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A healthier work environment, radically reduced energy consumption, a lower carbon footprint and more efficient operations: the sustainability gains from innovations in battery-based mining equipment are simply electrifying.

“Will electrification spark the next wave of mining innovation?” is the title of a recent report from consultancy firm EY. Brian Huff, vice president of technology at Sandvik-owned Artisan Vehicles, a manufacturer of battery electric vehicles (BEVs), says the wave has already reached the shore. Huff sees electrification more as a natural evolution of technology rather than a revolution, with the potential to reap a range of sustainability and cost benefits.

“We’re moving past the ‘why’ stage and approaching the ‘how’,” Huff says. “Most mining companies have analyzed the business case of electrification and seen the value. We just need to explain that an electric mine is not that different from a traditional mine, nor is it difficult to electrify. Battery-powered trucks and loaders are used the same way, and no new underground infrastructure is needed.”

The effects of electrification on employee health, however, are close to revolutionary. “We’ve heard many stories from miners claiming they would come home from a shift and be so tired they just crashed on the couch, blowing black snot from the nose, with no energy left to engage with their family,” he says. “Once they switched to battery equipment, they were much more energetic. These things are immeasurable. It’s beyond health, it’s about quality of life.”

At the Goldcorp Borden Lake mine in Ontario, Canada, the first all-electric underground operations are already up and running. “We have surveyed the first group of workers that started at our Borden mine,” John Mullally, Newmont Goldcorp group executive for sustainability, North America, told EY, adding: “Something like 90 percent said that they would not want to go back and work in a traditional underground mine alongside diesel engines.”

While human health and quality of life cannot be measured in numbers, opex and capex can. Another major benefit of an electrified operation is the amount of money that can be saved on construction of ventilation shafts and the energy bill for running the ventilation required to remove the hazardous fumes.

In terms of capex, ventilation systems don’t come cheap. “The per-foot cost of digging a ventilation shaft can typically be USD 5,000, or USD 30 million for an 1,800-metre ventilation shaft, plus the time spent,” Huff says.

Ventilation also comes with opex costs, in that it consumes a lot of power when generating the air that is funneled down into drifts. As much as 40 percent of an underground mine’s energy outlay is spent on powering ventilation systems to remove pollutants from tunnels, according to EY. In comparison, an electric mine requires roughly half as much ventilation, which cuts energy needs by close to 90 percent.

In 2019, Sandvik acquired Artisan Vehicle Systems, whose fleet of battery- electric, zero emission underground vehicles include the A4, a
four-tonne lithium battery-powered LHD underground mining
vehicle.

The reduced ventilation of an electrified mine also saves on heating and cooling costs, as the air transported from outside might be too cold or too hot, depending on the season, to produce the required ambience.

“All these things compound to provide a real financial advantage,” Huff says. “The capex costs for building ventilation shafts are substantial enough to pay for the entire equipment fleet needed to operate the mine.”

As mining companies are forced to dig increasingly deeper in search of new findings and extensions of existing ores, the cost of constructing ventilation shafts grows. “The deeper you go, the better the business case for electrification gets,” he says. “When you access a new stope you don’t need as much auxiliary ventilation as you would with a diesel-run unit. Plus, a BEV only generates some 12 percent of the heat generated by diesel-driven equipment.”

Electrifying operations helps mining companies contribute to a more sustainable industry from many perspectives. The cost of energy represents up to one-third of a mining company’s total cost base, making it a keenly managed component of operations, and the EY report notes that “demand for carbon reduction in the sector is inevitable, and electrification is one way to achieve it.”

In addition, the energy used to charge the batteries may come from renewable energy sources. With Sandvik-Artisan BEVs, the battery is being charged every time the vehicle trams downhill, and the recharged energy is used to carry the next load.

Adding to a lower total cost of ownership, Huff says, is that a BEV has fewer moving parts than a fossil-fueled unit. “There is no need for a mid-life engine or transmission replacement,” he says.

The latest Sandvik-Artisan BEV models are fitted with an additional battery pack, and the vehicle swaps batteries automatically when needed. “We designed the machine to swap its own batteries in just six minutes,” Huff says. “The machine has a secondary battery pack that is a third the size of a Tesla battery and is charged by the main pack once it’s loaded. After charging for one hour, the main pack typically lasts two to three hours and is swapped about four times a shift for a total time of 24 minutes.”

In comparison, refilling a diesel unit typically takes 30 minutes each shift, including the time to drive to the fuel bay.

It’s beyond health, it’s about quality of life

“We offer battery as a service, meaning we provide charged and available batteries as well as preventive maintenance and service,” Huff says. “This service converts capex into opex and minimizes maintenance work.”

According to the EY report, reaping the full value of electrification requires a rethink of mine design that considers a technology road map. Huff agrees that there is more leverage to be had for a greenfield mine that decides to go all-in electric from day one. “Then you have the ability to design around the potential for electrified equipment and benefit from the fact that you don’t need large ventilation shafts,” he says.

Still, so-called brownfield operations also stand to gain from electrification, he says. “Most existing mines are expanding, digging deeper to continue exploration of the ore currently being extracted and to find new ore bodies and explore adjacent ones. With BEVs, ventilation capacity is less of a problem.”

Electrification holds the potential of boosting the mining industry’s sustainability score. As Huff puts it, “Small changes create enormous advantages.”

Article courtesy of Sandvik

Ritchie Bros Providing the Philippines a World of Choice

Photo credit: Ritchie Bros.

Driven by long term infrastructure growth, the expansion of mining activity and post COVID-19 recovery plans, the demand for construction and mining equipment in the Philippines for the medium to long term is strong. Coupled with global supply chain constraints and long lead times for buying new equipment from OEMs and their dealers, equipment users in the Philippines are now, more than ever, looking around the globe for quality used equipment.

Ritchie Bros., the global marketplace of choice in the used machinery industry, has more channels and opportunities for Filipino customers to buy and sell equipment in the global marketplace.

Ritchie Bros. pioneered live public unreserved auctions in the Philippines when they conducted auctions for the benefit of Pinoys equipment owner in the mid to late 1990s in Subic Bay. Live public unreserved auctions is how Ritchie Bros. has secured its unparalleled reputation over the past 60 years. Scheduling an auction date, marshaling hundreds if not thousands of late model quality used equipment into one auction yard, and inviting the public to bid. All assets in our unreserved auctions are sold, regardless of the final sale price, benefiting both buyer and seller.

Ritchie Bros. has replicated this model around the globe, with over 50 permanent auction facilities located in 14 counties around the world (North America, Europe, Asia, the Middle East, and Australia).

But as the needs of the market change and technology advances, Ritchie Bros. provides sales channels and offerings that meet the dynamic needs of our customers. Our live public unreserved auction, with thousands of assets, is still the backbone of our business. However, to match the needs of our customers, we have also developed other sales and buying channels. IronPlanet is our online only auction platform, our 24/7 marketplace, Marketplace E, allows customers to buy equipment through offer and negotiation, while Ritchie Bros. Private Treaty, provides the ability to buy and sell assets discretely with Ritchie Bros.

