Olongapo SubicBay BatangGapo Newscenter

Wednesday, September 03, 2008

Solons seek probe into mining contracts

Business Mirror

Two militant legislators are seeking congressional inquiry, in aid of legislation, on the involvement of high-ranking government officials in the alleged irregular endorsement and granting of mining contracts to two companies headed by former environment secretary Michael Defensor.

Party-list Reps. Teodoro Casiño and Satur Ocampo of Bayan Muna field House Resolution 736 directing the House Committee on natural resources to conduct the inquiry after President Arroyo and Environment Secretary Joselito Atienza ordered Gov. Amor Deloso of Zambales to cancel all mineral extraction permits in the province.

The legislators said that in October lst year, Nihao Mineral Resources International Inc. and Geograce Philippines forged an agreement with QNI Philippines Inc., the local subsidiary of the world’s largest diversified resources company BHP Billiton Ltd., to explore for nickel in Botolan and Iba, Zambales.

They said that under the agreement, Nihao will deliver 500,000 wet metric tons of nickel ore annually to be sold based on London metal-exchange prices. Also, the legislators said Nihao and BHP signed a confidentiality agreement, which provides that both parties are not allowed to disclose any privileged information to third parties.

On August 7 President Arroyo witnessed the signing of a cooperation agreement between the two companies headed by Defensor and a Vhinese company to explore for nickel and put up a $150-million nickel-processing plant in Zambales.

Under the memorandum of understanding (MOU) signed between Nihao and Geograce, and China’s Jiangxi Rare Earth and Rare Metals Tungsten Group Co. of Chengdu, Sichuan, China, it stipulates that Jiangxi will explore for nickel and build an ore-processing plant in Zambales.

But Casiño and Ocampo said Nihao and Geograce, both listed on the Philippine Stock Exchange, have no track record or accomplished projects in mining prior to the multimillion-dollar deal with Jiangxi.

“But Nihao was granted rights to explore over 6,800 hectares in Botolan, Zambales, Misamis Oriental, and Antique, now in the pre exploration stages,” they said in the resolution.

The legislators said that Geograce, despite incurring a net loss of P17.18 million during the first quarter of 2008, has a claim to 142,376 hectares of mineral lands in the country.

They said under the MOU with Jiangxi, the three companies would form a strategic partnership to jointly explore and develop the Zambales mining holdings covering a total of 35,496.6 hectares, which are directly or indirectly held by Nihao and Geograce.

The agreements, they said, could be in violation of the Constitution, since Article 12, Section 2 requires a financial or technical assistance agreement (FTAA) signed by the President for foreign companies to exploit the country’s mineral resources.

The environment group Kalikasan Peoples Network for the Environment called it “baffling how a small mining company without a track record in the mining industry like Geograce and Nihao could get multi million dollar mining deals with big foreign mining companies and how these mining companies of Mike Defensor were given hundreds of thousands of hectares of mineral lands by the Arroyo government.”

The group also said the presence of high ranking government officials and their relatives in these mining transactions could be a sign that the Arroyo administration and its cronies are profiting from the country’s mineral resources without being mindful of their harsh effects on the community and the environment.

Besides Defensor, the legislators aid that the said companies also have businessman Jerry Angping, brother of Philippine Special Ambassador to China for Trade and Investments Harry Angping, as both chairman of Nihao and president of Geograce, while Renato Puno, brother of Interior Secretary Ronaldo Puno, is chairman of Geograce.

Atienza earlier threatened to close all small-scale mining in Zambales “if operators don’t shape up.”

Atienza said he was “inclined to draft a total moratorium in Zambales, the most problematic province in the country in terms of mining, where the illegal extraction of minerals is incomparable.”

On May 23 President Arroyo ordered a halt to illegal mining in Zambales, in the wake of the devastation inflicted by Typhoon Cosme on the province, even as she expressed disappointment over illegal mining activities in the area which had already caused discoloration of the province’s coast.

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