Mindoro Resources Ltd Technical Report for the Agata Nickel Laterite Project, Mindanao, Philippines
20 Dec 2011
2143-RPT-0014
Title Page
The “Technical Report for the Agata Nickel Laterite Project, Mindanao, Phhilippines” (Technical Report) is produced at the request of Mr Jon Dugdale, CEO of Mindoro Resources Ltd (MRL). The Project includes the development, mining and processing of the Agata nickel laterite deeposit which is located in an established mining district of Surigao in Northern Mindanao in the Philippines.
Independent Qualified Persons:
Mark Gifford M.Sc. (Hons), FAusIMM, Geological Consultant
Dallas Cox, B Eng (Mining) MAusIMM CP, Principal Consultant of Crystal Sun Consulting
Monte Christie, PE, GE, Senior Geotechnical Engineer at Ausenco
Ruth Sherrit, B Eng (Metallurgy) MAussIMM CP, Principal Process Engineerr Ausenco
Effective Date:
20 December 2011
Submitted to:
Mindoro Resources Ltd
Distribution:
Jon Dugdale, Mindoro Resources Ltd
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Table of Contents
1 Summary 1 1.1 Description of Property 1 1.2 Geology and Mineralisation 2 1.3 Minerals Resource Estimates 4 1.4 Mineral Reserve Estimates 5 1.5 Mining 5 1.6 Metallurgy 6 1.7 Ore Processing 12 1.8 Environment 13 1.9 Economic Analysis 14 2 Introduction 19 2.1 For Whom the Report Has Been Prepared 19 2.2 Purpose of the Report 19 2.3 Sources of Information 19 2.4 Scope of Personal Inspections 20 3 Reliance On Other Experts 21 3.1 Mindoro Resources Limited 21 3.2 Mineral Commerce Services 21 3.3 Gaia South, Inc. - Environmental Consultants 21 4 Property Description and Location 22 4.1 Location 22 4.2 Land Tenure 23 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography 24 5.1 Topography 24 5.2 Accessibility 25 5.3 Climate 25 6 History 26 7 Geological Setting and Mineralisation 27 7.1 Introduction 27 7.2 Geological Setting 28 8 Deposit Types 30 9 Exploration 32 10 Drilling 32 11 Sample Preparation, Analyses and Security 37 11.1 Sampling Method and Approach 37 11.2 Sample Preparation, Analysis and Security 39 12 Data Verification 47 12.1 Data Verification 47 12.2 Bulk density determinations 48 13 Mineral Processing and Metallurgical Testing 50 13.1 Introduction 50 13.2 Previous Testwork Program 50 13.3 PFS Testwork Program 59 13.4 Comminution and Scrubbing Testwork 91 13.5 Flow Properties and Conveyability of Ores 95 14 Mineral Resource Estimates 96
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14.1 Geometric Interpretation 96 14.2 Exploratory Data Analysis 98 14.3 Variography and Estimation 100 14.4 Resource Classification 103 14.5 Interpretation and Conclusions 107 15 Mineral Reserve Estimates 107 16 Mining Methods 111 17 Recovery Methods 115 17.1 Process Plant 115 17.4 Process Description 127 18 Project Infrastructure 139 18.1 Introduction 139 18.2 Scope and Status of the Infrastructure Study 140 18.3 Transport Infrastructure 142 18.4 Water Supply 147 18.5 Power Distribution 150 18.6 General Service Buildings and Ancillary Facilities 152 18.7 Communications & IT Summary 160 18.8 Port 162 18.9 Residue Storage Facility 168 19 Market Studies and Contracts 183 19.1 Summary Outlook for nickel 183 19.2 Recent Nickel Market Situation 183 19.3 Outlook for nickel demand 184 19.4 Nickel Supply 188 19.5 Market for Mixed Hydroxide Product 192 20 Environmental 194 20.1 Introduction 194 20.2 Environmental 197 20.3 Community and Social 318 20.4 Permitting 415 21 Capital and Operating Costs 418 21.1 Scope of Estimate 418 21.2 Accuracy of Estimate 418 21.3 Summary of Capital Cost Estimate 418 22 Economic Analysis 424 22.1 Introduction 424 22.2 Economic Model Input Parameters 424 22.3 Capital Costs 425 22.4 Operating Costs 427 22.5 Life of Mine Project Financials 428 22.6 Sensitivity Analysis 431 23 Adjacent Properties (MRL) 432 24 Other Relevant Data and Information 432 24.1 Mine Operating Costs 432 24.2 Mine Capital Costs 441 25 Interpretations and Conclusions 443 25.1 Geological Setting and Mineralisation 443 25.2 Drilling 444 25.3 Sample Preparation, Analyses and Security 444 25.4 Data Verification 444
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25.5 Metallurgy 444 26 Recommendations 445 26.1 Geological Setting and Mineralisation 445 26.2 Drilling 445 26.3 Sample Preparation, Analyses and Security 445 26.4 Data Verification 445 26.5 Mining 445 26.6 Metallurgy 446 26.7 Process Plant Site Location 446 27 References 447
