Photo Credit: dmcihouse.net

DMCI Mining Corporation is targeting to ship 1.5 million wet metric tons (WMT) of nickel ore in 2023, after its subsidiary Zambales Diversified Metals Corporation (ZDMC) was granted an Environmental Compliance Certificate (ECC) in January to produce 2 million WMT of nickel ore.

Prior to the ECC issuance, ZDMC was only allowed to extract 1 million WMT.

“We have the necessary facilities and mitigating measures to minimize the impact of our operations on the environment. With these in place, we’re targeting to produce anywhere between 1.7 million to 2 million tons of nickel ore this year,” said DMCI Mining president Tulsi Das C. Reyes.

From January to March, ZDMC nickel ore production soared by 88 percent from 318,000 WMT to 599,000 WMT, its highest-ever quarterly output. This led to a 16-percent improvement in total inventory, from 154,000 WMT to 178,000 WMT.

However, total shipment declined by 21 percent from 620,000 WMT to 487,000 WMT owing to the depletion of the BNC mine and stockpile, cushioned by the double-digit growth of ZDMC shipment.

Average selling price increased by 11 percent from USD44 to USD49 owing to higher Zambales shipments of higher-grade nickel ore.

Despite the mine and stockpile depletion of Berong, DMCI Mining standalone revenues narrowly declined (-8%) from P1.4 billion to P1.3 billion due to better selling prices while reported net income contracted by 15 percent from P543 million to P463 million.

Photo credit: Bilyonaryo

Integrated energy company Semirara Mining and Power Corporation (SMPC) is set to make its second trial shipment to Japan this June, in a bid to reduce its dependency on the Chinese market.

The company will export 50,000 metric tons (MT) of Semirara coal to Shikoku Electric Power Corporation for its 700-megawatt coal fired ultra-supercritical power station.

“China is still our main foreign buyer but with their industrial output growing slower than expected, we want to develop other Asian markets like Japan,” said SMPC president and COO Maria Cristina C. Gotianun.

From January to March, Semirara coal shipments to China plunged by 50 percent from 2.2 million MT to 1.1 million MT, accounting for 72 percent of exports.

South Korea was a steady market at 300,000 MT, representing one-fifth of export sales. The rest of the exports went to Japan (5%) and Brunei (3%).

SMPC first made a trial shipment to Japan in January 2023, selling 78,410 MT of mid-grade coal to J-Power, a utility company that operates coal, hydroelectric, wind and geothermal power stations.

“For 2023, we are targeting to export around 30 percent of our full-year sales target of 15 to 16 million MT,” added Gotianun.

In the first quarter, standalone coal revenues sank by 40 percent from P25.7 billion to P15.5 billion mainly due to high base effect of record production, shipments and selling prices.

Standalone reported net income slumped by 51 percent from P14.2 billion to P7 billion on topline weakness and slower decline in cash costs.

The Department of Environment and Natural Resources (DENR) has issued the revised guidelines in the classification and reporting standards of exploration results, mineral resources and mineral reserves.

The new guidelines, embodied in DENR Administrative Order (DAO) No. 2023-05 recently signed by Secretary Antonia Loyzaga, amended DAO 2010-09 to allow the local mining industry to adopt with advances and upgrades of internationally accepted standards as set out in the Philippine Mineral Reporting Code of 2020 (PMRC 2020).

The compliance of mining contractors, permittees, permit holders and operators, and mining applicants with the new DAO is seen to expedite the evaluation and development of mining projects, as a result of the harmonization and streamlining of the entire reporting process related to mineral exploration results.

Among other changes, DAO 2023-05 updated some terminologies, such as replacing “Competent Person” with Accredited Competent Person” or ACP to refer to an industry professional duly accredited by the Philippine Society of Mining Engineers (PSEM), the Geological Society of the Philippines (GSP), and the Society of the Metallurgical Engineers of the Philippines (SMEP), or other similar professional organizations accredited by the Professional Regulation Commission. It also replaced the terms “ore reserve” with “mineral reserve,” and “potential or target mineral resources” with “exploration targets.”

The updated guidelines also entailed consideration of “modifying factors,” which are applied to mineral resources to support mine planning and final evaluation of the economic viability of mineral deposits before they are converted to mineral reserves. These may include mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental factors.