Each of these unique channels allows our customers more choice and timely opportunities to buy and sell equipment. Each one is uniquely formulated to provide our customers with solutions for every situation they may face. Online only platforms make it easy and convenient to purchase equipment from anywhere in the world.

Ritchie Bros. comprehensive sales solutions give you a choice of selling channels through our global network.

Our unreserved online auctions

Ritchie Bros.’ unreserved auctions help you sell heavy equipment and machinery for the best price. Since we shifted to online auctions through our Timed Auction system, we’ve seen record-breaking bidder participation and sales results.

Our reserved online auctions

IronPlanet offers a convenient way to sell equipment quickly from your yard to a global buyer base. With the sale and transaction all taking place online, it’s a service designed to work with your schedule and location.

Our 24/7 marketplace

With Marketplace-E, our 24/7 online marketplace, you can set a minimum price and let us take care of finding the buyer. You can decide to sell from your own location or at one of Ritchie Bros. yards.

Our Ritchie Bros. Private Treaty

Ritchie Bros. facilitates private treaty negotiations for a wide variety of specialized and high-value heavy equipment and industrial assets. Buying is easy: just contact us to arrange an inspection and make an offer. We will handle confidential negotiations between you and the seller, and manage the settlement of transactions.

Ritchie Bros. in the Philippines

With the vision to serve the needs of our customers in the Philippines, Ritchie Bros. has set up a Philippine Country Representative based in Manila. Chris Edwards has more than 20 years’ experience in the equipment trading business in the Asia Pacific region and conveniently located in Manila to serve your needs. Have assets to sell? Need to find quality equipment for your project? Reach out to Mr. Edwards for a no-obligation consultation on how Ritchie Bros. and its many sales and distribution channels would be best for you and your situation.

2022 Presidential Candidates: Who truly walks the talk?

Photo credit: Good News Pilipinas

As this column is being written, there are less than 100 days to go before the May 9 elections. Many voters have made their minds up from the outset, some purely based on their visceral reactions to, and past experiences with, the candidates. However, we owe it to ourselves and future generations to scrutinize the candidates based on their platforms and advocacies, although time and again we are reminded that most campaign promises are made to be broken.

For the mining industry, the obvious primary point of comparison would be the candidates’ position on mining and the development of our natural resources. After all, the Philippine Constitution itself recognizes the role that mining plays in our economic life by providing the framework for the exploration, development and utilization of mineral resources.

The candidates’ respective positions on mining have been made public through their recent interviews and statements, including the debates that a certain candidate has been pointedly avoiding.

Speaking to Boy Abunda, instead of Jessica Soho who he claims is biased, Ferdinand Marcos Jr. said he is open to allowing “sustainable mining”, while expressing aversion toward open-pit mining. Marcos Jr. said he recognizes that mining is a big source of revenue for the Philippine government, and that in these difficult times, we should take advantage of our vast natural resources. On open-pit mining, he cited the pollution that it allegedly causes and post-mine closure issues. He also called for improving the working conditions and compensation received by mine workers.

Vice President Leni Robredo, for her part, has stated that she supports “responsible mining” and ensuring the protection of the environment. She believes that the benefits from mining should go back to local communities and contribute to holistic national development. She has also stated that she will continue to push for respect for the rights of indigenous peoples, which has been her advocacy from her days as an “alternative lawyer” and for “honest to goodness consultation” with the communities affected by mining. She, however, said she would immediately cancel President Duterte’s Executive Order 130 lifting the moratorium on new mineral agreements, issue an executive order identifying “no-mining areas” and would call for the passage of the National Land Use Act, which she co-authored as a member of Congress. She also supports the passage of the “Alternative Minerals Bill” which bans mining in critical areas and open-pit mining.

Manila Mayor Isko Moreno has said he will support mining as a means of reviving the economy especially after being ravaged by Covid-19, recognizing that mining can attract much-needed foreign direct investments and create jobs. He said that the government cannot rely on taxation alone and must develop its assets, including minerals, responsibly.

Senator Panfilo Lacson said that, if elected President, he will ensure the “responsible” extraction of minerals and eradicate the double standard in the regulation of the mining industry. “Ang mining industry, hindi naman pwede patayin kasi major industry ito ng Pilipinas”, he said. He has pointed to small scale mining as the source of violations of mining laws and environmental risks, and an area that he will devote attention to, emphasizing that his actions will be “data driven” and “science based”. He has also called for the creation of a special program and funding for indigenous peoples “who suffer the brunt of irresponsible mining.”

Senator Manny Pacquiao believes that the extraction of minerals can be done responsibly and is therefore against banning mining. He says that the number of mining projects in the country can be controlled and that the government can focus on monitoring open-pit mining.

Only “Ka Leody” de Guzman has outrightly called for a ban on mining, saying it endangers the lives of people, specifically citing the effects of Typhoon Yolanda in an area where there is a large-scale mining project. Instead, he advocates advancing a "just transition to a green economy" as a solution to “destructive extractive industries like mining and logging”. He said that residents in communities to be rehabilitated should be given the knowledge and skills to conserve the ecology of their environments, which is crucial to the return of their livelihoods in farming and fishing.

There is an entire laundry list of other issues on the candidates can be grilled. However, for the Makati Business Club (MBC) [whose Governance Committee I currently chair] and other business groups, including the Financial Executives Institute of the Philippines (FINEX), Legal Management Council of the Philippines (LMCP), and Management Association of the Philippines (MAP), as well as various Chambers of Commerce, one paramount point is where the candidates stand on Freedom of Information.

Freedom of information is enshrined in the Constitution. The Bill of Rights (Article III), particularly, Section 7, provides “(T)he right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.”

What we need, therefore, is a law which implements and operationalizes this. A Freedom of Information (FOI) Law would require government to make public information available to citizens, organizations and businesses. However, it has been 35 years, and counting, but an FOI Law has still not been passed.

From the perspective of FOI advocates, there is no lack of arguments in favor of the passage of an FOI Law. Good governance reforms are crucial in promoting sustainable and inclusive growth. This can only happen with clear rules and guidelines, easy access to information, eliminating vagueness in procedures, unchecked discretion among regulators, and inefficiency in the bureaucracy. An FOI Law would also encourage developing a culture of transparency at all levels.

On 23 July 2016, soon after President Duterte assumed office, he issued Executive Order 2, entitled “Operationalizing In The Executive Branch The People’s Constitutional Right To Information And The State Policies To Full Public Disclosure And Transparency In The Public Service And Providing Guidelines Therefor”.

