation and power generation will provide the needed capital to start the commercial operation of the biomass farm utilizing local labor with expert assistance from relevant agencies to ensure inclusive growth and sustainability in rural areas.

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Industry

Marcelle P. Villegas - May 29, 2019

Updates on the Bamboo Initiative by OLLI Cares

By Marcelle P. Villegas 3 May 2019 - During Philippine Mining Club at I’M Hotel, Makati City, Mr Leo Dominguez presented updates on his Bamboo Initiative, an advocacy which he started with the support of other mining companies and assoc. Mr Dominguez is the President of OLLI Consulting Group, Inc. and flamboyant Masters of Ceremonies in Philippine Mining Club events. During the recent PMC event, he stated, “If you were here on June 8, 2018 you will recall that we had this speaker from our Department of Environment and Natural Resources, Secretary Cimatu, where he spoke to us about reinventing mining. And during that presentation of his and in the ‘Question and Answer’ period after that, we started a conversation around bamboo.” “I'd like to report that that conversation has actually led to some developments. The first development after that was the participation of the mining industry in the FAME exhibition in November (2018) where bamboo products were put forward as part of the exhibit in a pavilion that was funded, thank you, by the Chamber of Mines of the Philippines as well as the Philippine Nickel Industry Association to the tune of PHP1.6 million. And it is in that FAME exhibition that the collaboration amongst the Department of Trade and Industry, the DENR, and the mining industry was first told. So we expect that FAME every year will repeat the story of that collaboration as it improves.” Furthermore, he said, “Now, beyond that in April this year, the Secretary of the Department of Environment and Natural Resources, Cimatu, hosted a meeting with the DTI Secretary, the mining industry as well as his staff responsible for bamboo. So I'd like to refer to it as a bamboo initiative and it was in that very well-attended meeting that the next steps of the bamboo initiative with the mining industry were discussed.” “So our next move will be a technical working group that will deal with the regulations and all that need to be tweaked to really make bamboo a greening material for the mining industry as we go forward.” The meeting which Mr Dominguez was referring to took place on 2nd April 2019 where OLLI Consulting Group, Inc. with DENR, DTI and mining companies and its stakeholders discussed the potential of bamboo in “reinventing mining”. OLLI Consulting Group, Inc. has a CSR component called “OLLI Cares” which supports the “Tanging Tanglaw” Project of Diwata-Women in Resource Development, Inc. (For more information about OLLI Cares and “Tanging Tanglaw Project”, please visit their webpage at https://olli.ph/olli-cares.) In that meeting with Secretary Cimatu and DTI Secretary Ramon Lopez, Mr Dominguez started the session by explaining the importance of bamboo. He said “Aptly called the Bamboo Initiative, this endeavor seeks to create a synergy between the government and the private sector on how to effectively harness the power and potential of this grass for the revegetation and rehabilitation of mine sites across the country.”[1] The following were present in that meeting [1] : ~ Philex Mining Corporation - Eulalio Austin ~ Marcventures Mining & Development Corporation - Isidro ‘Butch’ Alcantara Jr. ~ Filminera Resources Corporation - Gloria Tan Climaco ~ OceanaGold Philippines, Inc. - Jose ‘Joey’ Leviste, Jr. ~ The Chamber of Mines’ (COMP) Executive Director Atty. Ronald Recidoro ~ Philippine Nickel Industry Association’s (PNIA) Executive Director Charmaine Olea-Capili ~ Mine & Geosciences Bureau (MGB) - Mine Safety, Environment and Social Development Division Engr. Rodolfo L. Velasco, Jr. ~ DENR’s Forest Management Bureau (FMB) Director - Lourdes Ferrer ~ Ecosystems Research and Development Bureau’s (ERDB) - Bighani Manipula and Angelito Exconde ~ Biodiversity Management Bureau’s (BMB) - Juvy Ladisla ~ OLLI Consulting Group - Christopher Paris Lacson, Steve Araneta and Maria Paula Tolentino - - - Now, going back to the PMC event, Mr Dominguez said, “As you all know, the whole idea is the bamboo will also be the material that the communities on whom your SDMP funds are being spent will be taught to work with the bamboo. The result will be implementing the DTI's roadmap for the development of the bamboo industry. This will generate livelihoods and hopefully more than that -- real enterprises involving our mining communities.” “So one day, we hope to say that when visitors do come to the mining companies, the first protocol will be the community, seeing how hard they are working, products that are going to export market, and so on. And you, mining companies, will be able to tell your visitors that the mine over there is what makes it possible.” “So ladies and gentlemen, at the end of the day, with bamboo we have the opportunity to reinvent mining and then mining will now be defined as follows: The success of a mining company will no longer be judged simply by how profitable or how responsible the mining company is, but it will also be judged by how successful it makes its mining communities.” Finally, he concluded, “Therefore, mining reinvented, thanks to bamboo, will mean that mining is also a social enterprise. We'd like to see where that is going. Ladies and gentlemen, with your help and continuing support for this initiative, we hope to change the conversation about mining and therefore make that conversation speak of it as a social enterprise as well. You will hear more about this as the developments take place.“ - - - Reference: [1] Tolentino, Maria Paula (27 April 2019). "OLLI Cares spearheads the Bamboo Initiative". SEMScribe Publishing - - - Acknowledgement: Mr Leo Dominguez and Ms Maria Paula Tolentino