The latest DAO provided an expanded or detailed checklist of assessment or reporting criteria that must be considered by an ACP in preparing a report on exploration results, mineral resources, or mineral reserves. Should any item in the checklist not be discussed, the ACP must explain the reason for such.

Section 5 of DAO 2023-05 also introduced technical studies, which include scoping, pre-feasibility, and feasibility studies.

Other revisions include the required reporting of metal equivalents, as well as non-technical aspects of reporting of items, notably commodity pricing and marketing, permitting, legal requirements and sustainability considerations.

The latest DAO explicitly requires ACPs to prepare the necessary reports for public disclosure. Specifically, reporting of exploration results and mineral resources shall be disclosed by ACP geologist, while that for mineral reserves shall be disclosed by ACP mining engineer.

Additionally, the ACP metallurgical engineer shall disclose reporting of metallurgical test works that form part of a feasibility study of a mineral project.

Mineral industry players will be given a transition period of two years from the approval of DAO 2023-05 to adjust to the revised guidelines.

Prior to PMRC 2020, the industry had been adopting public reporting standards set under PMRC 2007 which was then compatible with the Australasian Joint Ore Reserves Committee (JORC) Code of 2004 and the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) International Reporting Template of 2006.

The CRIRSCO Template and the JORC Code have since been upgraded in 2019 and 2012, respectively, rendering the PMRC 2007 incompatible with its standards.

The revision of the PMRC to its 2020 edition was undertaken by the PMRC Committee, whose member-organizations include PSEM, GSP, and SMEP along with minerals industry-related organizations and bodies, such as the Philippine Stock Exchange Inc., the Chamber of Mines of the Philippines, the Philippine Mining and Exploration Association, the Philippines-Australia Business Council, and the Philippine Chamber of Coal Mines.

Photo credit: TVI Resource Development

The Board of RTG Mining Inc. is pleased to announce that a comprehensive settlement of all outstanding issues with the Villar Family controlled Sage Capital and TVI Resource Development (Phils.) Inc. (“TVIRD”) has been reached and a binding Memorandum of Agreement signed. On execution of the final documents, expected in the next month, all litigation that RTG had launched will be withdrawn as part of an agreed restructuring of the Mabilo Project.

The Villar Family is one of the most prominent families in the Philippines and RTG is pleased to partner with them in the development of the Mabilo Project, which is a significant mining project for the country.

The key terms of the agreement for RTG include the following:

• RTG (through SRM Gold Limited) will retain a 40% interest in Mt. Labo Exploration and Development Corporation (“Mt. Labo”) with the project also developed by Mt. Labo, in line with Philippine regulatory requirements, with Sage Capital (which is owned by TVIRD) holding the remaining 60%;
• RTG will have a 2% net smelter royalty (“NSR”);
• RTG’s debt together with interest, currently in the order of US$27M (subject to audit) will be repaid out of the proceeds of Stage 1 of the project, the Direct Shipping Operation subject to customary requirements to address liquidity and ongoing operations of Mt. Labo;
• Funding arrangements for the project as between the major shareholders of Mt. Labo have been successfully renegotiated, (relieving RTG of a sole funding obligation) and replaced with a pro-rata funding obligation, together with a disproportionate funding obligation of Sage Capital, as set out below;
• With debt repayments in full and the NSR, RTG will be entitled to approximately 57% of the proceeds of Stage 1, the Direct Shipping Operation;
• RTG will be entitled to 40% of the operating cashflow of the project, together with the 2% NSR and repayment of its debt, which is currently in the order of US$27M;
• The first US$5M of expenditure for Mt. Labo (or 12 months of expenditure, whichever occurs the earlier), will be funded pro-rata between the two shareholders (ie RTG will provide 40%) and thereafter, Sage Capital/TVIRD will sole fund the next US$5M of expenditure, with all additional funding thereafter to be provided on a pro-rata basis;
• All parties are required to act in the best interests of the project and not compete;
• A shareholders’ agreement will be finalised which will provide typical minority interest protection clauses including reserve matters for voting including annual budgets and appointments of key personnel;
• Any disputes will be resolved by the Singapore International Arbitration Centre; and
• On completion of final signed documents, all litigation matters will be withdrawn and settled in full.