While this was a very welcome development, the EO only covers the Executive branch, including but not limited to, the national government and all its offices, departments, bureaus, offices, and instrumentalities, including government-owned or -controlled corporations, and state universities and colleges. It does not, however, cover the legislature, judiciary and or even LGUs, although it encourages them to observe the order.

Interestingly, the EO contains a reminder to all public officials of their obligation to file and make available for scrutiny their Statements of Assets, Liabilities and Net Worth (SALN) in accordance with existing laws, rules and regulations, and “the spirit and letter of the Order”, but the signatory of the EO himself has time and again refused to provide his SALN, which is a basic instrument of transparency.

For its part, the Supreme Court issued the Rule on Access to Information About the Supreme Court in 2019. The Supreme Court likewise ordered the creation of FOI Manuals in the entire judiciary. The Rule on Access to Information About the Supreme Court guarantees one’s “privilege” (but not absolute right) to either obtain a copy, receive the information or gain insight to all information and records or portions of those records in the official custody, possession and control of offices in the Supreme Court. Like all other rights, the “right to know” is not an absolute right. Excluded are those “non-disclosable information” protected by laws, rules or resolutions of the Supreme Court En Banc.

The obvious limitations of these two issuances are that they only cover their respective branches of government. The goal is to pass an FOI Law which covers all three branches of government, including local governments.

The consolidated House Bill (HB 5776) currently pending for approval by the House Committee on Public Information enjoys strong support and has been consistently identified as a legislative priority by the business community. However, it is highly unlikely that it will pass in this administration, and it is therefore up to the next administration to take up the cudgels.

Information is power. Information will allow us to make better decisions about who we elect to office, how we allow our leaders to allocate and spend our taxes, and also examine the policies they seek to implement. Information will allow us to be better partners in nation-building. The right information will empower us to fight and correct misinformation, falsehoods and outright fake news.

During the campaign, a number of the presidential candidates have professed support for the concept of “freedom of information”, though some not necessarily for the passage of the law itself. What is more telling is not what they have said in words, but by their actions through the years, i.e., whether they have led lives of transparency and accountability.

The campaign period is therefore a time for us to really sift through the noise and get to know our candidates, both national and local, but most especially the presidential candidates, as to who truly walks the talk.

Mining Trends 2022: Will the Outlook Remain Positive?

Fernando “Ronnie” S. Penarroyo specializes in Energy and Resources Law, Project Finance and Business Development. He may be contacted at fspenarroyo@penpalaw.com for any matters or inquiries in relation to the Philippine resources industry and suggested topics for commentaries. Atty. Penarroyo’s commentaries are also archived at his professional blogsite at www.penarroyo.com

Last year saw miners experiencing record profitability and revenue. While the industry continues to benefit from relative high metal prices and opportunities from the clean energy transition and digital transformation, there are identified risks arising from COVID-19's resurgence and disruptions, potential for weaker-than-expected global economic growth, government intervention, and community opposition. Meanwhile compliance with environment, social and governance (“ESG”) standards will obligate mining companies to protect the environment, contribute to community development, and behave ethically.

On the local front, Department of Environment and Natural Resources (“DENR”) Secretary Roy Cimatu lifted the four year-old ban on the open-pit method of mining for copper, gold, silver, and complex ores. Enforced in 2017, the ban was one of the high-impact measures taken by the late DENR Secretary Regina Lopez. The former DENR secretary also ordered the closure of 26 mines. However, with the completion of the Mining Industry Coordinating Council audit which started in 2019, only 3 out of the 26 mines were deemed unsafe and the other closures were reversed.

The Chamber of Mines of the Philippines deplored the lost opportunities in the mining sector in the last decade. The chamber believed that the industry has been unjustly scrutinized and subjected to unfair publicity, which cost billions in lost revenue. Foreign direct investment (“FDI”) will remain stagnant for the industry unless regulations are eased and barriers are lowered. The ban also delayed FDIs in open pit mining projects like Sagittarius Mines Inc.’s $5.9-billion Tampakan copper project in South Cotabato and St. Augustine Gold and Copper Ltd.’s $2-billion King-king copper-gold project in Compostela Valley.

The lifting of the ban according to the DENR order, is meant to “revitalize the mining industry and usher in significant economic benefits to the country by providing raw materials for the construction and development of other industries and by increasing employment opportunities in rural areas.” With the lifting of the ban, the Department of Finance said the mining industry can become a key contributor to the nation’s economic recovery per DENR’s projection that open-pit mining will lead to the immediate development of 11 pending projects. These projects are expected to generate about PHP11 billion combined in yearly government revenue, increase annual exports by PHP36 billion, and provide employment to 22,880 people living in remote municipalities.

Economists see the Philippine economy’s continuing rebound this year after registering a 5.6 percent GDP growth in 2021. However, the outlook is threatened by the emergence of new COVID-19 variants and how the government handles them. Based on the World Bank’s Global Economic Prospects, despite the spike in infections from the omicron variant, the Philippines is poised to register the fastest growth in ASEAN this year and the second highest growth in 2023. According to the World Bank, the projected economic growth rate of 5.9 percent for 2022 will be the fastest growth expected in ASEAN, while the 5.7 percent expected next year will be second only to Vietnam’s 6.5 percent.

ESG will dictate investments in mining

Miners are under increasing pressure to integrate ESG into corporate strategies, investment decisions, and stakeholder reporting. Demands from shareholders, financial institutions, local communities, national governments, customers, and the sector’s own workforce are requiring miners to adhere to ESG standards. Sustainability in mining means minimizing the consumption of resources, reducing the use of energy through new technologies, and the use of alternative energies. Mining operations must utilize cost-effective and environmentally sound extraction alternatives, and efficient biodiversity and water management.

Green transition leads to a low-carbon economy

The green transition will accelerate amidst global pressures to reduce carbon footprints. At the latest UN Climate Change Conference (COP26) summit, many mining countries pledged to bring down their methane emissions. The rise in sustainable finance and tighter ESG criteria set by financial institutions on mining projects have led to an upcoming rise in GHG emission costs due to carbon pricing. Reducing emissions will require companies to invest in renewables to energize operations and advanced technologies in their decarbonization efforts. Renewable energy technologies, green buildings, electric vehicles, solar panels, wind turbines and battery storage will rely to a great extent on minerals and metals.

Project developers and governments are moving away from investments in thermal coal. Major mining companies, driven by ESG targets, will remove thermal coal projects from their portfolios and coal mining will be dominated by small-cap, pure-play and state-owned mining companies. Coal projects will be mostly self-funded, private equity-funded or state-funded as international banks reduce their financing of coal assets.

Miners will have to contend with license to operate (LTO)

Miners are under intense scrutiny on how they contribute to the social and economic well-being of local and national governments, engage with host communities and indigenous peoples, and protect water resources and heritage sites. Needless to say, LTO is also linked to a company’s ability to access capital and financing. While metals are a critical input for green transition technology, the mining sector’s social license to operate is contending against the rising public opposition to mines arising from environmental pollution and loss of diversity. The difficulty in acquiring LTO could lead to a slow-down in new project development.

