Place your Ad Here!

News

Mining

Philippine Resources - March 15, 2019

Bezant Resources pursuing creation of Mankayan Copper Gold Mine

UK mining Company Bezant has since the beginning of 2018 refocused towards the development of an international copper gold portfolio focused on the Mankayan project in Luzon. In this period Bezant with its partner and MPSA holder Crescent Mining and Development Corporation ( “Crescent”) has:Appointed a new Bezant management team led by Colin Bird and Laurence ReadIncoming Chairman of Bezant, Colin Bird, is founder and chairman of the highly successful Jubilee Metals, one of the UK’s most profitable independent metals companies and oversaw the exploration of the Kalumbila copper project in Zambia, which was sold to First Quantum for $260m. Alongside him Laurence Read was appointed as CEO, who has a track regard in a major independent mine development financing and transaction.With Crescent reassessed the extensive historical project dataThis has included site visits with strategic groups undertaking new, independent geological and engineering assessments, extensive relogging of historical drill data, creation of a fly through graded model of the resource and culminated in an economic report published in February 2019. Asked in Manilla recently for the rationale behind the strategic change towards Mankayan and the Philippines Laurence Read, CEO, said “Changing copper market dynamics means Mankayan is ready to be a standalone, underground mine and our focus is on delivering that. Copper is about to see a major upheaval in price due to demand issues and the Mankayan project is a tier 1 asset which you can drive directly to from Manilla airport.“The Mankayan project has grid power access, infrastructure, a highly skilled work force and as a block cave underground mine with a long life is not affected by the current Philippine restrictions on open pit mining. Over the last ten years the world copper supply shortage and improvements in mining techniques have meant that sustainable mining grades have fallen from 1% plus copper equivalent to slightly over 0.6% in just a decade. This means Mankayan with a life of mine copper equivalent grade of 0.63% to 0.65% depending on mining strategy is an attractive proposition with a Snowden resource estimate defining an indicated resource of 1.1 million tonnes of contained copper and 3.7 million ounces of contained gold and an inferred resource of 0.2 million tonnes of contained copper and 0.6 million ounces of contained gold.Highlights of the new independent economic study by Mining Plus released in February 2019 are11 different mining strategies modelledFor the first time, a Sub-Level Caving (“SLC”) ‘stepping stone’ scenario, with two main Block Caving (“BC”) routes identified for progression, with life of mine production grade in excess of 0.64% copper equivalent (“CuEq”).Various sub $19/t cost optionsThe study focused on delivering the project into production with highly robust copper equivalent production grade, with a high gold content and uniformly sub $19/t costs. The three main representative options summarized below, are taken from the 11 modelled (the option numbers being those used in the study) Asked what lay ahead in 2019 Laurence Read said; “We have a lot of important strategic decisions to make but what we aren’t worrying about is the copper and the gold in the ground or that this will be major mine for the Philippines. Picking the right path for the mid to long term is key for Crescent and Bezant, but whoever we work with to develop this mine will have access to significant amounts of physical, cost effective, copper and gold from Mankayan production and will be able to command a major strategic advantage in the global metals space for the next forty years.

Commentary

Philippine Resources - March 12, 2019

Defending our territorial rights through historical facts

By Marcelle P. VillegasOn 7 May 2009, China submitted the Nine-dashed Lines Map to the United Nations. Their map gobbles up large areas of the Exclusive Economic Zone (EEZ) and Extended Continental Shelf (ECS) of the Philippines, Vietnam, Malaysia, Brunei and Indonesia. China’s Nine-Dashed Lines Map shows that China is claiming 85.7% of the entire South China Sea. Their claim covers 3 million square kilometers out of the 3.5 million square kilometers surface area of the South China Sea. [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_SeaScarborough 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.

Commentary

Philippine Resources - March 12, 2019

How wars and historical events affected the mining industry

By Marcelle P. VillegasFor the past centuries, the mining industry in the Philippines was greatly affected by the changes of government or colonisers, events around the world and more. It seems that whenever there is war, there is also a rise in the demand in certain mineral resources or a fall in the production rate of some minerals.August is History Month in the Philippines as promoted by Government and Education sectors. The Philippines is rich in natural resources, cultural heritage and more noticeably, we are rich in history which brought progress or hindrance in economic growth through the years. Last August, during the Philippine Mining and Exploration Association (PMEA) Monthly Membership Meeting, one of the keynote speakers is Mr Hernulfo “Nonoy” Ruelo, Geologist Consultant. The title of his presentation is “Copper-Gold Discoveries and Mine in the Philippines - Understanding the Past, in order to make sense of the Current, and the Future”. It was a well-researched report and analysis on how historical events, like wars or change in leaders, affected the mining sector and the socio-economic status of the country. The presentation takes us back in time with some rare vintage photos from the past.During the pre-Spanish Period, the earliest use of metal in the Philippines by our Filipino ancestors was the use of copper for ornamentation, not for tools or currency. Other metals used were gold and tumbaga (copper alloyed with gold). “Gold was the major form of ‘currency’ among the early Filipinos and one of the first things they [ancestors] taught their children was the knowledge of gold and the weights with which they measured.” (From the book by Evelyn J. Caballero, 1996. “Gold from the Gods: Traditional small-scale miners in the Philippines”. Giraffe Books, Quezon City.( p 196 and 263) On note, the pre-colonial mining methods had no environmental impact on land, water, air and people.Pre-Spanish Period Mining in the Philippines started in the 3rd century when gold was traded with China and the Javanese empire where the height of this trade was during 12th to 14th century. The Chinese were the first foreign miners. Gold is both a commodity and a medium of exchange. When the Spaniards arrived in the 1521, gold was already being mined, traded and used as jewelry or ornamentation by the native Filipinos. In fact, 16th century Filipino noblemen were decked in gold.Colonial Period Under Spain 1500s - 1898: Paracale and Cordillera were the oldest goldfields. From 1500s - 1700s, gold was one of the tributes collected by the Spanish government and given to the King of Spain. In 1583 and 1595, an expedition was sent to mine in Cordillera but was a failure due to the resistance of the Igorots.“Gold mining before the coming of the Americans was primarily in the hands of enterprises organized in the Philippines by Spaniards and Chinese mestizos and Filipinos, with a few other companies trying, without success, to produce commercially.” (Ref. - Wirkus 1974)In 1600 to 1700, about 10,000 ounces of gold per annum were shipped to Spain, and the gold shipments to Spain increased from 1800 to 1895. For copper, the Spaniards opened the first copper mine in the country in 1842, called the Carawisan copper mine in Antique province. From 1864 to 1874, the Contrabro-Filipino Company operated Mankayan Copper Mine. Gold mining made its comeback in commerce in 1892 where concessions to foreigners were first granted. The British explorer, Frank Karuth of Philippine Mineral Syndicate, led the commercial-scale hard-rock and alluvial gold operations in Paracale District until 1895. (Ref. - Chaput 1987) Philippine Revolution 1896 – 1902: With the rise of the Philippine revolt against Spain, in 1896, mining operations at Paracale dwindled until 1902 when the Filipino-American War ended. The Organic Act of 1902 was created which organized companies, issued patents, and established the Geological & Mining Science Department. By 1927, gold was the third best export commodity and initiated by the Philippine (Manila) Stock Exchange.In the following years, the Mining Act of 1935 was released (Commonwealth Act 137) which introduced the Regalian Doctrine, the concept of Mining Lease, and the establishment of Bureau of Mines. The Americans invested US$ 34.2M in gold production. Mining for copper was reopened in 1936, the same time when the Japanese savvy for copper was high and led to the ‘discovery’ of the first large porphyry copper deposit in the country.Commonwealth Period 1937 - 1941: This period in Philippine history was considered a golden era when Manila was highly modernised and was one of the most beautiful cities in Southeast Asia. In fact, in 1937, we had the best and well-equipped airport in the Southeast Asia, the Nielson Airport. (This is now Ayala Triangle Park in Makati City, and the original Nielson Tower is now “Blackbird” Restaurant.) Although this elegant airport was primary used as an aviation school, it also paved the way for trade and commerce for foreign investors. Philippine Airline made its first commercial flight in 1941, from Nielson Airport to Baguio. The Philippines was the largest gold producer in Asia and second only to California in world production. During the American period, 9 million oz of gold was produced from 1906 – 1941.Japanese Occupation 1942 – 1945: Being a colony of United States of America, the Philippines got itself involved in war against the Japanese who invaded Manila in 1942. The Japanese took over Lepanto and the Hixbar mines (Rapu-rapu) and was able to mine and extract 11,000 tonnes of copper. No gold production was recorded. With the aggressive strategies of conquering their neighboring countries, Japan was unstoppable that time in their collection of natural resources that were needed to fuel their warships and planes and the production of weapons. Battleships Musashi and Yamato where the two giants in naval power that made Japan feared by other nations. The two battleships were defeated though in the Philippines during the Battle in Leyte Gulf in October 1945 which paved the way to the Liberation of Manila and eventually the whole country.Post-war Reconstruction 1946 – 1954: Those post-war years were hard times for all war-torn countries. However, with the need for repairs infrastructure after WWII, there was an increase in the global demand for copper. Some gold mines in the Philippines were rehabilitated but the problems were lack of capital and low market demand. Copper production re-started in 1947. Since Manila was the ground zero and battlefield of the war that ended WWII in the Pacific (Battle of Manila in 1945), there were serious damages in the country’s economy and on the mining industry.Korean War 1954 – 1960: For the Filipino soldiers who fought the Japanese during WWII, the Korean War was the first time for them to fight a battle in a foreign land. Although this war affected Southeast Asia directly, the gold prices maintained. However, in mid 1950s, the gold mines collapsed due to a recession period. The copper price rose slight due to high world demand. More Philippine copper mines opened. Vietnam War 1960-1975: In 1972, U.S. President Nixon took dollar off the gold standard. It was fixed at $35 since 1934, but gold prices are allowed to float free which devalued dollar to $38. In 1973, world gold price jumped from $38 to $120. World copper rate hit high at $0.90 in 1974. World copper mine production was at its peak.Martial Law 1972 - 1986: During Martial Law in the Philippines, copper price trended upward where the country’s copper production continued and boomed in 1980 where it reached its peak. It was in 1980 when Philippine copper production was recorded the highest at 306 Kt. However, the World Oil Crisis in 1973 - 1980 brought about a decline in copper demand. World Recession in 1982 – 1984 pulled down the copper prices. Philippine inflation devalued the Philippine peso and there was an increase in production costs, materials and equipment. The Global recession resulted in a decline in copper demand. The Philippine gold production was sustained and gold prices surged from 1978 to 1980. The modern Gold Bloom in 1980s brought about the rise of unregulated Small Scale Mining. In summary, the explanatory variables of growth and decline in PH copper industry in the 1950s-1980s are: - For Copper resources: risk capital or investments, development in the world’s copper market, technology, human capital in mining, domestic social, legal, and political environment .- For the gold industry: gold resources, competition, commodity price, production costs, technology (bulk mining, milling, treatment), damages – natural & man-made disasters(Reference). T.M. Santos 2001 . Growth of Copper Production: Determinants and Empirical Evidence. Social Science Diliman, July-December 2001. 2:2, 1-49.)There were other historical events in the Philippines that followed like:EDSA Revolution: 1986-1992 - gold averaged $381, copper $1.02 – There was investment uncertainty and several mines closed. New mining laws were crafted like the 1991 RA 7076 (Small Scale Mining Act). The 1987 Constitution replaced Leasehold into Agreements system.From 1990s – 2004, there was collapse of the local mining industry. However from 2004 – 2009, there was a revitalization of the mining industry with EO 270 National Policy Agenda – Mineral Action Plan. Gold price surged from $410 to $873. Copper production hit lowest in 2004 at 16 Kt since 1957. The year 2005 brought global gold boom where Philippine gold-copper mines had expansion and reopening.The Aquino Administration from 2010-2016 was within the Global Mining Boom period (2010 - 2013). It was a successful period for Philippine mine exploration, prospect drill-testing, and resource evaluation drilling. In conclusion, Mr Ruelo presented a list of challenges that miners will need to face at the present time, namely:- Fewer outcropping “easy-to-find” deposits are now left except in high-risk and “inaccessible” areas.- Current mining operations will encounter increasing real costs (labor, materials, energy, environmental, community impact) that will affect production.- The next generation of lower-grade copper/gold projects require significantly higher metal prices to justify development.- We need to discover high-quality or better gold/copper resources, even deeper ones that can be economically mined – e.g. in greenfields and brownfields.