With the restructuring of the Mabilo Project now agreed, over the balance of this year, the remaining permitting matters and financing plans will be finalised, a review of the 2016 Feasibility Study will be completed, together with finalising the acquisition of surface rights, following which, a commitment to development will be formalised by the Board of Mt. Labo.

RTG is pleased with the outcome of the discussions and the co-operative and constructive approach adopted by the Villar Family representatives. RTG believes they can be a strong and positive partner to work with to take the Mabilo Project forward, with both a near term development and future exploration activities to expand the project, which will start to unlock the value of the project for all stakeholders, not only the local communities but for the country as a whole.

Sandvik Philippines has successfully commissioned and delivered to loyal customer Filminera Resources Corporation (“Filminera”) their 11th and 12th Pantera DP1500i Top-hammer Surface Drills last 25 January 2023 at the Masbate Gold Project (MGP) located in Masbate Island, Philippines. Photo shows Sandvik Technician Larry Lugnas (second from left) and Service Operations Manager Jorge Cabello (third from left) handing over the drills to MGP representatives.

Located 360 km southeast of Manila, the Masbate Mine is operated by Filminera, the Philippine subsidiary of TSX- and NYSE-listed B2Gold with headquarters in Vancouver. In 2022, the mine produced a record-setting 212,728 oz of gold out of 7.93M tonnes of ore milled at an average grade of 1.11 g/t.  B2Gold also operates the Fekola Mine in Mali and the Otjikoto Mine in Namibia. Their projects under development include the Anaconda Area in Mali and the Gramalote JV Project in Colombia.

The Masbate Mine started operating in 2008 initially using 4 x Atlas Copco ECM660 Drills owned and operated by the erstwhile mining contractor, Leighton. When the opportunity for re-fleeting came about in 2012, Sandvik succeeded in winning the tender which came packaged with a full maintenance contract for 24,000 service meter hours of five years. Ironically, the said maintenance contract almost led to the cancellation of the order for the first 4 x DP1500i due to a dispute with the rates. Eventually, both Leighton and Sandvik were able to arrive at a mutually acceptable arrangement, and Sandvik ran the service contract for five years without incurring penalties in the availability guarantees. The contract was so profitable, Sandvik even had to share some of the residual profit at the end with Filminera under the pain-and-gain proviso of the contract.

The next re-fleeting opportunity came in 2017, with the Masbate Mine. This time, there was no service contract attached to the equipment and Leighton was no longer the mining contractor; the mine has shifted to owner-miner operation. Sandvik managed to secure the repeat order for another batch of 4x DP1500i, banking on the proven performance and reliability of the first four. That brings the total to 8 units. Drill numbers 9 and 10 were ordered in July 2020 and delivered in 2021. Numbers 11 and 12 in the photo above were ordered in January 2022 and are now handed over to the customer.

Filminera ordered two more DP1500i’s in November 2022; these machines are now awaiting completion in Tampere, for delivery later this year. That should bring the total to 14 x DP1500i units spread over 11 years for our most loyal Pantera DP1500i customer in the Philippines – Filminera Resources Corporation!

Photo: Mines and Geosciences Bureau (MGB) Region II Regional Director Mario Ancheta joined barangay and municipal government officials and Didipio Mine employees in the groundbreaking of a farm-to-market road project in Ifugao Village, Diffun, Quirino last February 2023. The road project is part of the Mine’s Community Development Fund (CDF), which aims to share the benefits of the Didipio Mine outside its immediate communities.

The Didipio Mine’s Community Development Fund (CDF) entered a new phase this year as different projects under the Fund are now in various stages of development and implementation.

“We are pleased to share that the Didipio Mine’s Community Development Fund (CDF) is now into full implementation phase as different projects have been breaking ground since December 2022,” Atty. Joan D. Adaci-Cattiling, President of OceanaGold (Philippines), Inc., said.

“From the drawing board to its launching last year, we are on our way to expanding the reach of the benefits brought by the Didipio Mine to more beneficiary communities in our host provinces of Nueva Vizcaya and Quirino,” she added.

The CDF aims to build community capacity and resilience as part of the additional terms and conditions of the Didipio Mine’s Financial or Technical Assistance Agreement (FTAA) renewal. The funding is from the additional 1.0 per cent of the gross mining revenue to meet the identified needs of the communities.