New COVID-19 variants will be a game changer

Hopefully, COVID-19-linked operational disruption will ease with increased vaccinations. However, new wave of restrictions with the omicron variant or subsequent waves will be a challenging environment for mining operations in 2022 and will cause a setback in economic recovery. Lockdowns not only hamper mine site operations but also slow down the movement of products and services in the supply chain, and affect consumption of goods. The COVID-19 pandemic resulted in the increase of costs of inputs, shipping, talent and decarbonization programs. COVID-19 has challenged the deployment of investments in 2020 and to some extent in 2021. Hopefully with the roll out of vaccines especially in emerging economies, COVID-19-related operational disruptions will most likely ease in 2022, helping exploration, construction and mine works to pick up.

Mineral demand will continue to grow but metal prices to weaken

Global demand for minerals and metals especially arising from the green transition, will continue to grow despite slowing growth in 2022. The outlook for auto manufacturing, machinery, appliances, and consumer electronics sectors is positive. Households with huge savings realized during the pandemic are eager to go into revenge spending. All eyes will be on China’s property development sector woes which will put a cap on overall metal demand in 2022. Evergrande’s financial difficulties and a general slowdown in Chinese construction activity will put pressure on ferrous metal prices. Meanwhile, investments in infrastructure is expected to remain relatively stable.

Fitch Solutions forecast that most metal prices to average lower in 2022 but will remain high compared with 2016-2020 averages. Looking at 2022, slowing economic growth, slow normalization in fiscal and monetary policy, and China's property sector woes will push metal prices lower in 2022. However, prices will still average at elevated levels, higher than pre-COVID-19 levels as the market balance for most metals remain extremely tight and stocks are historically low. Existing deposits that are known or held by the majors are being depleted and new ones will be required. Investments in mines and oilfields have dropped sharply over the past five years. The result is “greenflation” in commodity prices, which have had their biggest yearly increase since 1973.

Access to Capital will be a challenge amidst upward trend in global exploration budget

Access to capital for new projects or expansions will continue to be a challenge for the industry, as investors are deterred by risks associated with ESG, LTO, resource nationalism and geopolitics. Higher ESG ratings can enable access to a larger pool of attractively priced capital. Still, elevated metal prices coupled with an increase in production across commodities in 2022 will help mining and metal companies' financial performance to remain strong next year amidst the acceleration of the green transition and opening up of new business opportunities. However, strict ESG requirements will make development of new projects potentially more difficult.

Meanwhile, a report by S&P Global Market Intelligence notes that the aggregate annual global exploration budget is expected to increase between 5% and 15% year over year for 2022. According to S&P, a faster-than-expected recovery in market conditions and easing of lockdowns allowed explorers to reactivate programs by mid-2020, which caused some campaigns to carry over into 2021.

Government intervention intensifies In 2022

Because of the economic and fiscal hardships, and rising social inequality during the pandemic while mining companies are benefitting from elevated metal prices, government intervention in the sector will remain firmly in play in 2022 posing additional risks to mining projects. Companies will be subjected to resource nationalism in the form of increased taxes and royalties, policies to boost domestic beneficiation, and the renegotiation of contracts to get better terms for the governments. Governments are also developing investment plans to boost their own production or secure minerals that will be key to the green and digital transitions. Thus, miners will also need to contend with trade wars, geopolitics of the COVID-19 pandemic, and changing governments or policies aimed at protecting strategic resources and increasing “self-sufficiency” in critical products like fossil fuels and rare earths.

Automation, digitalization, and electrification to address productivity, safety, and ESG priorities

The mine of the future will be less visible and smaller, use less water and energy, less polluting, more productive, and extract minerals more efficiently due to the application of new technologies. Incorporation of new technologies in mining is critical for companies to modernize their operations and meet increasingly stringent environmental and sustainability goals, while remaining competitive and relevant.

The automation, digitalization and electrification of mining operations has the potential to increase mine productivity, daily operational capacity, sustainable use of non-renewable resources, operational safety, and productive lifespans of mines. The transition to off-grid mining and battery storage, together with the use of renewable energy to power operations are expected to bring advantages not only in terms of CO2 emissions reduction, but also in terms of helping industry-related companies manage costs. Electrification of mines have the potential to incur lower expenses due to minimal maintenance requirements leading to a reduction of operational downtime. Operational downtime is common among diesel-powered machinery due to the extensive maintenance required for their internal mechanisms that are prone to breakdown.

While automation and electrification will result in a decrease of operational input costs, digitization produces predictable data. Data management also converts data into decision-making information. Digital innovation also allows diversification into greener products and improve transparency of reporting. These innovations include artificial intelligence, big data and satellite imagery. However, digitalization also exposes companies to cyber threats and hacking. Technical advances have also been made in waterless processing and waste disposal, and biogenic processes.

Technological change in mining will require a workforce with new skills in roles that would be familiar with new technology. There will be a shift in the skills profile for future workers who will need to manage and engage the electric and digital transformation in the industry. A reevaluation of current skills sets will need to be considered as the future mining workforce is likely to change, which will be driven primarily by the adoption of new technologies.

Opportune time for new business and operational models

Miners now operate in a more volatile environment because of ESG and technology disruptions. They should adopt new business and operational models that will deliver greater returns directly to host communities and governments, minimize waste, reduce emissions, bring more value to investors, and gain low-risk access to capital.

Mining and metal players need to accelerate their efforts to benefit from the new opportunities brought about by the green transition. These involve more exposure in energy transition materials and spinning off higher growth businesses linked to the green transition to unlock value. Miners also have opportunities to invest in product differentiation to benefit from green price premiums on lower-carbon products. Product differentiation based on green/ESG credentials and assorted price premiums will make some metals more of a specialized product sector and less of a bulk commodity material.

Conclusion

Disruptions open the industry to new risks and volatility. The local industry needs to adapt to these disruptions in light of the possibility of a more severe COVID variant and the political uncertainty in the conduct of the coming elections. The lifting of the open pit mining ban was a step in the right direction. However, the incoming government’s stand on mining will determine if the industry will be able to take advantage of the increasing global demand for minerals and metals or miss out on the boat again.

