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Metals output dips by 8% in 2016
Metallic mineral production value incurred an 8% shortfall in 2016 from PhP109.84
billion in 2015 to PhP100.56 billion, lower by PhP9.28 billion. Poor base metal price,
string of mine suspension and mine imposed non-operations due to unfavorable
weather conditions, low metal price and/or maintenance status catapulted the metallic
sector to its lackluster performance.
In terms of percentage contribution to the total production-value, gold continued to
dominate the production scene in 2016 accounting for 44% or PhP44.85 billion of the
total metallic minerals production value. While nickel direct shipping ore together with
mixed nickel-cobalt sulfide took the second spot with 37% or PhP36.84 billion followed
by copper with 18% or PhP17.76 billion. The remaining 1% or PhP1.11 billion came
from the consolidated output of silver, chromite and iron ore.
The PhP10.88 billion gain in the combined production value of gold and silver in 2016
due to the growth in mine production coupled with improved metal price of gold and
silver was not sufficient to offset the substantial PhP16.00 billion decline in the
production value of copper and nickel. Nickel direct shipping ore production volume
and value alone, went down by 23% and 41%, respectively, from 32,076,948 dry
metric tons valued at PhP36.60 billion in 2015 to 24,652,913 dry metric tons valued at
PhP21.77 billion in 2016.
It is important to note that of the twenty-eight (28) nickel mines, seven (7) are currently
in suspended status and four (4) temporarily stopped their respective mine
operations. The total production of nickel direct shipping ore of this group in 2014 was
about 5,237,416 dry metric tons with an estimated value of about PhP8 billion.
The seven (7) nickel mines in suspended status prior to the mine audit include: 1)
Zambales Diversified Metals Corporation (Sta. Cruz-Candelaria Mining Project); 2)
BenguetCorp Nickel Mines Inc. (Sta. Cruz Nickel Mining Project); 3) Eramen Minerals
Inc. (Sta. Cruz Mining Project); 4) LNL Archipelago Minerals Inc. (Sta. Cruz Mining
Project); 5) Berong Nickel Corporation (Berong Nickel Project); 6) Citinickel Mines
and Development Corporation (Toronto and Pulot Nickel Projects); and 7) Claver
Mineral Development Corporation (Tandawa Nickel Project). Location of the said
mines are as follows: four in Zambales; two in Palawan; and one in Surigao Del
Norte.
While the following nickel mining projects: 1) Minahang Bayan ng Mamamayan ng
Dinagat Island Cooperative (Bel-at Nickel Project); 2) Oriental Vision Mining Phils.
Corporation (Palhi Nickel Project); and 3) Wellex Mining Corporation (Wellex Area
II Nickel Mining Project); 4) Sinosteel Philippines H.Y. Mining Corp. (H.Y.
Nickel-Chromite Project) temporarily stopped their respective mine operations during
the year due to lower metal price, poor metal demand and/or under maintenance
status. All four companies are located in Dinagat Island in Mindanao
Still on nickel production, major producers like Rio Tuba Nickel Mining Corporation
in Palawan, Taganito Mining Corporation in Surigao Del Norte, Platinum Group Metals
Corporation in Surigao Del Norte and SR Metals Inc. in Agusan Del Norte, all incurred
production setback both in volume and value.
Another mining project in suspended status prior to the mine audit is the Camachin
Iron Ore Mining Project of Ore Asia Mining and Development Corporation located in
Bulacan.
Mt. Sinai Mining Exploration and Development Corporation located in Eastern Samar
has also temporarily ceased its operations due to poor demand and low metal price of
chromite. While the Special Mines Permit No. 01-2015 of Emir Mineral Resources
Corporation expired last 28 August 2016.
On metal prices, precious metals gold and silver both enjoyed growth of almost 17%
and 19%, respectively. The average price of gold grew from $1,163.59 per troy ounce
to $1,360.85 per troy ounce, up by $197.26. Silver on the other hand, went up from
US$15.72 per troy ounce to US$18.63 per troy ounce up by US$2.91. While base
metals, copper and nickel both recorded declines of 3% and 11%, respectively.
Copper slipped from US$2.48 to US$2.40 per pound, while nickel went down from
US$5.34 per pound to US$4.75 per pound year-on-year.
