Open-pit ban triggers downsizing at Tampakan project

KORONADAL CITY (MindaNews/18 Aug) — The ban on open-pit mining imposed by South Cotabato province is among the reasons Sagittarius Mines, Inc. (SMI) is downsizing its operation that would lead to a significant slash in expenditure spending and retrenchment of 940 workers, a company executive admitted.

John Arnaldo, SMI external communications and media relations manager, said the new management, Glencore Xstrata plc., decided to downscale its operations after assessing that the Tampakan project “is not moving forward” due to the open-pit mining prohibition and failure to obtain the Free, Prior and Informed Consent (FPIC) of tribal communities affected by mining project.

“It has been six years since Xstrata took management supervision of the Tampakan project yet (the commercial operation) has yet to get started,” Arnaldo told Bombo Radyo here on August 15.

Xstrata Copper took over management control of the Tampakan project in 2007 after exercising its option to acquire 62.5 percent of the 40 percent controlling equity. Australian firm Indophil Resources NL owns the rest of the controlling equity.

Glencore International plc acquired Xstrata plc., the parent of Xstrata Copper, last May to form the merged Glencore Xstrata plc.

The Tampakan project was initially set for commercial operation in 2016 but late last year, SMI announced it was moving the target to 2019, a year before the project’s Financial and Technical Assistance Agreement (FTAA) ends.

The national government granted the FTAA for the Tampakan in 1995. It has a lifespan of 25 years and can be renewed for another 25 years.

In downsizing the operations, Arnaldo said the company wants to focus on resolving the open-pit ban and to focus on getting the FPIC of tribal communities affected by the Tampakan project.

Leo Jasareno, national director of the Mines and Geosciences Bureau, said on August 9 that the national government “is confident the ban on open-pit can be resolved.”

“May mga available remedies tayo under the present system. So sa tingin ko we will have to exhaust those available remedies. Sa tingin ko this can be resolved,” he told MindaNews at the sidelines of the 22nd Mindanao Business Conference in Davao City on August 9.

Pressed on what the national government’s remedies are,  Jasareno replied: “Continuing efforts to clarify, inform, dialogue, baka lang may mga issues that have to be properly clarified. Kaya kailan lang yung continuing engagement. Optimistic kami that these issues can be resolved.”

Jasareno did not give a clear answer when asked if the national government will file a case in court against the South Cotabato provincial government for imposing a ban on open-pit mining.

Arnaldo earlier said that “as much as the legal process is an option, it is not our preferred option.”

South Cotabato Gov. Daisy Avance Fuentes, who signed the Environment Code that bans open-pit mining method in the province in 2010, said they will continue implementing the prohibition.

Expenditure cut, retrenchment

With the downsizing, Arnaldo said that 920 workers will be displaced in a three-phased retrenchment crack down.

He added that the Tampakan project has a total workforce of 1,060 including the regular and contractual workers and consultants.

The company will just retain 140 workers, said Arnaldo, who admitted he will be retrenched.

Without giving the actual figure, Arnaldo said that the company will cut its expenditures by 75%.

Since 2007, the company has already spent some $500 million or P20 billion for the Tampakan project, he claimed.

Critics rejoiced at the downscaling at the Tampakan project.

In a statement, the Alyansa Tigil Mina (ATM) described the development as “a victory for the B’laan people, the local communities in Tampakan and the Provincial Government of South Cotabato.”

“Employment and livelihoods will not be drastically affected with this downgrading of operations.  In fact, 80,000 farmers will continue to benefit from the Mal River as water source to irrigate more than 200,000 hectares of farmlands in South Cotabato alone.  Around 4,000 hectares of forestlands will be preserved, to mitigate the impacts of climate change. The rights of indigenous peoples will now be respected,” said ATM, an alliance of people’s and non-government organizations opposing large-scale mining projects in the country.

“The struggle continues.  ATM will sustain its support to the struggle of B’laans to resist the entry of mining in their ancestral domains.  We will work with farmers and women groups to upscale and expand sustainable agriculture.  We stand in solidarity with the local government of South Cotabato to define its own path of sustainable development, without destructive and irresponsible mining,” it added.

Marbel Bishop Dinualdo Gutierrez said the downsizing should serve as a motivation to further intensify the campaign against the Tampakan project in the international, national and local levels. (Bong S. Sarmiento / MindaNews)

[First published in the August 19, 2013 issue of OUR Mindanao]