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Mining Caraga Caraga Mining Situation Under the Benigno Aquino III Presidency Updated 2011 October First Printed 2009 October Caraga Region, under the Gloria Macapagal-Arroyo government, was touted to be the mining capital of Asia. Thousands of hectares of forest land and mountains– ancestral lands of the Lumad people – were offered to foreign mining companies for exploitation. What followed was a deluge of mining operations. Within a couple of years, landslides and flash floods struck the region which affected lives and the very livelihood of the people of Caraga. Oplan Bantay Laya 2 was unleashed to quell the people’s growing opposition to the anti-people policies and programs of the Arroyo government, such as RA 7942. Areas with and targeted for mining operations especially those with movements that opposed mining, were highly militarized. This resulted in repeated incidents of forced evacuation of whole communities and caused economic dislocation of Lumad and peasant communities. Promising to be the antithesis of his predecessor, Noynoy Aquino mouths respect for human rights, promises an end to poverty and calls the Filipino people his “Boss” whom his government would serve by following the “daang matuwid.” His administration however, has proven no different from that of Mrs. Arroyo, essentially merely continuing her government’s thrusts and programs. Under his governance, Caraga region continues to be inundated with applications and operations of foreign and local mining companies and plantations that dislocate thousands and are threatening further destruction to the region and its people. THE CARAGA REGION The Caraga Region is made up of five (5) provinces, six (6) cities, seventy-one (71) municipalities and 1,306 barangays. It is situated in the northeast section of Mindanao. It is bounded on the north by the Bohol Sea; on the south by Region XI’s provinces of Compostela Valley and Davao Oriental; on the west by Region X’s Bukidnon and Misamis Oriental; and on the east by the Philippine Sea and the Pacific Ocean. It has a total land area of 1,884,697 hectares, representing 6.3% of the country’s total land area and 18.5% of Mindanao. It is largely composed of mountainous areas and flat and rolling lands. The Diwata mountain ranges divide the Agusan and Surigao provinces and sub-ranges separate most of the lowlands along the Pacific coast. The most productive agricultural area is located along the Agusan River Basin. It is home to the famous Agusan Marsh which lies at the heart of Agusan Del Sur. Among the lakes in the region, Lake Mainit is the widest, covering eight municipalities: Alegria, Tubod, Mainit and Sison in Surigao Del Norte and Tubay, Santiago, Jabonga and Kitcharao in Agusan Del Norte.

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Rich In Natural Resources Agriculture remains the main source of income of the people of Caraga with 452,600 hectares cultivated with rice, corn, coconut, bananas, mango and root crops for local consumption. Crops for export include palm oil, covering 100 square kilometres in Agusan del Sur; rubber; abaca; coffee and pineapple. Filipinas Palm Plantation Incorporated (FPPI) in Agusan del Sur is one of the biggest oil palm plantations in the region. Secondary source of income is fishing with the two Surigao provinces and Dinagat Island facing the Pacific Ocean. It is rich in marine resources and is the main source of fish in the region and in Northern Mindanao. 71.2% of the total land area of the region is forested with its dipterocarp coverage the third most extensive in the country. It has been host to large logging companies during the 80’s until the 90’s including PICOP Resources Incorporated (PRI) and SUDECOR of the Puyat family which continues to operate to date. Minerals According to the Mines & Geosciences Bureau (MGB-DENR), Caraga region has the 4th largest copper deposit, 3rd gold deposit, 5th nickel and 6th chromite deposits in the world. It also has the world’s biggest iron ore deposit within the mountains of the two Surigao provinces. It has the largest nickel (9.73%) and gold (11.10%) deposit in the country. Surigao Sur, Surigao Norte and Agusan del Norte are the principal gold‐producing provinces in what is called the Barobo Gold Corridor and the Surigao Gold District. Deposits of metallurgical grade chromite are found in Dinagat Island. Vast nickel laterites are found in Surigao del Norte and extensive deposits of aluminum bauxite are found in Bucas Grande Island. Coal, the country’s major lignite reserve, can be found in three of its provinces: Agusan del Sur, Surigao del Norte and Surigao del Sur. The biggest reserve of coal is said to be found in Bislig and the Andap Valley Complex which covers the municipalities of Tandag,Tago, San Miguel, Cagwait, Marihatag, San Agustin and Lianga in Surigao del Sur. Industrial non-metallic minerals such as marble, aggregates, limestone for cement and feldspar, among others, are also in abundance. EXPLOITING NATURAL RESOURCES The region’s mining resources have been extracted in various scales since the pre‐Hispanic period, but never has resource extraction been as extensive or as destructive as the present. Surigao del Norte nickel was first exploited in 1975. The nickel deposit in Nonoc, Surigao del Norte was mined from 1975 to 1982. Prior to the Mining Act of 1995 (RA 7942), there were already twelve large mining companies operating in Surigao del Norte alone. HEIGHTENED EXPLOITATION UNDER AQUINO The Aquino government continues to promote the mining industry as a major economic growth area of the Philippines. At present, 10 of the 22 Operating Expansion Projects in Mining are in the Caraga Region.