Mining

Philippine Resources - March 12, 2019

PH Nickel Industry Association at the PH Mining Club

By Marcelle P. Villegas“Nickel is all around us. As popular myths and research continue fanning endless debates on mining, an unpopular truth remains, the Philippines holds a strong track record for safe, responsible and sustainable mining. These practices catapulted the country into the roster of top nickel exporters worldwide. “ (an excerpt from the video presentation of Phil. Nickel Industry Association)Last August, Philippine Mining Club event presented Mr Isidro C. Alcantara, President of Marcventures Holdings Inc. as keynote speaker and as representative of Philippine Nickel Industry Association, Inc. or PNIA.PNIA is a non-stock, non-profit association duly registered with the Securities and Exchange Commission. The association was established in 2012 with a goal to promote and develop the nickel mining industry in the country, and aims to represent the Philippine nickel industry as the single voice to champion its cause with various stakeholders. The mining industry is a major backbone of the Philippine economy, and for that, PNIA believes that the government and the private sector have a big role as partners in developing this segment in the economy.The speaker, Mr Alcantara has a remarkable background related with banking and finance. He is a senior banker and former President and CEO of the Philippine Bank of Communications (PBCom), Executive Vice President of Equitable PCIBank, Senior VP of HSBC-Manila, and served four years as a Director of the Bankers Association of the Phils. (BAP). He is a certified public accountant and graduated with honours as magna cum laude with a degree in Economics and Accounting from De La Salle University, Manila. He also took Special Studies in Finance at Wharton School, University of Pennsylvania, U.S.A.He began his speech with gratitude for the attendees of the event who gathered to listen to the message of PNIA about the mining community. He states, “…hopefully we can inform, clarify and provide a factual and objective picture of the real status of the Philippine nickel industry. The Philippine nickel industry in particular and the entire mining industry is under scrutiny for its supposed shortcomings and inadequate environmental compliances. We beg to disagree. We contribute to the national economy and more significantly in a major way to the specific towns and provinces we are based in. Based on the [27th] information from the MGB in the Caraga region where the nickel belt is, the total socio-economic contributions and payments amounted to 467 million.” “If you follow the foundational wisdom and thinking from monetary authorities, which I am an alumni of, the money released from wages and other payments, this is the velocity of money that they talk about, the circulation of money. The contribution in provincial areas is 3 to 4 times. In Metro cities, the circulation of money is 11 times. So when they talk of the mining industry contributing 70 billion, that is really a contribution of at least 300 billion. And that a truism that you check with the Central Bank.” Mr Alcantara states that they believe that mining is a force for good and that overall, the industry contribute significantly to the upliftment of the socio-economic lives of the people in their host communities, where before there were none. “In our communities, we have provided education from nursery to high school levels, built clinics and healthcare facilities, initiated livelihood projects and created jobs, extended scholarships that allow the college education for our indigenous brothers and sisters. Taxes that allowed our LGUs to build roads and bridges and constructed much needed hospitals to give emergency and primary healthcare services. We are the only business where we are mandated to contribute 1.5% of our operating cost [directly] to our host communities for poverty alleviation.” He also noted that they, the member companies of PNIA, are doing a great job in the environmental programs and that in fact, they do beyond compliance.Why is nickel one of the leading minerals in the industry? From PNIA’s report, nickel is one of the most versatile minerals on earth that is so powerful that it plays a vital role in the development of various industries. It is used in healthcare, agriculture, and communication. Nickel is all around us. How does mining in Philippine context shape up? From a video presentation by PNIA, it states, “Massive advances in technology have transformed and improved the mining productivity over the years giving birth to safer, more efficient and more sustainable techniques. Philippine nickel mines use contour mining method where the process of benching is adopted to properly patch or extend the slope, hence the term contour mining, because it follows the slopes of the mountains by making benches for access in mining. With this type of surface mining, the ore extracted is closer to the surface ranger from only 3 – 25 meters below the ground.” In order to limit its side-effects on the environment, their method systematically removes a thin layer of overburdened or top soil to extract the desired deposit.However, despite all these systematic methods and well-regulated mining practices, there are still endless concerns about their long-term effects on the environment. How then can we make mining environmentally sustainable? The answer is, environmental rehabilitation and reforestation.After the speech and presentation by Mr Alcantara, a panel discussion took place with Clarence T. Pimentel, Jr., Chairman Emeritus of PNIA and President/CEO of CTPCMC; Ferdinand Pallera, President, Citinickel Mines and Development Corp.; Engr. Cesar F. Simbular, Jr. President, DMCI Mining Corp.; Tulsidas Consunji-Reyes, Vice President for Marketing, DMCI Mining; and Antonio L. Co, President, Carrascal Nickel Corporation.About Philippine Mining Club:Running for 8 years now, the Philippine Mining Club is closely affiliated wiht the Melborne Mining Club. The group was formed to create better relationships across all areas of the mining industry whose aim is to uphold a professional networking environment in promoting the exploration, extraction and minerals industry of the country.

Mining

Philippine Resources - March 12, 2019

Strategic Synergies at the Mining Philippines 2018

By Marcelle P. VillegasMining Philippines 2018 International Conference and Exhibition was held last 18-20 September 2018 at the Sofitel Philippine Plaza Manila. It was a three-day event organised by the Chamber of Mines of the Philippines (CoMP) with the theme “Strategic Synergies: Communicating the Gains of Responsible Mining”. The mining summit aims to give emphasis to the many innovations, technologies, and interventions undertaken by the mining industry which is often unknown to most people. The event also focuses on the environmental programs for local communities, best practices in mining, and the Chamber’s communication strategies in addressing the rampant misconception about the mining industry.The Chamber of Mines of the Philippines is a professional association of the country’s largest mining, quarrying and mineral processing companies. The Chamber was established with an objective to promote the responsible exploration, development, and utilization of minerals. Day 1 of the event had a lively start when the General Headquarters Band of the Armed Forces of the Philippines led the Philippine National Anthem. This was followed by their upbeat music lineup starting off with Glenn Miller’s 1939 hit “In the Mood” and then a medley of songs that pays tribute to the rock legend, Freddie Mercury of the band “Queen”. Mr Gerard H. Brimo, the Chairman of the Chamber of Mines of the Philippines and CEO of Nickel Asia Corporation covered various important topics about the industry in his opening speech. Regarding the landslide in Benguet in September that was triggered by Typhoon Ompong and killed many small-scale miners, he said, "It did not take long for our detractors to point fingers at the mining industry in general, and that is one problem we have been experiencing over the years -- the lack of distinction between small-scale and the formal large-scale mining industry.”He states, “As we grieve for the small-scale miners and their families over the tragedy, we must go on record that we in this room, are not connected with small-scale activities in any way, and we have done so yesterday in the media… I believe we should also go on record that we are not against small-scale mining. They do have a role to play and it is a valid occupation, but the activity has to be done legally and with proper supervision."Mr Brimo also gave recognition to two members of the Chamber who won awards during the First Asean Mineral Awards (AMA), namely Oceanagold’s Didipio gold-copper mine for “Best Practices in Sustainable Resource Development in Mineral Processing” [1] and Nickel Asia Corporation’s Rio Tuba for “Best Practices in Sustainable Mineral Development Award” in the Mineral Mining Category. "Imagine that, amidst all the criticisms, the best mine and the best plant in the Asean region is right here in the Philippines, voted no less by the various Asean mining ministers," said Mr Brimo. "While we continue with the struggle, your participation in the Chamber activities by your membership and through conferences such as these, is much appreciated and we thank you."During a short break period, Mr Brimo had a quick interview by the members of the press. One of the topics discussed was regarding the House Bill 7951 or the Mining Tax Reform Bill filed by Rep. Estrelita B. Suansing of the First District of Nueva Ecija province last July 24. [2] Mr Brimo emphasized that the Philippines is at risk of losing investments in the mining sector if Congress passes the proposed law that will impose a 5% tax on all its metal and nonmetal mines, regardless if they were declared as mineral reservations or not. The HB 7951 could make mining companies suffer and overall, the country could lose quality investments which could affect around 100,000 families who are dependent on the mining industry.Mr Melo Acuna, journalist and radio broadcaster, asked the question, “What is the impact of the President's statements about mining and how will it impact on your investment and your partners?” Mr Brimo replied, “We're concerned particularly with the Mining Tax Bill that has been filed recently in Congress… We've analyzed it and what we've done is we've compared that mining tax structure with the very large mining countries like Chile, Peru, South Africa, Canada and Australia. The way to figure out if the tax structure is expensive or not, or fair, is to do comparisons. So we know the exact tax structures of mining in very big mining countries and we have made a comparison. And that bill puts us more expensive than the five very large mining countries that we have done comparative study on.”He describes the proposed law as, “punishing”. “We are talking to the legislator to see what can be done about it, because you can't expect investors to come here under that tax structure, but it's actually more than that. You put in an additional 5% royalty on gross revenues, and we in the nickel space, most of the nickel mines are already in mineral reservations, so a lot of us are paying that 5%. But copper and gold is a different thing. They have never been under mineral reservation. Prices are low. Everybody thinks they're making a lot of money but the reality is they're not. In fact, one of them is losing money and has lost money for the last two years. So, you introduce an additional 5% royalty to the tax structure and you run the risk of those mines closing down, and these are big mines. These are copper and gold mines, bigger than nickel. One of them in particular has a community of 20,000 people. So you can imagine the closure of one of those mines and the impact on the area if that happens.”Mr Brimo stressed that this proposed tax structure will be a problem for new projects. “If that bill passes, we are not going to see investments in our mineral sector anymore from quality companies. We want to attract in this country quality companies. Companies that are large, that are technically knowledgeable, that have a lot of resources, and that can do things properly. And they operate all over the world, so they know what they're doing. They do things very carefully. But they will not come here with a tax structure that is too expensive.”Therefore, with this possible forecast, how much investment do we expect to lose if this law pushes through? “There are three large copper and gold developments that are pending. I don't have the figures for one of them, but we're talking in the billions of pesos of lost investment, lost taxes, more importantly, employment and social development and that is critical.”Referring to first-class municipalities such as Claver in Surigao del Norte, Cantilan in Surigao del Sur, Toledo City in Cebu, and others, “What a formal large-scale mining industry does is that it develops entire areas in the countryside… You will see the development that takes place there. It is huge. These municipalities are all first class. And why are they first class? It's because of the mining industry that's there. And you will lose all that down the road. And for a country that is as blessed like us with mineral resources that would be a shame. I don't know of any mineralised country that does not encourage a vibrant mining industry to develop their natural resources. And we might just very possibly be the first, and that would be a shame, because we need exports, we need employment, we need countryside development.”Additionally, Mr Brimo also shared his insight about how taxes should be done in mining. “If you study the tax structure of these other mining countries, most of their mining taxes are on profits. They're not on revenues and that's the right way to do it because it is progressive. In other words, the more money you make, the higher your operating margin, [and] the higher the special mining tax rate [will be]. In our country, we do it in the reverse. We're very high in terms of the imposition of revenues and it's not geared towards the profits. And that is very evident in our studies and we've shared that with the DENR, MGB and DOF as well, and we continued to do dialogue with them to see where we can all end up here.”References:[1] Didipio Mine Wins Asean Mineral Awards – retrieved from the website of Mines and Geosciences Bureau [2] Gomez, Eireene Jairee. (20 Sept. 2018). The Manila Times. “PH to lose investments under mining bill – mining chamber”. https://www.manilatimes.net/ph-to-lose-investments-under-mining-bill-mining-chamber/443089/