Industry

Marcelle P. Villegas - May 29, 2019

Is the East Mindanao Volcanic Arc Lost, Buried or Eroded?

By Marcelle P. Villegas During the GeoCon 2018 last year in December, a study about East Mindanao Volcanic Arc by Dr. Graciano Yumul, Jr. and his team, C.B. Dimalanta, J.A. Gabo-Ratio, B.D. Payot, et. al.[1], was presented. The title is "East Mindanao Volcanic Arc, Philippines: Lost, Buried or Eroded?". The members of the study are from Apex Mining Company, Inc. (Pasig City) and Rushurgent Working Group, National Institute of Geological Sciences, University of the Philippines (Diliman, Quezon City). It seems apparent that whenever an oceanic plate subducts along a trench, this would result into the formation of a volcanic arc. There may also be a formation of geothermal fields, mineralization, accretion of oceanic plates and subduction erosion. The Philippine Mobile Belt also plays a role in this study. The Philippine Mobile Belt is a complex portion of the tectonic boundary between the Philippine Sea Plate and the Eurasian Plate. This includes the Manila Trench to the west and the Philippine Trench to the east, and the Philippine Fault System. This belt is notable to having numerous of crustal blocks or microplates. Now based on the report, the eastern boundary of the Philippine Mobile Belt is characterized by the reactivated East Luzon Trough which shares a common transform boundary with the west-dipping Philippine Trench. “It has been argued that the East Luzon Trough-Philippine Trench is propagating northward whereas the Visayan-Mindanao segment of the subduction zone is propagating southward. This is mirrored by the northward and southward propagation of the Philippine Fault Zone whose northern and southern termini are characterized by horse-tail structures,” according to the study. “A look at the Philippine Trench with respect to the Bicol Peninsula through Samar-Leyte all the way to eastern Mindanao exposes differences in the morphology and distribution of volcanic arc centers. A well-formed volcanic chain characterizes the Bicol Peninsula, whereas an alignment of geothermal fields and volcanoes can be observed along the NW-SE stretch of the Leyte island. However, eastern Mindanao is defined by an almost non-existent volcanic arc range except for Mount Paco in Surigao del Norte and Leonard Range (also known as Leonard Kniassef) in Compostela Valley.” With all these geological features and movements described from the study, here are some points to think about. “A question to ask is why would the volcanic arc range along eastern Mindanao be absent? Was it lost due to large-scale fault-related dislocation? Is the volcanic arc range simply not just exposed? Or through time, would there have been a systematic, region-wide erosion of volcanic arc centers? Or were the volcanic centers not simply formed due to stunted subducted slab or the presence of a subducted, buoyant oceanic bathymetric high?” When we take into consideration the geological evolution on this part of Mindanao, an explanation can be found compatible with what is known. “Implication in terms of arc magmatism (super-critical fluids vs mantle fluids), crustal thickness vis-a-vis barometric fugacity, tholeiitic to calc-alkaline signature of cumulate rocks and the mineralization potential of the region will also be presented.” - - - [1] Complete list of authors and researchers: Dr. Graciano Yumul, Jr., C.B. Dimalanta, J.A. Gabo-Ratio, B.D. Payot, V.S.V. Olfindo, G.T. Valera, C.J. Arellano, K.C. Punzalan, K.D. Jabagat, J.B. Demegillo, K.L. Queano and N.L. Caagusan You may write the team through csrwg3@gmail.com.

