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Philippine Resources - March 19, 2021

Nickel Prices are Forecast to Fall in 2021, According to Fitch Solutions

The costs of nickel is expected to fall in 2021 as more supply enters the market but will be supported by recovering economies, according to Fitch Solutions Country Risk and Industry Research. Fitch Solutions raised its average nickel ore price estimate for 2021 from $15,250 to $15,750 per ton in a survey. “Prices over the past few months have progressed to multi-year highs on the back of increased optimism in the market, a weakening dollar and bullish expectations about nickel supply,” Fitch Solutions said. The current nickel price is about $18,180 per ton, according to Fitch Solutions, but it will fall as supply in key markets increases. “The end of the rainy season in the Philippines will allow the resumption of nickel mining activity to feed nickel pig iron (NPI) facilities in China, its dominant nickel ore trading partner,” Fitch Solutions said. “We are maintaining our bearish outlook on prices in 2021 compared with the year-to-date average of $18,140 per ton as increasing supply over the year reduces the market deficit, maintaining lower prices.” Nickel prices are expected to rise gradually in the long run, according to Fitch Solutions, as the global market remains undersupplied. Demand is expected to remain stable due to continued growth in China's domestic construction and auto manufacturing industries, according to the study. “We forecast China’s construction sector to grow by an average of 3.8% year on year over 2021-2029 while vehicle production grows by an average of 1.2% over the same period. The rise in demand will exceed production growth in the short term, underpinning a prolonged deficit in the market and push prices higher,” Fitch Solutions said. According to Fitch Solutions, the electric vehicle (EV) market would raise nickel demand due to the need for longer-range batteries. “We expect this trend to begin taking hold over the coming years as consumers favour EVs with longer driving distance capabilities before recharging, making nickel-based battery compositions the optimal choice for vehicle producers,” Fitch Solutions said. Chamber of Mines of the Philippines Chairman Gerard H. Brimo said that policy changes that allow the Philippines to service demand from electric vehicle battery makers could help the industry. “While the Philippines is a top nickel ore producer, we only have two processing plants that produce nickel and cobalt sulfide concentrates — intermediate products that are further processed in Japan to make electric vehicle (EV) batteries,” he said. According to him, the two plants are run by Coral Bay Nickel Corp. in Palawan and Taganito HPAL Nickel Corp. in Surigao del Sur. “To enable our country to become a fully integrated EV battery supplier, certain policy changes have to be made, among them the lifting of the moratorium on new mining projects that has been in place for nearly a decade,” he said. “The industry needs full government support in terms of stable mining and investment policies that do not change mid-stream,” he added. According to the Mines and Geosciences Bureau, the volume of the metallic mining industry's production in 2020 increased 1.13 per cent year on year to P132.21 billion (MGB). Nickel ore and by-products accounted for 51.8 per cent of the total, or P68.48 billion, according to the MGB. The amount of direct-shipping nickel ore — the type in which the metal is shipped for processing overseas — increased by 3.3 per cent to 333,962 metric tons year on year (MT). Meanwhile, mixed nickel-cobalt sulfide production dropped 2.9 per cent to 49,647 MT year over year.

