Digging for profits: Who owns PH mines?
QUICK FACTS
Name of mining firm: Eramen Minerals Inc.
Location: Sta. Cruz and Candelaria, Zambales
Mining area: 4,619.69 hectares
Metals extracted/mine products: Nickel ore
Mine production: None reported for 2020 and 2019
Mining permit period: 2005-2030
OWNERSHIP
Incorporation date: Sept. 4, 2002
Stockholders:
Eramen Holdings Corp.
Fernandez, Enrique C.
Reyes, Oscar S.
Disini, Artemio F.
Dominguez, Leo G.
Chairperson of the Board: Fernandez, Enrique C.
MINING REVENUE
Current assets: P651.55 million (2018)
Current liabilities: P221.96 million (2018)
Total revenue: P860.35 million (2018)
Revenue from sale of nickel ore: P860.35 million (2018)
Net income: P106.88 million (2018)
MINE AUDIT FINDINGS (2016/2017)
According to the Notice of Issuance of an Order sent to Eramen Minerals Inc., an order was given to the firm on Feb. 8, 2017 pertaining to operations under MPSA 209-2005-III.
The audit found that the company had committed violations of mining and environmental laws, such as: non-submission of the 2015 Integrated Annual Report; lack of discharge permits for the settling ponds; failure to desilt filled-up settling ponds and silt traps; failure to maintain safety berms, resulting in gully erosion; lack of a water permit; lack of a tree-cutting permit; and incomplete implementation of the 2015 annual Social Development and Management Program, among others.
Field validation by the DENR determined that Eramen’s mining operations have impaired the functions of the watershed in the area.
The DENR review of the audit report as well as explanations from the company showed that it had violated certain provisions of the following laws, rules, and regulations:
- RA 9275 or the Clean Water Act of 2004;
- DAO 2005-10 or the IRR of the Clean Water Act of 2004;
- RA 8749 or the Clean Air Act of 1999;
- DAO 2004-26 or the Amending Rule IXI of DENR DAO 200-81 (IRR of RA 8749);
- RA 7942, the Philippine Mining Act of 1995, and its IRR;
- DAO 2000-98 or the Mine Safety and Health Standards; and
- PD 705 as amended, or the Revised Forestry Code of the Philippines, and its IRR.
The 2017 order stated that these violations constituted sufficient grounds for the cancellation of Eramen’s MPSA.
The full report and/or copy of the DENR order may be viewed here.
STATUS OF RECOMMENDATIONS / COMPANY RESPONSE (AS OF MARCH 2022)
PCIJ sent a letter to the company on Feb. 14, 2022 and made follow-ups on March 2, 2022 and March 24, 2022. We have not received a response as of this writing.
STATUS OF OPERATIONS
Eramen’s mineral production sharing agreement (MPSA) is suspended, according to the Mines and Geosciences Bureau’s list of MPSAs as of Feb. 28, 2021.
On Feb. 8, 2017, the DENR cancelled the company’s permit for supposedly violating provisions of the following:
● Philippine Clean Water Act of 2004 and its implementing rules and regulations;
● Philippine Clean Air Act of 1999 and its amending Rule IX;
● Philippine Mining Act of 1995 and its implementing rules and regulations; and
● Revised Forestry Code of the Philippines.
In its appeal with the Office of the President, Eramen addressed the issues raised by DENR, claiming, among others, that the “non-issuance of the tree-cutting permit is the fault of the DENR as they failed to act on the various permits applied by the company” and that its mining operation “has not adversely impaired the functions of the watershed in the area based on a one-year scientific study conducted by UP NIGS (the University of the Philippines’s National Institute of Geological Sciences).”
The company also argued that the DENR violated the terms and conditions of the MPSA when it did not resort to arbitration before cancelling the agreement. Prior to the 2017 closure order, the DENR in 2014 directed the company to suspend its hauling operations until certain conditions were met.
In 2016, concerned citizens of Sta. Cruz, Zambales filed a petition for a Writ of Kalikasan, an injunction, against five mining firms including Eramen. The Supreme Court granted the petition. But after petitions before the Court of Appeals, the provisional Writ of Kalikasan issued by the high court was lifted.
COMMUNITY PROFILE
Municipality class of mining location: Sta. Cruz, Zambales (1st class)
Population: 58,151 (2015)
Poverty incidence rate: 23.7% (2015)
Human Development Index: 0.53 (2012, provincial)
Municipality class of mining location: Candelaria, Zambales (3rd class)
Population: 27,174 (2015)
Poverty incidence rate: 20.54% (2015)
Human Development Index: 0.53 (2012, provincial)
IN THE NEWS
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Sources:
General Information Sheet, 2020
Financial Statement, 2018
List of existing Mineral Production Sharing Agreements, Mining and Geosciences Bureau
Philippine Metallic Mineral Production, Mines and Geosciences Bureau
Poverty and socioeconomic indicators, Philippines Statistics Authority
Copy of full Mine Audit Reports by company, 2016
Copy of Notices of Issuance of an Order, 2017
Copy of Orders of Cancellation and/or Suspension, 2017
Acronyms used:
RA (Republic Act)
IRR (Implementing Rules and Regulations)
PD (Presidential Decree)
DAO (Department Administrative Order)
MPSA (Mineral Production Sharing Agreement)
SDMP (Social Development and Management Plan)
Disclaimer: The mine audit was conducted in 2016 after Regina “Gina” Paz Lopez assumed the post of environment secretary. The findings in the reports, which authorities sent to the mining firms in 2016, were likely addressed in the succeeding years following a review conducted by the Mining Industry Coordinating Council after the audit led by Lopez, who died in 2019. PCIJ has verified the reports and reached out to each company for comment. We suggest you also confirm findings included in the reports as some information may have changed over time.
The reports come from files that PCIJ has received in connection with various environmental investigations. We are releasing them in full, recognizing the public value of the files to mining communities, miners, policymakers, civil society, and researchers.
Note: The Human Development Index is a measure of how well a country has performed, not only in terms of real income growth, but also in terms of social indicators that measure people's ability to lead a long and healthy life, acquire knowledge and skills, and have access to the resources needed to afford a decent standard of living. An HDI value below 0.550 is considered low and below 0.399 is very low. The national average for the Philippines is 0.718 as of 2020.
This article was produced with the support of Internews' Earth Journalism Network.