Industry

Marcelle P. Villegas - May 29, 2019

Australian Embassy Hosts the Annual Journalists’ Reception

By Marcelle P. Villegas Every year, the Australian Embassy in the Philippines hosts the Annual Journalists’ Reception with a goal to provide a dialogue and interaction between Australian companies in the Philippines and the local media. Last 4th April 2019, the event was held at the residence of the Australian Ambassador in Makati City. Present during the Reception were several business executives from various Australian companies representing banking, finance, mining, shipbuilding, telecommunication, education sector and more. The first part of the Annual Journalists’ Reception was a business forum that was led by Ms Elodie Journet who is the Senior Trade and Investment Commissioner - Austrade. Other representatives from the Australian Embassy in the Philippines were Mr Mat Kimberley (Deputy Head of Missions), Ms Clare Duffield (Counsellor - Political and Public Diplomacy), Ms Nardia Simpson (Counsellor - Economic), Ms Kerrie Anderson (Counsellor - Development), Grp Capt. Ian Goold, CSC (Defence Attache), Det. Supt. Richard Stanford, APM (Senior Liaison Officer - AFP), Ms Elizabeth Carter (Counsellor and Chief Migration Officer), Ms Cristina Mojica (Counsellor and Chief Migration Officer), and Ms Jenni McEwin (First Secretary Economic). The speakers during the forum were Ms Anna Green (CEO, ANZ Bank Phils.), Mr Wayne Murray (President, Austal), Mikhail Jao (Marketing Manager, IDP Education Phils. Office), Eric Yaptangco (Division Director, Macquarie Phils.), Bradley Norman (Country Director, OceanaGold Phils.), Mark Woolfrey (Exec. GM, QBE Insurance), Brett McPhee (GM, Site Skills Training Phils.), Russell Claxton (CEO, TWPS), and Mark Richardson (VP, TWPS). Other companies that participated were Crone, GHD, Greenstone, Qantas, and Telstra. The discussion was centered on how Australian companies are helping the Philippines in economic development and other aspects like defence, education, mining, environment and more. Mr Wayne Murray, President and GM of Austal Philippines stated that they are working with the Philippine Navy and looking into a contract to build and provide six offshore patrol vessels (OPVs). This is in relation to the August 2018 Nikkei report that Defense Secretary Delfin Lorenzana of the Armed Forces of the Philippines said that they would be sourcing six OPVs from Austal. “Because it’s an offshore patrol vessel, as the name implies, it’s offshore, but it’s not going to be for international use. It’s for inter-island protection,” according to Mr Murray. He noted that OPVs can be used in travelling in areas like Benham Rise and the Spratly Islands. [1] Philippine Resources Journal interviewed Austrade’s Senior Trade and Investment Commissioner, Ms Elodie Journet about how Australia is helping the mining sector in the Philippines given that the industry has been under a lot of setbacks and is strongly contradicted by anti-mining lobbyists. We also asked her about her views about mining in general. Ms Journet said, “We [Australia], truly believe in sustainable mining. As a country, we have proven that you can actually have sustainable mining and we can have mining in environment. We've had very strong standards as well to it, to ensure that you can actually operate and protect the environment as well. For that, we've been very keen on looking at collaborating with the Philippine government and to ensure that we share our knowledge, share our standards, share also some of our latest technologies.” She adds, “We've got a very strong industry around mining, technology, equipment and services, so we've got a whole range of companies in Australia that are very keen on coming to the Philippines and collaborating as well.” With regards to best practices in mining, she states, “You've already got some really good mining operations here in the Philippines that