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List of Tables Table 1 – Agata Mineral Resource Estimates 20 September 2011, includes Bolobolo-Karihatag, Agata South ...... 4 Table 2 – Mineral Reserves ...... 5 Table 3 - Plant Feed Rates ...... 6 Table 4 - Ore Feed (Year 1-3) Slurry Settling Results ...... 8 Table 5 - HPAL Test Results at 255°C (Limonite/Low Mg Saprolite Blend at 6% Mg) ...... 8 Table 6 – Confirmatory Atmospheric Leaching Test Results ...... 8 Table 7 – Saprolite Neutralisation Test Results ...... 9 Table 8 - Settling Tests on CCD Feed Slurry at SGS Perth ...... 9 Table 9 - Settling Tests on CCD Feed Slurry at SGS Lakefield ...... 9 Table 10 - Limestone Head Assays ...... 11 Table 11 - Limestone Calcination Results ...... 11 Table 12 – Comminution Indices ...... 12 Table 13 – Limonite Scrubbing – Elemental Recoveries, 4 Minutes Scrubbing (LIM1) ...... 12 Table 14 – Limonite Scrubbing – Elemental Recoveries, 8 Minutes Scrubbing (LIM2) ...... 12 Table 15 - Summary of Financial Analysis Results ...... 15 Table 16 - Capital Cost Estimate for the Agata Nickel Project PFS ...... 16 Table 17 - Operating Cost Estimate ...... 17 Table 18 - Risk Assessment and Mitigation ...... 18 Table 19 - Climate Averages and Extremes 1961 - 2000 ...... 26 Table 20 - Ni Standards used at ANLP and frequency ...... 40 Table 21 - Variance of Original and Internal Laboratory Duplicate Analyses ...... 41 Table 22 - Variance of Ni Standard and Laboratory Assays ...... 42 Table 23 - Variance of Field Duplicate and Original Assays ...... 43 Table 24 - Variance of Coarse Reject and Original Assays ...... 43 Table 25 - Variance of Pulp Duplicate and Original Assays ...... 45 Table 26 - Variance of Pulp Duplicate and Interlab Assays ...... 46 Table 27 - Results of Independent Check on Drill Core Assays ...... 47 Table 28 - Summary of Bulk Density Measurements ...... 49 Table 29 - Source of Metallurgical Samples Tested at SGS Perth ...... 50 Table 30 - Head Analyses of Metallurgical Composites Tested at SGS Perth ...... 52 Table 31 - Scrubbing Test Results at SGS Perth ...... 53 Table 32 - Ore Slurry Settling at SGS Perth - Key Parameters ...... 53 Table 33 - HPAL Test Results on L/T Blend Samples at SGS Perth ...... 54 Table 34 - AL Tests on Saprolite Samples at SGS Perth ...... 55 Table 35 - Saprolite Neutralisation Testing at SGS Perth ...... 57 Table 36 - Settling Tests on Saprolite Neutralisation Slurry at SGS Perth ...... 58
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Table 37 - Make-up of Limonite Ore Composites ...... 61 Table 38 - Make-up of Saprolite Ore Composites ...... 62 Table 39 - Head Analyses of Metallurgical Composites Prepared at SGS Lakefield ...... 63 Table 40 - Year 1-3 Ore Feed Slurry Settling Results ...... 64 Table 41 - Ore Feed Variability – Comparison of 2-litre Cylinder Settling Results ...... 69 Table 42 - HPAL Test Results on Year 1-3 Limonite/Low Magnesium Saprolite Blends (8.1% Mg) . 70 Table 43 - HPAL Test Results on Year 1-3 Limonite/Low Magnesium Saprolite Blends (5.9-6.1% Mg) ...... 72 Table 44 - HPAL Test Results at Different Leach Temperatures ...... 73 Table 45 - Confirmatory HPAL Test Extractions (Limonite/Low Mg Saprolite Blend at 6% Mg) ...... 75 Table 46 – Confirmatory HPAL Test Residual Concentrations (Limonite/Low Mg Saprolite Blend at 6% Mg) ...... 76 Table 47 – Key Results from HPAL Variability Tests ...... 77 Table 48 – AL Test Results on Year 1-3 Medium Magnesium Saprolite Composite ...... 77 Table 49 – Confirmatory Atmospheric Leaching Conditions and Extractions ...... 79 Table 50 – Confirmatory Atmospheric Leaching Residual Concentrations...... 80 Table 51 – Key Results from AL Variability Tests ...... 81 Table 52 – Saprolite Neutralisation Test Conditions ...... 82 Table 53 – Saprolite Neutralisation Test Extractions ...... 83 Table 54 – Saprolite Neutralisation Test Residual Concentrations ...... 84 Table 55 - Settling Tests on Saprolite Neutralisation Slurry...... 84 Table 56 - Stage 1 Iron/Aluminium Removal Locked Cycle Testing ...... 86 Table 57 - Stage 2 Iron/Aluminium Removal Locked Cycle Testing ...... 87 Table 58 - Comparison of Magnesia Products for MHP Stage 1 ...... 88 Table 59 - MHP Stage 1 Locked Cycle Testing ...... 88 Table 60 - MHP Stage 2 Locked Cycle Testing ...... 89 Table 61 - Limestone Head Assays ...... 90 Table 62 - Limestone Reactivity ...... 90 Table 63 - Limestone Calcination Results ...... 90 Table 64 – Ore Samples for Ammtec ...... 91 Table 65 – Comminution Indices ...... 93 Table 66 – Limonite Scrubbing – Passing Grades, 4 Minutes Scrubbing (LIM1) ...... 94 Table 67 – Limonite Scrubbing – Passing Grades, 8 Minutes Scrubbing (LIM2) ...... 94 Table 68 – Limonite Scrubbing – Elemental Recoveries, 4 Minutes Scrubbing (LIM1) ...... 94 Table 69 – Limonite Scrubbing – Elemental Recoveries, 8 Minutes Scrubbing (LIM2) ...... 95 Table 70 – Ore Samples for TUNRA ...... 96 Table 71 - Block Model Properties ...... 97 Table 72 - Basic Statistics, Agata North Deposit ...... 99