References

Ferguson, Mark, The Big Picture: 2022 Metals and Mining Industry Outlook, S&P Global Market Intelligence, 02 November 2021, https://www.spglobal.com/marketintelligence/en/news-insights/blog/the-big-picture-2022-metals-and-mining-industry-outlook

Ford, Alastair, The Mining Sector: 4 Key Trends for 2022, Proactive Investors, 27 December 2021, https://www.proactiveinvestors.co.uk/companies/news/968909/the-mining-sector-4-key-trends-for-2022-968909.html

Goosen, Matthew, The Future of Mining Through Electrification, Digitalization and Automation, Energy Capital and Power, 08 September 2021, https://energycapitalpower.com/the-future-of-mining-through-electrification-digitalization-and-automation/

Mining: News on Mining & Construction Machines, https://www.bauma.de/en/trade-fair/trade-fair-profile/exhibition-sectors/mining/

Mining And Metals Key Themes For 2022, Fitch Solutions, 06 October 2021, https://www.fitchsolutions.com/mining/mining-and-metals-key-themes-2022-06-10-2021

Mitchell, Paul, Top 10 Business Risks and Opportunities for Mining and Metals in 2022, Ersnt and Young, 07 October 2021, https://www.ey.com/en_gl/mining-metals/top-10-business-risks-and-opportunities-for-mining-and-metals-in-2022

Ordinario, Cai, PHL Will Post Fastest Growth in Asean—WB, BusinessMirror, 12 January 2022, https://businessmirror.com.ph/2022/01/12/phl-will-post-fastest-growth-in-asean-wb/

Sharmka, Ruchir, Ten Economic Trends That Could Define 2022, Financial Review, 04 January 2022, https://www.afr.com/policy/economy/ten-economic-trends-that-could-define-2022-20220104-p59lpj

Six Global Trends Shaping the Industry, https://www.futuremineralssummit.com/mining-trends/

Top Three Technology Trends Set to Disrupt Mining, Australian Mining, 02 December 2021, https://www.australianmining.com.au/news/top-three-technology-trends-set-to-disrupt-mining/

Upward Trend in Global Exploration Budget to Continue in 2022 – Report, MINING.COM Staff, 19 October 2021, https://www.canadianminingjournal.com/news/upward-trend-in-global-exploration-budget-to-continue-in-2022-report/

What’s In Store For The Mining Industry In 2022?, Ag Metal Miner, 20 December 2021, https://oilprice.com/Metals/Commodities/Whats-In-Store-For-The-Mining-Industry-In-2022.html

Philex core net income hits P2.533b for 2021

Photo credit: Redjie Melvic Cawis

Philex Mining Corporation, one of the oldest and largest gold and copper producers in Southeast Asia added Php668 million of Core Net Income in 4Q2021 to its Php1.865 billion Core Net Income for the first nine months ended September 30, 2021. Thus, full year Core Net Income rose 118% to Php2.533 billion compared with Php1.162 billion for the full year of 2020.

Favorable and sustained higher level of realized prices for Gold and Copper resulted in higher operating revenues in 2021, registering a healthy 25% increase over the year 2020. Operating revenues reached Php9.797 billion in 2021 from Php7.834 billion in 2020. Realized Gold prices was at its highest level in 4Q2021 reaching $1,783 per ounce, while Copper reached $4.44 per pound in October 2021. Operating costs were only slightly elevated by 4.8% to Php6.598 billion from Php6.298 billion in 2020 due to the increase in cost of materials and supplies, partly offset by lower power cost and non-cash charges.

PRODUCTION

Tonnage milled for 4Q2021 slowed down slightly to 1.972 million tonnes from 2.006 million tonnes in 3Q2021. Tonnage milled in 2021 reached 7.946 million tonnes, or 1.4% higher than 2020. Ore grades continue to hold at the same level as in 2020, leading to minimal impact on Gold and Copper output in 2021 compared with 2020. Gold output in 4Q2021 reached 13,855 ounces, adding to the 41,295 ounces for the three quarters ending September 2021, resulting in annual production of 55,149 ounces, slightly lower by 1.6% from 2020 Gold output. Copper output for 2021 stood at 26.2 million pounds, 1.4% lower from the 2020 Copper output.

OPERATING EXPENSES, EBITDA, AND CASH DIVIDENDS

Operating costs and expenses rose slightly up by 4.8% from the 2020 levels due to the increase in the cost of materials and supplies, including logistics expenses, higher excise taxes and royalties on account of higher operating revenues, partly offset by lower power costs and lower non-cash charges as a result of the extension of the life of mine.

The healthy EBITDA level for 2021 at Php4.317 billion allowed the Company to continue its debt reduction program during 2021. Total payments made to short term creditors amounted to US$8 million for the period.

With a very good performance in 2021, the Board declared a cash dividend of 5 centavos (Php0.05) per common share aggregating to Php247 million, to shareholders on record as of March 21, 2022, which will be paid on April 3, 2022, as Philex preserves cash surplus as part of the initial capital for the development of Silangan.

OUTLOOK

The sustained prices of Gold and Copper in the global market are providing Philex a continuing window of opportunity to optimize the mineable reserves and metal output. Profitability and liquidity since 2020 have been on a positive trend and has materially enhanced the Company’s profitability and financial condition, allowing the Company to expedite the launching of the development of Silangan project under its In Phase Mine Plan.

At the same time, studies are underway to explore and determine the feasibility of the mineable resources and/or reserves surrounding the Padcal mine, whilst the Gold and Copper prices are at its current high levels.

The Company has been working diligently with all stakeholders on implementing the fund raising plan which pave the way for the timely development and start of commercial operations of the Silangan project by early 2025. The initial capital needed under the In Phase Mine Plan is US$224 million or about Php11.2 billion, to be funded by a combination of proceeds from a stock rights offer, from the cash reserves of Philex, and possibly some incremental debt at the Silangan level. The Company has appointed BDO Capital and Investment Corporation as its issue manager and lead underwriter for the fund raising.

“No doubt, 2021 was a blessing for us considering the high metal prices for Copper & Gold that even with the marginal grades of ore that we are mining, we continue working on our business continuity plans,” according to Philex president and CEO Eulalio B. Austin, Jr. “Furthermore, we were also able to successfully deal with the deadly Covid-19 virus because of our strict and constant adherence to health protocols and our mass vaccination program. Consequently, we have had no disruption in our operation for the year.”

“The year 2021 also brought hope to the mining industry with significant regulatory changes on the horizon, such as the suspension of the ban on new mining agreements and lifting of the ban on open pit mining method. These developments auger well for the mining industry come 2022—a light at the end of the tunnel, so to speak.”

“We will continue our relentless drive to improve our operations, and are now looking at new investment opportunities,” whilst prolonging the life of our Padcal mine, said Philex Chairman M. V. Pangilinan. The job security and welfare of our employees and their dependents are still our primordial concern.”

“Silangan will be an exciting project for us in 2022— it could ensure that our business continues for a long time to come. We look forward this year with a fair degree optimism, given the buoyant prices of commodities in general, and of metal prices in particular, driven by global geopolitical and supply factors,” concluded Chairman Pangilinan.

Aritcle courtesy of the Philippine Stock Exchange

Metro Manila subway project 30% complete: DOTr

Photo credit: Department of Transportation

Some 30.55 percent of the Metro Manila Subway Project (MMSP) is already complete, Department of Transportation (DOTr) Undersecretary for Railways Timothy John Batan said on Tuesday.

