Philex hopes for a better 2018, despite 2017 challenges

TUBA, Benguet – From its sole operating mine of Padcal, in Benguet, to its Silangan project, in Surigao del Norte, Philex Mining Corp. is hopeful of a better 2018, despite the challenges it faced in 2017, notably what seemed to be an unfriendly atmosphere brought about by certain government policies at a particular phase. It had remained steadfast, however, in its role as a government partner in community development, economic progress, and environmental protection, becoming some sort of a “poster boy” of responsible mining, which had become more apparent when it passed with flying colors, in August 2016, the technical mine audit conducted by the government on all large-scale miners nationwide.

But no, it wasn’t just responsible mining that had set the company led by its gold-and-copper operations in the Benguet towns of Tuba and Itogon a cut above the rest, according to its president and CEO, Eulalio Austin, Jr. “It was, indeed, its conscientious way of doing responsible mining,” he opines. “Modesty aside, we really are what most if not all of our stakeholders see us like some kind of a ‘poster boy’ for the mining industry.” Something which the host towns had attested to, owing to the company being a good taxpayer. This year saw Philex Mining contribute a total of P15.3 million in local business taxes toward the coffers of Tuba (P8 million, or 44 percent of the company’s gross receipts) and Itogon (P7.4 million, 41.25 percent). Taxes paid between 2011 and 2015 amounted to P10.1 billion, broken down into P6.6 billion in regular taxes and P3.5 billion in mining-related taxes.

MAJOR ACCOMPLISHMENTS

Moving through to the coming year, Austin says Philex Mining would surely continue to mark 2018 with some of its major accomplishments in social development, particularly the completion of a P16-million agricultural high school, in Itogon, as well as the delivery and turn-over of a number of infrastructure projects to its host and neighboring villages. It also would want to celebrate the year with the government having a clear-cut policy on open-pit mining, so it could already operate its Silangan project and be of help in the socioeconomic and cultural development in southern Philippines, which, in the words of President Rodrigo Duterte, has long been neglected.

With a little delay due to unforeseen events, the Itogon Agricultural National High School (IANHS) situated at the town’s Sitio Ayosip, Brgy. Poblacion, and which had its groundbreaking on Jan. 16 would start accepting its first enrollees by 2018, in coordination with the local government and the Department of Education. The granting of funds for the school, Austin says, is part of Philex Mining’s commitment to a humanized responsible mining, which translates to community development by building schools and roads, adhering to labor standards, protecting the environment, and promoting the welfare of stakeholders.

Another Philex Mining building set for completion by 2018 is its new administrative offices for Padcal the construction of which was started following Super Typhoon Lawin (international codename: Haima) that wreaked havoc across northern and eastern Luzon, including Benguet, in October 2016, partly damaging the mine’s wooden main building. The new offices would be a semblance of how responsible Philex Mining is as well as its optimism that it would be able to operate beyond 2022.

Philex Mining, whose 2016 income jumped 83 percent to P1.657 billion from P905 million a year earlier, has ongoing exploration activities aimed at improving its current mine life expectancy of until 2022; consolidated costs and expenses, meanwhile, fell 2 percent to P6.9 billion from P7.011 billion for the same period, owing to good governance and vigilant management.

There is no stopping Philex Mining as well from preparing confidently for the renewal of its TÜV Rheinland accreditation by 2018, following its success in 2017 that followed its first certification on IMS, or Integrated Management System, in April 2015. Granted by the German-based technical services provider TÜV Rheinland, the certification covers the miner’s environmental management system and safety management. The latter includes operations in mining, milling, and tailings storage facilities. The certification consists of ISO 14001:2004 from the International Organization for Standardization which is a systematic approach to improving environmental-protection efforts, and OHSAS 18001:2007, a British Standard and external assessment of Occupational Health & Safety (OH&S) Management Systems.

OPERATIONS’ HALLMARK

Social and environmental projects, which are implemented in the host municipalities, have been the hallmark of Philex Mining’s operations this year, as they had been in the previous years. The company was set to turn over by the end of the year 33 infrastructure projects worth almost P14 million which range from concrete road and retaining wall to drainage canal and grouted riprap with parapet wall to science building and classroom, as well as health center and potable water system to Itogon.

Last August, Philex Mining turned over five projects valued at P6 million under its 2016 annual budget allocation to Itogon’s Brgy. Ampucao. From 2016 up to the first half of 2017 alone, the company had completed P40.34 million worth of projects, such as farm-to-market roads, concrete bridges, and potable water systems, in Itogon and Tuba. In 2016, a total of 67 projects were delivered to outlying communities, to the tune of P24.5 million, or 36.58 percent of the year’s total infra budget of P66,987,723.13.

A total of P83 million had been set aside for the company’s 2017 Social Development and Management Program (SDMP), slated for implementation in its five outlying communities. Also, P16.6 million had been allocated for the Information, Education and Communications (IEC) campaign, while another P11 million was for the Development of Mining Technology and Geosciences (DMTG).

As mandated by the Mines and Geosciences Bureau (MGB), a government agency under the DENR, or Department of Environment and Natural Resources, a miner has to devote 1.5 percent of its previous year’s total operating costs for the current year’s SDMP, a program for health, education, livelihood, and public infrastructure; IEC, which is designed to disseminate information on the benefits derived from the mining industry; and DMTG, which provides trainings and seminars for industry professionals, as well as funds research-and-development activities for industry improvement. Of the mandated funds, SDMP gets a lion’s share of 75 percent, while IEC has 15 percent, and, DMTG, 10 percent.