Mining

Marcelle P. Villegas - March 17, 2021

First Offshore Magnetite Iron Mining in the PH

Last December, Apollo Global Capital’s (PSE: APL) subsidiary, JDVC Resources Corporation, announced that Department of Environment and Natural Resources granted them a permit to start the commercial operations of the country’s first offshore magnetite iron mining project. According to JDVC and APL consultant, Jun Herrera, the mining operations in Cagayan are expected to start by mid or end of February. He said that the first newly-built deep sea mining vessel arrived in Cagayan and needed to take shelter for now due to strong sea currents. In relation to this project, they assured the government that there will be minimal impact on the marine ecosystem as per the studies and survey conducted by a Singapore-based company. Their study shows that there is no coral or aquamarine life within the mining area which is located 150 meters below sea level. Herrera stated that three more vessels are expected to arrive this year. The vessel is capable of commercial extraction, sampling, testing and production of magnetite iron. [1] With regards to the apprehension of some residents of Ballesteros in Cagayan that this offshore mining operation will destroy the coral ecosystem, APL addressed the issue by stating that such assumption by the locals has no basis. APL stated last January, “We won’t even be mining in their waters. In the first place, our mining operation will be in the waters of Buguey and Gonzaga towns, and at a distance of over 14 kilometers. That’s more than two horizon lengths away from the shoreline.” Lazaro Ramos, a resident of Ballesteros, sent a formal complaint to DENR Secretary Roy Cimatu. Ramos warned them of the possible “catastrophe” that the offshore mining will bring about should it resumes. He mentioned in comparison a study conducted by Craig Smith from the University of Hawaii regarding the ocean seabed in the NE Pacific abyssal waters. APL, however, contradicted this argument by Ramos and said that the study by Craig Smith is applicable to a different part of the ocean and not necessarily comparable with the mining site in Cagayan.  “That’s a different part of the Pacific. It looks at the ocean bed more than 200 meters below sea level, whereas we can only go down to 150 meters with current technology. Moreover, the Smith study did not look at magnetite iron reserves. From the experience of countries like Indonesia, Japan and New Zealand, magnetite iron is known to be toxic to corals, fish and other aquamarine life.” Moreover, JDVC emphasised on the study results done by the Singapore-based survey company whom they commissioned to conduct a full “sea bottom profile” of its mining tenements off Cagayan. As mentioned, their study reveals no corals or aquamarine life in the area. APL also reported that they have done their part in coordinating with the locals and providing corporate social responsibility activities for the residents of Buguey and Gonzaga. “We’re proud to say that over 90 percent of the residents support us and are even anxious for us to get started.” According to Herrera, the municipalities of Aparri, Buguey and Gonzaga received funding from the Development Bank of the Philippines. These are the municipalities covered by the mining project. DBP grated JDVC a grant worth $8-million credit line for the magnetite iron mining project.   Herrera said, “We have proven to them [DBP] that it’s environmentally safe.” He added, “The DBP loan has zero borrowings yet as of now, hence, our company remains to be zero debts and internally funded by our shareholders. The DBP loan will only kick off once we have the letter of credit presented to the bank for the discounting the letter of credit of export buyers, to obtain a 90-day working capital, to fund the production of the ordered iron ore.” This project is seen as profitable, because magnetite mining has a strong market globally. In China, for example, they consider the steel industry as their “roadmap for their economic recovery”. Herrera mentioned that JVDC is an ISO-certified company. This means that there is an assurance that they shall comply with environmental standards. With all these assurances of a promising mining project ahead, some still have apprehension about it, perhaps rooting down to past incidents. In November 2020, the Cagayan Valley region was greatly affected by the Super Typhoon Rolly and Typhoon Ulysses. The two simultaneous typhoons are classified as category-5 and category-4 tropical cyclones respectively. As an effect, the devastation was great marked by massive flooding in Isabela and Cagayan provinces. [2] The residents in those areas blame the National Irrigation Association (NIA) for the flood when they opened the floodgates of the nearby Magat Dam on the last minute. The two provinces were submerged in high waters as high as a two-storey building. NIA on the other hand firmly contradicted such claim and explained that the release of water from Magat Dam was not the main cause of flooding. NIA points out that proper and sufficient warnings were given to those communities in low-lying areas. Additionally, they stated that the volume of water released was only 25% of the carrying capacity of the Cagayan River. The river is the longest stream in the Philippines that serves as the catch basin of the nine provinces in three regions. [2] Aside from the two typhoons, a second issue related with the river was about the illegal magnetite mining at the mouth of the Cagayan River in the municipality of Aparri. The provincial board of Cagayan appealed to President Rodrigo Duterte in 2019 to stop the dredging operations of Pacific Offshore Exploration, Inc. (POEI) due to potential threat to the environment and the livelihood of the locals. The Chinese company Zhong Hai Gravel Group headed by Dong Biao Su is POEI’s partner in that operation. The company was controversial recently after the Bureau of Customs and the Philippine Coast Guard raided its Zhonhai 68 dredging vessel during a maritime security patrol off the Bataan coast. “Bureau of Customs are poised to issue a warrant of seizure and detention against the undocumented vessel.” However, the Chinese Embassy in Manila claimed that the vessel is technically non-Chinese because it is registered under an African flag of convenience. [2] Currently, JDVC Resources Corp. is the first and only company that was granted a declaration of mining project feasibility by Department of Environment and Natural Resources (DENR) to extract magnetite sand and other minerals in Cagayan. In response to Cagayan’s decade-old black sand mining problem, the launching of Cagayan River Rehabilitation Project last February 2 is seen to solve the problem. DENR stated early in February that mining regulations will strictly monitor the extraction of magnetite or black sand in the coastal waters and rivers of Cagayan province. [3] With regards to APL’s/JDVC Resources Corp.’s offshore magnetite iron mining, MGB Director Wilfredo Monaco stated the project has gone through an environmental impact assessment system processes and the company has secured an environmental clearance certificate (ECC) from the Environmental Management Bureau (EMB). [3]  “JDVC has undergone environmental impact assessment and the company was issued an ECC, which means environmental issues have been considered by the EMB,” Moncano stated. Magnetite or black sand mining is supposed to be banned in the Philippines, but Moncano explained that the extraction of the said mineral offshore is allowed. He said, “Mining in shoreline is prohibited but offshore mining is allowed.  If it is at least 1,500 meters from the shoreline going out to the sea, it is allowed.” He also assured that the company’s operation will be monitored by the MGB and EMB, that in case of any destruction or damage to the coastal or marine ecosystem by JDVC Resources Corp., there will be a corresponding penalty under the mining law. “What is important is that the JDVC will not cause damage to the coastal or marine ecosystem,” he said. As for mining in rivers like in the Cagayan River, it is also allowed as long as the primary purpose of the project is river rehabilitation or restoration. One example is their plan to extract some 7 million metric tons of sand to remove three of the 19 sandbars along is stretch. Moncano said that the DENR-MGB will also monitor the dredging operations because while the activity is primarily flood mitigation, the minerals to be extracted include magnetite sand. [3] Moncano stated, “Black sand mining is also part of the purposes that’s why we will assess the mineral content of the river channel. If the magnetite sand contained surpasses the threshold of 6 percent, we will charge the company of 4-percent excise tax.” He said that every shipment will undergo mineral assessment. (--Marcelle P. Villegas, PRJ) References: [1] Flores, Alena Mae S. (31 Jan. 2021). Manila Standard. "Apollo Global announces subsidiary’s start of magnetite mining operations in Cagayan". [2] Gamboa, J. Albert (5 Feb. 2021). Business World. "Building back better in Cagayan Valley". [3] Mayuga, Jonathan L. (4 Feb. 2021). Business Mirror. "MGB exec vows to keep tabs of Cagayan River magnetite quarry operations set to start in February".