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Table 73 - Limonite and Saprolite Variogram Models ...... 100 Table 74 - Estimation neighbourhood parameters, Agata North Resource ...... 101 Table 75 - Composites vs blocks comparison ...... 102 Table 76 - Agata Mineral Resource Estimate 20 September 2011 ...... 103 Table 77 – Mineral Reserves ...... 110 Table 78 - Road Sheeting ...... 113 Table 79 - Key Operating Parameters ...... 115 Table 80 - Average Plant Feed Grades (Years 1 to 8 and LOM) ...... 116 Table 81 - Key Process Design Assumptions ...... 120 Table 82 - Mixed Hydroxide Product (based on year 1 to 8 average feed data METSIM) ...... 121 Table 83 - Light Vehicles and Service Equipment ...... 124 Table 84 - Nominal Water Consumption Summary ...... 127 Table 85 - Infrastructure Study Status ...... 140 Table 86 - Road Development Summary...... 146 Table 87 - Preliminary power distribution list ...... 150 Table 88 - Building Facility ...... 152 Table 89 - Village Buildings ...... 154 Table 90- Berth Occupancy ...... 166 Table 91 – Port Facilities ...... 167 Table 92 - Valley Comparisons ...... 171 Table 93 – Summary of RSF Design Criteria ...... 175 Table 94 – Summary of RSF Capital and Deferred Costs ...... 180 Table 95 - Global Primary Nickel Supply and Consumption Forecasts ...... 183 Table 96 - Nickel Price Forecasts ...... 183 Table 97 – Analysis of Global Nickel Demand ...... 186 Table 98 - Summary of Global Nickel Production ...... 190 Table 99 – Agata Product Quality ...... 192 Table 100 - Calculated earthquake magnitude for each seismic generator ...... 204 Table 101 - Peak Ground Acceleration values for rock and soil conditions at the project site ...... 206 Table 102 - Soil Physico-Chemical Properties ...... 214 Table 103 - Heavy metal of river sediments ...... 218 Table 104 - Location and description of river sediment sampling stations ...... 219 Table 105 - Environmental requirements of selected plants ...... 223 Table 106 - Erosion Susceptibility based on rainfall ...... 224 Table 107 - Erosion Susceptibility based on soil properties ...... 225 Table 108 - Erosion Susceptibility based on Vegetation and Crops Grown ...... 225 Table 109 - Erosion Susceptibility based on slope ...... 228
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Table 110 - Composite Erosion Susceptibility Decision Rule ...... 228 Table 111 - Location of sampling stations for terrestrial flora assessment ...... 230 Table 112 - Location of quadrat sampling stations for terrestrial flora assessment ...... 230 Table 113 - Plant habits found within Agata Project ...... 232 Table 114 - Total individuals, average individuals, and number of species of each ecosystem .... 233 Table 115 - Diversity index of each forest ecosystem in the project area ...... 240 Table 116 - List of threatened plant species found within the Agata Nickel Project ...... 240 Table 117 - Location of sampling stations for terrestrial fauna assessment ...... 241 Table 118 - List of bird families with representative species observed in the eight survey areas . 242 Table 119 - List of mammals observed and recorded in E. Mogrado and Binuangan...... 243 Table 120 - Herpetofauna observed in E. Morgad ...... 244 Table 121 - Ecological status of birds observed during the survey ...... 247 Table 122 - Ecological and Conservation Status of mammalian species observed and recorded during the survey ...... 249 Table 123 - Ecological and Conservation status of herps observed and recorded during the survey ...... 250 Table 124 - Average Monthly and Annual Rainfall ...... 251 Table 125 - Average Minimum, Maximum and Mean Temperature ...... 252 Table 126 - Monthly and Annual PET and AET ...... 253 Table 127 - Average Stream Flow of Tubay River ...... 256 Table 128 - Average rainfall and evapotranspiration in the Tubay River Watershed ...... 257 Table 129 - Water Balance Summary ...... 258 Table 130 - Summary of Water Source Inventory ...... 260 Table 131 - Groundwater quality sampling stations ...... 263 Table 132 - Results of Groundwater quality ...... 264 Table 133 - Freshwater quality sampling stations ...... 266 Table 134 - Sampling locations for coastal and marine water quality ...... 267 Table 135 - Results of laboratory analysis for surface water ...... 269 Table 136 - Results of marine water quality sampling ...... 271 Table 137 - Location of sampling stations for freshwater assessment ...... 273 Table 138 - Benthic profile of freshwater sampling stations ...... 275 Table 139 - Results of fish flesh analysis for heavy metal on Ophiocephalus sp. from Kalinawan River ...... 278 Table 140 - Location of sampling stations for marine biological assessment ...... 279 Table 141 - General benthic profile of the surveyed marine station ...... 279 Table 142 - Results of the heavy metal analysis on fish flesh from marine stations surveyed ...... 287 Table 143 - Location of sampling stations for physical oceanography ...... 287 Table 144 - Tide observations ...... 294