Launched in July 2022, the CDF operates under seven pillars of benefit-sharing:

• Infrastructure
• Enterprise Development
• Socio-cultural or IP Program
• Capacity Building
• Disaster Response/Management and Environment
• Health
• Education

The CDF emphasizes collaboration and partnership with relevant local government units (LGUs), community groups, organizations, Indigenous peoples, or Indigenous cultural communities to determine the plan and implementation.

The Fund is underpinned by the widespread participation among multiple community stakeholders to deliver programs that have broad benefits and purpose, and to build effective partnerships to foster learning and continuous improvement.

“These projects are identified through consultations with different groups and involve government agencies and organizations in the technical working group and steering committee for the implementation of the CDF, so it is participatory and inclusive,” Marjorie Idio, External Affairs and Communications Manager, said.

“And as we expand the CDF’s reach beyond the host and neighboring barangays, more and more communities in the greater Nueva Vizcaya and Quirino provinces stand to benefit from it.

“We look forward to the completion, inauguration, and turnover of these projects,” she added.

The other additional program for community development under the FTAA renewal is the Provincial Development Fund (PDF), which is 0.5 percent of the gross mining revenue. The PDF will benefit the provincial local government units of Nueva Vizcaya and Quirino.

Photo: WEDA L110N and QAS 210PD

The mining industry comes with various challenges; from scarce resources to uncertainty around commodity prices, miners are always looking at ways to overcome barriers to stay competitive. Nickel mining, for example, is mined from various depths and beneath the surface using large earth-moving equipment, the robustness and toughness of the used pieces of equipment played an important role in effective mining operations.

One of the various types of equipment used in mining is the pump. While there are substantial pumps available in the market, not every pump is suitable for a mine setting. Dewatering pumps for example. These mining pumps help to ensure dry working conditions for a mining operation, it also prevents flooding alongside other environmental complications. Another pump required is the slurry pump that is used to transport slurry. The demanding condition in mining makes it important to have robust and high tolerances pumps that ensure minimal chance of failure.

Mining also uses large equipment to extract, process, and transport materials. Another substantial piece of equipment for mining is generators, where the right use of suitable generators helps the industry to operate efficiently.

Carrascal Nickel Corporation is a large-scale nickel mine located in Carrascal, Surigao del Sur, Philippines. The company operates under Mineral Production Sharing Agreement (MPSA) granted in 2007 and began its commercial operations in 2009. Primarily engaged in the exploration, mining, and exporting of nickel laterite ore, Carrascal Nickel Corporation also believe in Sustainable Development Goal and environmental impact. These beliefs are practiced through various environmental and social development programs, also through their mining operation.

The concrete examples are Carrascal Nickel Corporation is using two of Atlas Copco's WEDA L110N 79.9kW electric submersible slurry pump powered by a QAS210PD 200kVQ Prime Power generator on their Cayawyawan bridge site, together with PAS150MF vacuum pump centrifugal pumps on their Pit 2B. “Atlas Copco’s sustainable performance pumps and the less footprint generator helps Carrascal Nickel Corporation in running a more sustainable mining operations. It is also the perfect fit for our requirements.” said Engr Lester Marqueres, the Resident Manager of Carrascal Nickel Corporation. “The innovative products that Atlas Copco offered and the proactive after-sales support, ensures the continuous operation of its partner, making it convenient and efficient for our mining operations.” Engr Lester Marqueres continued.

Atlas Copco just recently celebrated its 150 years of innovations. For a century and a half, Atlas Copco has been driving development and delivering breakthrough innovations to customers in many different industries. The Power Technique business area provides air, power and flow solutions through products such as mobile compressors, pumps, light towers, and generators, along with several complementary products. The business area innovates for sustainable productivity across multiple industries, including construction, manufacturing, oil and gas and exploration drilling. To know more about Atlas Copco's range of products and services, visit https://www.atlascopco.com/en-ph/construction-equipment or email powertechnique.SEA@atlascopco.com

Photo credit: Department of Finance

The government is planning to sell more of its assets this year, the Department of Finance (DOF) said.

"Last year we already sold I think something like PHP1.5 billion assets, and then for this year, we're aiming to sell more," Finance undersecretary for privatization and corporate affairs group Catherine Fong said in a briefing.

Fong said they are mostly looking at real estate properties.

"There's still a lot under the ownership of government under the Privatization Management Office (PMO) that we're intending to roll out faster. We're aiming for higher than last year. Definitely double that or at least higher," Fong added.