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The Nonoc Nickel Project is currently in the Feasibility/ Financing Stage covering 25,000 hectares. A $1.5 billion investment to rehabilitate the Nonoc Mining Project has allegedly been committed by Chinese company Jinchuan during Aqunio’s recent trip to China. The $2.107B Surigao Sumitomo HPAL Project is currently under construction and is set for operation in 2013. Eight (8) of the 11 nickel mines in the country are in the Surigao provinces.

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As of June 2011 there are 54 existing Mineral Production Sharing Agreements (MPSA) in the region covering 125,670 hectares; 36 Mineral Production Sharing Agreements (MPSA) Applications covering 91,429.17 hectares; 16 Existing Exploration Permits (EP) covering 31,367 hectares and 128 Exploration Permits Applications (EP) covering an additional 534,543.22 hectares. In all, 783, 009.39 hectares have been allocated for mining covering 41.54% of the region's total land area, one third bigger than the 24% land area reserved for agriculture.

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Foreign Mining Companies In Caraga Anglo American

Has a joint venture with local firm Philex Mining Corp. in the Boyongan Copper Project at the boundaries of Surigao del Norte and Agusan del Norte.

Has joint venture project with Manila Mining Corp. for the Bayugo Gold‐Copper Project ‐ the Kalayaan Project, in Surigao del Norte.

Has 12 pending applications for exploration permits, seven in the Surigao and Agusan Norte areas.

BHP Billiton Is one of the biggest buyers of nickel in the Philippines. It has a purchasing agreement with Platinum Group Metals Corp. (PGMC), which operates two

nickel mines in Surigao Norte and Isabela. It collaborated with QNI Philippines in 2002, which made a joint venture agreement with

Asiaticus Management Corporation (Amcor) over the Pujada mining project in Davao Oriental. Red 5 Limited

Has 90% beneficial interest in the Siana Gold Project. The project covers an area of approximately 33 square kilometers focused around the Siana Gold Mine in the established gold mining region of Surigao del Norte.

Greenstone Resource Corporation is its local subsidiary in the Siana Gold Project that took over the Surigao Consolidated Mines site in Siana, Surigao del Norte.

It has over 1,700 shareholders including AngloGold Ashanti Australia Limited with 10% share. Medusa Mining Limited

Owns the Mindanao Mineral Processing and Refining Corporation (MMPRC) which is in charge of the Bananghilig and Co‐O mines in the Barobo Gold Corridor in Barobo, Surigao del Sur.

MMPRC is involved in small scale mining and organizing mining cooperatives. It also operates the Das-agan Project in the Lingig Copper Discovery.

Its subsidiary, Philsaga Mining Corporation (Philsaga) operates the Tambis Project, comprising the Bananghilig and Kamarangan prospects with Philex Gold Philippines Inc. with an MPSA covering 6,262 hectares of land in Barobo, Surigao del Sur.

It has Joint Venture Agreements (JVA) with MRL Philippines to mine areas in the Surigao Agusan del Norte areas and Bunawan Mining Corporation in Agusan del Sur along with a memorandum of agreement with Abacus Consolidated Resources and Holdings Inc. for exploration of 8,100 hectares in Agusan del Sur.

Mindoro Resources Ltd. Is a Canadian company that organizes small‐scale mining cooperatives. Its Philippine subsidiary is MRL Gold Philippines Inc. manages the Agata and Tapian San

Francisco Mining Projects which covers 7 areas for copper, nickel and gold mining. The Agata and Tapian San Francisco Projects are situated in the Surigao Gold District in

Surigao del Norte. The mining areas of Red 5 Limited and Mindoro Resources Ltd. surrounds Lake Mainit, the

Philippine’s 4th largest lake. Semco Exploration And Mining Co.

