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Mining in the Municipality of Tampakan:

risks and alternativesJustice and Peace Desk

Social Action Center, Diocese of MarbelWith Arturo Boquiren

Assistant Professor, EconomicsUniversity of the Philippines-Baguio

Sr. Pat BabieraCoordinator, Justice and Peace Desk

Fr. Romeo CatedralDirector

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Key results: Benefits from mining

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Opportunity cost analysis of benefit• Opportunity costs are benefits foregone or

deprived from a community (economic agent) given alternative or better uses for a resource

• One possible best use for the lands covered by mining is through a combination of agriculture, agro-forestry, and forest development

• Comparative analysis was used to determine what is superior: use the land for mining or use it for a combination of agriculture, agro-forestry, and forest development. This is done through the use of a proxy

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Basis for opportunity cost analysis• Mining in Tampakan will initially involve at least

81,000 hectares

• Although there is provision in the mining law that lands for exploration will be limited to only 5,000 by the 8th year of exploration, Tampakan ore targeted by Sagitarius mines is scattered in around 144 hectares of land

• Other than 144 hectares of land, mine operators will need a mill, tailing ponds, and various types of land for operation

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SMI data implies that the ore is located in an area of around 144 hectares

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Implication

•Net economic benefit from Tampakan mining is zero

• If potential environmental damage is considered net benefit from mining is a large negative number

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Risks of mining in municipality of

Tampakan

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Comparison: Philex and Tampakan• Philex milled 311 million metric tons of ore between

1955 to 2006

• Today, Philex will mill 54 million metric tons in six years or around 9 million metric tons per annum

• Tampakan mining will mill 2.2 billion metric tons in 25 years implying 88 million metric tons per annum or more than 10 times of Philex mining from 1955 to 2008

• Thus, Tampakan mining is unprecedented and more than 10 times the environmental impact and risks of Philex mining

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How does an ISO-certified mining company operate

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Like Philex, Tampakan mining will require not only the area for ore mining but also land for the following• Space for the mined ore

• Milling

• Tailing ponds

• Company facilities

• Public relations facilities

• Dams (tailing ponds must be linked to rivers that have dams preferably for environmental damage controls)

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Thus, Tampakan mining will require

• Ten times the tailing ponds required in Philex mining • Dams or dam services more than that provided today by

the San Roque Dam• Mining in Benguet or environmental damage from Benguet

mining are addressed or subsidized by government through the San Roque mega dam that serve as a catch dam for tailing ponds. Mega dams have risks

• In addition, the tailing ponds themselves have risks. For instance, the 1992 breakdown of a Philex tailing pond in Benguet released 80 million metric tons of mine waste to the environment

• Tampakan mining have the potential create unprecedented social unrests in Tampakan and South Cotabato as farms are deprived of water and exposed to mine tailings or as dams as created similar to the San Roque dam or as tailing ponds similar to those in Benguet are created

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How do tailing ponds look?

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Establishment of Philex-type tailing ponds times 10 with Tampakan Mining (source: Philex PowerPoint Slides)

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From the sky, this how tailing ponds look like (vicinity of Philex mining and tailing ponds are in the northeast of the picture):

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Possible route of wastes 1: Malalag Bay and Davao Gulf

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Possible route of wastes 2: Buluan lake

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Implications:• Tampakan mining threatens the tuna industry of

Gensan that generates around P15 billion annually and the multi-million fish industries of Lake Buluan and Malalag Bay and Davao Gulf

• Thousands of hectares of farmlands are threatened with mine wastes from 88 million metric tons of ore annually

• Farms will be deprived of water that will be used by mining companies and as water tables are disturbed or rerouted

• Given that net benefits from mining is already zero as alternatives exist that can provide incomes comparable to Tampakan mining, the above implies that the net benefits from mining is a large negative number

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Our limitation: the following is still unanalyzed