Mining

Marcelle P. Villegas - March 17, 2021

The Aftermath of the Carmen Copper Mine Landslide

After the tragic landslide that occurred at the open pit’s north wall at around 4:15 p.m. on Monday, 21 Dec. 2020,  Mines and Geosciences Bureau (MGB) 7 ordered the immediate suspension of the mine operations in Carmen Copper Corporation (CCC). According to MGB’s report last 22 Dec. 2020 on their official website, they stated “Initial investigations revealed there was no mining activity in the area on that day.” [1] On that day, landslide debris fell on the water at the pit bottom. This has an elevation of 41m above sea level. The landslide created a tsunami-like wave that reached an elevation of 105m in the southern portion of the pit where the workers were located. On 22 Dec. 2020, four fatalities were recorded along with six missing. [1] Further on, an assessment of the area was conducted by Director Pacquito Melicor Jr. (DENR Central Visayas Regional Executive Director), Director Armando Malicse (MGB 7 Regional Director), MGB Region 7 team, and Mine Safety, Environment and Social Development Division. CCC and Toledo City Disaster Risk Reduction and Management team continued their search and retrieval operations on a limited scale due to unstable condition. MGB 7 technical personnel continues its on-site inspection and investigation in accordance with R.A. 7942 (Philippine Mining Act of 1995) and the DENR Administrative Order Nos. 2010-21 (Consolidated IRR of RA 7942) and 2000-98 (Mine Safety and Health Standards). [1] A list of names of workers who died was given by CCC to the Toledo Police Station Chief, Lt. Col. Junnel Caadlawon. The second list contains the names of those who are still missing. [2] Those who died from the landslide are the following: Junil S. Lagola, age 44, from Barangay Don Andres Soriano, leadman Ernesto G. Caspe, age 54, from Dasmamac, Lutopan, checker Juan M. Tapang, age 44, from Don Andres Soriano Village, heavy equipment operator Dionisio Labang, from barangay Uling, Naga, backhoe operator/Anseca Contractor Those who are still missing are the following: Jose B. Carpentero, age 31, from Barangay Biga, heavy equipment operator from Mine Services Department Jonwel S. Herediano, age 33, from Barangay Don Andres Soriano, pump operator Simeon B. Laconas, age 33, from Barangay Biga, leadman - mine services department John Paul L. Resuelo, age 27, from Barangay Biga, heavy equipment operator Renante F. Sepada, age 35, from Barangay Bagakay, pump operator Alfred C. Tautho, age 33, from Barangay Mainggit, welder Carmen Copper Corp. (CCC) expressed their support and commitment to provide free education until college and allowances to all the children of its employees who died or are still missing after the tragedy last December. Based on a press statement of the company last 27 Dec. 2020, they have provided various forms of financial and other assistance to the immediate families of its deceased workers. [3] Additionally, CCC also offered employment opportunities for the victims’ next of kin, spouse and children. “CCC has given the same attention to the immediate family of the missing CCC employees and will afford them of the same commitments CCC provided to the family of the deceased,” according to the company’s statement. CCC also extended support to the family of the contractor who was among the victims. [3] On 8 Feb. 2021, Toledo City Mayor, Hon. Marjorie Piczon-Perales along with Vice-Mayor Jay B. Go met the families of the victims at the open shed of the City Hall Garden to provide them with “ayuda” or financial assistance. This was posted on the Toledo City Public Information Office social media page. The mayor granted the families of deceased workers the amount of Php15 million. For the victims who are injured, they were given Php5 million. Additionally, they were all given food packs. [4] On 29 Jan. 2021, the Office of Senator Christopher “Bong” Go distributed assistance to the Toledo City residents who were affected by the landslide in CCC mine. This was held at the Carmen Copper Recreation Center, Toledo City, Cebu. During the distribution, 248 families received meals, financial assistance, food packs, vitamins, face masks and face shields. Senator Go also gave bicycles and shoes to selected recipients, and computer tablets for their children to be used for online classes. Health and safety protocols were strictly implemented to avoid the further spread of COVID-19. The Senator was not present during the distribution but he sent them a video message with words of encouragement. [5] Senator Go also offered assistance to those who needed major medical operations such as heart surgeries. He urged those in need of such medical attention to seek assistance from any of the Malasakit Centers in the province. [5] While the local and national government along with CCC are busy sending assistance to the families of the victims of the December landslide, mining industry in general received backlashes from various groups who believe that the deaths and injuries could have been prevented. Barely a month before the landslide, there had been reports from residents of Barangay Biga in Toledo City who claim they warned officials of the MGB Central Visayas and CCC as well about large cracks in the village prior to the landslide. However, they said that their appeal was not properly addressed. [6] Biga Barangay Captian Pedro Sepada Jr. told a local newspaper in Cebu last 29 Dec. 2020 that prior to the landslide, barangay officials called for an emergency consultative meeting on 26 Nov. 2020 with representatives of CCC, MGB 7 and Biga residents to talk about the possible measures to be done after the cracks were discovered. Sepada said that MGB 7 Director Armando Malicse and CCC Vice President for Safety, Ignas Alburo were present. No representative from the Toledo City government was present. Sepada noted that during the meeting, they were not given a concrete response or alternative solution by CCC or MGB to provide assurance to the residents that they will all be safe while mining operations are ongoing. But Sepada said that they were simply told by MGB 7 and CCC officials that their place remained safe. [6] According to the local news reports in Toledo City, residents now believe the huge cracks caused the fatal landslide.      “It was only after the landslide last Dec. 21, that they declared our area to be unsafe within a radius of 600-meter distance from the pipeline of Carmen Copper. They now say it’s unsafe. What happened to their guarantee of safety before?” [6] Governor Gwendolyn Garcia said last December that they shall leave the investigation to MGB before implementing any course of action. She mentioned that she will leave it up to the MGB 7 to decide whether or not CCC has any liability.  Garcia said, “The investigation is not our expertise nor is that our mandate. MGB has already issued a suspension of operations and MGB is going to undertake the investigation. So let’s put things in proper perspective. While the investigation is ongoing, perhaps it is best to wait for the results.” [6] “I am not taking any sides. I want to be as objective as possible. However, there are some personalities who are not as objective because they have their own interest in Carmen Copper. They want to control so that they can do business with Carmen Copper. This is a warning to those who want to make it difficult.” Garcia also noted that CCC mining operations have given so much to Toledo City in terms of employment and the city’s development. She said that a thorough investigation is needed in order to prevent those with “personal interest” in the mining operations of CCC from ruining the lives of so many people working there. [6] Garcia assured the Province will provide assistance and support to the families of miners who died and those who remain missing after the landslide. [6] Renester P. Suraltra, a college professor wrote a commentary last December on SunStar Cebu with the title “Toledo tragedy: The untold story”. He wrote, “Who is always responsible for any mining accident? Is it nature or man? Who is at fault? Is it the bad weather or the safety engineer?” “Accidents may happen in the workplace but it can also be avoided. We can’t discount the fact that accidents can happen because of unsafe supervision, lack of situation awareness, and failure to identify the potential threat. That’s the job of the safety engineer under the direction and supervision of sympathetic and responsible management. If workers are dying frequently then responsible mining is a big issue.” “There is another lesson to be learned in the Toledo mining tragedy. We should never compromise safety and security. We can’t always blame nature out of man’s folly. One should think that the mining industry provides short-term revenue but long-term harmful effect on nature and the environment. Life is much precious than copper and gold.” [7] Acknowledgement: Ryan Peter Vivo Penaranda for Cebuano to English translation from some news articles   Reference: [1] Mines and Geosciences Bureau Press Release (22 Dec. 2020)."Carmen Copper Mine In-Pit Landslide Incident". [2] ANV (23 Dec. 2020). SunStar Cebu. "Listahan sa namatay, missing sa Carmen pit gipagawas". [3] WBS and PR (27 Dec. 2020). SunStar Cebu. "Carmen Copper Corp. commits to help landslide victims' families".  [4] Toledo City Public Information Office Facebook Page (8 Feb. 2021). "Families of the victims of the land in Biga Pit Gitagaan ug ayuda in Toledo". [5] Office of the Presidential Assistant for the Visayas Facebook Page (31 Jan. 2021). "Hundreds of Toledo City, Cebu residents affected by a copper mine landslide receive assistance from Senator Bong Go". [6] Sabalo, Wenilyn (30 Dec. 2020). SunStar Cebu. "Biga chief claims please ignored before landslide". Retrieved from - https://www.sunstar.com.ph/article/1881418/Cebu/Local-News/Biga-chief-claims-pleas-ignored-before-landslide [7] Suralta, Renester P. (27 Dec. 2020). SunStar Cebu. "Tell it to SunStar: Toledo tragedy: The untold story". Retrieved from - https://www.sunstar.com.ph/article/1881194