had been winning awards as well in terms of environmental protection. Thus, I think it is just a matter of also being able to highlight some of those successes and also continue to build on ensuring that in order to protect the environment further.” What were the measures done by Australia in order to help the Philippine mining industry? Ms Journet said, “We have taken delegations from DENR to Australia. Every year, we host the International Mining Conference in Melbourne. The conference is all about presenting some of the latest techniques and sharing of information. We took the delegation from DENR there to be able to see some of our operations in Australia.” “There are many areas in Australia that are successful mining operations and right next to it you have great agricultural land. We've got great tourism industries as well so it's a great way to actually look at how can you contribute to the community as well. Indeed, mining and agriculture can co-exist.” She added, “I think the Philippines has already got some great guidelines in mining. It is really looking at how do you help the industry follow some of the implementation as well. We are happy to partner with the Philippines in that way.” This year’s Journalists’ Reception is the first one with the new Australian Ambassador to the Philippines, His Excellency Steven J. Robinson AO. Although this event was not his first time to have a gathering at his residence, the Annual Journalists’ Reception this year is somehow one of the first instances when he faced a wider range of journalists from various media outlets, publications and TV networks. During an open forum with him, the Ambassador eloquently answered a battery of questions from his guests that touched many subject matters about politics, agriculture, economics, defence, his first encounter with the Philippine President, Australia’s standing about the South China Sea dispute, his impression of the Philippines, and more. Ambassador Robinson arrived here in the Philippines early in January 2019, two weeks before the celebration of Australia Day (24 January 2019). During the Annual Journalists’ Reception, he mentioned that one of the first things he did as ambassador was to visit Marawi in order to continue the work that was endorsed to him by the former Australian Ambassador, Honourable Amanda Gorely. As of October 2018, Australia increased their support to Marawi’s recovery and rehabilitation to Php975 million (AUD25 million). Australia’s effort aims to bring long-term peace and stability in the southern Philippines following the siege of Marawi City in May - October 2017. [2] The Ambassador shared that his first visit to the Philippines was around 40 years ago during his college years. “At that time I was struck by the archipelago’s natural beauty, I experienced the warmth of the Filipino people and felt the dynamic energy of the cities of Manila, Cebu and Zamboanga. It seized my attention and I have returned many times over the intervening years. So it is a great honour and a privilege to return here now as Australia’s new Ambassador to the Philippines.” [3] Ambassador Robinson is a senior career officer (Deputy Secretary level) in the Foreign Affairs and Trade portfolio. In 2009, he was made an Officer of the Order of Australia (AO) “for service to Australia’s international interests through a significant and sustained contribution”. The Ambassador holds a BA (Hons) and Diploma in Education from the University of Sydney. - - - References: [1] Mogato, Anna Gabriela A. (8 April 2019). “Australian firm eyes Philippine Navy contract for patrol vessels”. Rappler. [2] “Australia Increases Support to PHP 975 Million For Marawi Recovery” Retrieved from https://philippines.embassy.gov.au/mnla/medrel181026.html [3] H.E. Steven J. Robinson’s speech during Australia Day Celebration, 24 January 2019 Retrived from https://philippines.embassy.gov.au/mnla/speech20190124.html