“Despite the effects of the Covid-19 pandemic, again, back-to-back to back major milestones were still realized despite all odds,” Batan said during an inspection of the MMSP’s Valenzuela depot.

He said 576 out of the 6,400 tunnel rings needed for the partial operability segment of the MMSP have been completed, with more underway at the MMSP’s 7.5-hectare fabrication yard in Norzagaray, Bulacan.

The DOTr has acquired 197,000 square meters of land and 585 structures from 324 property owners as part of the project’s right-of-way acquisition.

Despite this, he said there has been no “forced eviction resettlement” of the 183 informal settler families affected by the project through the help of the Valenzuela City government.

Through a right-of-way agreement signed with the Department of National Defense – Armed Forces of the Philippines (DND-AFP) in December 2020, he said the MMSP will make use of 50,000 square meters of DND-AFP land, with an additional 60,000 square meters of land for tunneling works, and additional 55,000 square meters of land for temporary works.

“This partnership forged between the DND-AFP and DOTr, under the leadership of Secretary [Delfin] Lorenzana and Secretary [Arthur] Tugade, will not only enable DOTr to fast track its access to construction and work sites needed for the subway but will also give DND and the AFP a fair and recurring source of resources,” Batan said.

He said the first two out of 25 tunnel boring machines to be used in the project arrived in February 2021 while the PHP66 billion contract for the MMSP’s electromechanical systems has been awarded to Mitsubishi Corporation in October 2021

The PHP27 billion contract for 240 subway train cars was awarded to the J-Trec-Sumitomo Joint Venture in December 2020.

“With today's inspection of the MMSP, we are showing how decades of ‘plan, plan, plan,’ how decades of ‘drawing, drawing, drawing,’ and how decades of talk, talk, talk’ have changed to ‘Build, Build, Build,’” Batan said.

The MMSP will be the country’s first underground railway system and will provide mass transit in the National Capital Region (NCR)—from Valenzuela City to FTI in Taguig City, Parañaque City, and Ninoy Aquino International Airport (NAIA) Terminal 3 in Pasay City, and will further extend to the north and south of NCR.

With 17 stations—two of which are interoperable with the North-South Commuter Railway line—the MMSP is seen to reduce travel time between Quezon City and NAIA from one hour and 10 minutes to just 35 minutes. By Raymond Carl Dela Cruz

Article courtesy of the Philippine News Agency

Customised liner solution boosts SAG mill throughput and mine profits

Photo: The existing grates within the SAG Mill were pegging. Critical size grinding media were blocking apertures, reducing throughput

A gold and copper mine in South East Asia was experiencing a range of challenges with its SAG mill that were hitting productivity. Facing a significant increase in ore hardness that would have exacerbated the problems, the mine turned to us to provide a solution for a safer and more productive grinding operation.

A multifaceted mill challenge

A remote copper and gold mine in South East Asia had a problem: its 34 ft SAG mill was experiencing a range of performance issues that were limiting its production performance:

Pulp dischargers of many parts. The steel dischargers on the SAG mill comprised 187 pieces. Not unsurprisingly, this led to lengthy downtimes for component replacement. Making the situation worse: the discharger service life was a relatively short 12 months.
Inadequate liner service life. The SAG mill’s steel liners were failing to meet the required service life. To remedy the problem, the supplier had added more material to the liner design. But this created its own challenges, reducing the effective grinding volume and adding weight to the mill that was pushing bearing pressures dangerously close to limitations.
Peening liners. The steel used to make the liners produced a significant amount of peening. This made liner removal a time-consuming activity and more hazardous activity, as a heat lance is needed to remove peened liners. It also increases the risk of structurally damaging the mill’s shell.
Pegging of the grate plates. There was excessive pegging of the grate plates by worn metal grinding media, reducing flow. As temporary measure, the mine was cutting out the pegged media every few weeks. Which only increased the time and cost spent on mill maintenance.

To solve these challenges, the mine issued a request for quote to three companies with the challenge to improve the safety of mill maintenance and increase mill discharge. In practice, this meant reducing the number and length of maintenance interventions, as well the need for hazardous installation manoeuvres, lowering mill weight and eliminating flow constraints, such as clogging and pegging.

The beginning of the solution is understanding the problem

The journey to our solution began with a thorough review of operating conditions and liner design. Through this, we determined the first course of action should be to tackle the problems associated with the discharge system. This would allow us to increase throughput and reduce weight – and would also lead to other objectives being met.

With some key improvements in mind, we created sophisticated DEM simulations to help evaluate what discharge design would best meet the mine’s objectives. These simulations allowed us to beat the mine’s throughput target of 2,100 tpd and forecast a maximum possible throughput of 2,300 tpd. The new simulated design also showed a significant increase in service life, meeting the need to reduce maintenance interventions.

DEM simulations were conducted to help evaluate the discharge design and meet mine’s objectives

After initial onsite discussions, mine personnel were invited to review the design adjustments and define the final scope. This made sure customer knowledge was also incorporated into the solution, as well as those of our engineering team.’

Exceeding expectations

Our solution centred on our PulpMax™ composite mill liners, which were combined with material and design modifications to the steel lining system to promote increased efficiency and service life. The new liners boast 27% fewer parts (136 vs 187) and 45% lower weight (106,130 kg vs 191,962 kg).

Made from material that is up to 50% LIGHTER. This makes the liners easier to handle and improves worker safety. Lighter materials allow us to engineer larger components at reduced weight. It also results in less parts.
They typically have 50% FEWER PARTS. This results in a faster reline speed and quicker installation, and this adds up to workers spending less time in a confined space performing hazardous work.

Along the journey, we were also able to provide solutions to other challenges – for example, pegging of the grates and peening of the discharge steel. The result was a solution that exceeded original expectations:

Improved safety. Fewer pieces and lower weight make maintenance simpler and quicker. This reduces the amount of time that workers spend on the mill – improving safety. It also lowers the total cost of ownership. Compounding these benefits, PulpMax composite wear liners last much longer than previous liners – through some 25 million tonnes of production. Liner service life has therefore been extended from 12 months to 15 months and based on wear measurements, could extend to 18 months.
Improved throughput. The new system consistently achieves throughput of 2,250-2,300 tpd, exceeding the target of 2,100 tpd. This results from:
- Reduced liner mass (>100 tonnes)
- Improved shell design
- Improved discharge efficiency
- Less clogging and pegging

Epiroc’s ambitious climate targets validated as science based

Photo credit: Epiroc Philippines

Epiroc, a leading productivity and sustainability partner for the mining and infrastructure industries, has received validation by the Science Based Targets initiative (SBTi) for the company’s ambitious targets to reduce CO2 emissions.

Epiroc launched ambitious sustainability goals that include halving its CO2 emissions by 2030. The SBTi has now validated Epiroc’s climate targets as being in line with keeping global warming at a maximum 1.5° C, consistent with the latest climate science and the goal of the Paris Climate Agreement.