Mining

Philippine Resources - March 16, 2021

Income of Nickel Asia Up 52%

  NICKEL ASIA Corp. gained P4.07 billion in attributable net profits in 2020, up 51.9 per cent year over year due to higher ore export rates. The listed business said in a regulatory filing on Thursday that total revenues increased 21.5 per cent to P21.77 billion from P17.92 billion in 2019. In the disclosure, the firm said, “The significant improvement in the realized nickel price of the combined ore exports and ore deliveries to the two plants in 2020 more than offset the slight decline in sales volume and the less favourable (Philippine) Peso to United States Dollar exchange rate.” Nickel Asia announced that it exported 10 million wet metric tons (WMT) of nickel ore in 2020, down from 10.4 million WMT the previous year. Despite lower ore exports, export prices increased 45 per cent year over year in 2020, to $33.99 per WMT. Ore supplies to the Taganito HPAL Nickel Corp. (THPAL) and Coral Bay Nickel Corp. (CNBC) HPAL plants fell 2.4 per cent to 8.2 million WMT in 2020, according to Nickel Asia, with an average price of $6.22 per pound of payable nickel. Nickel Asia said, “On a combined basis, the company sold a total of 18.2 million WMT at $22.46 per WMT and 18.8 million WMT at $16.69 per WMT in 2020 and 2019, respectively.” Total operating cash costs for 2020 increased 1% year on year to P10.68 billion, according to the company. It went on to say that the realized Philippine Peso to US Dollar exchange rate for ore sales in 2020 was P49.15, down from P51.72 the previous year. Nickel Asia President and Chief Executive Officer Martin Antonio G. Zamora reported that demand for nickel ore remained stable despite the coronavirus disease 2019 (COVID-19) pandemic. He said, “As Indonesia resumed its ban on direct export of nickel ore at the start of 2020, we realized higher prices for our ore exports. In spite of every consequence the global standstill brought, we took care of our people, we focused on our communities, and Nickel Asia survived 2020.” Nickel Asia's stock gained 7.21 per cent, or 0.37 centavos, to P5.50 apiece on the stock exchange on Thursday. Meanwhile, Atlas Consolidated Mining and Production Corp. reported on Thursday that its Carmen Copper Corp. (CCC) has been granted permission by the Department of Environment and Natural Resources (DENR) to resume mining operations in the Carmen Pit. The approval, however, does not allow for the resumption of work at the sections affected by the slide that occurred on December 21 last year, according to CCC. CCC stated that it will continue to enforce safety measures in the reconstruction of affected areas at the pit and that it is collaborating closely with various regulatory agencies and local government units to resolve the ongoing rehabilitation efforts. CCC's operations were halted in December after a slide occurred at its mining site in Toledo City, Cebu, due to heavy rains triggered by Typhoon Vicky. At least four people were killed. Atlas Mining's stock rose 2.22 per cent, or 14 centavos, to end the day at P6.46 per share on the stock exchange on Thursday.