Mining

Philippine Resources - March 12, 2019

Sec. Cimatu on “Reinventing Mining”

By Marcelle P. VillegasIn terms of taxes, fees and other charges of the Government to mining companies, how much are mining companies really contributing to the country? How much funds are mining companies giving to local communities through their social development programs? And moreover, at the present time, how may trees have mining companies planted on the land area that they have mined and rehabilitated? With all the negative media and misinformation about the industry where most people think that the mining industry is not contributing much in this country, DENR Secretary Roy A. Cimatu addressed these issues during his speech at the Mining Philippines 2018 last 18 September 2018 at Sofitel Philippine Plaza Hotel. Additionally, the Secretary emphasized the mechanics of “reinventing mining” for the benefit of people where they can utilize the mineral resources of the country. On Day 1 of the mining summit, Secretary Cimatu was in Baguio to attend to the problems relating to the landslide brought about by typhoon Ompong. On his behalf, Environment Undersecretary Analiza A. Rebuelta-Teh read his speech. The Secretary attended on Day 2 of Mining Philippines 2018.Mining Philippines Conference and Exhibition is an annual event that is organised by the Chamber of Mines of the Philippines. The event is a venue that showcase the achievements and best practices of mining companies. The participants also discuss current relevant topics that surround the mining industry. This year’s theme is “Strategic Synergies: Communicating the Gains of Responsible Mining”.Here is Sec. Cimatu’s speech during the Opening Session of Mining Philippines 2018.“To the members of the board of trustees of the Chamber of Mines headed by its Chairman, Mr Gerard Brimo, and also to the mine officers of the Chamber, Ambassador Delia Albert, Ambassador Martin Slabber from South Africa, Ambassador Win Naing of Myanmar, Ambassador Lý Quôc Tuân from Vietnam, and Canadian Trade Commissioner Crista McInnis, the Australian Senior Trade Commissioner Elodie Journet, and of course colleagues from the government and especially MGB Director Moncano and Assistant Director Uykieng. “To all the guests and participants to the mining summit, a pleasant morning. During the last forum on mining which the DENR convinced regularly as a venue to address with the mining companies the various issues confronting the industry, I mentioned about the need to reinvent mining as pronounced by the President. Why reinvent? Why not regaining and rebuilding as we call our rehabilitation efforts in Boracay? Why not reforming mining? “Reinvent means to change something so much that it appears to be entirely new. It means to take up a very different way of life. So why reinvent mining? Because that is what exactly the industry needs now. We need to change to be almost entirely new. We need to take up a very different way of life.“That is the only way to go if we are to preserve the industry’s gains in promoting sustainable mineral resources development. So how do we intend to reinvent mining? When I say “we”, not just “we”, the National Government. “We” includes the mining companies, the local government units and other stakeholders. Let us look first at where the mining industry is now.“According to reports the total Philippine metallic mineral production value advanced by 4% as of June 2018, from 52.42 billion pesos to 54.57 billion pesos year on year, or an increase of 2.14 billion pesos. The positive trend was brought about with the improved metal prices in the world market. In terms of gross value added, mining contributed 53 billion pesos during the first half of 2018. Mineral exports during the first quarter reached 1.1 billion dollars. Total employment during the same period totalled 215,000 workers. In terms of royalties, fees and other charges collected by the government from mining operations, a total of 644.4 million pesos was recorded with additional 292.6 million pesos in taxes, fees and charges collected by local government units from mining. As of July this year, the mining industry committed a total fund of 16.42 billion pesos for social development programs benefiting 966 barangays affected by mining operations.“In terms of environmental protection and enhancement programs, the amount committed reached 18.39 billion pesos and another 2.55 billion pesos for final mine rehabilitation and the commissioning programs. Under the Mining Forest Program 107 mining companies reported that they have planted 26,023.62 hectares of trees numbering 28,349,833.“So can we say, not that bad? Or maybe we should say we can do more or even better we should do more. And when we say that we should do more, we are reinventing mining. We are changing the industry’s way of life. Is the government on the other hand providing the enabling policy environment to support the growth of mining industry with high regard to environmental considerations? There are several policy issuances that I have signed as initial efforts to reinvent mining.“DENR Administrative Order 2018-13 Lifting the Moratorium on the Acceptance, Processing and Approval of Applications for Exploration Permit for Metallic and Non-metallic Minerals following the completion of the audit on all mining operations pursuant to DENR Memorandum Order 2016-01 or the Audit of All Operating Mines and Moratorium on New Mining Projects.“Administrative Order No. 2018-19 or The Guidelines for Additional Environmental Measures for Operating Surface Metallic Mines was issued to provide new environmental policies that will ensure sustainable environmental conditions at every stage of the mining operation and minimize the disturbed area of a mining project at any given time. “Administrative Order No. 2018-20 or Providing for a New Guidelines in the Evaluation and Approval of the Three-year Development/Utilization Work Program provides standards in the evaluation and approval of the said program that is consistent with the approved feasibility study, the provisions of mining laws, rules and regulations, and the terms and conditions of the mining permit and contract. The new guideline was also designed to provide for an efficient monitoring system of operating mines. The review conducted by the Mining Industry Coordinating Council or the MICC technical review teams showed that mining industry really needs to shape up as a sector.“Even if there are responsible mining companies, those which still disregard environmental laws unfortunately affect not just the overall image of the sector but also provides an impression of this malperformance of this industry in general.“The reviews specified major reforms needed. For example, on adequate mine tailings pond and the very slow rehabilitation of the disturbed mined areas. It also pointed out unacceptable practices regarding stock pile areas, location of tailing storage facilities, and dumping of toxic and hazardous waste. I believe that enforcement is critical to usher in a new era of doing mining in the country. Reinventing mining entails improving the MGB monitoring of operations and compliance of mining companies to mining and environmental laws, rules and regulations; enforcing fines, penalties, suspension and closure to demonstrate no-nonsense, putting-into-force compliance and promoting deterrence for commission of violations is imperative. Most importantly, reinventing mining in the Philippines is providing actual benefits to the people, who must benefit first and foremost from the utilization of the country’s mineral resources as pronounced by the President in several instances.“We can do more not by imposing additional taxes, or giving incentives, or implementing social development programs. We can do more by strictly complying with the protection and conservation of the natural resources to ensure that future generation will benefit. So let us continue undertaking reforestation programs as a mining sector. Let us implement progressive rehabilitation in our mining areas. Let us provide appropriate mitigating measures to protect our watershed and water bodies. But most of all, let us follow strictly the environmental guidelines in all aspects of mining operation.“As the scheduled re-opening of Boracay gets near, we will be able to demonstrate that effective enforcement and coordination among concerned agencies and stakeholders can lead to successful rehabilitation and improve environmental quality.“As a military man, I have received several commendations that anyone could be proud of, but the truth is, the things that we have done and accomplished to make Boracay “cessful no more” gives me more satisfaction than any military award that I have received, maybe because I know I am doing something for the environment, for our children’s future and our children’s children’s future. And now the challenge is for us all to work together to make something that we will all be proud of and satisfied. We should do more. We can change mining’s way of life. Let us change the face of mining in the Philippines, a sector that is capable to discipline itself, that has high regard for the environmental protection, one that works genuinely with the communities.“I would like to congratulate the Chamber of Mines of the Philippines and its partners in organizing this mining summit. As we engage each other in sharing experiences in discussing policy issues and recommendations, in just by getting to know more each other, we are undertaking efforts to unite the industry towards our common goal, sustainable development of our resources, economic upliftment of the people, and progress for our country. Maraming salamat po at mabuhay!”