She said they are aiming just for PMO properties, adding however that there are still a lot of government assets for disposition.

Fong said they want to auction the 2.2 hectare Mile Long property in Makati City.

"Then we're hoping to sell this year or next year some mining rights still owned by the government," she said.

Fong said that for now, what's hindering the government from auctioning one of the mining rights is the verification of the content of the mine itself.

"A lot of the feasibility studies are still desktop. So we're having the valuation done, but definitely there are a lot who are interested. We're being assisted right now by the German government, and we've also received offers from the US government and Australian government to assist us in assessing the value of the mines and to help us in packaging it for auction, so definitely there's a lot of local and foreign interest once we're ready to auction the mines," she said.

Fong said the government currently has four mining rights.

"We have four, as I understand, they're quite big, but some are still under litigation, so we're not prepared to auction it out yet, but at least one already has a clean title, so we're going with that [Basay Mine] first, but we're still in the process of validating its actual value," said Fong.

Fong explained that the government is looking at not just outright auctioning the Basay Mines but also asking development partners to assist them on a possible joint venture.

"There's a technical term for it in mining, some sharing agreement. We're trying to get assistance on the modern good practices in the mining industry on how to sell it, we're trying to package it in a more responsible way," she noted. By Anna Leah Gonzales

Article courtesy of the Philippine News Agency

Photo credit: Global Ferronickel Holdings, Inc. 

Global Ferronickel Holdings, Inc. achieved Q1 2023 revenues of ₱1.1 billion and net income of ₱358.8 million, turning a first quarter profit for the first time in the company’s history. Earnings per share on net income attributable to equity holders of the company came in at ₱0.0296 compared to a loss of ₱0.0375 in the same period in 2022, mainly resulting from the commercial operations of its new mine in Palawan and the share in net income of its associate.  

FNI President Dante R. Bravo commented, “We had a solid start to 2023, coming primarily from our Palawan mine which benefits from medium-grade nickel ore. We expect a year of increased production, focused operational execution, and additional exploration drilling at our mine sites. Specifically, we plan to export 6.5 million wet metric tons (WMT), including 5 million WMT from Cagdianao and 1.5 million WMT from Palawan.” 

A total of 0.330 million WMT was shipped in the quarter, all of which are medium-grade nickel ore. The average realized nickel ore price was US$61.48/WMT and the average realized peso over the U.S. dollar was ₱54.82.

In September 2022, FNI announced its first nickel ore shipment from its mine in Palawan, which is a significant step forward in establishing year-round mining operations for the company. With the successful daily operations and ramp-up in production, the Palawan mine reached its 1 million WMT production last April 29, 2023 and is set to ship its 1 millionth WMT by the end of May 2023. 

Additionally, the company acquired a 22.22% interest in GHGC Holdings Ltd., which gives FNI a 20% ownership in Guangdong Century Tsingshan Nickel Industry Co. Ltd, the owner of a 33-hectare rotary kiln-electric furnace processing facility in China that caters to customers from within and outside Guangdong’s Economic and Technological Development Zones. Beginning in the fourth quarter of 2022, these recent developments supported FNI’s earnings and will pave the way for a steady income stream throughout the year. 

Outlook

The company’s financial results along with its recent operational achievements in key strategic areas point to a strong momentum going forward.

On the demand side, the outlook for the nickel industry remains compelling, led by fundamental drivers such as population and income growth, urbanization, and energy transition. 

For more than a decade, China has been and will continue to be the world’s largest nickel consumer. In the short term, the easing of its COVID-19 restrictions as well as the reopening of the economy is expected to resume construction activity and support the recovery of demand for stainless steel and by extension on the nickel market. Additionally, China’s infrastructure investment plan can also shore up the country’s real estate sector. Reflecting these anticipated developments as well as the increasing usage of nickel in batteries for electric vehicles (EVs), intergovernmental organization International Nickel Study Group (INSG) now estimates the global demand for nickel to increase 11% from 2.89 million tonnes in 2022 to 3.22 million tonnes in 2023. In terms of price outlook, research provider Fitch Group revised up its LME spot price forecast by 10% from US$20,000 to US$22,000 per tonne for 2023, while S&P Global expects the average LME three-month price to climb 5% from a year earlier to US$26,838 per tonne. 