Mining

Philippine Resources - March 11, 2021

CMC and RTNMC Awarded PMIEA

The Presidential Mineral Industry Environmental Award (PMIEA) has been awarded to Cagdianao Mining Corp. (CMC), based in Valencia, in Dinagat Islands, and Rio Tuba Nickel Mining Corp. (RTNMC), based in Bataraza in Palawan, for outstanding initiatives in the pursuit of excellence in environmental management. CMC and RTNMC are subsidiaries of NAC, the country’s largest nickel supplier. “The award for 2020 is made more significant because of the unprecedented challenges posed by COVID-19. Our employees had to exert double efforts and had to sacrifice personal time in order to achieve our goals, to ensure 100 per cent implementation of our commitments to all our stakeholders in the mining communities” explained Engr. Arnilo C. Milaor, Resident Mine Manager at CMC. Last year, the Dinagat-based company also received the Presidential Award.  “The improved living conditions in the mining areas are proof of our commitment to the communities. One outstanding CMC project for example is the 19.2-kilometre farm-to-market road worth P12 Million pesos, connecting 5 barangays from 2 municipalities to the main provincial road, effectively providing the residents access to basic services like the hospital, and, most importantly, efficient access to trade and commerce,” said Engr. Aloysius C. Diaz, NAC VP for Operations. Rio Tuba Nickel has never stopped its operations and has won the Presidential Award 4 times – 2002, 2015, 2018, and 2020. “With strict enforcement of preventive measures against COVID-19 to protect employees and our host communities, we did not have work stoppage with no recorded-case of infection within the mine site, and, most significantly, we did not lay-off any worker” shared Engr. Cynthia E. Rosero, RTN’s Resident Mine Manager. According to Environmental Planner, Janice M. Tupas, Manager of the Mines Environmental Protection and Enhancement Dept. (MEPED) of RTN, “The qualifiers or applicants for the PMIEA must achieve a final rating of more than 95%. There are significant points also for ‘no unresolved notice of violations’; ‘compliance to operational and legal obligations, and no fatal work-related accidents.”

Mining

Philippine Resources - March 10, 2021

Chamber of Mines to tap Independent Verifiers

According to a top official, the Chamber of Mines of the Philippines (COMP), which represents some of the country's largest mining companies, will hire independent verifiers to assess members' compliance with society's growing standards regarding the mining industry's social, economic, and environmental performance. COMP Chairman Gerard Brimo said that the main task of the verifiers is to review COMP members’ self-assessment reports on their mining projects. This is amid the adoption of Towards Sustainable Mining (TSM), an environment and social governance standard established by the Mining Association of Canada (MAC).  “This year, we will begin our search for independent external verifiers who will be tasked to evaluate the self-assessment reports of mining projects,” said Brimo, who also serves as the President of Nickel Asia Corp. “The external verifiers who will be vetted and approved by the COI [Community of Interest] Panel will undergo extensive training early next year with the assistance of MAC as we prepare for external verification of our members’ reports in 2023.” In 2017, COMP adopted TSM in response to President Rodrigo Duterte’s that he will support mining as long it follows the Australian and Canadian standard. In spite of the ire of the pandemic last year, COMP completed the “Filipinization” process for TSM to make sure that the program is responsive to Philippine conditions. A COI Advisory Panel has approved this and was sent to COMP members in August and September.  ‘’We have strong faith in TSM’s continuous standard enhancement approach spearheaded by Canada.  Not only will TSM help our members further improve their operations,” said Brimo. More importantly, it will tremendously boost our efforts to meet society’s growing expectations on the mining industry’s social, economic, and environmental performance.” Other countries that have also adopted the TSM include Norway, Argentina, Spain, Brazil, Botswana, Finland, and Australia. 