Mining

Philippine Resources - March 12, 2019

Acid rock drainage management at Masbate Gold Project

By Marcelle P. VillegasFilminera Resources Corp. is a company involved in mining and quarrying of gold, silver, nickel, copper and chromite. Masbate Gold Mine was acquired in an acquisition in January 2013. It was in April 2010 when exploration drilling began. The mine site is located in Aroroy, Masbate (Region V) which is around 350km south of Manila. The mine site is a brownfield, an open-pit mine, and is a major gold producer in the Philippines. [1]Gold processing in a mine site could result into environmental issues if not managed properly. In the case of Masbate Gold Project, how do they manage the Acid Rock Discharge from the site?During the MinECon 2018 in Surigao City last June and the PMEA Monthly Membership Meeting last September, Engr. Elvira Pelleja- Acleta, Senior Mine Engineer of Filminera Resources Corp. presented the topic “Acid Rock Drainage Management at Masbate Gold Project”. Her technical presentation addressed various issues like environmental protection and rehabilitation in their gold mine project. “Acid Rock Drainage or ARD is the discharge of acidic water from the mine. It may come from the active pit or from dumps and stockpiles as a result of oxidation of sulphide minerals, predominantly Pyrite (FeS2).” [2]The chemical equation goes:Pyrite + Oxygen + Water = Iron hydroxide + Sulphuric acid FeS2 + O2 + H2O = Fe(OH)3 + H2SO4 (exothermic) This processing stage produces acid, salinity (in the form of sulphate, calcium, magnesium mainly), dissolved metals (iron, aluminum, and can also contain elements such as As, Cd, Cu, Mn, Pb, Se, Zn etc. and other trace metals based on mineralogy). The contact water can be acid or metallifeorus. It may also be neutral, alkaline and saline, depending on the balance of oxidation or neutralisation reactions. Carbonate minerals and silicates act as buffer for the acidity, thus maintaining elevated pH and low metal concentrations.Why is ARD a potential environmental hazard? According to her report, ARD is one of the key issues of the Mining Industry due to its potential for water contamination, possible damage to flora and fauna, and human health hazards when it contaminates drinking water, food crops and fish stocks. Additionally, ARD can increase soil erosion and dump stability issues, increase cost for closure, long-term liability and possible negative company reputation.The good news is, for the record, in prior years, they avoided mining potential acidic areas. In 2015, they have done preliminary studies with Environmental Geochemistry International (EGi). By 2016, more results came out and ARD awareness spread to the mining groups and other departments and contractors. Further studies were done in 2017 to determine criteria for segregation, instrumentation and monitoring commence cover design studies. This year, more site supporting, instrumentation, cover design completion and monitoring are executed. The objective of Masbate Gold Project is to create a Management Plan for ARD that is science-based, financially viable, globally acceptable using international standards and practices, compliant to local regulations, and the approach is preventive rather than reactive.In order to reach the objective, key programs are established and applied on the site namely:- Geochemical Testing - for classifying Potential Acid Forming (PAF) and Non Acid Forming (NAF) Waste Rocks- PAF/NAF Delineation and Modelling- Integrate Segregation Criteria into Mine Planning and Operations- Dump Cover Systems to ensure long term control of ARD- Oxygen and Surface Water Quality Monitoring Programs to ensure detection of ARD effects- Drilling campaign on existing Waste Rock Dumps - Continuous collaboration with EGi provides specialized services in mine waste geochemistry and mine waste managementGeochemical Testing and Leaching provides a scientific approach in identifying Potential Acid Forming (PAF) versus Non-Acid Forming (NAF) waste rocks. It is important to identify PAF vs NAF because the results are used for the PAF/NAF modelling and blocking. These models are produced by Leapfrog Software. Using Geovia Surpac, a software specializing in geology and mine planning, PAF/NAF are blocked together with High Grade and Low Grade Ore to produce dig blocks. The software provides information for material scheduling and selective handling. The next stage is integration into planning and operation where actual dig blocks are marked on the ground using flagging tapes. Ore spotter will now guide the Excavator and Truck Operators on material loaded and its destination. This prompts review of dumping strategy and monitoring.Dump Cover Systems are used to control oxygen advection/diffusion and infiltration. The system must also have the capability to neutralise by encapsulation (NAF outside/PAF inside).Following this is the rehabilitation of the final lift using with Compacted Barrier with Vegetation. Rehabilitation along the slopes minimizes erosion and water infiltration via evapotranspiration.References:[1] https://www.mining-technology.com/projects/cga-mining/[2] Elvira Pelleja-Acleta, Genn Russell Abad. “Acid Rock Drainage Management at Masbate Gold Project”

Company

Philippine Resources - March 12, 2019

CTPCMC creates bamboo plantation

By Marcelle P. VillegasThere are numerous entrepreneurs and environmentalists who have concluded from their research and studies that the bamboo is an excellent choice in a reforestation project. Last year, CTP Construction and Mining Corporation launched their Bamboo Plantation as part of their reforestation program.CTP Construction and Mining Corporation operates the Adlay Mining Project and Dahican Nickel Project in Surigao Del Sur. The company actively participates in the National Greening Program (NGP) of the Department of Environment and Natural Resources (DENR).From our previous articles about CTP Construction and Mining Corporation (PRJ Issues 2 and 3 – 2018), we had featured the company’s reforestation project and their notable implementation of environmental protection and rehabilitation in their mine site. The company launched Project Gaia in 2017 where their team is composed of women from Barangay Adlay who are assigned for the company’s reforestation activities (plant nursery operations, planting, landscaping and maintenance).The company has a variety of tree species in their reforestation program but why is the bamboo a special part of this endeavour? It is a grass, not a tree. Trees are traditionally planted to create or rehabilitate a forest, so why is a grass like bamboo an excellent choice in a reforestation planning, according to the bamboo experts? Mr Leo Dominguez, President of OLLI Consulting Group, Inc. and an advocate for bamboo planting states that there is an advantage in planting bamboos instead of trees. “I am a lawyer in the responsible mining industry. Since 2015, I have been advocating to the mining industry the planting of bamboo. Traditionally, the mining industry has planted trees in the rehabilitation of mine sites. By law, mining companies are required to spend 1.5% of their OPEX on SDMP or Social Development Management Programs. Trees are highly regulated. You cannot cut a tree without permits from the DENR." He further explains that, “Bamboo is a grass. Consequently, bamboo is not subjected to the same burdensome regulatory protocols as trees.”Additionally, the bamboo is very effective in cleaning the air compared with other plants or trees. According to the study of Mr Dominguez, bamboo works 400 times better than trees in terms of carbon sequestration. Mr Dominguez was a presenter at the Mining Philippines 2018 last September and in his report, he featured photos of CTPCMC as one of the mining companies who are currently advocates of planting bamboo for environmental and socio-economic reasons. Bamboos are also fast-growing, low-maintenance, resilient plants with high survival rate. Eventually when the bamboos grow in height, their upper stalks may be cut down, leaving the lower stalks on the grown for it to regrow again. The bamboo can be utilised for other purposes like as building materials for houses, furniture, bicycle framework, and more. It has a lifespan of 80 to 100 years. Therefore, they can provide livelihood to mining communities for decades. This is a remarkable benefit that not all plant or tree varieties may provide.In order to establish a mother source of bamboo for future bamboo production of the company, last September 2018, a total of 9 seedlings of bamboo planted at Area 1 (rehabilitated area) for initial stage. Species planted were Laak, Kajali and Guadua. These were planted by Mr Clarence “Carlo” J. Pimentel, Jr. (President and CEO of CTP Construction and Mining Corp. and co-founder of the Philippine Nickel Industry Association), Atty. Ross Romanillos and Engr. Charlo R. Basadre. Today, there are 580 bamboo seedlings produced from the nursery of the company with Laak species. From the startup nursery, CTPCMC Bamboo plantation was finally created in October 2017 where the planting on site started the following month. There were 301 bamboo seedlings planted in Dahican Nickel Project (DNP) and 300 for Adlay, therefore a total of 601 bamboo seedlings planted. They planted Giant Bamboo species at the 2B rehabilitated area of the mine site. Bamboo production and planting is a continuous activity as part of the company’s reforestation program.CTPCMC is 100% Filipino owned and has been operating since 2007. It is one of the top 5 nickel mines in the Philippines. It is also the second nickel mine in the Philippines that was awarded a triple ISO certifications namely, ISO 9001, ISO 14001, and OHSAS certifications last 2016 and in February 2018. It upgraded to latest versions namely ISO 9001:2015 (Quality Management System) and ISO 14001:2015 (Environmental Management System) along with its existing OHSAS 18001:2007, certified by TÜV Rheinland.

Events

Philippine Resources - March 08, 2019

1st Philippine Natural Resources Development Forum

The European Chamber of Commerce of the Philippines (ECCP) is organizing the 1st Philippine Natural Resources Development Forum on April 26, 2019 at Marriott Hotel Manila with the theme “Harnessing Natural Resources for inclusiveness and Sustainable Development”.The mining industry in the Philippines is a major economic activity but remains operating below potential. There is a considerable anti-mining sentiment in the country especially at the subnational levels where environmental impact and displacement of indigenous peoples caused by mining operations have been the focus of much debate. Small-scale mining is also contentious, due to poor regulations and overlapping policies between national and local government. The ECCP believes that the contribution to national development and share value can be further enhanced through better regulatory and enabling policies, best practices in value sharing, environment-friendly technologies and socially responsible investments.The 1st Philippine Natural Resources Development Forum intends to convene decision makers and other key stakeholders from the Mining (Metallic and Non-metallic subsectors) as well as Upstream Oil & Gas, Coal sub sectors to discuss challenges, opportunities, policy reforms and best practices in harnessing the country’s natural resources and their contribution to sustainable development.Visit https://www.eccp.com/events/?id=499 for more information.

Events

Philippine Resources - March 08, 2019

Renewable Energy and Energy Efficiency Philippines

Powering Future Energy SolutionsWitness the 2nd edition of the country’s most comprehensive energy trade event!The 3-day exhibition, RE EE Philippines 2019 will highlight ways and means to attain alternative energy advancements and productivity. Increase your audience reach as it brings together key players and top practitioners from the industry, while also inviting target visitors and some government authorities for building new profitable partnerships and a lot more proactive business opportunities. It will showcase a wide range of technologies suppliers and equipment from various segments in the industry including: - Solar- Wind- Hydroelectric- Biomass- GeothermalSupported by the Philippine Energy Efficiency Alliance (PE2), Renewable Energy Association of the Philippines (REAP) and Philippine Independent Power Producers Association, Inc. (PIPPA), this professional trade show is the best platform to build connections and transform it to mutually beneficial relationships.Renewable Energy & Energy Efficiency (RE EE) 2019 is just one of the successful energy series spearheaded by UBM, which includes ASEAN Sustainable Energy Week (Thailand), Renewable Energy India, Renewable Energy Myanmar, Renewable Energy Vietnam, Solar Asia and Green Energy Malaysia.Visit https://www.renergyphilippines.com/ for more information

Events

Philippine Resources - March 08, 2019

The Nickel Initiative 2019

THE EVENTThe Nickel Initiative 2019 is the premiere business event in the Philippines that tackles issues that cut across multiple industries involved in the nickel supply chain, its inter-relationships, and potential areas for collaboration.  Featured industries include companies involved in exploring, extracting, and processing nickel as well as businesses that utilize nickel as a key resource, such as e-vehicle, transportation, and infrastructure.OBJECTIVES- Enable discussions and identification of cross-cutting issues impacting nickel and other industries critical to economic and sustainable development.- Identify and pursue potential business and development opportunities for key industries in the Philippines, including nickel and other mineral industries, infrastructure, and e-vehicle.- Open doors for improved networking and collaboration among stakeholders and industry players locally and abroad. For more information: https://www.philippinenickel.org/the-nickel-initiative/