In the medium to long-term, nickel demand is projected to grow further due to its wide range of applications in renewable energy technologies and critical infrastructure including EVs, solar panels, power grid systems, wind turbines, and new technologies such as hydrogen-based energy. In fact, the World Bank identified nickel as one of the critical minerals in the clean energy transition that is cross-cutting because it is used across a variety of technologies and is not dependent on a single application. Within EVs, the World Bank finds that electric mobility has not only become key to decarbonization for several major economies, but also increasingly relevant for low- and middle-income countries (LMICs) over the next few decades. Its 2023 report, The Economics of Electric Vehicles for Passenger Transportation, suggests that global policy targets such as having 30% new passenger vehicles to be electric by 2030 will offer economic and financial advantages for many LMICs, with two-wheeled vehicles and buses as cost-effective starting points to transitioning to electric mobility. Overall, nickel demand from new EV sales is expected to surge 41 times between 2020 and 2040 under the International Energy Agency’s Sustainable Development Scenario.

On the supply side, Indonesia and the Philippines will predominantly be the top nickel producing countries, as was the case since 2010. Looking ahead, INSG projects global nickel output to rise from 3.04 million tonnes in 2022 to 3.39 million tonnes in 2023, creating a market surplus of 171,000 tonnes. Over the medium to long-term, the Fitch Group is of view that global nickel mine production will grow by an average of 5% annually from 2022 to 2026, with strong nickel ore output from Indonesia and Philippines this year. 

Inevitably, with such huge potential also comes complexity. As a major nickel miner, FNI recognizes that there are external headwinds which may have a negative impact on its performance and in the industry including fuel price spikes, natural disasters, conflicts, increased mining taxation, and other factors over which it has no control. Despite these uncertainties, the company draws strength from the resilience that the organization has already shown over the years, underpinned by its highly experienced leadership team who has operated in most market conditions, and a clear strategy to continue to deliver for all stakeholders.

Photo: DENR Secretary Antonia Loyzaga

The Department of Environment and Natural Resources (DENR) is mulling the implementation of a "big brother-small brother" strategy to capacitate small miners and enhance the resilience of the mining community.

In a press release on Monday, DENR Secretary Antonia Loyzaga said they are planning to incorporate said strategy within the social development and management programs (SDMP) of large mining companies.

“It is high time for big mining firms to help small-scale miners meet their social development targets by setting aside a portion of their social development fund for the purpose,” Loyzaga said.

“There must be a way to negotiate the resilience of communities where mining is happening, the social development needs to happen. This way inclusivity in terms of the progress of the community as a whole can really be institutionalized," she added.

To achieve this, Loyzaga emphasized the need to revisit the social development funding of large mining companies.

She said that President Ferdinand R. Marcos Jr. is open to responsible miners who consider not only the environmental aspects of mining, but also promote social development.

“In this government, you cannot move forward with your for-profit agenda without a national dividend that redounds to a local community. And that’s the bottom line,” she said.

DENR Administrative Order No. 2010-21, or the Revised Implementing Rules and Regulations of Republic Act 7942, otherwise known as the Philippine Mining Act of 1995, requires mining contractors and permit holders to have an SDMP, which aims for the sustained improvement in the living standards of host and neighboring communities.

With a timeline of five years, the SDMP is funded by the companies themselves by allocating 1.5 percent of their annual expenses.

Out of this allocation, 75 percent goes to community development while 10 percent goes to the development of mining technology and geosciences, and the remaining 15 percent is used for an information, education, and communication campaign.

Photo credit: Global Ferronickel Holdings, Inc.

The environmental management system of Ipilan Nickel Corporation (INC), the operating arm of Global Ferronickel Holdings, Inc. in Brooke’s Point, Palawan, has been recertified by Intertek last April 7, 2023 as conforming to the requirements of International Organization for Standardization (ISO) 14001:2015. The management system is applicable to INC’s mining operations including Development, Extraction, Hauling, Stockyard and Port Operations of Nickel Laterite Ore and other Associated Minerals covering barangay’s Maasin, Mambalot, Calasaguen and Ipilan.

“This demonstrates that we take our environmental responsibilities very seriously as we constantly find ways to minimize our impact and consider all environmental issues relevant to our operations,” said Alex Arabis, Resident Mine Manager of INC. “It also reaffirms INC’s commitment to preserving the beauty of Palawan and adherence to best practices to promote a better future for everyone.”