Mining

Philippine Resources - March 10, 2021

THPAL Wins First PMIEA Award

Presidential Mineral Industry Environmental Award (PMIEA) from the Mines and Geosciences Bureau (MGB) and of the Department of Environment and Natural Resources (DENR) has awarded Mineral processing plant Taganito HPAL Nickel Corporation (THPAL) with its first presidential award, the Best Mining Forest Award in the mineral processing plant category for 2020. MGB and the Philippine Mine Safety and Environment Association (PMSEA) have also awarded THPAL as runner-up in the safest mines award in the same category. Started in 1997, the annual awards industry players for "outstanding levels of dedication, initiative, and innovation in the pursuit of excellence in environmental management, development of host and neighbouring communities, land use improvement, exploration, and mining site rehabilitation and final decommissioning." In spite of the pandemic, the awards ceremony still pushed through, said MGB. The awards committee has conducted offsite validations on 18 contenders through the use of technology and with the help of the MGB's regional offices. "This recognition speaks of THPAL’s commitment towards community transformation, environmental protection, and promotion of safety culture. This is in line with the philosophy of total development by improving the quality of life while caring for the wealth of creation given to mankind. The Management is grateful to all employees who exerted their tireless effort to make THPAL’s commitment possible, and this award is just an outcome of such relentless dedication,” THPAL Plant Manager Osamu Nakai said.

Mining

Philippine Resources - March 10, 2021

Philex Still Searching for Strategic Partners

In the development of the Silangan copper and gold project in Surigao del Norte, Philex Mining Corporation has continued its search for strategic partners, saying that it is currently in discussion with potential investors. “We are closely working with our financial advisors in the search for a strategic partner and this includes several major Chinese mining companies,” Philex said. Philex president and CEO Eulalio Austin earlier said that Morgan Stanley is helping the firm with its search.  However, searching for the right investors has proved to be challenging as the firm earlier targeted to raise at least $350 million by the first half of 2020, which was to be raised as equity, and the balance of $400 million through loans. “The pandemic has slowed down global M&A (merger and acquisition) transactions and the investors for Silangan project is no exception,” Philex said. In December, the Department of Environment and Natural Resources (DENR) has renewed its mineral production sharing agreement (MPSA) - which covers another 25 years of its wholly-owned subsidiary, Silangan Mindanao Mining Co. Inc., the operator of the $750-million Silangan copper and gold project. Austin said that the firm is working closely with the financial advisor to bring Silangan into operation and to also optimize its Padcal mine. The firm also added that with the recent trend in costs, the long-erm prospective for copper and gold has also tremendously increased the interest of global investors in the Silagan project.  Philex noted that its core net income jumped from P156 million in 2019 to P1.16 billion in 2020. The costs of gold were at the highest in the third quarter, which has reached $1,915 per ounce, and copper was at $3.43 per pound in December 2020. Operating revenues went from P6.79 billion to P7.8 billion.  In the first and third quarter of 2020, tonnage milled at an average of 1.985 million tons per quarter. In the fourth quarter, this decreased to 1.881 million tons because of the impact of COVID. In spite of this, the production of gold went up to 56,000 ounces, and also produced 26.38 million pounds of copper. In total, Philex produced 56,000 ounces of gold and 26.379 million pounds of copper. 

Mining

Philippine Resources - March 05, 2021

PSE Proposes Changes to the Mineral Reporting Code

In order to meet international reporting standards, the Philippine Stock Exchange Inc (PSE) has given suggested changes to the 2007 Philippine Mineral Reporting Code (PMRC). According to its memorandum, PSE said that it gave a proposal to involve talks on the remediation and mediation plans of the impact of the environmental, social, and health. Another proposal is the inclusion of a statement that confirms the compliance of an accredited competent person or the report in the 2020 PRMC version. Other revisions that the PSE suggests include the editorial revisions, accredited competent person’s content to the public disclosure of the report; and the revelation of any potential conflict of interest with the issuer’s related parties as defined in the PSE’s consolidated listing and disclosure rules.The PSE said that the 2007 mineral reporting code details the minimum standards needed which is to be followed by the stakeholders for the public reporting of mineral resources, exploration results, and ore reserves. The PSE said the proposed 2020 code was “modelled substantially after the 2019 International Reporting Template of the Committee for Mineral Reserves International Reporting Standards and the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves of the Australasian Joint Ore Reserves Committee.”The Philippine Mineral Reporting Code Committee (PMRCC), however, started the review of the reporting code in Feb. 2019 to make it at par with global reporting standards. It has also proposed changes such as revising the term “competent person” to “accredited competent person”, some technical studies, modifying reporting terminologies; and requiring the reporting of metal equivalents. “Another proposed revision is the inclusion of a transitory provision, which states that the 2020 PMRC shall be fully implemented two years after SEC approval and that during said two-year transitory period, the reporting company shall comply with the 2007 PMRC but may choose to comply with the 2020 PMRC,” the memorandum said.Ronald S. Recidoro, executive director of the Chamber of Mines of the Philippines, said that they fully support the proposed amendments to the PMRC. He added that the chamber is working closely with the PMRCC to upgrade the mineral code of the country and other concerns. “Once approved, the PMRC will give due recognition to the work being done by Filipino geologists, mining engineers, and metallurgists in determining and reporting on mineral resources and reserves,” Recidoro said.PMRCC Chairperson Ciceron A. Angeles, Jr. said he is hopeful of the approval of the 2020 PMRC “Our current PMRC 2007 edition is no longer compatible with the international mineral reporting codes recognized by stock exchanges other than the PSE,” he said.