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Table 145 - Tidal elevation (cm) measurement at Binuangan area ...... 296 Table 146 - Depth profile offshore to coast route at station OC1 (Binuangan) ...... 301 Table 147 - Depth profile offshore to coast route at station OC2 (Tagpangahoy) ...... 301 Table 148 - Depth profile offshore to coast route at station OC3 (Payongpayong) ...... 302 Table 149 - Location of sampling stations for air quality assessment ...... 305 Table 150 - Results of air quality sampling ...... 306 Table 151 - Results of noise level observation in the area ...... 307 Table 152 - Philippine Ambient Noise Standard ...... 307 Table 153 - Available and required water for the ANLP ...... 317 Table 154 - Experts And Researchers Conducted The Community And Social Study ...... 319 Table 155 - Fire Protection Service ...... 321 Table 156 - Inventory of roads by system classification and type of pavement, year 2009 ...... 322 Table 157 - Inventory of bridges by location, type, capacity and condition, Year 2009 ...... 323 Table 158 - Land transportation terminals by location and condition, year 2009 ...... 323 Table 159 - Number of connections by type of users and coverage consumption (KWh/Mo.) ...... 323 Table 160 - Projected power requirements by type of connections (KWH) ...... 324 Table 161 - Level 2 Water Supply by Type and Number of Population Served, Year 2009 ...... 324 Table 162 - Existing Surface Water Resources by Type and Classification, Year 2009 ...... 325 Table 163 - Inventory of telecommunications facilities and services by type and classification, year 2009 ...... 326 Table 164 - Postal Service Facilities ...... 326 Table 165 - Burial Facilities ...... 327 Table 166 - Various tourism areas in the region ...... 327 Table 167 - Local Activities ...... 328 Table 168 - Common agricultural products ...... 328 Table 169 - Poultry and livestock data ...... 329 Table 170 - Fishing activities ...... 329 Table 171 - Age-sex distribution ...... 330 Table 172 - Informal household settlers, 2007 ...... 332 Table 173 - Households living in makeshift housing ...... 332 Table 174 - Social welfare facilities, services and clientele ...... 334 Table 175 - Protective Services by Facilities and Equipment, Year 2008 ...... 336 Table 176 - Barangay Services, Year 2008 ...... 337 Table 177 - Inventory of Roads by System Classification and Type of Pavement, Year 2008 ...... 338 Table 178 - Road Bridges ...... 339 Table 179 - Critical – for priority action...... 339 Table 180 - Households Served and Unserved by Electricity, Year 2008 ...... 339 Table 181 - Power/Electricity ...... 340
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Table 182 - Level 2 Water Supply by Type and Number of Population Served, Year 2008 ...... 340 Table 183 - Observed water supply condition ...... 341 Table 184 - Other water sources, year 2008 ...... 341 Table 185 - Existing surfacewater resources by type and classification, year 2008 ...... 341 Table 186 - Source of Drinking Water ...... 342 Table 187 - Methods of Solid Waste Disposal ...... 343 Table 188 - Existing Cemeteries And Memorial Parks, Year 2008 ...... 343 Table 189 - Inventory of Tourism Establishments, Year 2008 ...... 344 Table 190 - Accessibility of Existing Tourism Establishment And Tourist Attraction ...... 344 Table 191 - Existing Major Agricultural Crops By Area, Production And Market, Year 2008 ...... 345 Table 192 - Major Crop ...... 346 Table 193 - Existing Livestock And Poultry Farms, Year 2008 ...... 347 Table 194 - Existing Fishing Ground And Aquaculture Production, Year 2008 ...... 349 Table 195 - List of Business Permits Issued By Type ...... 349 Table 196 - Student -teacher and Student - Classroom Ratio By Level, 2008-2009 ...... 351 Table 197 - Social welfare facilities, services and clientele ...... 352 Table 198 - Inventory Of Roads By System Classification And Type Of Pavement ...... 355 Table 199 - Inventory Of Bridges By Location, Type, Capacity And Condition ...... 