Is British‐owned and has exploration permits for copper and gold in close to 2,000 hectares in Cabadbaran and Tubay, Agusan del Norte

Exploration permit for its Pakuan Property of over 10,000 hectares at Pakuan, Cantilan, Surigao Sur.

Century Peak Metals Holdings Corporation Owns Century Peak Corp. (CPC), the nickel mining company operating in Loreto, Dinagat

Islands and Century Hua Guang Smelting Inc..

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Century Hua Guang Smelting Inc. is a joint venture of CPMHC with the owners of Zhejiang Hua Guang, a privately‐owned Chinese corporation and one of the largest nickel pig iron producers in China, to establish a blast furnace facility in the Philippines with the purpose of producing nickel pig iron.

Coal mining has started in the region. The Department of Energy (DOE) launched its Philippine Energy Contracting Round (PECR) in 2005, 2006 and 2009. Coal blocks in the Andap Valley Complex in Surigao del Sur has been on offer since 2005. The Complex covers the municipalities of Tandag, Tago, Cagwait, San Agustin, Marihatag and Lianga in Surigao del Sur. Offered in its PECR 2006 and 2009 are coal blocks in Bislig, Surigao del Sur; Gigaguit in Surigao del Norte, Kitcharao in Agusan del Norte and Bunawan, Trento and Sibagat in Agusan del Sur. Around 70,000 hectares of land has been contracted for coal mining as of September 2009. On June 19 and 23, 2011, Abacus Coal Exploration and Development Corporation (AbaCoal) disclosed its shift to the production and development phase for Coal Operating Contract No. 148 covering 7 coal blocks or 7,000 hectares within the mountains of Tago and Marihatag, Surigao del Sur. According to AbaCoal’s work program it “intends to start producing coal in January 2012”. Its Coal Operating Contract with the DOE is for 10 years effective January 2010 and renewable for another 10 years for the next contract and every three years thereafter. WHAT DEVELOPMENT? It has always been said by the government and mining companies that investments in the mining industry will bring development and alleviate poverty. However, even with the increase in mining investments, Caraga remains among the poorest regions with 3 of its provinces perennially included among the top ten poorest provinces in the country.

The mining industry has not provided stable and broad employment as most workers in the mining industry are employed by contractual basis. The destruction of the environment brought about by mining deprives the peasants of their land, the small fisherfolks of their livelihood and has displaced thousands from their homes and farmlands. Landslides and flashfloods has resulted in the decrease in rice and corn production in the region, caused a halt to the economic activities because of impassable roads and destruction of small businesses. Tax holidays and other incentives covering years of operation awarded by the Philippine government to foreign mining companies hugely decrease the government’s collections from the industry. CASUALTIES OF MINING Large-scale Environmental Degradation 26 were reported dead by the NDRRMC during the January 2011 flash floods in the Caraga Region which affected 76,078 families. Damage to agriculture amounted to P 13 million while damage to infrastructure reached P72.6 million (GMA News Online January 6, 2011). Roads were impassable

DOE 6 Coal Operating Contracts (COC) as of 2009 1. Philippine National Oil Company – Exploration Corporation

(PNOC-EC): Tago: Exploration 2. Benguet Corporation: Lianga, Marihatag & San Miguel,

Surigao del Sur: Development and Production 3. Great Wall Mining & Power Corp. (*former COC of

CAREMINER): San Miguel, Tandag, Surigao del Sur: Exploration

4. Lodestar Consolidated Holdings, Inc. (Bought from Abacus Consolidated Resources & Holdings Inc.: Tandag, Surigao del Sur: Exploration

5. Oriental Energy and Power Corp. 6. ASK Mining and Exploration Corp. 7. Bislig Ventures and Development Corp. (M.G. Mining and

Energy Corporation), Bislig, Surigao del Sur: Exploration (2 COCs)