Commentary

Philippine Resources - March 07, 2019

Solar Lolas on the way to financial literacy

By Patricia A. O. BunyeI have written frequently about the journey of our “Solar Lolas”, seven Aeta women who trained at the Barefoot College in Tilonia, India under the “Tanging Tanglaw: Turning IP Grandmothers into Solar Engineers” project of Diwata-Women in Resource Development, Inc. and its project partners, the Land Rover Club of the Philippines and the Philippine Mine Safety and Environment Association. Five years after we first launched this project in 2014, we remain as excited and committed as we see the Solar Lolas making great strides.At the Barefoot College, where rheir training was made possible by the support of the Government of India through its Indian Technical and Economic Program, they learned how to assemble, repair and maintain solar panels for installation in their respective communities in Bamban, Tarlac and Gala, Zambales. The first batch trained from September 2014 to March 2015, while the second batch trained from April to September 2018. The first installation of solar panels in Bamban took place in 2016, with the installation in Gala following soon after. Rural Electrification Workshops (REW) where the Solar Lolas do their work, and which serve as community activity centers, have also been constructed. During typhoons, these REW have served as emergency shelters as well.In each community, “Lupong Solar”, or committees composed of 7 members (3 IP chieftains, 2 Solar Lolas, a lupon secretary and a collector) have been organized. The Lupong Solar is tasked with managing the funds collected from the users of the solar panels for future use when the panels would need to be repaired or replaced. The Solar Lolas who undertake the installation, maintenance and repair of these panels are also paid a modest stipend from these funds.One major milestone is that the Lupong Solar of Bamban has opened, with the assistance of Diwata, its own bank account with Chinabank’s Bamban Branch, in which they are now depositing their monthly collections. The whole process of opening their accounts took more than half a day, but it was an accomplishment that the Solar Lolas can be proud of.The Tanging Tanglaw Project also receives tremendous support from FWD Insurance which has designed a Financial Sustainability Training Program for Solar Lolas. The first formal training session, which was facilitated by trainors from Bayan Academy, was held on 04 December 2018 at Diwata’s training room at the Clark Skills and Training Center (formerly known as the “Clark Polytechnic College”). [Pursuant to a Memorandum of Agreement with the Bases Conversion Development Authority and the Clark Development Corporation, the Tanging Tanglaw Project is allowed the use of a training room formally known as the “BCDA Group Women’s Center” and a storage facility for its solar equipment.One activity during the training session was to construct a model community by using pictures, drawings and cut outs. Although the participants were divided into different groups, their envisioned model communities contained the same features: water, schools and concrete homes. In this regard, Diwata has been looking into how it may assist the Bamban community in improving its water supply. Volunteers from the UP National Institute of Geological Sciences have conducted the necessary studies, but the actual funding and implementation of the water project will have to be deferred.Although the training session was conducted informally, a number of more sensitive or serious concerns were elicited from the discussions, including the participants’ thoughts on family, government and even discrimination. They also expressed the desire to implement culturally appropriate conservation and development programs. The discussions were a good starting point for further engagement with them, particularly on short, medium and long term developmental interventions. To make the program more meaningful and impactful, there is a need to calibrate their expectations versus the actual programs that can be delivered. Moving forward, we will have to focus on the need for livelihood projects for the communities. Currently, majority of the community members are farmers. They produce root crops, vegetables and raise poultry. Other sources of income come from charcoal production and wild animal hunting. Other tribe members also work in the lowlands as construction workers.While Diwata has been engaged with these communities for five years now, there is still so much to learn about them, particularly their dynamics and cultural norms. It is a continuing lesson in being open and patient, and most importantly, not imposing our ways on them. It never ceases to amaze me how far our Solar Lolas have come and how they have been transformed by the Tanging Tanglaw Project. It will certainly be exciting to accompany them further on this journey to financial self sufficiency. Patricia A. O. Bunye is a senior partner at Cruz Marcelo & Tenefrancia and head of its mining and energy practice. She is also President of Diwata-Women in Resource Development, Inc. Questions and comments are welcome at po.bunye@cruzmarcelo.com.

Place your Ad Here!

Commentary

Philippine Resources - February 28, 2019

How Do You Solve a Problem Like Malampaya?

