SPECIAL REPORT: The Tampakan project: battle over Southeast Asia’s largest copper-gold reserve (1)

1st of two parts

TAMPAKAN, South Cotabato (MindaNews/11 Nov) — How huge is the proposed open pit mine that will gouge out a mountain here to extract 17.9 million ounces of gold deposits and 15 million metric tons of copper?

Imagine at least 17,000 basketball courts laid out beside each other being swallowed with ease by that pit and you will have a general idea of its size. As for its depth of 800 meters, imagine a hole as deep as a 160-storey building in a country whose tallest building is all of 73 floors.

Mt. Matutum, a dormant volcano and South Cotabato's landmark peak, beckons from the mines development site of Sagittarius Mines, Inc. Mindanews Photo by Bong Sarmiento
Mt. Matutum, a dormant volcano and South Cotabato’s landmark peak, beckons from the mines development site of Sagittarius Mines, Inc. Mindanews Photo by Bong Sarmiento

As the largest known undeveloped copper and gold minefield in Southeast Asia, the project of foreign-backed Sagittarius Mines, Inc. (SMI) promises tantalizing economic returns with global prices of the precious metals at an all-time high.  But it also paints a terrifying picture of the area’s environmental future and its implications for the people of the mountains and those who live in the lowlands.

The stakes are extremely high, so high that both those who oppose mining and those who are for it have already drawn the line on the sand…with blood. The fact that the mineral deposits lie buried underneath ancestral lands of the B’laan tribe further complicates the already volatile situation.

A number of male tribal members have begun arming themselves with improvised shotguns and high-powered rifles like M16s and M1 Garands. They are ready and willing to use these, they say, should mining operations commence.

The B’laans are essentially a peace-loving people although they have the hearts of warriors whose instincts have, to a great extent, been honed by hunting in the forest, a territory they know like the palm of their hands. While there have been conflicts within the tribe, in some instances ending in killings, they try to fix them using kasfala—their tribal justice system—to prevent the escalation of violence.

But when pushed against the wall, they fight back. And some of them are doing that now against SMI.

Xstrata Copper, the world’s fourth largest copper producer, controls SMI, with Australian firm Indophil Resources NL as the junior partner. Xstrata Copper is a subsidiary of Switzerland-based Xstrata Plc., a global diversified mining company.
After assuming in 2001 rights over the Financial or Technical Assistance Agreement (FTAA) of the Western Mining Corp., the Australian mining company that originally discovered the deposits in the early 1990s, SMI launched in 2003 the Tampakan project, which also straddles the towns of Kiblawan in Davao del Sur and Columbio in Sultan Kudarat.

The core of the copper and gold deposits lies in Tampakan, a second class municipality without a single bank and lacking in the usual modern economic infrastructures.    Lately, however, its streets are littered with the latest model of four-wheel drive pick-up trucks purchased by several residents, in the hope of renting these out to SMI.

The Tampakan project has not gone into production because its application for an environmental compliance certificate (ECC) was rejected early this year by the Department of Environment and Natural Resources (DENR), on the grounds that it violates the open-pit ban imposed by the South Cotabato government.

From the time SMI started its Tampakan project, it has been hounded with protests mounted by environment, human rights and church groups opposing it.

The opposition fears that once it goes on commercial stream — 2018 is the revised target from the original 2016 — the environment may suffer irreversibly.

Environmental impacts

SMI plans to excavate the massive deposits by digging a hole, or open-pit in the language of the mining industry, in an area measuring 2.5 kilometers wide and 3 km long down to a depth of 800 meters, or an area equivalent to the size of 17,000 basketball courts and as deep as a 160-storey building .

The  Philippines’ tallest building as of 2012 is the 73-floor Gramercy Residences at Century City  in Makati City while Mindanao’s tallest for now is the 20-floor Marco Polo Hotel in Davao City.

The depth of the Tampakan pit will be eight times the height of Davao’s Marco Polo.

The Tampakan prect site, which includes the open-pit area and other support infrastructure like the waste rock storage facility, tailings pond, and fresh water dam, among others, will sit on some 10,000 hectares (ha) of land altogether.

According to the company’s Environmental Impact Assessment (EIA), out of the total project site, 40 percent or 3,750 hectares are rainforest vegetation.

While there is no declared watershed in the Tampakan project site (mining is banned in watersheds), the remaining rainforests are believed to be the source of water for rivers that feed agricultural farms and ponds downstream.