On Department of Environment and Natural Resources (DENR) Memorandum Order
(DMO) No. 2016-01 which covers auditing of all operating mines including mines under
suspension and/or care and maintenance status. On 27 September 2016, DENR
Secretary Regina Paz L. Lopez announced the initial result of the mine audit. The
initial result of the audit team recommended the suspension of 20 metallic mines. The
composition of which in terms of minerals being produced is as follows: three (3) gold
with silver mines; one (1) copper with gold and silver mine; two (2) chromite mines;
and 14 nickel mines. All the 14 nickel mines in the list are located in Mindanao.
The metallic mining companies who passed the mine audit include: 1) Philex Mining
Corporation; 2) Rio Tuba Nickel Mining Corporation; 3) Atlas Consolidated Mining and
Development Corporation; 4) Techiron Resources Inc.; 5) Cagdianao Mining
Corporation; 6) Platinum Group Metals Corporation; 7) Greenstone Resources
Corporation; 8) Philsaga Mining Corporation; 9) Taganito Mining Corporation; 10)
Pacific Nickel Philippines, Inc. and 11) Apex Mining Company, Inc. According to
DENR, the final result of the mine audit will be released soon.
To date, although the initial result of the mine audit were announced in September
2016 and recommended for the suspension of twenty (20) operating mines, no
suspensions from the said list were actually made or imposed. The mine audit did not
substantially affect the production performance of the metallic mines in 2016.
In a worst case scenario where operating recommended for suspension are finally
suspended, the immediate impact to the economy in terms of investment, employment
and production are conservatively estimated to be as follows:
o Affected investment will be 27.54% of the total investment or US$1.69
billion from US$4.45 billion.
Investment of 41 Operating Metallic Mines
NUMBER OF
PROJECTS
% INVESTMENT INVESTMENT (US$ Million)
INVESTMENT (Php Million)
Operating Mines 11 72.46 4,446.67 204,546.82
Mines in suspended status prior to mine audit/Mines recommended for suspension
30 27.54 1,689.93 77,751.08
Total 41 100.00 6,136.60 282,297.90
Foreign exchange rate used US$1.00 = Php46.00 As of December 2015
o In terms of employment generation, 42.79% or 19,674 of the current workforce stood to lose their jobs in case of mine closures. Not to mention, the employment generated from livelihood/enterprises/small businesses created due to the presence of mining operations in the host and neighboring communities. The role of mining when it comes to employment generation whether direct or indirect in the rural areas cannot be overly emphasized. It is estimated that about four (4) indirect jobs may be generated for every direct employment in the upstream and downstream sectors.
Employment of 41 Operating Metallic Mines
NUMBER OF PROJECTS
EMPLOYMENT % EMPLOYMENT
Operating Mines 11 26,303 57.21
Mines in suspended status prior to mine audit/Mines recommended for suspension
30 19,674 42.79
Total 41 45,977 100.00
While estimates vary, it is conservatively assumed that for every job in the company, about four (4)
indirect jobs may be generated in the upstream and downstream sectors.
Possible Impact of the Initial Result of the Mine Audit to Metallic Mineral Production
o Based on 2016 data, Masbate Gold Project of Filminera Resources
Corporation (FRC)/Philippine Gold Processing and Refining
Corporation (PGPRC) and Didipio Gold Project of OceanaGold
Phils., Incorporated (OGPI) Incorporated were the top gold producers
accounting for 28% or 6,414 kilograms and 20% or 4,576 kilograms
of the total gold produced, respectively. While in terms of silver
production OGPI took the second spot with 23% or 7,901 kilograms
and FRC/PGPRC followed at third spot with 22% or 7,430 kilograms
of the total silver production. The absence of these two (2) mining
projects to the production stream would certainly create a vacuum
since said companies are among the top precious metal producers
in the country.
o Likewise, for base metals copper and nickel, we are looking at a
decline of 26% and 67%, respectively. Currently, we only have three
(3) copper mines Carmen Copper Corporation, Philex Mining
Corporation and OceanGold Phils. While for nickel of the twenty-
eight (28) nickel mines only five (5) passed the initial metallic mine
audit result released last September 2016.
o It is important to note that the decline in mineral production is
tantamount to lower taxes, fees and royalties collected by the
government both national and local. Mineral exports is also expected
to go down.