“Climate change is happening as we speak and we are working internally as well as together with our customers to reduce the impact on climate,” says Helena Hedblom, Epiroc’s President and CEO. “We are driving the industry’s transition toward a climate-friendly future, not the least with our growing offering of battery-electric equipment. Epiroc is committed to halve CO2 emissions from the use of our equipment as well as in our own production and in transport by 2030. With the approval of our goals from SBTi, our position as a sustainability leader in our industry has now been reinforced.”

In line with SBTi requirements, Epiroc commits to halve its absolute CO2 emissions in its own operations – so called Scope 1 and Scope 2 – by 2030, with 2019 as base year. However, more than 99% of Epiroc’s total CO2 emissions are other indirect emissions, with about 83% of the total coming from when customers use the products. Therefore, Epiroc has committed to halve the absolute CO2 emissions from use of sold products – so called Scope 3 – by 2030. This is industry leading and well above SBTi’s minimum requirements. The transition from diesel-powered to battery-electric machines will make a significant impact.

In addition, Epiroc’s 2030 sustainability goals also include halving CO2 emissions from transport, requiring 50% reductions of CO2 emissions from relevant suppliers, having 90% renewable energy in own operations, and offering a full range of emissions-free products, as well as ambitious targets for people. In addition to providing a growing range of battery-electric products, Epiroc’s climate actions include, among others, shifting transport from air to sea, and installing solar panels at many of its facilities.

The SBTi - a partnership among the Carbon Disclosure Project, the UN Global Compact, the World Resources Institute and the World Wide Fund for Nature – is driving ambitious, science-backed climate action in the private sector.

Epiroc presents 6th Sense, a game changer for smarter mining and infrastructure operations

There is a growing need for the mining and infrastructure industries to look to digital technologies to enhance productivity, sustainability and safety. 6th Sense is the Epiroc way to optimize customers’ processes by connecting machines, systems and people using automation, information management and system integration. With 6th Sense comes a great focus on system connectivity, using interoperability to unlock the full potential of automation for production gains at lower operating costs.

“6th Sense is a formula we have developed for getting the right solutions in place and achieving operational excellence in mining and infrastructure operations,” said Helena Hedblom, Senior Executive Vice President Mining and Infrastructure. “The name 6th Sense implies that the solution brings something extra and that is just what it does, providing a significant advantage such as track and respond to real-time working conditions and equipment needs.”

One example of Epiroc’s focus on automated and productivity-enhancing solutions comes from the Hollinger mine in Timmins, Canada. Together with long-term partner Newmont Goldcorp, Epiroc has put the world’s first fully autonomous SmartROC D65 surface drill rig in production. The operator can be positioned remotely and perform other tasks while the drill rig completes a full drill pattern autonomously. Besides increased operator safety, this boosts productivity thanks to Global Navigation Satellite System accuracy, non-stop operations and less wear and tear on drilling tools, reducing production costs and improving reliability.

Another example is the new Teleremote e-tramming option for Epiroc’s popular range of Simba long-hole underground drill rigs. The automation package includes functionalities to monitor, plan and automate drilling operations from onboard the rig or from a remote location. Not only is the tramming process faster and simpler, the e-tramming function also provides a safer work environment and reduces variability in performance.

“The 6th Sense approach is based on our customers’ needs for implementing digitalization, automation and new process integrations. We are continuously rolling out new innovative features, always with the customers’ needs in mind,”

Helena Hedblom | President

All-in-one solution for reliable precision elemental analysis

Philippine minerals have a wide range of ores from nickel laterite, copper ore, iron ore, chromite ore, limestone and more. Thus, when daily operations require elemental analysis of a wide range of inorganic/geological samples, it is often cumbersome, or not possible to setup and maintain a large number of dedicated calibrations to handle such range. In these cases, a widely applicable, but accurate solution is highly desirable. In this application note we demonstrate Malvern Panalytical’s unique solution WROXI in combination with Epsilon 4 and Leneo sample preparation, is capable to handle a wide range of sample types. This is the value-added offerings by Malvern Panalytical to enhance precision elemental analysis, by way of in-house affordable traceability guaranteed CRMs.

WROXI solution

The WROXI BASE application module comprises 15 synthetic multi-elements standards, containing in total 11 different inorganic oxides. Made from traceable compounds WROXI is a primary analytical solution. The standards are delivered as powders to be prepared as fused beads on-site, using the customer’s flux, dilution ratios and methodology. Each set of WROXI standards is supplied with 15 bottles containing 10 g of powdered standards each, packed under nitrogen, in air-tight plastic bottles. Each set is supplied with drift monitors to maintain the application. WROXI offers good calibration especially when doing shipment of ores and exploration thus following tolerance and penalty elements. It eliminates the use of different calibration in every ores and provides good accuracy and repeatability.

Table 1. Concentration ranges of the 11 compounds in WROXI standards.

Instrumentation

A Claisse LeNEO automatic fusion instrument was used to make all the fused glass beads. LeNEO Requiring only an electrical connection and fume exhaust, the LeNEO can prepare glass disks for XRF analysis with high reproducibility. In addition to being easy to use, his fully automatic instrument guarantees safety for the operator as well as superior analytical performance in the laboratory. Its muffle furnace and excellent insulation properties ensure uniform heating conditions providing excellent repeatability and reproducibility. 40 mm fused beads were produced by mixing 0.9 g of sample material and 9 g of flux (66 % lithium tetraborate / 34 % lithium metaborate). WROXI standards used to set up the calibration were prepared in duplicate. Measurements were performed using a Malvern Panalytical Epsilon 4 EDXRF spectrometer, equipped with a 15W, 50 kV silver anode X-ray tube, a high-resolution SDD30 silicon drift detector, 6 beam filters, a helium purge facility, a sample spinner and a 10-position removable sample changer. Epsilon 4 has an option to use in air mode, no vacuum system and no film consumables. To test the accuracy of the method 12 certified reference materials (CRM) of different geological matrices were prepared as fused beads. The results for the 11 compounds in the CRMs are shown in Table 2. For a wide range of sample types, the measured concentrations show excellent agreement with the certified values.

Calibration results

The calibration was set up using all 15 WROXI standards. The concentration ranges of the 11 compounds in the WROXI standards are shown in Table 1.

Table 2. Analytical accuracy: comparison of certified and measured values for eleven major and minor oxides in twelve CRMs of various types

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Atlas Mining Net Income soared to Php3.86 billion in 2021

Photo credit: Bilyonaryo

Atlas Consolidated Mining and Development Corporation ("Atlas Mining") reported a record net income of Php3.83 billion for the year 2021 compared to the net income of Php118 million for the same period in 2020. Stable production, resilient operation and higher metal prices sustained the turnaround performance of Atlas Mining.

Metal prices remained high throughout the year pushing average copper price for 2021 higher by 53% to $4.26/1b and gold price from USD1,777/ounce to USD1,802/ounce compared to the same period last year.