Industry

Philippine Resources - April 24, 2019

A formula for the Philippines, China, and Vietnam in the West Philippine Sea-South China Sea

By Jose De Vencia Jr. At some point now or sooner than later, the claimants in the South China Sea/West Philippine Sea will have to sit down and agree on a seismic and oil exploration program to be fol­lowed by a definitive oil drilling and development schedule for a satisfac­tory commercial petroleum discovery which is anticipated. This should include a detailed and definitive agreement in the event of marginal hydrocarbon discoveries, non-commercial in volume, and must be followed through by a series of exploration activities in the areas with reasonable looking anticlines or likely oil-bearing structures before the areas are given up, or abandoned, or preserved for other uses by suc­ceeding generations. The anticipated agreement should include sharing of explora­tion expense, the more expensive development costs in the event of commercial discovery, distribution of export petroleum to refineries in the Philippines, China, and Vietnam, and/or third-party international buy­ers, and an agreement on a second-round or third-round of exploration areas nearby or in much farther locations. There is a need for a focussed Petroleum Academy or a unit in the Philippines to train future Filipino geologists, drilling technicians in hydro-carbons-related work who can be assigned at home or abroad for hydrocarbons employment. The petroleum division can be an initial extension or component of an expanded Base Metals Mining Division in our Department of Environment and Natural Resources (DENR). It will be the workplace for Filipino students eyeing positions in petroleum or min­ing industries after graduation. The Philippine government must now consider training an initial 100 scholars in petroleum and mining industries for future assignment af­ter graduation at home or overseas under veteran executives and who will mobilize successive waves of like-minded students. This early, we should have ex­changes with Australian, US, Chi­nese, Japanese, Canadian, South Ko­rean, Malaysian, and Indonesian oil exploration and base metals mining organizations to help develop Philip­pine capabilities in these fields if we have not yet done so, or for perhaps only an inadequate few until now. The government and existing capable Philippine companies must assist our eager students in these fields. For all these expectations to come to pass, the Philippines or ASEAN, or just the concerned ASEAN countries, must now initiate work and call first for an initial meeting and get to work soon on valid proposals. The first task is to undertake detailed extensive seismic surveys in the target offshore areas, to iden­tify the first exploratory drillable structures in the South China Sea (West Philippine Sea), approximate the costs of exploration for, say, an initial program of five wells (shallow or deep wells as needed), preferably using Chinese or US drillships, with common Filipino, Chinese, Viet­namese drilling representatives and crews onsite. I must say that in the event of commercial oil discovery, the refin­ing will be done in Philippine or Chinese or Vietnamese refineries located relatively nearby through eventual interconnecting pipelines or immediate oil tankers parked in the vicinity. Engaging American drillships from the Gulf of Mexico will be too expensive to hire or engage and bring them all the way to the South China Sea for drilling in the offshore areas near Palawan and further in Fujian or on to the Tonkin Gulf area of Vietnam. I believe if we start talking quietly and professionally instead of shout­ing at each other in the wire news services, television, or radio, our ne­gotiations, aided by our professional petroleum executives and geologists, could agree on a Philippine-Chinese-Vietnamese initial five-wells explora­tion program with reasonable budget costs for an 18-month or two-year period, including adequate time for data analysis. This will immediately mean two years of uninterrupted peace in the South China Sea. So that nobody will be more equal than others irrespective of size, might, and contribution, the cost of exploration and development must be shared and divided equally among the three-nation partners. And the three countries must agree among them­selves who will be the designated “op­erator” who will assume leadership and management responsibility for the drilling program under a Drilling Committee composed of the three na­tion partners who might engage other offshore international technicians for independent consultations. The sharing system, unless one partner abdicates for any valid rea­son whatsoever, must continue to preserve the continuing efficacy of the partnership and of the system itself which could run for as long as a hundred years or more. Sooner than later, Malaysia and Brunei should be invited to join the Philippines, China, and Vietnam strat­egraphic oil/gas drilling in other areas of the South China Sea. An under­standing with China must be reached to deal with Taiwan’s role in the explo­ration/development program. If this South China Sea oil explo­ration and, hopefully, oil development project can run for a long period, it is hoped that it will extend to China and Japan in the disputed areas in the Senkaku or Diayou Straits in the East China Sea. It can also be a formula for last­ing peace between China and India in their vast conflict areas in the high Himalayas, between India and Pakistan over Kashmir, and between Azerbaijan and Armenia over Na­gorno Karabakh, which will put Israel and Palestine to shame if they do not finally agree on their already much-delayed land-sharing agreement. There are also other Philippine areas for possible oil discovery in the Sulu Sea below the Treaty Line across Sabah which has not yet been explored geologically until now. The Muslim areas in Central Mindanao have also not yet been explored for petroleum resources, which are Filipino Muslim and Christian brothers need badly for development. Right now, almost all of Northeast Asia, China, Japan, and South Korea, and in Southeast Asia, the Philip­pines, Cambodia, Thailand, Laos, and Singapore, must send their oil tankers across the South China Sea and into the Indian Ocean and the Arabian Sea and into the Straits of Hormuz to lift crude from the rich oilfields of Saudi Arabia, Kuwait, and the United Arab Emirates. In our earlier humble capacity as president of the Petroleum As­sociation of the Philippines and later as speaker of the House, I had made similar earlier proposals in 1970 and 1987 to the same countries and I believe now is the most auspicious time for undertaking opportunities for exploration and development in the sea. The alternatives for all of us are endless tension, conflict, and, God forbid, even war. Source: https://news.mb.com.ph/2019/04/20/a-formula-for-the-philippines-china-and-vietnam-in-the-west-philippine-sea-south-china-sea-and-other-participants/