INC, which operates a Mineral Production Sharing Agreement (MPSA) with the government, holds the exclusive right to conduct mining operations in the Municipality of Brooke’s Point, Palawan covering 2,835 hectares, of which 260 hectares have been partially declared as mining area. The validity of its operations has been confirmed by the Department of Environment and Natural Resources (DENR) stating that INC remains compliant with all its requirements. INC continually strives to work together with all relevant stakeholders to achieve sustainable development and to maximize the benefits of responsible mining.

Photo credit: 

Integrated energy company Semirara Mining and Power Corporation (SMPC) recorded a 40-percent decline in consolidated net income from P15 billion to P9 billion mostly due to high-base effect, as the company posted its highest-ever quarterly bottom line during the same period last year.

Consolidated topline contracted by 29% from P29.1 billion to P20.7 billion on weaker coal contribution, offset by all-time high revenues from the power segment.

Coal revenues declined by 40% from P25.7 billion to P15.5 billion mainly due to lower shipments and selling prices as the company turned cautious amid market volatility.

“We limited our first-quarter exports because of the wild price swings. Now that prices have settled, we intend to boost our foreign shipments in the coming months,” said SMPC president and COO Maria Cristina C. Gotianun.

“Our sales target for this year is between 15 and 16 million metric tons,” she added.

Total coal shipments from January to March receded by 31% from 5.1 million metric tons (MMT) to 3.5 MMT following a 52-percent drop in exports from 3.1 MMT to 1.5 MMT and flat domestic sales (2 MMT).

Semirara coal average selling prices (ASP) decreased by 14% from P5,125 per metric ton (MT) to P4,427 per MT primarily due to sluggish exports and higher shipments of lower grade coal.

Meanwhile, revenues from the power businesses rose by 59% from P4.8 billion to a historic high of P7.7 billion on the back of double-digit improvements across all key operating metrics.

With the commercial operation of SEM-Calaca Power Corporation (SCPC)’s Unit 2 on October 9, 2022, overall plant availability surged by 48% from 58% to 86%, while total average capacity increased by 32% from 520 MW to 688 MW.

Total gross generation rebounded by 44% from 914 GWh to 1,316 GWh, as three of the four SMPCowned power plants recorded better availability and average capacity.

Consequently, total power sales accelerated by 37% from 908 GWh to 1,241 GWh, bulk (71%) of which was sold to the Wholesale Electricity Spot Market (WESM). Sales to the spot market expanded by 69% from 522 GWh to 880 GWh.

Easing fuel prices and sluggish January demand led to a 2-percent dip in spot ASP, from P6.84/KWh to P6.69/KWh. However, higher spot sales and a 53-percent upturn in BCQ prices lifted overall ASP by 17% from P5.29/KWh to P6.17/KWh.

Total spot purchases contracted by 33% from P493 million to P331 million because of better plant availability and capacity, coupled with slightly lower contracted capacity.

At the end of the first quarter, only 26% of SMPC’s 720MW dependable capacity was tied to contracts, which were mostly under SLPGC. 

Philex Mining Corporation, one of the oldest and largest gold and copper producers in Southeast Asia, and a leader in right and principled mining, generated Php388 million Core Net Income and EBITDA of Php635 million for 1Q2023 against the backdrop of favorable gold prices and foreign exchange rates that kept them within safe margins as a continuation from the previous year. However, lower metal output held back these positive trends.

The production level in 1Q2023 realized operating revenues of Php2.105 billion, lower than the Php2.528 billion for the same period in 2022. Gold prices in first quarter were higher at US$1,889 per ounce while copper was slightly lower at US$4.00 per pound. Operating costs were slightly lower than 1Q2022 at Php1.636 billion.

PRODUCTION

Tonnage milled for 1Q2023 was 6% lower at 1.706 million tonnes from 1.822 million tonnes in 1Q2022 as the Company continues to address issues with the grinding equipment at the mill plant. The requested replacement parts have already been ordered. Ore grades for Gold and Copper continue to hold to the same levels as in 1Q2022. Gold output for 1Q2023 was 17% lower at 10,062 ounces versus 12,097 ounces in 1Q2022. On the other hand, Copper output for 1Q2023 was 11% lower at 5.531 million pounds versus 6.181 million pounds in 1Q2022.