Mining

Philippine Resources - March 02, 2021

Philex Posts P1.23 Billion Income

Philex Mining Corporation posted a net income of P1.23 billion which can be attributed to parent company equity holders last year on the back of lower expenses and higher revenues. The Pangilinan-led mining firm noted a turnaround from its P647,78 million attributable net loss in the previous year, and also reported a core net income of P1.16 billion, seven times higher than last year. Its revenues in 2020 also improved to P7.83 against P6.79 billion in 2019. The cost went down nearly 9% to P6.3 billion from P6.92 billion previously because of efficient operations and cost management.According to Philex, the fourth quarter tonnage fell to 1.88 million tons as compared with 1.99 million tons in the previous quarter. This was because of the temporary stoppage of underground operations after a number of personnel tested positive for the virus. “The shutdown was necessary to undertake COVID-19 mass testing of miners and contain the local transmission of the virus,” it said. “Despite the COVID-19 related temporary shutdown, the company produced a total of 56,000 ounces of gold and 26.38 million pounds of copper (in 2020), higher than full-year 2019 production of 53,064 ounces of gold and 25.74 million pounds of copper.”The firm added that it would optimize its Pacdal mine in Benguet and on strategic planning for its Silangan copper and gold mine project in Surigao del Norte. Eulalio B. Austin Jr., Philex president and chief executive officer, said that this positive outlook has boosted the interest of the global economy. “We are closely working with our financial advisor to bring Silangan into operation in the soonest possible time and at the same time optimizing the Padcal Mine,” he said.Meanwhile, Philex Chairman Manuel V. Pangilinan said that those who would survive the effects of the pandemic are those businesses that can adapt to change. “Thankfully enough, Philex as an export-oriented company was permitted to operate by the government despite the community quarantine, providing revenues to allow us to concentrate on… the health and financial well-being of our employees; maintaining service excellence to our customers; and assistance to the government in caring for those most affected,” he said, “Mining shall and always will be a key economic driver towards inclusive national growth. Mining has the potential to provide much-needed revenue for the government’s response against the pandemic, particularly in the purchase of vaccines, if it is allowed to flourish.”On Friday, the shares of Philex Mining at the stock exchange increased to 1.22% or six centavos to conclude at P4.96 apiece.

Mining

Philippine Resources - March 01, 2021

Francisco Named as MMDC’s Consulting Operations Head

Marcventures Mining and Development Corporation (MMDC) has a new consulting operations head for its nickel mine operations in Surigao del Sur. Eduardo Francisco, a registered professional mining engineer with over 30 years of experience in open-pit mining, engineering and operations, has worked for Rio Tuba Nickel Mining Corporation for 18 years before moving to Canada where he continued his career.Among the responsibilities he has had in his storied career include being a mine coordinator for the Agrium (Nutrien) phosphate mine, senior mine engineer of Syncrude Canada oil sands mine, technical lead for Imperial Oil (Exxon) oil sands mine, development specialist for Suncor Energy oil sands mine, director for Operations for Canadian Silica Industries, and manager for Capital projects of Barrick Gold mine and senior mine engineer for De Beers Canada diamond mine.Armed with a degree of Bachelor of Science in Mining Engineering from Adamson University, his new position takes him to the forefront of the mining operations in Surigao, and other projects.

Mining

Philippine Resources - February 25, 2021

Value of Philippine Metallic Mining Industry Increases by 1.3%

Due to improved nickel volumes, the output of the value of the metallic mining industry has increased by 1.3% to P132.21 billion.This was according to the Mines and Geosciences Bureau (MGB), which said in a report that nickel ore and its bye-products accounted for 51.8% or P68.48 billion of the total, and gold at 36% or P47.60 billion, copper at 11.25% or P14.88 billion, followed by silver, chromite, and iron combined at P1.26 billion. The volume of nickel ore increased to 2.2% year on year to 333,962 metric tons (MT), and valued at P38.39 billion. “Of the 30 nickel mines, the key producers were Taganito Mining Corp. (TMC) with 67,324 MT, followed by Rio Tuba Nickel Mining Corp. (RTNMC) with 46,571 MT. In third was Platinum Group Metals Corp. with 32,848 MT,” the MGB said.The MGB added that 11 mining projects announced zero output because of either maintenance care or subject to suspension orders by the government. The MGB noted that nickel benefited from the increase in metal prices because of supply disruptions and strong demand from the stainless steel industry in China. It also flagged an overall reduction in supply due to Indonesia’s nickel ore export ban.“Tight supply coupled with strong demand will naturally push prices to better levels. Next to Indonesia, the Philippines is the largest supplier of nickel ore to China,” the MGB said. “China was still the country’s top export market for its nickel ore followed by Japan in 2020.”In 2020, mixed nickel-cobalt decreased to 49,647 MT, valued at P29.76 billion. A year earlier, the corresponding totals were 51,144 MT, worth P31.70 billion.Taganito HPAL Nickel Corp. based in Surigao del Norte produced 62% or 30,587 MT, followed by Coral Bay Nickel Corp. in Palawan with 38% or 19,060 MT.Meanwhile, the MGB said that the output of silver, gold, and copper declined in 2020 due to the suspension of the Didipio Gold-Copper Project of OceanaGold Philippines, Inc. in Nueva Vizcaya.In 2020, gold output dropped 15.6% to 17,424 kilograms (kg). By value, however, the precious metal rose 0.5% to P47.60 billion.MGB said Philippine Gold Processing Refining Corp. in Masbate produced 6,045 kg valued at P15.33 billion. The output of silver decreased to 23.2% to 24,024 kg in 2020, while the value declined 6.9% to P770.50 million.Apex Mining Corp. was the top silver producer - with 11,631 kg, worth P0.38 billion.The MGB said copper output in 2020 fell 15.4% to 60,856 MT valued at P14.88 billion. Cebu-based Carmen Copper Corp. produced 48,576 MT valued at P11.19 billion, and then by Philex Mining Corp. with 11,964 MT worth P3.65 billion, and Lepanto Consolidated Mining Corp. 316 MT valued at P0.42 billion.Meanwhile, the MGB said that the costs for gold and silver were higher than during the pre-pandemic. The firm said the average gold price in 2020 was $1,770.21 per troy ounce, up 27.3%. Silver prices rose 26.6% to $20.45 per troy ounce.“Experts said that the upward trend for precious metals gold and silver was attributed to depreciation in the US dollar and lower interest rates,” MGB said.