355 Table 200 - Level I Water Supply System By Type And Number Of Population Served, 2008 ...... 359 Table 201 - Level II and III Systems ...... 359 Table 202 - Communication Services Facilities ...... 360 Table 203 - Accessibility Of Existing Tourism Establishment And Tourist Attractions ...... 361 Table 204 - Business Survey ...... 365 Table 205 - Local Receipts And Expenditures ...... 365 Table 206 - Municipal Revenues by Source ...... 366 Table 207 - Extent of Fiscal Autonomy ...... 366 Table 208 - Vital Health Statistics of the Philippines and Impact Municipalities, Agusan del Norte ...... 370 Table 209 - Morbidity: Leading Causes: Philippines versus Impact Municipalities (Rate/1000 Population) ...... 371 Table 210 - Mortality: Leading Causes: Philippines versus Impact Municipalities (Rate/1000 Population) ...... 372 Table 211 - Standard Number of Health Personnel per population ...... 373 Table 212 - Vital Health Statistics Of Santiago Municipality By Year, Agusan Del Norte Rate Per 1,000 Populations ...... 374 Table 213 - Leading Causes Of Disease, Santiago, Agusan Del Norte, 2010 ...... 376 Table 214 - Leading Causes Of Diseases By Year Santiago, Agusan Del Norte ...... 377 Table 215 - Causes Of Mortality, Santiago, Agusan Del Norte, 2009 - Rate Per 1,000 Populations379 Table 216 - Causes Of Mortality By Year, Santiago, Agusan Del Norte ...... 380
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Table 217 - Health Workers in Santiago Municipality, Agusan del Norte, 2010 ...... 382 Table 218 - Environmental Sanitation Program by year, Santiago, Agusan del Norte, 2010 ...... 382 Table 219 - Vital Health Statistics Of Jabonga Municipality By Year, Agusan Del Norte (Rate Per 1,000 Populations) ...... 383 Table 220 - Leading Causes Of Disease By Municipality, 2010 - Jabonga, Agusan Del Norte ...... 385 Table 221 - Leading Causes Of Diseases By Year, Jabonga, Agusan Del Norte ...... 386 Table 222 - Nutritional Status, Jabonga, Agusan Del Norte, 2009 (Rate Per 1,000 Populations) ... 387 Table 223 - Causes of Mortality, Jabonga, Agusan del Norte, 2009 (rate per 1,000 populations) .. 387 Table 224 - Health Workers in the Municipality of Jabonga, Agusan del Norte, 2007 ...... 388 Table 225 - Vital Health Statistics of Tubay Municipality by year, Agusan del Norte (rate per 1,000 populations) ...... 389 Table 226 - Leading Causes Of Disease, Tubay, Agusan del Norte, 2007...... 391 Table 227 - Leading Causes Of Diseases By Year Tubay, Agusan Del Norte ...... 392 Table 228 - Causes of Mortality, Tubay, Agusan del Norte, 2007 (rate per 10,000 populations) .... 393 Table 229 - Causes Of Mortality by year, Tubay, Agusan del Norte ...... 394 Table 230 - Health Workers in Tubay Municipality, Agusan del Norte, 2010 ...... 395 Table 231 - Environmental Sanitation Program by Year, Tubay, Agusan del Norte, 2009 ...... 396 Table 232 - Summary Of Possible Issues And Potential Deal Breakers ...... 414 Table 233 – Estimate Contributors ...... 418 Table 234 - Capital Cost Estimate Summary ...... 418 Table 235 – Summary of Sustaining Capital - Mining ...... 419 Table 236– Summary of Sustaining Capital – Residue Storage Facility ...... 419 Table 237– Capital Cost by Major Facility (level 2 WBS)...... 419 Table 238 - Operating Cost Summary ...... 421 Table 239 - Capital Cost Estimates ...... 426 Table 240 - Operating Cost Assumptions ...... 427 Table 241- Summary Cash Flow ...... 428 Table 242- Project Production & Cash Flow ...... 430 Table 243 - Project Sensitivity To Key Operating Costs ...... 431 Table 244 - Loading Unit Productivity ...... 433 Table 245 - Hauler Productivity ...... 434 Table 246 - Equipment Costs ...... 436 Table 247 - Mine Administration and Technical Services Costs ...... 436 Table 248 - Manning Levels in Peak Production Periods...... 437 Table 249 - Mine Operating Costs ...... 439 Table 250- Mine Unit Costs ...... 441 Table 251 - Mine Infrastructure Capital ...... 441 Table 252 - Mining Fleet, Equipment Capital and Mobilisation ...... 442
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Table 253 - Mine Capital Cost Summary ...... 443