Still on DMO No. 2016-01 which also covers the moratorium of acceptance,
processing and/or approval of mining applications and/or new mining projects for all
metallic and non-metallic minerals. The processing of the feasibility studies of the
following mining projects were put on hold because of the said moratorium:
1) Silangan Copper-Gold Project of Silangan Mindanao Mining Company located in
Surigao del Norte; 2) Nickel and Chromite Mining Project of Westchinamin
Corporation in Zambales; 3) Mabilo Mining Operation of Mt. Labo Exploration &
Development Corporation in Camarines Norte; 4) Camachin Iron Ore Mining Project
of Ore Asia Mining & Development Corporation; and 5) Pargum Gold Project of
Pargum Consolidated Corporation in Camarines Norte.
The government is firm in its policy that the utilization of the country’s mineral
resources should only be allowed when the proposed mining operation is technically
feasible, environmentally compliant, socially acceptable and financially viable. The
absence of any of these imperatives means that it is not the time to mine.
To realize the true potential of our mineral resources, the government shall pursue
policy directions toward a long term and stable policy environment. Focus shall be on
the following areas: 1) Minerals and metal led industrialization initiatives; 2)
Streamlining of application procedures; 3) Mines and Geosciences Bureau led inter-
agency coordination of regulatory agencies in mining projects; 4) Strong community
relations programs; and 5) Final land use options of mineral lands.
Table 1. Philippine Metallic Mineral Production, CY 2016 vs CY 2015
Table 2: Philippine Gold Production
Quantity: Kilograms Value: PhP
Table 3: Philippine Silver Production
Quantity: Kilograms Value: PhP
Quantity Value Quantity Value Quantity Value
PRIMARY PRODUCERS
Lepanto Cons. Mng. Corp. Victoria Gold Project 735 1,399,721,328 659 1,109,753,615 11 26
Benguet Corporation Acupan Contract Mng. Project 450 826,367,963 686 1,137,774,375 -34 -27
Mindanao Mineral Processing and
Refining Corporation (MMPRC)/Philsaga
Mining Corp.
Co-O Gold Project
2,676 5,127,177,225 3,385 5,716,457,168 -21 -10
APEX Mining Company Inc. APEX Maco Operation 1,445 2,997,110,268 1,450 2,062,293,293 0 45
Various Small Scale Mines based on
Purchases of BSP* 140 174,215,444 63 96,847,288 124 80
Filminera Resources Corporation/Phil.
Gold Processing & Refining Corp. Masbate Gold Project 6,414 13,566,213,132 5,470 9,169,501,495 17 48
Greenstone Resources Corporation Siana Gold Project 1,721 3,317,570,566 821 1,476,814,349 110 125
FCF Minerals
Runruno Gold-Molybdenum
Project 254 494,692,639 0 0
SECONDARY PRODUCERS
Philex Mining Corp.
Padcal Copper-Gold Operation
3,213 6,236,337,705 3,356 5,642,864,781 -4 11
Carmen Copper Corporation
Toledo Copper Operation -
Lutopan Miining Area 0 0 12 16,792,852 -100 -100
Carmen Copper Corporation
Toledo Copper Operation -
Carmen Mining Areai 1,050 1,994,658,801 933 1,492,479,100 13 34
Oceana Gold Philippines Inc. Didipio Copper Gold Project 4,576 8,713,120,373 3,809 6,318,672,611 20 38
TOTAL 22,674 44,847,185,443 20,643 34,240,250,925 10 31
Name Of Producer Project NameCY 2016 CY 2015 % Change
Quantity Value Quantity Value Quantity Value
PRIMARY PRODUCERS
Lepanto Cons. Mng. Corp. Victoria Gold Project 1,218 32,199,889 1,543 35,024,911 -21 -8
Mindanao Mineral Processing and
Refining Corporation (MMPRC)/Philsaga
Mining Corp.
Gold Processing Plant 682 17,741,122 882 20,055,422 -23 -12
Benguet Corporation Acupan Contract Mng. Project 74 1,441,198 196 3,120,116 -62 -54
APEX Mining Company Inc. APEX Maco Operation 8,380 237,857,081 7,947 149,382,119 5 59
Filminera Resources Corporation/Phil.