Industry

Marcelle P. Villegas - March 19, 2019

DOST Undersec Dr. Solidum on Boracay's Environmental Issue

By Marcelle P. Villegas MANILA HOTEL, 11 December 2018 -- It was the first day of GEOCON 2018 by the Geological Society of the Philippines. During the event, Philippine Resource Journal has this exclusive interview of Dr. Renato U. Solidum, Jr. regarding his scientific views regarding Boracay’s water and beach pollution. This is one of the most conspicuous environmental issues of this famous beach. Dr. Solidum is the Undersecretary for Disaster Risk Reduction and Climate Change of the Philippines, Department of Science and Technology (DOST). He is also the Officer-In-Charge of the Philippine Institute of Volcanology and Seismology (PHIVOLCS) where has worked since 1984 and became its Director in 2003 up to February 2017. During the interview, he mentioned an important aspect of marine biology and ecology that most people are unaware of. He explained how the chemicals from shampoos and soaps are not merely chemical pollutants but as well as substances that cause disorder in the equilibrium of the marine ecosystem. This imbalance eventually triggers more pollution in the sea and coastline. “Well, essentially the problem in Boracay and many other beaches is that people are not aware that the normal things that they do might actually harm the environment. They need to be educated on why this is so.” “For example, let me just say going back to Boracay, that the prime resource of Boracay is the white beach sand. However, people do not know, especially the tourists or even the locals, that the beach sand is not provided by the erosion of the limestone of Boracay. It is actually provided by the corals growing on the water, and so the breaking up of the corals provide the beach sand. Also, the corals actually serve as barrier in the shoreline from strong waves that can cause erosion.” Regarding the types of wastes found in the water and beach, he adds, “The problem is, due to the rapid utilization of Boracay and the untreated waste, the waste can be of several forms. One is the actual waste that would go down on the septic tanks or not at all. Another is simply the washing of our own bodies and clothes using shampoo and soap. Shampoo and soap for example have phosphorus. Phosphorus is part of the fertilizer. So if it reaches the water, that would cause the proliferation of the algal growth of the blue-green algae.” In Biology, blue-green algae are also knowns as Cyanobacteria or Cyanophyta. These are a group of plant-like bacteria capable of photosynthesis. Blue-green algae have a symbiotic relationship with other organisms in the aquatic environment and have many important functions in the environment. One of them is nitrogen fixation in the atmosphere which assists plants in creating proteins and nucleic acids which are essential for a plant’s survival. However, moderation is vital to maintain balance in nature. Therefore, a rapid, abnormal growth of the blue-green algae causes pollution. This is called “algal bloom” where the sea water is dominated by blue-green algae. These blooms can be toxic and can lead to closure of beaches. Moreover, Dr. Solidum explains how algal bloom can be destructive, “The sign of pollution is not only the fecal coliform which you don't see, but if you see that there is blue-green algae [in the water], then that's polluted.” In this statement, he is referring to an algal bloom which is manifested by greenish scum visible in the water. Fecal coliform on the other hand are microscopic organisms which are not visible to the naked eye. Both algal bloom and fecal coliform presence in the water are toxic and unsafe for drinking or swimming. How does an algal bloom affect the coral reefs? “When the blue-green algae grow, they would suffocate the corals or will cause the corals to die. And so, if corals die, they won’t be able to produce the sand grain to preserve the beach. Then the stronger waves shall now reach the beach and can cause further erosion. So in the past two decades, Boracay has been eroded by 40 meters,” said Dr. Solidum. “Actually the move of the President and the Government and supported by everyone to close Boracay and treat the water are very good but that has to be maintained. People have to play their part. From the presentation [in GeoCon 2018 about sand and water pollution in Boracay], there are three E's in this kind of job. One is Engineering Solution -- you have to treat the water… or somewhat related, Bioengineering. It is not simply the septic tank hard core but there can be bioengineering.” “Second is the Education -- how people should contribute so that pollutants will not reach the ground or the water, and three is the Enforcement. This refers to the regulatory actions.” “Therefore, education is key because everyone has to play a role. If people are not educated as to the cause of the pollution and to the effect of the pollution, people will take things for granted. So it starts from education. Sometimes people will take shower around the beach and wash their clothes with soap or use shampoo and that's dangerous. And people do not know. I was actually the one who briefed the National Disaster Risk Reduction Management on the reason why shampoos and soaps should not be used while in the beach or water. These findings are done by the specialists and not by me. I learned it (algal bloom effect) from them.” Dr. Solidum is the Chairperson of GeoCon 2018 from which he his message, “There are many differences in our focus of work or interest but when GEOCON comes, this event allows us to share what we have learned from our studies or gain new knowledge from others. It brings to light what we think will be relevant to us and our fellow geologists. It is a venue for highlighting opportunities and bridging gaps and interests for the benefit of our profession and society.” Dr. Solidum has a degree in BS Geology from University of the Philippines, finished his M.Sc. in Geological Sciences from the University of Illinois, Chicago, plus his Ph.D. in Earth Sciences from the Scripps Institution of Oceanography, University of California, San Diego, CA. In recognition of his contribution to disaster risk reduction in the Philippines, Dr. Solidum has several notable awards such as the Presidential Citation for Public Service, the Presidential Lingkod Bayan Award (Civil Servant) by the Civil Service Commission, the Professional of the Year in the Field of Geology by the Professional Regulation Commission (PRC), the Excellence Award for Government Service by the Philippine Federation of Professional Associations and the Presidential Career Executive Service Award by the Career Executive Service Board.

Industry

Marcelle P. Villegas - 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.