List of Figures Figure 1 - Project Location ...... 1 Figure 2 - Map of the Philippines Showing MRL Project Areas ...... 3 Figure 3 - Mine Operations Total Movement ...... 6 Figure 4 – Effect of pH on Residual Fe(III) Concentration in Stage 1 Iron/Aluminium Removal ...... 10 Figure 5 – Effect of pH on Residual Fe(III) Concentration in Stage 2 Iron/Aluminium Removal ...... 11 Figure 6 - Sensitivity Analysis ...... 18 Figure 7 - Project Location ...... 23 Figure 8 - Agata Nickel Deposit – View to the South ...... 25 Figure 9 - Agata Nickel Deposit - View from Butuan Bay...... 25 Figure 10 – Map of the Philippines showing MRL Project Areas ...... 28 Figure 11 - Geological Map of Surigao Mineral District ...... 30 Figure 12 - Local Geological Map of Agata North Project Area ...... 31 Figure 13 - ANLP Drillhole Location Map – BHP-Billiton and MRL (2007) Drilling...... 33 Figure 14 - ANLP Drillhole Location Map – All Drilling ...... 35 Figure 15 - Graphs of Nickel Standards Assays...... 45 Figure 16 - Comparison of Independent Checks and MRL Assays ...... 48 Figure 17 - Agata North Bulk Density Test Pit Location Map ...... 49 Figure 18 - Saprolite Neutralisation Test Results at SGS Perth ...... 58 Figure 19 - Ore Sampling Locations ...... 60 Figure 20 - Feed % Solids Optimisation – HPAL Feed ...... 65 Figure 21 - Flocculant Dosage Optimisation – HPAL Feed...... 65 Figure 22 - CSD Determination – HPAL Feed (Year 1-3) ...... 66 Figure 23 - Feed % Solids Optimisation – Medium Mg Saprolite ...... 66 Figure 24 – Flocculant Dosage Optimisation – Medium Mg Saprolite ...... 67 Figure 25 – CSD Determination – Medium Mg Saprolite (Year 1-3) ...... 67 Figure 26 – Feed % Solids Optimisation – High Mg Saprolite ...... 68 Figure 27 – Flocculant Dosage Optimisation – High Mg Saprolite ...... 68 Figure 28 – CSD Determination – High Mg Saprolite (Year 1-3) ...... 69 Figure 29 – Effect of Leach Time on HPAL Nickel Extractions (Limonite/Low Mg Saprolite Blend at 8.1% Mg) ...... 72 Figure 30 – Effect of Residual Free Acid on HPAL Extractions (Limonite/Low Mg Saprolite Blend at 8.1% Mg) ...... 72
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Figure 31 – Effect of Temperature on HPAL Nickel Extractions – Limonite/Low Mg Saprolite Blend ...... 74 Figure 32 – Effect of Temperature on HPAL Iron Hydrolysis ...... 74 Figure 33 – Effect of Sodium Concentration on HPAL Residual Iron Concentration ...... 75 Figure 34 – Effect of Free Acid on HPAL Extractions (Limonite/Low Mg Saprolite Blend at 6% Mg) ...... 75 Figure 35 – AL Scoping Tests – Effect of Acid Addition Rate on Residual Free Acid Concentration ...... 79 Figure 36 – Effect of Residual Free Acid Concentration on AL Extractions ...... 80 Figure 37 – Effect of Free Acid Concentration on Decrease in Sodium Concentration ...... 81 Figure 38 – Effect of pH on Residual Fe(III) Concentration in Stage 1 Iron/Aluminium Removal ..... 85 Figure 39 – Effect of pH on Residual Fe(III) Concentration in Stage 1 Iron/Aluminium Removal ..... 89 Figure 40 - Bedrock, Saprolite, and Topography triangulations in cross section with drillholes .... 98 Figure 41 - Block model, coloured by laterite horizon ...... 98 Figure 42 - Comparison of composites against the block model for Ni in Saprolite ...... 102 Figure 43 - Resource Classification, Agata North Deposit ...... 103 Figure 44 - Grade-tonnage curve, Measured + Indicated, Limonite...... 106 Figure 45 - Grade-Tonnage Curve, Measured + Indicated, Saprolite...... 106 Figure 46 – Agata North Pit Design (3m benches) and Road Network ...... 108 Figure 47 – Agata South Pit Design (3m benches) ...... 109 Figure 48 – Bolobolo Pit Design (3m benches) ...... 109 Figure 49 – Overall Block Flowsheet ...... 119 Figure 50 - Overall Layout Plan ...... 142 Figure 51 - Road Section ...... 144 Figure 52 - Typical Haul Truck ...... 145 Figure 53 - Road Development Summary ...... 145 Figure 54 - Tubay River with Lake Mainit in background ...... 148 Figure 55 - Tubay River at the proposed water intake location ...... 149 Figure 56 - Typical Camp (Courtesy of BHP Billiton Bumbun Camp- Central Kalimantan) ...... 158 Figure 57 - Port location - South Tagpangahoy ...... 163 Figure 58 - South Tagpangahoy Port Lay Out ...... 165 Figure 59 - Regional tectonic setting in the southern portion of the Philippines. The Philippine Trench borders the eastern side of the archipelago. The Philippine Fault (bold line) traced for about 1200 km traverses the Philippines in a NW direction...... 198 Figure 60 - Map showing the spatial distribution of seismicity in the eastern portion of Philippine archipelago with Ms 2 to 9 from 1907 to 1998 and a major earthquake event occurred on July 1, 1879...... 201 Figure 61 - Map showing the major historical earthquakes with Ms 7 to 9 in the eastern portion of Philippine archipelago from 1907 to 1998...... 202 Figure 62 - Distribution of active faults in the Northern Mindanao Region ...... 205