Gold Processing & Refining Corp.
Masbate Gold Project
7,430 198,128,951 4,309 97,906,341 72 102
Greenstone Resources Corporation Siana Gold Project 1,888 46,087,855 816 21,028,206 131 119
FCF Minerals Runruno Gold-Molybdenum
Project 68 1,891,251 0 0
SECONDARY PRODUCERS
Philex Mining Corporation Padcal Copper-Gold Operation 3,109 86,846,077 3,109 69,756,652 0 24
Carmen Copper Corporation
Toledo Copper Operation -
Lutopan Miining Area 0 0 0 0
Carmen Copper Corporation
Toledo Copper Operation -
Carmen Mining Areai 3,465 89,083,075 2,358 53,276,489 47 67
Oceana Gold Philippines Inc. Didipio Copper Gold Project 7,901 206,037,320 8,621 197,466,856 -8 4
TOTAL 34,216 917,313,821 29,780 647,017,112 15 42
Name Of Producer Project NameCY 2016 CY 2015 % Change
Table 4: Philippine Copper Production
Quantity: Concentrate in DMT Copper content of concentrate in MT Value: PhP
Table 5: Philippine Chromite Production
Quantity: DMT
Value: PhP
Table 6: Philippine Iron Ore Production
Quantity: In DMT
Value: In PhP
Table 7: Philippine Mixed Nickel Sulfide Production
Quantity: Mixed Sulfide in DMT
Mixed Sulfide in MT
Value: PhP
Quantity Value Quantity Value Quantity Value
Philex Mining Corporation Padcal Copper-Gold Operation
Concentrate 73,109 3,781,363,677 69,988 3,639,396,637 4 4
Copper content of concentrate 15,860 15,471 3
Carmen Copper Corporation
Toledo Copper Operations
(Lutopan Mng Area)
Concentrate 0 0 2,377 154,632,228 -100 -100
Copper content of concentrate 0 632 -100
Carmen Copper Corporation
Toledo Copper Operations
(Carmen Mng Area)
Concentrate 175,700 9,088,807,112 170,920 9,407,672,461 3 -3
Copper content of concentrate 46,666 44,815 4
Oceana Gold Philippines Inc. Didipio Copper Gold Project
Concentrate 86,856 4,889,748,289 93,900 5,718,912,067 -8 -14
Copper content of concentrate 21,123 22,917 -8
TOTAL
Concentrate 335,665 17,759,919,078 337,185 18,920,613,393 0 -6
Copper content of concentrate 83,649 83,835 0
Name Of Producer Project NameCY 2016 CY 2015 % Change
Quantity Value Quantity Value Quantity Value
Techiron Resources Inc. Homonhon Chromite Project 25,745 182,618,406 12,469 90,400,325 106 102
Krominco Inc. Dinagat Chromite Project 0 0 3,033 23,127,641
Total 25,745 182,618,406 15,502 113,527,965 66 61
Name Of Producer Project NameCY 2016 CY 2015 % Change
Quantity Value Quantity Value Quantity Value
Ore Asia Mining & Development
Corporation
Camachin Iron Ore Mining
Project 6,549 12,273,594 107,119 226,760,752 -94 -95
Total 6,549 12,273,594 107,119 226,760,752 -94 -95
Name Of Producer Project NameCY 2016 CY 2015 % Change
Quantity Value Quantity Value Quantity Value
Coral Bay Nickel Corporation Coral Bay HPAL Project
Mixed Sulfide in DMT 36,783 9,359,256,000 40,991 10,485,341,000 -10 -11
Mixed Sulfide in MT 21,010 23,687 -11
Taganito HPAL Nickel Corporation Taganito HPAL Project
Mixed Sulfide in DMT 42,310 5,710,954,662 48,473 8,603,644,863 -13 -34
Mixed Sulfide in MT 24,603 28,047 -12
TOTAL
Mixed Sulfide in DMT 79,093 15,070,210,662 89,464 19,088,985,863 -12 -21
Mixed Sulfide in MT 45,613 51,733 -12
Name Of Producer Project NameCY 2016 CY 2015 % Change
Table 8: Philippine Nickel Production
Quantity: Direct Shipping Ore (DMT) Nickel Content of Ore (MT) Value: PhP