Industry

Marcelle P. Villegas - March 18, 2019

Super Grass Bamboo presents promising future

By Marcelle P. Villegas Most of us have the impression that bamboo is only useful in building nipa huts or creating furniture. There is actually far more about this plant than most of us are aware of. Let’s begin as far back as the 1950s when bamboo technology was used in aviation. Do you know that a Filipino named Antonio De Leon designed two airplanes in 1950s using WOBEX (Woven Bamboo Experimental), a resin reinforced woven bamboo composite? He was from the Institute of Science and Technology (IST), a national science board previously known as Bureau of Science (1905, from the American era), the predecessor of our present-day Department of Science and Technology (DOST).[1] Mr. De Leon’s first experimental aircraft was the I.S.T. XL-14 Maya, a single-engine, light aircraft designed to investigate the use of indigenous materials in aircraft construction. [2] He later designed the I.S.T. XL-15 Tagak (swan) using the same WOBEX technology. This is a single-engine, twin-boom, high-wing monoplane. It made its first flight in October 1954. This project was a collaboration with the Philippine Air Force with a goal to design an aircraft for utility, liaison, medical emergency, and a test bed for the use of local materials in aviation. [3] Tagak (1954). Institute of Science and Technology’s [IST] Antonio De Leon designed these two experimental airplanes using WOBEX (Woven Bamboo Experimental), a technology that uses reinforced bamboo as materials in aviation. IST was founded in 1946 which aims to develop science and technology in the country. It was later named National Science Development Board in 1958. Eventually in 1981, President Marcos reorganised its agencies with a new name, National Science and Technology Authority. Then, it was later renamed as Department of science and Technology (DOST) by President Corazon Aquino in 1987. Bamboo is also called a “Super Grass”. Yes, a super grass that presents sustainable solutions from rehabilitation of mined-out land. It also offers proven ecological solutions to climate change and social economic problems. No other plant offers the same package in such a short period of time. Ahead of its time, nearly 70 years ago, bamboo-technology was already used for aviation. Today, there are many fascinating stories on how bamboo can impact our country’s advancement, not only with bamboo technology, but manifold social enterprises and agro-industries that grow from planting bamboo with the end in mind. These powerful topics were discussed by Atty. Leo G. Dominguez during the Mining Philippines Conference in September 2018. Atty. Dominguez connected the dots for many people in several sectors of society (such as the mining industry) with the introduction of high value product design, planting programs, social enterprise manufacturing, and how holistic agriculture can greatly benefit from the super grass. Atty. Dominguez presented a report entitled “Bamboo: From Advocacy to Changing the Conversation about Mining in the Philippines”. He is the President of OLLI Consulting Group, Inc. and an advocate in promoting the bamboo’s socio-economic importance and its role in the mining industry. He began his report by comparing the super grass with trees. Trees are only useful if they are fruit-bearing and can offer economic value to a community. “If trees are planted within Mining Communities but if they are not fruit bearing, they will eventually be cut down in the name of poverty, mainly for firewood, or the freshly-planted forest could mysteriously burn down, so that the community that planted the initial trees would be paid again to replant them. Since the bamboo is not a tree (but is actually classified as a grass in Botany), it has qualities that make it a compelling, lucrative and sustainable alternative,” he stated. Bamboo is coined as a “Super Grass” because it is the fastest-growing plant in the world. It can grow up to 35 inches a day in ideal conditions. Bamboo addresses climate change by sequestering carbon 400 times more than trees, and reducing carbon release. In general, bamboo is flexible and adaptive. If offers restoration to mined out areas and provides numerous possibilities for livelihood enterprises. Moreover, Atty. Dominguez stated that, “Because bamboo is a grass, it is not subject to the heavy government regulations affecting the cutting of trees. Depending on species, soil and climate conditions, bamboo can live about 60-100 years. Bamboo can be harvested continuously during its lifetime.” He then asked the audience, “Now, what does bamboo have to do with mining?” Atty. Dominguez continued by saying, “In his talk before the Philippine Mining Luncheon on 8 June 2018, Department of Environment and Natural Resources (“DENR”) Secretary Cimatu emphasized that mining companies must use their Social Development Management Program (“SDMP”) funds to create truly sustainable economic activities for their mining communities. In his State of the Nation (“SONA”) Address in 2018, President Duterte said to the mining industry, ‘Do not just give me taxes. I can get it from other sources. Give me what needs to be given to my countrymen.’” In relation to this, we the following questions: 1. How will the DENR achieve its commitment under the National Greening Program to plant 1 million hectares of bamboo to help address climate change? 2. How will Department of Trade and Industry (DTI) implement its 3 years-in-the-making Bamboo Industry Development Roadmap without the land to do it on and the people/communities to do it with? 3. How would the people in the mining communities achieve sustainable livelihoods even beyond the life of the mines? 