Atlas Mining's wholly-owned subsidiary, Carmen Copper Corporation, reported higher copper production and shipments in the second half compared to the first half of the year due to improvements in copper head grades and recovery. Copper metal produced in the second half increased by 13% from 38.73 million lbs to 43.68 million lbs while gold produced increased by 25% from 11,176 ounces to 13,997 ounces. Year-on-year, copper metal production decreased from 107.09 million pounds in 2020 to 82.41 million pounds in 2021, due mainly to the decrease in copper grades by 19% from 0.304% to 0.247%. Gold production decreased year-on-year by 47% from 47,857 ounces to 25,173 ounces due also to lower gold grades from 8.17 grams/dmt to 5.37 grams/dmt. Despite operational disruptions arising from high rainfall levels and typhoon Odette that affected our mining area, milling tonnage in 2020 of 50,000 tonnes per day or 18.3 million tonnes was sustained in 2021 which tempered the impact of lower grades.

Cash costs decreased by 6% year-on-year from Php9.51 billion in 2020 to Php8.95 billion in 2021, due to overall lower volumes of shipments. Earnings before interest, tax, depreciation and amortization (EB1TDA) was Php9.77 billion for the year, 10% higher compared to Php8.92 billion in 2020. Core income was Php3.28 billion in 2021 compared to Php2.58 billion in 2020.

Atlas Mining continues to strengthen its overall financial position supported by its improving earnings, efficient operations and robust metals market.

According to Atlas Mining President, Adrian Ramos, "The turnaround of Atlas Mining is credited to a resilient and stable operation that was sustained over the years with a disciplined focus on safety and efficiencies. This enabled Atlas Mining to survive the market downturn and to optimize earnings in a resurgent commodities market."

Article courtesy of the Philippine Stock Exchange

Duterte approves inclusion of nuclear power in PH energy mix

Photo credit: Manila Times - Bataan Nuclear Power Plant

President Rodrigo Duterte has signed Executive Order (EO) 164 that now includes the potential of nuclear power in the country’s energy mix.

Released on Thursday, EO 164 was signed by the Chief Executive last February 28.

“This policy is the start of the national nuclear power program,” said Department of Energy (DOE) Undersecretary Gerardo Erguiza Jr. in a press conference.

Under the new policy, it stated that the country “shall ensure the peaceful use of nuclear technology anchored on critical tenets of public safety, national security, energy self-sufficiency, and environmental sustainability”.

Duterte issued the policy following the recommendation of the Nuclear Energy Program Inter-Agency Committee (NEP-IAC), which conducted a pre-feasibility study and public consultation on the matter.

Through EO 164, the Chief Executive has recognized that nuclear power can be a reliable, cost-competitive, and environment-friendly source of energy based on the experience of highly developed countries.

“For the country to achieve its sustained growth targets, it must ensure that it has a reliable, secure, sustainable, quality and affordable electricity supply, including sufficient reserve to guarantee that there will be no disruptions in the power supply,” the policy read.

It added the use of nuclear energy will address the increasing demand for clean energy, rising by 4.4 percent annually, or an additional capacity of 68 gigawatts by 2040.

The EO still included the Bataan Nuclear Power Plant (BNPP) in the national nuclear program, but other nuclear power installations will be pursued.

The BNPP was the only nuclear power plant in the region during the 1980s, as the Philippines was one of the first Southeast Asian countries to embark on a nuclear energy program.

However, the project was mothballed because of corruption allegations and safety concerns on the use of nuclear energy.

A study conducted by Russia State Atomic Energy Corporation (ROSATOM) in 2017 said the rehabilitation of BNPP will require around USD3 billion to USD4 billion.

The public is also becoming more open to the potential of nuclear energy.

“(A) Public Perception Survey on Nuclear Energy in 2019 indicated that almost 79 percent of Filipinos expressed approval or acceptability of the possible use or rehabilitation of an existing nuclear power plant,” the EO said.

The same survey showed that 65 percent approved the construction of new nuclear power plants and 78 percent are open to learning more about nuclear energy.

Article courtesy of the Philippine News Agency

DOE welcomes EO on nuclear power

Photo credit: Shuttershock

The Department of Energy (DOE) has welcomed the signing of Executive Order 164, or the inclusion of nuclear power in the country’s energy mix, as this will address the high electricity rate and secure energy for the future.

“We thank the President for seeing merit in the DOE’s recommendation to consider integrating nuclear energy into our country’s energy mix. Since we want a stable, reliable, and sustainable energy resource, I believe that nuclear is the way to go,” DOE Secretary Alfonso Cusi said in a statement.

In a press conference Thursday, DOE Undersecretary Gerardo Erguiza Jr. said nuclear power is cheaper and cleaner than other sources of energy and will help the country in achieving energy security.

Erguiza, chairperson of the DOE Nuclear Energy Programme Implementing Organization (NEPIO), added that the EO provides four cornerstone approaches in developing the Nuclear Energy Program (NEP).

These include establishing a national policy on nuclear energy that could withstand changes in administration; legislative framework by institutionalizing the NEP; alignment with international standards in which the NEP will be formulated under the guidance of the International Atomic Agency; and public awareness and acceptability by conducting strong public consultation and information campaigns promoting scientific findings on the benefits of nuclear energy use.

“Adopting a nuclear program is not just about constructing nuclear power plants. It is a matter of energy and national security. Should it be decided in the future that the Philippines is fit and finally ready to embark on its nuclear energy journey then, we would be able to look back and appreciate this landmark issuance,” Erguiza said.

Drawing away from Bataan plant

Although the EO still includes the potential of the Bataan Nuclear Power Plant (BNPP) in the NEP, the DOE official said the EO is drawing away from the old but unused power plant.

“We recognized the fact that BNPP was very much polarized,” Erguiza said, adding that the policy has focused on whether or not to include nuclear power in the energy mix and not on the rehabilitation of BNPP which received widespread safety concerns in the past.

The BNPP is designed for two nuclear reactors with a capacity of 650 megawatts each, he said.

Erguiza said the country is in talks with Russia, South Korea, and the United States on the use of small modular reactor (SMR) technology.

Cusi and other DOE officials are set to travel to the US to seal a deal on SMR study.

New technology

Erguiza said the policy will also help the government to pursue new power installations across the country.

There were around 15 locations identified even in the 1980s that are viable for nuclear power– Bataan, Cagayan, Quezon, Puerto Princesa, Negros Occidental, General Santos, Zamboanga del Norte, and Sulu.

Erguiza said the industry has learned from the past accidents globally involving nuclear power plants, such as the Three Mile Island nuclear disaster in the US in 1979, the Chernobyl accident in 1986, and the Fukushima disaster in 2011.

He said the new technologies on nuclear power “has almost been perfected” over the years.

Pursuit of nuclear energy to reduce PH oil dependency