OPERATING EXPENSES AND EBITDA

Total operating costs and expenses for 1Q2023 stood at Php1.636 billion, at a similar level for the same period in 1Q2022 at Php1.655 billion. The increases in the purchase costs of the materials 3 and supplies as well as equipment parts and repairs were offset by the continued implementation of the efficiency measures in operations. Higher power rates increased operating costs and expenses despite lower production level. EBITDA generated for 1Q2023 reached Php635 million, or 46% lower than the Php1.182 billion in 1Q2022.

OUTLOOK AND THE SILANGAN PROJECT

The current global commodity outlook has turned bullish for Gold – in the face of geopolitical risks, recession and economic uncertainty – but bearish for Copper, in spite of the latter’s foreseen surge in demand due to its use in green technology. Price levels though were sustained within safe margins, has provided the Company with the breathing space to pursue its recovery program and much-needed repairs on its ageing equipment.

Development works on the Silangan Project in Surigao del Norte are currently underway and are on schedule with completion of the construction of the east decline portal towards the end of the 1Q2023. Final preparations for the commencement of the development of the tunnel is on-going with the arrival of tunnelling equipment and accessories. Tunnelling works will commence in May 2023.

The Company will likewise continue with its funding plan for Silangan commenced last year with the Stock Rights Offering. This involves a debt syndication effort and fresh capital infusion from the Company’s cash reserves. The Company is in the final stages of the debt syndication process with several financial institutions.

“We will continue to push the frontier of the Silangan development, pursue improvements towards our recovery program and sustain the extension of the life of our Padcal mine,” according to Philex President and CEO Eulalio B. Austin, Jr. “Resilience is still the name of the game as we look for other business opportunities and for more participation in the ‘green metals space’. Time and again, the Company and its people have shown that they were able to withstand the challenges of the times with much fortitude, and this year won’t be any different.”

Photo: Company officials of the 2022 PMIEA recipients with DENR Secretary M.A. Yulo Loyzaga, Executive Secretary L.P. Bersamin, and COMP Vice Chairman Mr. G.H. Brimo

Recipients of the 2022 Presidential Mineral Industry Environmental Award (PMIEA) represented by their company officials attended the Ceremonial Awarding held at the Bonifacio Hall of the Malacañang Palace last April 20, 2023. The Executive Secretary of the Philippines Hon. Lucas P. Bersamin, Department of Environment and Natural Resources (DENR) Secretary Maria Antonia Yulo Loyzaga, and Chamber of Mines of the Philippines (COMP) Vice Chairman Gerard H. Brimo officially awarded the prestigious 2022 PMIEA trophies to the company representatives during the ceremony. The event was also participated by the PMIEA Selection Committee members and representatives, MGB Central Office officials and personnel headed by OIC Director Atty. Danilo U. Uykieng and Chief of Policy, Planning, and International Affairs Division and OIC Assistant Director in concurrent capacity Engr. Teodorico A. Sandoval, PMIEA Technical Working Group led by the Chief of Mine Safety, Environment and Social Development Division Engr. Marcial H. Mateo, and Regional Directors of MGB Regional Office Nos. II, III, IV CALABARZON, MIMAROPA, IX, X, and XIII.

In her Welcome Address, DENR Secretary M.A. Yulo Loyzaga affirms the Department’s commitment towards responsible mining through the implementation of pro-people, pro-environment, and science-based legislation, policies, and programs. The DENR Secretary reminded the 2022 PMIEA recipients to always raise awareness of the mining industry’s vital contributions towards an inclusive and sustainable future.

Executive Secretary L.P. Bersamin also recognized the importance of the mining sector as one of the government’s partners in long-term economic growth. By supporting the economic recovery of the country through their initiatives from the unprecedented COVID-19 pandemic, the current administration acknowledges the valuable role of the mineral sector in achieving its goals for the Filipinos. The Executive Secretary emphasized that the PMIEA is ultimately bestowed by and should always be for the people.

Pursuant to Executive Order No. 399, series of 1997, the PMIEA is given every year to mining groups and companies that have shown exemplary performance in safety and health management, environmental protection and enhancement, and social and community development. The 2022 PMIEA were conferred to the following Contractors/Permit Holders during the Ceremonial Awarding:

Article courtesy of the DENR