The Malampaya Deepwater Gas-to-Power project (“Malampaya”) located in Northwest Palawan, employs deepwater technology to draw natural gas that fuels three gas-fired power plants and provides 30% of Luzon's power generation requirements. Operating under Service Contract (“SC”) No. 39, the project is a joint undertaking by the Department of Energy (“DOE”) and Shell Philippines Exploration B.V. on behalf of joint venture partners Chevron Malampaya LLC and the Philippine National Oil Corporation Exploration Corporation. Malampaya delivers through six (6) Gas Sales and Purchase Agreements and fuels 2,700 MW of power stations as baseload plants and an additional 500+ MW operating as mid-merit and peaking plants. It produces an average of 380 million standard cubic feet per day. Data from the DOE indicated that given the present production level and continuous decrease in reservoir pressure, drop in supply is expected by 2022. Recoverable reserves at the end of field life is 3.08 to 3.29 trillion cubic feet. SC 39 will expire in 2024 with no certainty in an extension and while it may have enough gas, this may not be sufficient to last beyond five years. This comes as domestic electricity consumption is likely to reach 50 million kilowatts in 2040. The Philippines in 2017 produced half its power from coal, a quarter from renewable energy and 22% from natural gas. It is imperative then that the country urgently finds a replacement through new petroleum discoveries once the Malampaya gas field is depleted.Liquified Natural GasThere are currently no sufficient remaining resources from the Malampaya field or other potential upstream developments to justify new natural gas infrastructure development. The only reliable source of new gas would be imported liquefied natural gas (“LNG”) ensuring supply security and sustainability. As there are no existing infrastructure for importing LNG, the Philippines cannot access the gas market for industrial, commercial, and transportation. In anticipation of the Malampaya field depletion, the government is pursuing LNG projects and several foreign companies in partnership with domestic entities have committed investments in LNG importation facilities. Leading the pack is Energy World Corporation (“EWC”), which reported that the DOE has issued to affiliate, Energy World Gas Operations Philippines, Inc. a permit to construct, own and operate an LNG import terminal and re-gasification facility in Pagbilao Grande island in Quezon province. EWC said the permit would enable the completion date for the first tank of the LNG hub to be aligned to the commercial operation date of the associated 650 MW power plant and the National Grid Corporation of the Philippines switchyard expansion, and the construction of the second tank. The 650 MW plant has been recognized as the anchor off-taker of the LNG project which consists of two 130,000 bcm LNG tanks, a dedicated jetty and marine infrastructure as well as re-gasification and other ancillary facilities. Fitch Solutions earlier reported that the start up of LNG import terminal has been delayed due to difficulty in obtaining access to existing local transmission infrastructure, most of which is dominated by coal-fired power generators.The state-owned Philippine National Oil Company (“PNOC”) is developing a USD 600 million facility to be used to receive, store, re-gasify and distribute LNG. PNOC announced that it will start its tendering process for its LNG import facility. PNOC will be assuming minority stake in the project – as referenced on the joint venture rules set forth by the National Economic and Development Authority, in which the company can assume equity of not more than 50-percent. The technology preference will be a floating storage re-gasification unit and its capacity will be initially at 3.0 million tons per annum. PNOC has requested the DOE to declare the project as an Energy Project of National Significance under Executive Order (“EO”) No. 30.Meanwhile, the Philippines has become a new front in China and Japan's infrastructure rivalry as companies from both countries bid to build the country's first LNG terminal. Both Tokyo Gas and the state-owned China National Offshore Oil Corp. (“CNOOC”) have partnered with domestic companies.FGEN LNG Corp, a wholly-owned unit of First Gen Corp. of the Lopez conglomerate, signed a Joint Development Agreement with Tokyo Gas to build LNG terminals. The project will be located in Batangas Province, where First Gen operates four (4) gas-fired power plants that have a total capacity of 2,000 megawatts. The plan calls for building a terminal that will re-gasify and supply 3 to 5 million tons of LNG imports annually to the power facilities. The project is expected to cost more than $700 million, with First Gen taking an 80% stake in the operating company. FGEN recently filed with the DOE a notice to proceed with the construction of its proposed Batangas LNG terminal project in the First Gen Clean Energy Complex in Batangas City. The Japan Bank for International Cooperation is likely to fund the Tokyo Gas project if it is approved. It would be the first Japanese-built LNG terminal overseas, a core part of Japan's effort to boost infrastructure exports.On the other hand, CNOOC, a pioneer of China's LNG industry having built its country's first terminal in 2006, formed a consortium with Phoenix Petroleum Philippines and submitted a proposal for an LNG facility on November 2018. Phoenix Petroleum recently announced that the DOE granted Tanglawan Philippines LNG Inc. the notice to proceed to build the facility. Tanglawan plans to break ground by 2019 and aims to start commercial operations by 2023. The CNOOC consortium is thought to have the political edge since Phoenix Petroleum is owned by Dennis Uy who is perceived to be close to President Rodrigo Duterte. Petroleum Geopolitics in the South China SeaDue to the geologic fact that most of the Philippines’ most prospective petroleum acreage lie in Northwest Palawan and the disputed waters in the South China Sea, improving bilateral relations with China remains key for the Philippines to improve its hydrocarbon reserves and production growth outlook.According to The Diplomat, China’s assertion of sovereignty over the disputed areas and entering into joint oil and gas exploration with other claimant states in the latter’s exclusive economic zones somewhat legitimizes China’s nine-dash line claim. China is adopting a carrot and stick approach in addressing this diplomatic issue. On one hand, Vietnam was threatened with force over its unilateral exploration activities in waters claimed by China. Conversely, offers of joint exploration with Brunei and the Philippines, which opted for pragmatism and seem willing to skirt contentious sovereignty issues, are framed as partnership with promises of technical support, capital, and wider investment. Prof. Jay Batongbacal, a maritime law expert postulates that to make any joint exploration deal work, the Philippines must overcome two major legal problems: 1) internationally, how to justify its acceptance that China contingently shares the petroleum resources within its continental shelf after an international arbitration award clearly declared that no plausible claim exists; and (2) domestically, how to accommodate any petroleum development not under its sole jurisdiction, control, and supervision but rather on a shared, co-equal basis with another state.MOU Between the Philippines and ChinaIn pursuit of an acceptable legal framework, the Philippines signed a Memorandum of Understanding (“MOU”) with China against the backdrop of brewing energy security concerns, years of negligible offshore exploration, declining upstream investment, and depleting resources in the Malampaya gas field.The MOU on oil and gas development in the West Philippine Sea signed during President Xi Jinping’s visit to Manila, creates a body that will study how the two countries can pursue joint exploration and development. The MOU does not mean the immediate conduct of joint exploration or joint development of marine resources. However, it paves the way for the crafting of a program on how such joint ventures can happen in the future. Department of Foreign Affairs (“DFA”) Secretary Teodoro Locsin, Jr. described the MOU as a "non-legally binding framework.” As to the geographic coverage of the framework, Locsin states that the agreement is designed to "govern an area once that area has been agreed upon according to the framework.” Supreme Court Senior Associate Justice Antonio Carpio, the leading advocate of Philippine rights in the West Philippine Sea, believes that the MOU allows only “cooperation in oil and gas activities” and is not violative of the Constitution. Carpio also assumed that the service contracts to be entered by CNOOC will exactly follow the model service contract of the DOE where the natural resources covered by the contract belong to the Philippines and the contractor must comply with Philippine laws, rules, and regulations. If such regulations are followed, CNOOC would be merely a subcontractor of the Philippine service contractor or an equity holder of the Philippine service contractor. “Clearly, under the signed MOU, there is compliance with the Philippine Constitution and there is no waiver of Philippine sovereign rights under the arbitral ruling,” said Carpio. The real test according to Carpio will be if the “cooperation agreements” to be finalized in twelve months, will involve service contracts in which Philippine law will govern the oil and gas activities with China. The answer lies with the working group and intergovernmental committee formed by the MOU composed of officials from the DFA, Chinese Foreign Ministry, DOE, and Chinese Energy Ministry, which will work out a program of cooperation that could lead to joint exploration.Unlocking the Petroleum Potential of the Disputed Areas Following these developments, the DOE has indicated that it is recommending to the DFA the lifting of the force majeure imposed in 2014 on Service Contract 72 in Recto Bank (Reed Bank) in response to the request of PXP Energy Corp./Forum Energy.SC 72’s Sampaguita Gas Field holds substantial volume of potential gas reserves, according to PXP, citing verified data from seismic surveys originally conducted in 2011. “The interpretation of these surveys was carried out by Weatherford Petroleum Consultants in 2012. The report indicated the Sampaguita Gas Field to contain contingent resources of 2.6 trillion cubic feet (TCF) of gas in place,” the company said. “The 2D seismic data were reprocessed in 2013 and were subsequently interpreted, aided by gravity-magnetics data by Fugro (2012) and Cosine Ltd. (2015). In 2015, Arex Energy produced a report on the north bank area and estimated prospective resources to be 3.1 trillion cubic feet.” PXP cautioned however, that the development of SC 72 must commence not later than 2027 as it would take at least six years from start to first gas. The contractor is committed to spend at least $80 to $100 million to fully appraise the Sampaguita gas field and other identified prospects within its contract area. The Philippines began exploring the area in 1970 and discovered natural gas in 1976. U.K.-based Forum Energy acquired the concession in 2005 and became its operator. PXP holds a 78.98 percent interest in Forum Energy, which in turn has a 70 percent stake in SC 72. In October 2018, PXP announced that Dennison Holdings, another company owned by Dennis Uy, would subscribe to 340,000,000 PXP shares bringing its stake to 14.78% of PXP after the transaction. PXP, which is also negotiating with CNOOC for another potential joint exploration in the South China Sea, will use the proceeds from the share sale to fund its exploration activities and other oil assets within the Philippines. Manuel V. Pangilinan, Chair of PXP remarked that the company is "interested to participate" in Dennis Uy's Tanglawan LNG project with CNOOC.The US Energy Information Administration (2013) estimates the region around the Spratly Islands to have virtually no proved or probable oil reserves. Industry sources suggest less than 100 billion cubic feet in currently economically-viable natural gas reserves exist in surrounding fields. However, the Spratly Island territory may contain significant deposits of undiscovered hydrocarbons. US Geological Survey assessments estimate anywhere between 0.8 and 5.4 (mean 2.5) billion barrels of oil and between 7.6 and 55.1 (mean 25.5) trillion cubic feet of natural gas in undiscovered resources. Expiring Coal Operating ContractsCompounding the Malampaya depletion are expiring coal operating contracts (“COC“) under Presidential Decree No. 972 known as “Promulgating an Act to Promote an Accelerated Exploration, Development, Exploitation, Production of Coal” (1976), that currently are producing and with existing proven reserves lasting beyond expiration. The fifty-year term limit for contracts involving coal exploration and production is enshrined in the Constitution. The Philippine Conventional Energy Contracting Program (“PCECP”) for coal established under DOE Department Circular (“DC”) No. 2017-09-0010 mandates the issuance of new COCs over these “open” areas upon expiration of the 50-year term. Under the current guidelines, the COC contractors will be required to prematurely cease production operations, relinquish the COC area to be qualified for re-application and/or nomination, and hope that they will be awarded with new COCs over their previously-held contract area. However, the COC contractors if they have to undergo the present PCECP process, do not have the certainty of getting the COC awarded to them. This will result in the premature cessation of continued profitable production operations.Some COC contractors have existing proven reserves lasting beyond the expiration of their COCs, and from a technical and economic perspective, they recognize the feasibility and the potential need to continue and extend operations of their COCs beyond the 50-year term limit. The extended period of operation on these COCs will allow continued coal production and maximum utilization of existing production assets and facilities giving rise to uninterrupted revenue to both COC contractors and government. Further, since the present COC contractors have a good understanding of the geological conditions and mining processes involved in their operations, these proprietary information will generate additional reserves and potential resources as determined from advance exploration, a clear advantage over a new COC contractor.The cessation in production operations will certainly result in premature mine abandonment and rehabilitation as there will be no subsisting contract with the government that will allow COC contractors to continue its operations. While the COC contractors are undergoing the process set by present guidelines, they will be hesitant in allocating funds and resources for the care and maintenance of idle facilities without commercial confidence that there will be an award of a new contract over the same COC area. Consequently, for areas with plan of developments that will exceed the 50-year term limit, aggressive production strategies within the remaining term of the COC will need to be adopted to ensure the recoupment of investment costs, as opposed to a deliberate and well-planned production operations strategy to better manage coal reserves that would ultimately yield a fully optimized coal production.More importantly, coal mines are major suppliers of downstream power facilities. Off-taking power plants need stability of supply from coal mines. Off-takers will not enter into long-term fuel supply agreements from COC contractors whose COCs are expiring. Also, in the absence of stable coal supply agreements, project and loan financing of new power plants are difficult to obtain. Coal mines are potential energy projects of national significance under EO 30 in light of the expected depletion of the Malampaya natural gas field.Nuclear Energy OptionNuclear energy can also be a viable alternative power source as a substitute for Malampaya with the proper legal and regulatory framework in place. In January of this year, the House of Representatives has approved on third and final reading a bill that provides for a comprehensive regulatory framework in harnessing the peaceful uses of nuclear energy. Consolidating eight related administrative proposals, House Bill No. 8733 provides for the creation of the Philippine Nuclear Regulatory Commission (“PNRC”) as an independent central nuclear regulatory body. The measure aims among others to harness the peaceful and beneficial uses of nuclear energy in power generation establishing a legal and regulatory framework for the regulation and control of the peaceful uses of nuclear resources; manage radioactive waste; and establish a legal and regulatory framework to prevent, detect, and respond to unauthorized activities involving nuclear materials. PNRC will ensure consistency with the nation’s obligations under relevant international instruments and modernize the nuclear civil liability and compensation regime in line with internationally-accepted standards.Among PNRC’s other functions are to: (a) issue regulations on financial capability of operators to cover liability for nuclear damage; (b) inspect, assess, and monitor activities to ensure compliance; (c) coordinate with other agencies on health and safety, environmental protection, security, and transportation of nuclear and related dangerous goods; and (d) act as the national authority on nuclear safety, security, and regulatory matters relative to the International Atomic Energy Agency. PNRC will also establish a Nuclear Waste Management Fund and set aside a portion of the payment for the electricity generated from the nuclear energy use which shall only be utilized for the safe disposal of nuclear waste, to include site research, transport, and final geological disposal. PNRC shall be headed by a Commissioner, appointed by the President and shall be assisted by four Deputy Commissioners and an Executive Director who will assist them in the discharge of executive, administrative and planning functions of the body. PNRC shall likewise have an Advisory Board chaired by the Department of Science and Technology Secretary, with the Secretary of the Department of Health as vice chair, and the Secretaries of the Departments of Energy, of Environment and Natural Resources, of National Defense, of Trade and Industry, and of Agriculture as members, as well as some five members from the academe or non-government organizations. All powers, duties, records, files, and assets pertaining to nuclear and radioactive materials and facilities of the Philippine Nuclear Research Institute shall be transferred to PNRC.Geothermal EnergyAnother viable alternative is putting on stream the untapped geothermal fields in the country. Recently the Philippines has dropped down to number three in the global ranking of geothermal energy producers. Based on the report of Climate Policy Initiative (2015), 45% of all renewable energy projects in Asia are either marginally bankable or not bankable at all due in part, to the lengthy process of securing required permits, licences and land access agreements. Another issue is grid connectivity. The amount of effort required for all the different aspects of the process means it can take years to achieve a bankable solution. Geothermal development’s high costs of field development, coupled with the high risks associated with resource exploration and drilling, pose a significant barrier to private sector financing.Despite the ambitious deployment targets set by the DOE that recognize the potential of geothermal to contribute to the energy mix, there is a need to balance the need to reduce private sector risks and incentivize investment while minimizing costs to the public sector. Needless to say, streamlining the permit process by government regulators will have an impact on geothermal development, as shorter project periods would reduce uncertainty for policy and market dynamics when modeling economic returns. Geothermal projects are characterized by significant upfront capital investment for exploration, well drilling, and the installation of plant and equipment. But once the geothermal projects are placed in commercial operation the fuel source is secure for the tens of years of expected lifetime with a steady revenue stream.Investment Opportunities and ChallengesInvestment opportunities abound in the power sector as there is a need to supply the natural gas requirement of the existing gas-fired plants when the Malampaya field shuts down. According to the Philippine Energy Plan prepared by the DOE, the country will need 43,765 MW by 2040; 14,500 MW will be for mid-merit and 4,000 MW for peaking. Renewable energy capacity is poised to increase from its 2010 level of 5,000 MW to 2030 level of 15,000 MW and due to its intermittent nature, natural gas-fired power plants can complement when these plants will not be running. Additional potential demand for LNG will come from off-grid or missionary islands in replacement of existing diesel-fired power plants. LNG will primarily be consumed in the power sector, but will soon cover non-power applications such as in the industrial processes, transportation, commercial and residential sectors.More incentives should be given to upstream natural gas exploration so as to have a viable and stable replacement to the Malampaya gas field and enhance the economic feasibility of marginal deposits. While the backbone of the upstream natural gas industry is now in place, it was brought about by a lack of a comprehensive regulatory framework to guide natural gas industry operations in the Philippines. This gap was addressed through contractual agreements in service contracts and ad hoc arrangements between the regulators and service contractors. The Philippines does not have a separate Natural Gas Act that establishes administrative authority and accountability for the gas sector in a single agency. Although the DOE has legislative authority to promulgate regulations, broader issues regarding access and pricing have not gone beyond expressions of policy intent. The DOE has addressed issues affecting Malampaya through amendments or interpretation of service contracts. As a result, gas sector policy is largely driven by upstream considerations according to issues on which the service contractors have sought clarification as amendments to the original contract. In reality, the present regulatory regime for gas exploration and development is seen to limit the competitiveness of gas to replace oil products except for high cost products such as liquefied petroleum gas and diesel in industry and even residential electricity. This may not necessarily apply to other lower cost gas field developments than Malampaya, which has a deepwater occurrence. Royalty and taxes account for about half of the gas price. Reducing these components will transfer the benefits of developing natural gas directly from the government to the consumers through lower electricity prices. Increased use of natural gas will, in turn, provide economic benefits through foreign exchange savings from foregone oil importation and reduced environmental impact of the country’s overall energy balance.ConclusionThere is an urgent need for more energy sources with the depletion of the Malampaya field. Unless the government acts with dispatch, the power situation does not look good as the import facilities for LNG to replace the indigenous gas must be operational by 2024. Fortunately, Philippine energy regulators have taken a technology-neutral stand on possible solutions to the country’s growing demand for energy by looking at all available options. Investments in energy infrastructure will always be driven by the combination of a strong energy supply imperative, increasingly liberalized energy sector, ambitious capacity targets and a relatively stable off-take mechanism. Petroleum exploration and development resources particularly in the Northwest Palawan basin and disputed areas of the West Philippine Sea are fraught with technical operational complexities, cost enormous sums of money, and certainly dictated by externalities arising from the country’s relation with China. The two countries’ cooperation has taken a broader energy partnership narrative in light of the present administration’s more conciliatory stance toward China.Fernando “Ronnie” S. Penarroyo specializes in Energy and Resources Law, Project Finance and Business Development. He may be contacted at fspenarroyo@gmail.com for any matters or inquiries in relation to the Philippine resources industry. Feel free to follow Atty. Penarroyo on LinkedIn (https://www.linkedin.com/in/fernando-s-penarroyo-2b8a7312/)References:Batongbacal, Jay, Philippine-ChinaJoint Development Talks Still at an Impasse, Despite Green Light, 13 April 2018, https://amti.csis.org/philippine-china-joint-development-impasse/DOE Now Amenable to Lifting Reed Bank Oil Exploration Ban, 04 December 2018, https://www.doe.gov.ph/energist/doe-now-amenable-lifting-reed-bank-oil-exploration-banEndo, Jun; Tabeta, Shunsuke; Sugiura, Yuta, Philippines’ First LNG terminal Sought by China and Japan, Nikkei Asian Review, 18 December 2018, https://asia.nikkei.com/Business/Business-Trends/Philippines-first-LNG-terminal-sought-by-China-and-JapanJacob, Don Honor, Development Plans in the Emerging Downstream Natural Gas Industry, Department of Energy, Prepared for the E-POWER MO! Communicating Efficiency Across Energy Sector, 24 April 2018, https://www.doe.gov.ph/e-power-mo-communicating-efficiency-across-energy-sector-baguio-cityKuo, Mercy A., The Geopolitics of Oil and Gas in the South China Sea, Insights from Eufracia Taylor and Hugo Brennan of Risk Consultancy Verisk Maplecroft, The Diplomat, 12 December 2018, https://thediplomat.com/2018/12/the-geopolitics-of-oil-and-gas-in-the-south-china-sea/Philippines Oil and Gas Report, Fitch Solutions, 01 January 2018Ranada, Pia, Oil Deal with China May Be Solution to Sea Dispute – Carpio, Rappler, 07 December 2018, https://www.rappler.com/nation/218431-carpio-says-oil-deal-with-china-may-be-solution-west-philippine-sea-disputeRanada, Pia, PH-China Deal on Oil, Gas Dev't Creates Body to Study Joint Exploration, 21 November 2018, https://www.rappler.com/nation/217185-philippines-china-deal-oil-gas-development-creates-body-study-joint-explorationRosario, Ben, House OKs on Third and Final Reading Bill on Use and Regulation of Nuclear Energy, Manila Bulletin, 18 January 2019, https://news.mb.com.ph/2019/01/18/house-oks-on-third-and-final-reading-bill-on-use-and-regulation-of-nuclear-energy/South China Sea - International - Analysis; U.S. Energy Information Administration, 07 February 2013, https://www.eia.gov/beta/international/regions-topics.php?RegionTopicID=SCSValerio Micale; Padraig Oliver, Lessons on the Role of Public Finance in Deploying Geothermal Energy in Developing Countries, Climate Policy Initiatives, August 2015, https://climatepolicyinitiative.org/publication/lessons-role-public-finance-deploying-geothermal-energy-developing-countries/Velasco, M. M., PNOC Kicks Off Tender Process for $600-M LNG Terminal, Manila Bulletin, 10 September 2018, https://business.mb.com.ph/2018/09/10/pnoc-kicks-off-tender-process-for-600-m-lng-terminal/