In fact, the reason why then South Cotabato Governor Daisy P. Avance-Fuentes signed into law on June, 29, 2010 the Environment Code that banned open-pit mining in the province was because of the possible drying up of agricultural areas in the lowlands if the resource-rich area is mined.

Fuentes, the representative of South Cotabato’s 2nd district in Congress from 1992 to 2001, signed the law a day before stepping down as governor. She is now back in her former post as Representative.

In her explanatory note during the announcement of her approval of the Environment Code in 2010, Fuentes cited a study by a British group titled “Philippines: Mining or Food?” which warns about the drying up of lowland rivers if the Tampakan project would proceed.

“This is a landmark legislation. It marks the province’s maturing autonomy by owning up to the responsibility as environment steward,” she said.

Fuentes acknowledged pressures for her to veto the open-pit ban, the strong lobbying even shifting to Malacanang, the seat of the national government.

She explained to reporters that vetoing the ban on open pit mining would not only render the whole Environment Code inoperative but will expose communities and resources to danger which will, with certainty, affect their health, security and economic sustainability.

The open-pit ban is one of the provisions, albeit the most controversial, of the provincial Environment Code.

“After mining is completed, the open-pit can’t be restored to its original state,” SMI said in its open-pit mining public briefer.

Sixty per cent of the project site has been disturbed by logging, agriculture and kaingin (slash and burn farming). The rest, however, supports a high diversity of flora and fauna, including over 1,000 flora species and around 280 fauna species, the company’s EIA Overview Document showed.

Of this, at least 50 flora species and 33 fauna species are either on the list of threatened species in the Philippines and international bodies.

Generally speaking, Sagittarius Mines, in its EIA Overview Document, plans to clear approximately 1,300 hectares of remnant rainforest (35% of the 3,750 hectares of rainforest on the site) that supports a high diversity of flora and fauna species, including threatened species. This area is equivalent to at least 30 times the size of SM Mall of Asia in Metro Manila.

The final mine area is approximately 10,000 hectares and it potentially includes 355 hectares of old growth forest, SMI said in response to an e-mail query. The DENR has yet to validate this old growth forest area. But under the law, forest of this kind shall not be disturbed.

Remnant rainforest and old growth forests are two different things. The former refers to those leftover trees that were untouched by logging activities decades ago that are now fully grown. Old growth forest, in lay language, means virgin forest.

Earthquake fault lines

The Tampakan project has also been described by some experts as potentially one of the most dangerous mines in the world because of its geologic location, which is about 12 kilometers from Mt. Matutum, a dormant volcano.   Matutum is South Cotabato’s landmark peak at 2,286 meters and its tip towers over the Tampakan minefield.  It was declared a protected landscape in March 1995 through Presidential Proclamation 552 issued by then President Fidel V. Ramos.

Aside from the open-pit, which the environment experts warn will indelibly scar the mountains of Tampakan, other support facilities will be constructed in the area like the waste rock storage facility (WRSF), concentrator (processing facility), tailings storage facility (TSF), and fresh water dam (FWD).

MINING FORUM. Thousands attend the forum on the Tampakan copper-gold project of Sagittarius Mines, Inc. in Koronadal City on September 23, 2011, sponsored by the provincial government of South Cotabato. The Tampakan project has become a hot issue in the country’s mining industry. MindaNews photo by Bong S. Sarmiento

The proposed open pit site will straddle the villages of Danlag, Pula Bato and Tablu in the town of Tampakan, province of South Cotabato. To the northeast and adjacent to the open pit site will be the proposed sites of the WRSF, with the concentrator (processing facility), TSF and FWD 13 kilometers east of the open pit in the town of Kiblawan in the province of Davao del Sur.

“These facilities pose an imminent danger to the environment and lives of the people [in downstream areas] in case of an accident (dam and other containment failure that result into floods carrying poisonous substances to downstream areas) because the project area lies in an unstable geography,”  Emmanuel Diaz, a geologist working at the ASEAN Centre for Biodiversity, said.

The mines development site lies at an estimated 1,300 meters above sea level and atop the two big rivers—Taplan River and Mal River—that feed lowland agricultural farms in South Cotabato and Davao del Sur, respectively. The proposed open pit will be located in the Taplan River catchment while the remainder of the proposed site infrastructures will be situated in the Mal River catchment.

Diaz particularly expressed concern on the mining project’s impact on biodiversity—all living forms to include plants and trees and animals (and even humans). He stressed there could be plants and trees and animal species endemic only in the Tampakan mining project area that will not only be disturbed but may become extinct as the mining phases (exploration, exploitation, and production) progress.