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Figure 63 - PGA values for medium soil components in the Visayas. From Thenhaus, et al, 1994. The PGA value for medium soil in the site is around 0.40 based on this map ...... 208 Figure 64 - PGA values for rock components in Visayas. From Thenhaus et al., 1994. The PGA value for rock in the site is around 0.40 based on this map...... 209 Figure 65 - PGA values for soft soil components in the Visayas. From Thenhaus, et al, 1994. The PGA value for soft soil in the site is around 0.70 based on this map...... 210 Figure 66 - Active fault maps (PHIVOLCS) superimposed on the satellite image of the northern portion of Eastern Mindanao ...... 211 Figure 67 - The trace of the Philippine Fault (red line) that pass through the Malimono quadrangle map ...... 211 Figure 68 - The trace of the Philippine Fault (red line) that pass through the Jagupit quadrangle map ...... 212 Figure 69 - The second growth forest on the upper slopes of Payong-payong watershed, Sitio Payong-payong, Barangay Tinigbasan...... 220 Figure 70 - The coconut and forest association at Sitio Payong-payong, Barangay Tinigbasan. . 221 Figure 71 - The coconut plantation at Barangay Binuangan ...... 221 Figure 72 - Fen “ Agsam” in the Resource Area on the plateau-like top ridge at Barangay E. Morgado...... 222 Figure 73 - The grassland dominated by cogon and hagonoy (lower half) at Barangay Binuangan ...... 222 Figure 74 - The active landslide on the upper slope of Binuangan watershed, Barangay Binuangan ...... 223 Figure 75 - The landuse/vegetation map...... 227 Figure 76 - The soil erosion susceptibility map ...... 229 Figure 77 - Stand of dead Xanthostemon verdugonianus seen in Sitio Sua, Brgy. Lawigan, Tubay ...... 231 Figure 78 - The 10 species with the highest importance value found in the forest over ultramafic rocks ...... 235 Figure 79 - The 10 species with the highest importance value found in the tropical lowland evergreen rain forest ...... 236 Figure 80 - The 10 species with the highest importance value found in the plantation ecosystem ...... 237 Figure 81 - Limestone forest located in Barangay Tinigbasan, Tubay ...... 239 Figure 82 - Beach forest located in So. Payong-Payong, Barangay Tinigbasan, Tubay ...... 239 Figure 83 - Comparison of the species diversity, species richness and evenness of bird species observed from different survey sites ...... 245 Figure 84 - Comparison of species diversity, richness and evenness of mammalian species in E. Morgado and Binuangan ...... 246 Figure 85 - Species diversity, richness and evenness of herps in E. Morgado...... 246 Figure 86 - Ecological status of bird species ...... 249 Figure 87 - Rainfall Trend (Source: 1981-2000 Climatological Normals of PAGASA Butuan City Station) ...... 252 Figure 88 - The watershed map ...... 255
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Figure 89 SP10, Spring water source Brgy. Binuangan ...... 259 Figure 90 - CR3 Creek water source, Brgy. Lawigan ...... 259 Figure 91 - Water source location map ...... 262 Figure 92 - Tabulate Acroporids are found on ledges of the reef material from MW1. Acroporid and Pocilloporid species dominate the area and known to be prevalent in high energy environments...... 282 Figure 93 - MW2 is dominated by Poritids. Coral colonies are relatively smaller indicating recent disturbance on the area...... 282 Figure 94 - Benthic profile of MW3 mirrors that of MW2 with the dominance of submassive Poritids ...... 283 Figure 95 - MW4 is dominated by rock bommies covered with algae ...... 283 Figure 96 - Coral recruits are small with size ranging from 1-3 cm in diameter ...... 283 Figure 97 - MW5 is dominated by soft corals which predominates in areas with high suspended silts ...... 284 Figure 98 - Abiotic components are the dominant feature of MW6. Small colonies of sponges (purple in the middle of the photo) dominates the biotic components...... 284 Figure 99 - MW7 is a silted reef with small coral colonies ...... 284 Figure 100 - Rocks covered with silt and overgrown by algae dominates the benthic profile of MW8. Encrusting coral recruits of Favids fused together form quilt-like pattern (foreground) competing with algae on space...... 284 Figure 101 - Phytoplankton density profile of the marine stations. Density is comparable among all stations except for MW8...... 285 Figure 102 - Profile of the estimated fish biomass between marine samplingareas surveyed. MW1 has the highest estimated density among the sites and among the sanctuaries surveyed for this study...... 286 Figure 103 - Time series of seawater temperature ate OC1 (Binuangan) station ...... 289 Figure 104 - Time series of seawater temperature ate OC2 (Tagpangahoy) station ...... 