Company

Philippine Resources - February 28, 2019

The Silver Coconut Carbon Versus Precipitation For High Silver Ores

Whenever flowsheets are considered for treatment of silver ores, the conventional approach is in favor of a Merrill-Crowe processing circuit rather than CIL/CIP. This is understandable when the historical development of CIP is considered. What has been disregarded is the fact that for the last 30 years there have been ClP plants successfully treating ore with high silver/gold ratios. The paper presented addresses the continuing debate on the use of carbon for silver recovery and seeks to explain the origin of the Silver Coconut 'myth'. Since many major gold projects contain large amounts of silver, this discussion is of particular interest to the region. During the 1970’s and 1980's significant advances in gold processing technology centered around CIP. Many of these developments occurred almost in isolation on three different continents. Cross-pollination of ideas was slow despite the excellent work done by international conferences. Prior to the commercial application of CIP both North America and South Africa had well proven Merrill-Crowe processes for most gold operations. CIP was initially developed in North America but further refined in South Africa where it became the major process for gold recovery.Its popularity quickly grew internationally, in particular for the treatment of low grade oxide deposits. The high clay content in many oxide ores proved a challenge for the liquid/solid separation step with Merrill Crowe. Although South Africa made major advances in CIP technology, there was no need to address the treatment of silver ores since South African ores do not contain any significant amount of silver. Australasia saw the development of several operations having high silver levels designed with CIP circuits. Several of these plants encountered processing problems due to the high silver content. In nearly all cases this was caused by an under-sized elution plant. The operations that were more successful such as the Martha Hill Project in New Zealand were those using the AARL elution system, which is more flexible than other elution systems owing to its ability to treat higher carbon flows. However, the publicity generated by the unsuccessful projects overshadowed the successful ones. The resultant confusion concerning CIP and silver has persisted to the present day. Flowsheet OptionsThe basic flowsheet choice is between zinc precipitation (Merrill-Crowe) (Figure 1) and carbon adsorption (CIP) (Figure 2). Various hybrid combinations of these two options are also considered as a compromise. A detailed description of the processes is not provided here as this is well described elsewhere. (Ref 1). The hybrid options are worthy of some discussion as they attempt to overcome some of the perceived problems with the two basic flowsheets when applied to high silver ores. The first hybrid option is to treat thickener overflow by Merrill-Crowe to reduce the grade of solution in the thickener underflow reporting to a subsequent CIP plant. It is believed that this proportionally reduces the carbon treatment rate. In fact, as the solution grade decreases, due to thickener feed dilution so does the carbon loading. Halving the solution grade does not halve the carbon treatment rate. Gold and Silver loading onto carbon is an equilibrium process, therefore, the lower the solution grade, the lower the carbon loading. The second hybrid option is the replacement of the electrowinning step by zinc precipitation. However, there are hidden cost implications in this route, which are not always considered. Treatment of high silver grade ores usually involves very large masses of recovered metal, up to several hundred times the weight of the gold recovered. In practice the electrowinning step becomes easier with high silver because a stainless steel wool cathode can be used. The deposited silver/gold slime is simply washed off the wool, filtered, dried and directly smelted with minimum flux usage. New cell designs also allow metal sludge removal without taking the cathode out of the electrowinning cell, thus reducing labour input. The final flowsheet selection is made through the economic comparison of capital and operating costs for the various options. The factors included in the assessment have previously depended very much on the degree of understanding of the metallurgical process. The following sections describe the testwork and modelling required to make a comprehensive assessment of the f!owsheet options. Testwork & ModellingA comprehensive computer model has been developed to study and optimise the CIP flowsheet. (Ref 2). The model includes the leach, adsorption and elution processes using data generated in specifically designed testwork. Leach and carbon design parameters are derived from the testwork which are fed directly into the process model. Capital and operating information is contained within the model which then allows a full optimisation study to be carried out for the cyanidation and metal recovery areas. Variables examined are Leach time (number and size of leach tanks); Adsorption stage (number and size of tanks); Degree of integration between CIP and CIL; Carbon concentrations and loadings and Elution plant size. The specific testwork techniques to derive the appropriate model parameters are now well established. The laboratory scale test equipment has proven scaleup factors which have been successfully demonstrated on numerous plants, with both high and low silver values. A bulk leach test is first undertaken to produce sufficient sample for the adsorption testwork. The leach curve derived from this test is described by an equation which demonstrates the fast and slow leaching and unleachable components of the ore. The adsorption testwork examines the carbon kinetics, equilibrium loadings and fouling factors for both gold and silver. The derived data is then used along with the leach parameters to optimise the circuit design. Gold and silver are examined independently. The silver flowsheet is first optimised as this tends to determine the size of the plant. The gold parameters are then checked to ensure acceptable performance. The Merrill-Crowe flowsheet is not modelled in the same ways since its' performance is fairly well fixed by a zinc consumption rate and metal recovery percentage. Testwork is carried out to confirm the precipitation parameters and to check for problem elements, such as copper. Process Selection The carbon option is often eliminated because of high capital and operating costs. Two major misconceptions have significant effects on the final costings and therefore the final flowsheet selection. These refer to carbon loadings and plant sizing. Carbon LoadingThe size of the elution plant is determined by the silver loading assumed for the loaded carbon. For conservative reasons, design silver loadings on carbon have traditionally been kept below 7500g/t, whereas in practice levels of two or three times that are achieved. If higher loadings are used for design, then the plant size can be proportionally reduced, thus reducing the plant and operating costs. Plant SizingThe capital and operating costs for the recovery plant are made up of a contribution from several areas: Acid wash, Elution, Electro-winning, Smelting and Regeneration. Traditionally it has been the practice to size each individual area to match the carbon elution rate. This, however, is not logical since different factors affect different areas, especially when related to high metal values. Acid Washing removes inorganic fouling of the carbon. The level of fouling decreases as the turnaround time increases at the higher carbon treatment rates. In many cases the inorganic fouling is minimal and the requirement for acid treatment of the carbon is reduced to as low as 20 per cent of the overall elution rate. Elution. The old debate of Zadra versus AARL is hopefully over. The use of Zadra systems was a significant contributor to the negative view of using carbon for silver recovery. The AARL elution process has the advantage of a short elution time (3 hours) compared with the 12-24 hours for Zadra. Clearly the AARL can easily accommodate much higher treatment rates with a smaller column compared to Zadra. Further advances, such as the split elution, have significantly reduced operating costs, thereby making the carbon route more competitive for silver recovery. Electrowinning. This has always been labour intensive and any increase in the size of the electrowinning plant was not favored, especially the size of plant required for high silver recovery. In practice, however, the high silver level actually becomes an advantage as it produces a non-coherent deposit that can simply be washed off the stainless-steel wool, filtered, dried and smelted. The usual problems of acid treating steel wool or calcining large quantities of iron are overcome.Modern electro-winning plant designs incorporate low cost, single pass, high efficiency cells with in-situ cleaning. The new designs are no longer labour intensive. Smelting. The use of stainless-steel cathodes to produce a silver/gold slime results in far less flux requirement and therefore reduced metal loss. The smelting furnace size is also reduced because of the smaller volumetric requirements. The bullion product gives a high quality silver/gold bar.Regeneration. It is generally assumed that carbon regeneration is a high capital and operating cost area of the carbon plant. Again, no cognisance has been taken of the process fundamentals of this step. Comparative cost estimates are frequently made on the basis of regeneration of 100 percent of eluted carbon. What is so often forgotten is that the organic fouling is more a function of ore treatment rate and not the contained metal values. Typically, a 1mtpa gold plant would treat 1000tpa of carbon. If silver were present, say at 50g/t (soluble), then the carbon treatment rate through elution would increase to say, 3000tpa ie three times.However, the carbon regeneration capacity could stay close to the original 1000tpa because this is tied to the ore treatment rate, not the silver levels, with some minor adjustment because of a slightly higher carbon inventory. Cost ConsiderationsThe economic model takes into account the various factors considered above to give more realistic values to the capital and operating costs for the carbon circuit. In a conventional gold plant, the process selected is usually CIP for reasons of lower capital and operating costs and reduced soluble losses. Additional advantages apply when treating ores with difficult liquid:solid separation steps. eg. Clays. When treating ores with high silver content a substantial increase in the size of the carbon plant is usually predicted by some designers. This results in a substantial increase in capital and operating costs which can reverse the economic advantages of the CIP flowsheet. Other concerns are the displacement of gold by silver on the carbon, causing soluble gold losses and poor silver adsorption kinetics. In well designed plants these factors are not material. Capital CostsFor a gold ore, the size of the carbon circuit increases more or less proportionally to the ore treatment rate, not the metal grade. A plant treating 1mtpa of ore would typically treat 1000tpa of carbon through the acid wash, elution and regeneration stages. The indicative capital cost relationship for varying plant sizes is shown graphically in Figure 3. The range of capital costs for a particular size are indicated to reflect differing project-specific detail requirements such as for various climatic conditions. The treatment of a high silver gold ore results in an increase in the size of the carbon circuit when compared to a 'gold' plant with the same ore treatment rate. This is due to the lower loading ratio of silver compared to gold.Using the above example of 1mtpa ore treatment rate the increase in carbon treatment rate with a 30glt soluble silver ore would typically be three times that of the gold ore i.e. 3000tpa. However, it is not the total recovery plant that increases in proportion, only the elution stage increases to this level. As previously noted, the acid wash and regeneration stages do not require to be matched to the elution rate. The capital cost therefore increases by only 60 per cent instead of doubling, as might perhaps be expected from simple application of the relative cost data given in Figure 3. Operating CostsThe differences which apply to operating costs are more significant than those for capital costs and benefit the CIP treatment route for high silver ore. Figure 4 and Figure 5 illustrate the operating cost distribution for the two cases of treating gold ore and high silver ore at the same ore treatment rate. These results translate to 60 per cent increase in the annual operating cost for the high silver ore recovery plant instead of a pro-rata 200 per cent increase. This obviously has a major influence on any cost comparison study. There are many other factors that need to be considered when undertaking a comparative study of two processes and this paper does not address what are often case-specific factors. The intention is simply to point out some additional major factors that should be addressed when designing plants for high silver ores. ConclusionsThe above assessment does not give a specific comparison of Merrill-Crowe versus CIP but instead indicates the fundamental considerations when assessing the applicability of a carbon system for the treatment of high silver ores. Testwork must be specifically designed to measure the carbon parameters for silver. Each process area for the carbon plant should be assessed separately and not simply matched to the elution rate. The latest process system should be included, such as the AARL elution system and in·situ cleaning, high efficiency electrowinning cells. There is no limiting silver/gold ratio that naturally precludes the use of carbon, and many more high silver ore projects would select the carbon route if the methods described above are given due consideration in the technical and economic evaluations. By carrying out appropriate testwork and using a proven modelling technique it can be demonstrated that CIP is more often a preferable option for high silver ores than Merrill-Crowe. GreenGold have recently been involved in the conversion of a hybrid Merrill-Crowe plant to a full CIL circuit simply with the addition of electro-winning capacity. Silver grades for this plant range up to 150g/t. References1. S.A.I.M.M. monograph series M.T. The Extractive Metallurgy of Gold in South Africa. Editor G.G. Stanley: 1987.2. Menne D.M., Predicting and assessing Carbon-in-Pulp circuit performance: XIV International Mineral Processing Conference, 1982.