EDUCATION, HEALTH CARE

For its education program covering the entire 2017, Philex Mining had a budget of P15.7 million, and had spent P101 million between 2003 and 2016 for scholarships and other programs on quality education involving elementary, high school, college, and graduate students from its outlying communities. The latter make up the company’s host barangays of Camp 3, in Tuba, and Ampucao, in Itogon; and the neighboring barangays of Camp 1 and Ansagan (Tuba) and Dalupirip (Itogon).

The incoming year, meanwhile, will likewise continue to mark Philex Mining’s adherence to social projects in community development, as it expects to grant free health insurance to more beneficiaries. Through the PhilHealth, or Philippine Health Insurance Corp., the company provided health insurance to 620 individuals, together with their families, to the tune of P1.48 million in 2017, bringing to P3.4 million the total amount of coverage given to the indigent residents in the outlying communities of its Padcal mine over the past four years. The company will also continue sending medical and dental missions to remote villages for the benefit of its less fortunate stakeholders. Between 2003 and 2015 alone, Philex Mining had spent P25.2 million for its health-care program in the outlying communities. It had also constructed health-care centers, sanitary facilities, and potable water systems in the said villages.

ENVIRONMENTAL PROTECTION

With a budget of P2.1 million for its 2017 reforestation program, Philex Mining surpassed its goal of planting 83,350 tree species with a survival rate of 90 percent across 50 hectares (ha.) of land, now covered with the forest trees Benguet pine, kupang, narra, ipil-ipil, and antsoan dilau; the fruit-bearing tree guava; and the tropical flowering plants bougainvillea, calliandra, and coffee. The program included the maintenance ring weeding, applying fertilizer, and the planting of seedlings to replace the trees that did not survive of areas that had been reforested earlier. Having already spent close to P70 million for its reforestation program since 1987, planting over 8 million trees in almost 3,000 ha. of land in Tuba and Itogon, Philex Mining has no plans of falling short on its commitment to protect the environment for today’s and tomorrow’s generations.

INVESTOR CONFIDENCE

February was a more challenging month for Philex Mining, as it took exception of the latest move by then-Environment Secretary Regina Lopez to cancel 75 mining contracts for these allegedly were located in watershed areas saying this seemingly disregard of due process resulted in a P6.5-billion loss in the company’s shareholder value in one day. The ensuing “confusion and uncertainty,” as Austin had described it, has endangered the Silangan project of Philex Mining’s wholly-owned subsidiary, Silangan Mindanao Mining Co., as well as the four tenements of another Philex Mining subsidiary, Philex Gold Philippines, Inc. (PGPI). “This has eroded investor confidence in the midst of a worrisome regulatory landscape that appears to disregard due process and interpret applicable laws at it wishes,” he said in a Feb. 17 statement. He stressed that Silangan’s MPSA, or Mineral Production Sharing Agreement, as well as PGPI’s four tenements have all been issued validly and, contrary Lopez’s assertions in a press conference, were not located in proclaimed watershed forest reserves.

In October, Philex Mining moved closer to operating its Silangan project, following a recommendation by the Mining Industry Coordinating Council (tasked to institute reforms in the industry) to lift the ban on open-pit mining that Lopez had imposed earlier only to be stalled again when Duterte announced toward the end of the year that the ban stays. This despite the President’s earlier statement that open-pit mining was allowed under the law.

TSF3 INTEGRITY

It was in July that Philex Mining welcomed the new DENR Secretary, following Lopez’s failure to get the nod of the powerful Commission on Appointments, to Padcal mine. Roy Cimatu got an assurance from Philex Mining officials on the integrity of its Tailings Storage Facility No. 3 (TSF3), as well as the continuation of its program on environmental protection and rehabilitation, following the 2012 accident (tailings spill) after two typhoons.

Austin said the tailings pond could withstand earthquakes equivalent to the strongest magnitude 6.9 in Leyte last July and 7.3 in Baguio in 1990 that had hit the country. Also, TSF3’s state-of-the-art open spillway, which has replaced its underground drainage system starting from August 2013, was built with embankment-design parameters based on ANCOLD and ICOLD guidelines and could, therefore, handle the amount of rainwater more than what Typhoons Ondoy (2009), and Ferdie and Gener (2012) had dumped. The apolitical industry body ANCOLD, or Australian National Committee on Large Dams, and the ICOLD, or International Commission on Large Dams, a European NGO founded in Paris, provide guidelines in the building of dams that are safe, economical, and environmentally and socially sustainable. These are vital to achieving excellence for all aspects of dam engineering, management, and related issues.

AWARDS, RECOGNITIONS

No matter the challenges it faced this year, Philex Mining got some relief, good news, and a breather toward the end of the year, as it won first runner-up in the Exploration Category of a government-initiated reforestation contest as well as becoming a champion in two field and some sports events at the annual Philippine Mine Safety and Environment Association (PMSEA). Held at the CAP-John Hay Trade and Cultural Center, in Baguio City, for four days, ending Nov. 24, PMSEA’s 64th Annual National Mine Safety and Environment Conference (ANMSEC) honored Philex Mining for its reforestation program on the disturbed areas at its two MPSAs with the government and in connection with its Padcal operations.

The company has been consistent in its environmental-protection efforts, winning numerous awards in reforestation. It had spent a total of P1.56 million between 2015 and 2016 alone for its rehabilitation efforts, including the replanting and reforestation, as well as the backfilling of abandoned drill sites, at its MPSAs 156-2000-CAR and 157-2000-CAR in Tuba and Itogon. An MPSA provides for the government to share in the production of a contractor (miner) in kind or in monetary value.

Not resting on its laurels must be one Philex Mining’s best characters as a world-class company in the extractive sector, despite its latest award on environmental protection and many other previous recognitions, and could remain a clever stratagem in living through a more productive and meaningful 2018.

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