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Mining

Philippine Resources - February 22, 2021

26 Mining Projects to Start This Year

At least 26 mining projects will start this year.According to Mines and Geosciences Bureau (MGB) director Wilfredo Moncano, these projects have already finished their documentary requirements, allowing them to proceed with development.“These are MPSAs (mineral production sharing agreements) that had waited for a long time to develop and commercially operate and think now is the right time because of the high demand for aggregates, sand and gravel, limestone as cement feed, and other construction industry raw materials,” he said.Because of the recent effects of the pandemic, the government has been thinking of ways to boost the economy. One of those experiencing robust growth is mining - which can improve the economy through taxes, increased exports, and employment. In addition, the mining sector has already been enjoying good costs for most minerals. Moncano said that these mines include eight metallic mines and 18 non-metallic mines.“Although most of them are in the non-metallic category, these new mining projects support the Build Build Build program of the government,” he said. “The metallic mines have a longer development period even up to three years but, yes, within the year, all these companies will start development works.”Larry Heradez, Mining Tenements Management Division chief of MGB, said the $750-million Silangan copper and gold project in Surigao del Norte of Pangilinan-led Philex Mining Corp. is one of the 26 firms expected to begin this year.This is also a response to the rising demand in China as consumption remains strong, and where 90 per cent of the country’s nickel exports goes to that country.

Mining

Philippine Resources - February 15, 2021

Demand For Nickel Ore May Remain High

If Indonesia maintains its nickel export ban, the demand for Philippine nickel ore in China will remain high. According to Chamber of Mines of the Philippines (COMP) Vice-President for Communications Rocky G. Dimaculangan, “As long as Indonesia keeps its nickel export ban, demand for Philippine nickel ore from China’s NPI (nickel pig iron) plants will remain strong.”Last year, Indonesia banned nickel ore exports to develop a domestic-processing industry. This would allow the country to capture more added value from ore - instead of exporting the ore to be processed in China.Since April 2020, S&P Global Market Intelligence said that China had grown more dependent on the Philippines to supply nickel in the absence of Indonesia. Dimaculangan said that the main driver of the cost of nickel will be electric vehicles. He said, “Given the growing demand for nickel from the electric vehicle market, LME nickel prices (are) expected to remain strong.” COMP said that it expects the prices of gold to “remain close to or even above 2020 levels”.He added, “We anticipate central banks and governments to sustain their high monetary and deficit-spending stimulus programs even as economies slowly recover from the COVID pandemic following the worldwide vaccinations.”

Mining

Philippine Resources - February 15, 2021

Nickel Industry Is Expected to Improve In 2021

As demands from the foreign market are expected to improve this year in spite of the threats of the pandemic, the nickel industry may see a robust year in 2021.According to Philippine Nickel Industry Association President Dante R. Bravo, the consumption of the nickel would continue because of the demands from other sectors such as appliance equipment and infrastructure. “The mining industry has kept employing 190,000 people in the entire country and this is very important, especially that the Philippine government is trying to implement economic recovery efforts from the impact of the pandemic,” he said.Because of the strict quarantine measures, the production of nickel had a 14% drop last year - 18.5 million dry metric tons (DMT) - as compared with the 21.6 million DMT output the year earlier. In spite of this decrease, however, the group said that the export value of the nickel improved to almost P25 billion in the January-September period, as compared with P24 billion in the same period in 2019. This is due to the demands from China, said Bravo. In the year 2020, Bravo said that the contribution of the association members amounted to almost 50% of the nickel production - which produced a total of 7.9 million DMT with an export value of P11.6 billion, based on the data of the Mines and Geosciences Bureau. “The industry is grateful that we were able to perform well despite the pandemic and that we were able to contribute to the economy during these trying times,” he said. “We’re all aware that a large number of businesses closed down in 2020 and some are closing down this year.”Furthermore, he said that the group spent P166.8 million for the development management program in the Caraga region, Zambales, and Palawan. He said that P49 million was allotted for the recovery efforts - providing food and medicines, medical assistance to the communities and other neighbouring local government units.“Some of these efforts included the build-up of isolation rooms and testing centres, provision for an ambulance, transportation, the supplemental supply of thermal scanners, test kits and personal protective equipment to local hospitals as well as provision of food packs, facemasks and hygiene kits to local health workers and frontliners,” he said.

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