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which halted the region’s economy for more than 2 days. Caraga is perennially threatened with landslides and flashfloods during the rainy season. The contamination of potable water sources, poisoning of the air, water and soil, siltation of the coastline and natural waterways and degradation of nearby fishing grounds, destruction of habitats and decrease in biodiversity are among the indisputable impact of mining on the human and ecological environment. Intensifying Militarization, Increasing Human Rights Violations The human rights situation in Caraga has not improved under the Aquino Administration. Just like Arroyo, Aquino has unleashed yet another internal security campaign similar to, even far surpassing Oplan Bantay Laya, in its deceptive and militarist character. It has deployed Community Organizing for Peace and Development (COPD) teams to lumad and peasant communities targeted for mining under the guise of counter-insurgency campaigns. He has ordered the strengthening of Arroyo’s “investment security forces”, deploying hundreds of these “to investment intensive areas” to secure mining and other foreign interests, quell the peoples struggle to protect their land and their rights against such destructive operations and ensuring the smooth exploitation of Philippine resources by foreign companies. There are 6 battalions deployed and scattered all over the Caraga region: 36th, 58th, 23rd, 26th, 29th and 30th IBPA. The 30th IB PA concentrates on Surigao and Agusan del Norte; the 36th IBPA in Agusan del Sur and Surigao del Sur, the 29th IBPA in Surigao del Sur; the 58th IBPA in the first district of Surigao del Sur. The 23rd IBPA are deployed in the CAFGU detachments in Agusan del Sur. The 26th IB PA are deployed in Sibagat, Bayugan, Prosperidad, San Luis, La Paz and Talacogon in Agusan del Sur. There are two infantry brigades in the region, the 401st Infantry Brigade main headquarters is located in St.Christine, Lianga, Surigao del Sur and the 402nd Infantry Brigade in New Leyte, Prosperidad, Agusan del Sur. Logging and mining companies have their own security forces (Special Citizen Auxiliary Army-SCAA), the largest number of SCAAs are of the PRI scattered in the municipalities of Tagbina, Hinatuan, Bislig ang Lingig; SCAAs of the FPPI are in Bunawan, Rosario, and Trento in Agusan del Sur while the Puyat SCAAs are in Lanuza, Carmen, Madrid and Cantilan in Surigao del Sur. There is also an increase in the number of paramilitary forces like the CAFGU, CVO, BIN, Bantay Bayan, Bantay Purok, village patrols in every barangay in what is

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called the Barangay Defense System (BDS). The implementation of Oplan Bayanihan in January of this year and the subsequent round of military operations in mountain communities has resulted to evacuations of communities in the region. May 20, 2011: Evacuation of 90 Mamanwa and peasant settler families/405 individuals from Sitio Zapanta, Brgy. Bangayan, Kitcharao, Agusan del Norte. September 1, 2011: 106 residents of Ansili and Zapanta Valley of Brgy. Bangayan, Kitcharao, Agusan del Norte were again dislocated due to the ongoing military operations of the 402nd ID and 30th IB PA on the same communities.

Surrounding Kitcharao are the municipalities in Agusan and Surigao del Norte targeted for nickel and gold mining along with the Sumitomo HPAL plant in Claver, Surigao del Norte. May 5, 2011: Evacuation of 141 families/550 individuals from Brgy. Mahaba, Marihatag, Surigao del Sur and the evacuation of 22 families from Brgy. Buhisan, San Agustin, Surigao del Sur. June 26, 2011: Evacuation of 77 families from Magkahunao and Upper Janipaan in Brgy. Buhisan, San Agustin, Surigao del Sur

Brgy. Mahaba in Marihatag is the doorway to the Andap Valley Complex – targeted for coal mining while Janipaan and Magkahunao of Brgy. Buhisan, San Agustin are adjacent communities. People’s organizations in these mountain communities are vocal in their opposition to mining. The next five years under President Aquino will bring in further exploitation of Philippine resources especially in Mindanao and particularly in the Davao and Caraga regions. The NEDA’s Mindanao Strategic Development Framework Mindanao intends to exploit Mindanao mineral deposits which are valued at $312 billion or about 40% of the country’s mineral reserves of $840. It intends to increase Caraga’s mineral output which currently contributes the most to the country’s mineral output at 8% (DENR-MGB 2008). It has taken steps to induce mining investments by easing mining application processing. His trips abroad are nothing but the peddling of Philippine lands and cheap labor mainly to mining companies. 15 officials of mining companies accompanied Pres. Noynoy Aquino in his recent trip to China. They came back with 4 nickel mining agreements with Chinese companies that is said to bring in $ 14 billion in investments for the next five years but would consequently bring destruction to the region’s environment. #

Resources: MINDANAO 1. NEDA-Strategic Development Framework 2010-2020 2. DENR-MGB: Complete list of MPSA as of June 2011 3. DENR-MGB: Complete list of FTAA as of June 2011 4. DENR-MGB: Complete list of EP as of June 2011 5. DENR-MGB: Tenement Control Map of Region XIII 2011 6. PNOC Coal areas on Offer 7. Caraga Watch: Mining Caraga, 2009

8. Kasalo: The Truth Behind the Military Operations in Surigao del Sur: Clearing the Way for Coal Mining, June 2011