4. More importantly, how will the mined-out areas be greened to the satisfaction of the President? His answer to all of these? Bamboo - The Super Grass. Atty. Dominguez points out, “Now, how do we make bamboo the tool to reinvent mining? Bring together DENR, DTI, Design Center Philippines, DOST, Department of Agriculture, the mining industry -- a unifying target, a win-win for all.” Secretary Ramon Lopez of DTI and Chair of the Philippine Bamboo Industry Development Council pointed out that if the mining industry would contribute mined out and other available areas for planting bamboo, and then work with DENR, all can work together under the DTI Bamboo Roadmap and their applications. The DTI Bamboo Roadmap covers the following: 1. planting technology 2. identifying low to high value bamboo products 3. training the community to design and manufacture these products 4. assisting in the marketing of bamboo products to pre-targeted buyers and consumers The next big question: “Who will fund the planting of bamboo and the training of the mining communities to work with bamboo?” The funds will come from the mining companies who are required by law to spend specified amounts on their respective Environment Protection and Enhancement Programs (“EPEP”) and SDMP’s. There are many misinformed people who seriously believe that mining is bad for the country. How can the bamboo industry change this negative conversation about mining? From his report, Atty. Dominguez states, “Bamboo will not only be a source of sustainable livelihood. With inputs from all the partners involved in the Bamboo Roadmap, bamboo has the potential to launch the mining communities into agro-industrial enterprises of the future. This bamboo rocket ship would not be possible without the mining industry as the launch pad for all these endeavors.” What about the money? How profitable is a bamboo plantation? Based on his study and report, a family that farms 10 hectares of bamboo plantation has potential income, as follows: ~ Cost/10 hectares = Php960,000 ~ Revenue/10 hectares = Php6.3 million ~ 1 hectare contains 210 bamboo clumps ~ price/bamboo = Php100 ~ 210 x 30 x Php6.3 million gross value of poles/10 hectares Therefore, projected net family income/year/10-hectare bamboo plantation = Php1.4 million How does this “super grass” connect Mines and Agriculture? Historically, mining companies first remove minerals that normally make mineralized lands inhospitable to agriculture. “These minerals eventually make their way into things that we use like our cars, jewelry, cellphones and devices, refrigerators, watches, houses, and so on. After this, mining companies are required to rehabilitate and transform the mined-out land into agricultural land. Then, mining companies plant trees to fulfill their obligation to re-vegetate the mined-out area.” Land rehabilitation has always been a part of mining operations of responsible mining companies, and yet many misinformed people blame mining for the loss of agriculture land. Atty. Dominguez clarifies that, “One of the major problems of our country is that it is rapidly losing food-producing agricultural land to real estate development. The mines actually generate agricultural land. The mining industry has in fact, all along, been addressing the loss of agricultural land to real estate by transforming mineral lands (which by their nature are not good for agriculture in the first place) into agricultural lands.” He suggests that mining companies can take this further if they accomplish the following: ~ Help the country comply with its commitment to plant bamboo to address climate change; ~ For the first time, plant something that can be harvested and used by their mining communities in many ways to generate sustainable livelihoods for their communities; ~ Provide the mining communities with long-term sustainable enterprises that can go on beyond the life of the mine. With regard to the overall reputation of the mining industry, bamboo could be a crucial catalyst that can change the way people see the industry. “The success of mining companies could also be evaluated by how successful mining communities, [who are] working with bamboo, have become.” In summary, in his presentation, Atty. Dominguez, emphasized the following: ~ The mining industry is an unsung hero. It actually transforms non-agricultural to agricultural land. ~ When you plant bamboo on this newly-created agricultural land, you actually launch sustainable social enterprises and economic empowerment for the mining communities. ~ Over time, even beyond the life of the mine, these communities could become agro- industrial port cities of the Filipino future. He concludes, “All of this would not be possible without the mining industry as the launch pad, working in collaboration with the DENR, DTI, and hopefully the DOST and the DA as well.” References: [1] https://en.wikipedia.org/wiki/Science_and_technology_in_the_Philippines and https://en.wikipedia.org/wiki/Department_of_Science_and_Technology_(Philippines) [2] https://en.wikipedia.org/wiki/I.S.T._XL-14_Maya [3] https://en.wikipedia.org/wiki/I.S.T._XL-15_Tagak Acknowledgment: Mr Leo G. Dominguez and Mr Christopher Lacson

Industry

Marcelle P. Villegas - March 12, 2019

Defending our territorial rights through historical facts

By Marcelle P. Villegas On 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. [1] 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. [2] 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. [3] 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. [2] 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. [4] 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. [5] 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.” [5] (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" [6] 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. [7][8] 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: [1] “South China Sea Arbitral Award” - https://www.slideshare.net/SamGalope/south-china-sea-arbitral-award [2] South China Sea - https://en.wikipedia.org/wiki/South_China_Sea Scarborough Shoal - https://en.wikipedia.org/wiki/Scarborough_Shoal [3] 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 [4] “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 [5] https://www.slideshare.net/7philippines/the-south-china-sea-west-philippine-sea-dispute [6] Perez, Jane (12 July 2016). "Beijing's South China Sea Claims Rejected by Hague Tribunal". The New York Times. [7] Tom Phillips, Oliver Holmes, Owen Bowcott (12 July 2016). "Beijing rejects tribunal's ruling in South China Sea case". The Guardian. [8] "South China Sea: Tribunal backs case against China brought by Philippines". BBC. 12 July 2016.

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