Company

Philippine Resources - February 28, 2019

Hino Total Support emphasizes efficient, eco-friendly vehicles, reliable service

Hino Motors Philippines (HMP), exclusive distributor of Hino trucks and buses in the Philippines, shores up its Total Support initiative further, launching heavy-duty trucks and modern jeepneys that are also environment-friendly, expanding its range of vehicles, and training manpower and dealers, all to meet the logistics and transportation requirements of the market.Seeing the growing demand in the country’s trucking industry as a result of the increasing number of development and infrastructure projects, Hino is investing in Euro 4 heavy-duty trucks. Its new jeepneys, meanwhile, address the need for a modernized and more comfortable transport system aligned with government goals. The company supports the call to care for the environment and is, thus, using Euro 4 engines.“Hino’s Total Support aims to maximize operation and minimize lifetime cost for our business partners. We strongly believe that by providing good products and total support we are able to support our customers’ business and contribute to society and grow with them at the same time,” shared Hino Motors, Ltd. Chairman Yasuhiko Ichihashi.Addressing growing logistics requirementsHino’s 700 series of heavy-duty trucks is designed to meet the diverse needs of the country’s thriving logistics industry. With these trucks, the company hopes to provide businesses all over the Philippines with more options for fleet upgrade or expansion and be better equipped in catering to the different logistical requirements of their clients.The 700 series of heavy-duty trucks from Hino consists of the SS2P, SH2P, FS2P and FY2P models. All models are designed for optimum performance and can be used for different applications and logistics needs.The SS2P is a 10-wheeler tractor head truck with high roof and 16-speed transmission while the SH2P is a 6-wheeler tractor head truck, also with high roof and 12-speed transmission. The SS2P supports 60-ton gross combined mass and 40 to 45 tons pulling capacity. On the other hand, the SH2P features 45.5-ton gross combined mass and 30 to 35 tons pulling capacity.The FS2P comes in two models – the FS2P Mixer Truck and the FS2P Dump Truck. Both are 10-wheeler trucks with 12-speed transmission and standard roof. The FS2P Mixer Truck comes with a 9m³ mixer body and features 32.3-ton gross vehicle weight while the FS2P Dump Truck is made to support dump body and 34-ton gross vehicle weight.The FY2P comes in three variants – the FY2P Mixer Truck, FY2P Dump Truck and FY2P Cargo Truck. All are 12-wheeler trucks with 12-speed transmission and 39.4-ton gross vehicle weight.The FY2P Mixer and FY2P Dump Trucks have standard roofs while the FY2P Cargo has a high roof. The FY2P Cargo comes with 11.8-meter overall chassis length for cargo body requirements.Supporting shift to modern transport unitsHeeding the government’s call to modernize the public transport system, Hino is one of the first to develop modern jeepney prototypes aligned with the PUV Modernization Program (PUVMP) and the Office of Transport Cooperatives (OTC) theme, “Arangkada sa Pagbabago.”Hino’s modern jeepneys use a more efficient engine and adopt green technology to reduce harm to the environment. The Euro 4-powered Class II jeepneys meet the requirements of the Bureau of Philippine Standards. They have a seating capacity of 19 passengers. Seats are side facing, resembling those of the conventional jeepney. 7 additional standing passengers can also be accommodated in the middle to maximize the vehicle’s capacity.The modern jeepneys are air-conditioned for greater commuter comfort. They are equipped with a Beep Card system, speed limiter, GPS, CCTV and a dashboard camera.Hino has turned over some of these modern jeepneys to the Pateros-Fort Bonifacio Transport Service and Multi-Purpose Cooperative (TSMC) and Taguig Transport Service Cooperative (TSC). These two are among the three preselected by the OTC to be the first to adopt the PUVMP because of their good standing, financial capability and established management structure.The Pateros-Fort Bonifacio TSMC will receive 137 Hino modern jeepney units while the Taguig TSC will get 279 units. The approved routes include Gate III of Fort Bonifacio to Guadalupe Market and Bagumbayan, Taguig to Pasig. These include the 13 air-conditioned jeepneys given to Pateros-Fort Bonifacio TSMC and 20 non-air-conditioned units given to Taguig TSC during the second turnover ceremony held late 2018.These modern jeepneys, which have been plying the roads for some months now, involve the assistance of a passenger assistance officer (PAO) in place of the Beep Card system, which has yet to be operational. PAOs collect passengers’ fares and inform the driver passengers need to get off.Broadening vehicle range, training manpowerKeen to grow its market in the Philippines, Hino will continue to broaden its line of trucks and buses to cater to the different industries. The heavy-duty trucks target businesses with heavier logistics and transport requirements. They are also ideal for businesses engaged in development projects, which are expected to increase in number on the back of the government’s Build Build Build program. The modern jeepneys are for public transport while the trucks with P11C Engine launched much earlier were aimed at boosting Hino’s position in the Heavy-Duty Truck segment.To support vehicle development efforts, Hino broke ground for a new office building and technical service training center last year. This new facility, which is expected to be completed by mid-2019, will be used to strengthen the skill set of the company’s manpower. Through this, Hino hopes to provide the best kind of training and preparation for its staff and dealers to enable them to handle different situations as truck service providers.HMP Chairman Vicente T. Mills, Jr. reaffirms the company’s commitment to offer only good-quality products and services that meet the requirements of its customers and partners. “We at Hino believe the Filipinos deserve better transportation and infrastructure. Through our Total Support principle, we hope to advance this vision further and continue to deliver only high-quality trucks and buses that Filipinos can rely on,” Mills said.“The Philippines is primed for growth, and it is during these times of changes that it is more important to have a secure, reliable and efficient logistics partner for businesses to survive. Hino will continue to develop and deliver technologies and upgrade its products to meet the country’s truck and bus requirements,” said HMP President Mr. Mitsuharu Tabata.

Join the Philippines'

Mining and Construction Community

Be the "First" to get our exclusive Digital Magazine & Newsletter.