In a 10-page paper, Dr. Robert Goodland and Clive Montgomery Wicks described the Tampakan project as a “risk forever.”

“The chances of the 2.1 km long and 280 meters high tailings dam and the 0.8 km long and the 150 meters high fresh water dam surviving for any length of time is doubtful… The chances of water passing through the toxic waste rock storage and other toxic sites and then into the environment is very high, particularly if damaged by the fault underneath,” they said after reviewing the Tampakan project’s environmental impact statement.

In 2009, Goodland and Wicks wrote the book entitled Philippines Mining or Food?

But John Arnaldo, SMI spokesperson, allayed fears about the disastrous characteristics of the Tampakan project that many believe could exact a terrible toll on the environment and on human lives.

“We are confident that our facilities would withstand the most extreme events. Just as high-rise buildings exist in earthquake prone areas around the world and resist strong earthquakes, today it is absolutely feasible to build tailings dams to withstand such events,” he said.

Arnaldo said that in the “unlikely” event of any environmental damage resulting from the mining operations, SMI will compensate those affected and rectify any damage. He did not discuss the compensation package though.

He also noted that the company has obtained a certification from the Philippine Institute of Volcanology and Seismology that states that the nearest active earthquake fault is some 10 kilometers from the project area, indicating that the proposed final mine area “is not within a high risk zone.”

“SMI has mitigated the risk of seismic activity in the project area as part of our planning for the project, including designing project components to withstand major earthquakes,” Arnaldo said.

But Page 42 of the company’s Environmental and Social Impact Assessment states:  “Based on Table 5.1, the TSF (tailings storage facility) has been given an extreme consequence classification, during operation and closure, due to the high potential for loss of life and high environmental damage if failure occurs. This classification also applies to waste rock co-disposed with tailings in the TSF.”

It quickly explained, however, that the selection of extreme classification means “that the structure is designed to the highest level of protection consistent with international dam engineering practice.”

Arnaldo said “dams and buildings are constructed safely world-wide in a variety of environments and the analysis undertaken by our geologists and engineers is consistent with leading practice, that is to assess the risk and design the structures accordingly.”

“With rigorous design standards and the proposed construction supervision and monitoring we are confident that our dams and waste rock facilities can be constructed to minimize the risk of failure and impact to the community/environment,” he said.

Indophil, the junior foreign partner at SMI, placed the initial life of the mine at 17 years.

Two decades in the pipeline

The Tampakan project has been in the pipeline for 20 years, with the discovery of the mineral deposits in 1992. Just recently, SMI announced the moving of the target year for commercial operation from 2016 to 2018. Construction of the mining support facilities would have started this year had it not been for the open-pit ban which the DENR invoked to deny the firm’s ECC.

The mines development site straddles five tribal councils in five barangays under three towns (Tampakan in South Cotabato, Kiblawan in Davao del Sur and Columbio in Sultan Kudarat), all of which have expressed support to SMI under principal agreements that provide financial assistance to them even if the firm has yet to extract the deposits.

The Financial or Technical Assistance Agreement (FTAA) for the Tampakan project was granted to Western Mining Corp. (WMC) in 1995 and was transferred to Sagittarius Mines in 2001, then controlled by Australian firm Indophil Resources NL.

Xstrata Copper exercised its option to acquire 62.5 percent of the 40 percent controlling equity held by Indophil in 2007, making the Swiss miner the majority holder of the controlling equity at the Tampakan project. The 60 percent non-controlling equity continues to be held by the locals collectively known as the Tampakan Group of Companies.

From the time the FTAA was granted to WMC up until the entry of Xstrata Copper in Sagittarius Mines—or a total period of 17 years as of this writing —an annual financial assistance has been extended to the host tribal councils, barangays and towns, as contained in separate principal agreements.

When Xstrata Copper assumed management control at SMI, company expenditures already reached a staggering P18 billion (U$416 million) from 2007 to end of 2011 alone for the Tampakan project. Indophil had spent Au$27 million for the exploration activities prior to the entry of Xstrata Copper.

Of the P18 billion, P367 million (U$8.2 million) went to various corporate social involvement programs including community fund assistance to the host barangays and tribal communities, said Arnaldo, the company’s spokesperson.

Curiously though, the tribal communities remain mired in poverty. (Conclusion tomorrow: Tampakan minefield: Dark side, bright prospect)

 (This special report by Bong S. Sarmiento was  produced under the Environmental Investigative Reporting Fellowship project of the International Women’s Media Foundation)