289 Figure 105 - Time series of seawater temperature ate OC3 (Payongpayong) station ...... 289 Figure 106 - Binuangan Drogue ...... 291 Figure 107 - Tagpangahoy drogue ...... 292 Figure 108 - Sitio Payong-payong drogue ...... 293 Figure 109 - Tidal elevation (cm) measurement at Binuanagan coastal area ...... 296 Figure 110 - Temperature profile of seawater at OC1 (Binuangan) during Ebb tide period, (19 June 2011) ...... 298 Figure 111 - Temperature profile of seawater column at OC1 (Binuangan) during Flood Tide Period (20 June 2011) ...... 298 Figure 112 - Temperature profile of seawater column at OC2 (Tagpanaghoy) during Ebb Tide Period (20 June 2011) ...... 299 Figure 113 - Temperature profile of seawater column at OC2 (Tagpanaghoy) during Ebb Tide Period (20 June 2011) ...... 299 Figure 114 - Temperature profile of seawater, column at OC3 (Payongoayong) during Ebb Tide Period (20 June 2011) ...... 300
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Figure 115 - Temperature profile of seawater column at OC3 (Payongpayong) During Flood Tide Period (21 June 2011) ...... 300 Figure 116 - Depth profile route at station OC1 (Binuangan) ...... 303 Figure 117 - Depth profile route at station OC2 (Tagpangahoy) ...... 303 Figure 118 - Depth profile route at station OC3 (Payong-payong ...... 303 Figure 119 - Agata Depth Contour Map ...... 304 Figure 120 - Proposed water source for ANLP ...... 317 Figure 121 - Proposed alternative water source ...... 318 Figure 122 - Number of connections by type of users ...... 358 Figure 123 - Number Of Connections By Average Consumptions ...... 358 Figure 124 - Agricultural Activity In The Area Figure 125 - Livestock Activity In The Area ...... 362 Figure 126 - Coconut Oil Processing ...... 364 Figure 127 - Focus Group Discussion at Municipality of Jabonga ...... 369 Figure 128 - Key Informant Interview with the Mayor of Jabonga Hon. Glicerio Monton, Jr...... 369 Figure 129 - Key Informant Interview with the Barangay Captain of E. Morgado, Santiago Lucita Estrada ...... 369 Figure 130 - Key Informant Interview with the MSWDO Officer of Municipality of Santiago, Zenaida S. Chavez ...... 369 Figure 131 - Focus Group Discussion at Municipality of Santiago ...... 369 Figure 132 - Focus Group Discussion at Municipality of Tubay ...... 369 Figure 133- Key Informant Interview with the Mayor of Tubay Hon. Sadeka S. Tomaneng ...... 369 Figure 134 - Health Statistics of the Philippines and Impact Municipalities, Agusan del Norte ..... 370 Figure 135 - Morbidity: Leading Causes: Philippines versus Impact Municipalities (Rate/1000 Population) ...... 372 Figure 136 - Mortality: Leading Causes: Philippines versus Impact Municipalities (Rate/1000 Population) ...... 373 Figure 137 - Population of Santiago, Agusan del Norte by Year ...... 375 Figure 138 - Total Live births and Deaths in Santiago, Agusan del Norte by Year ...... 376 Figure 139 - Leading Causes of Disease, Santiago, Agusan del Norte, 2010 ...... 377 Figure 140 - Leading Cause of Diseases: URTI by Year Santiago, Agusan del Norte ...... 378 Figure 141 - Leading Causes Of Diseases By Year ,Santiago, Agusan Del Norte ...... 378 Figure 142 - Causes of Mortality, Santiago, Agusan del Norte, 2009 ...... 380 Figure 143 - Causes of Mortality by Year, Santiago, Agusan del Norte ...... 381 Figure 144 - Sources of Safe Water, Santiago, Agusan del Norte, 2010 ...... 383 Figure 145 - Population of Jabonga, Agusan del Norte by Year ...... 384 Figure 146 - Number of Live births and deaths of Jabonga, Agusan del Norte by Year ...... 384 Figure 147 - Leading Causes of Disease by Municipality, 2010Jabonga, Agusan del Norte ...... 385 Figure 148 - Leading Causes of Diseases by Year, Jabonga, Agusan del Norte ...... 386 Figure 149 - Nutritional Status, Jabonga, Agusan del Norte, 2009Rate per 1,000 Populations ...... 387
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Figure 150 - Causes of Mortality, Jabonga Agusan del Norte, 2009 ...... 388 Figure 151 - Population of Tubay, Agusan del Norte by Year ...... 390 Figure 152 - Total Live Births and Deaths in Tubay, Agusan del Norte by Year ...... 390 Figure 153 - Leading Causes of Disease, Tubay, Agusan del Norte, 2010...... 391 Figure 154 - Leading Causes of Disease, Tubay, Agusan del Norte, 2010...... 393 Figure 155 - Leading Causes of Diseases by Year Tubay, Agusan del Norte ...... 393 Figure 156 - Causes of Mortality, Tubay, Agusan del Norte, 2009 ...... 394 Figure 157 - Causes of Mortality by Year, Tubay, Agusan del Norte ...... 395 Figure 158 - Sources Of Safe Water In Tubay Municipality, Agusan Del Norte, 2009 ...... 397 Figure 159 - The ECC Application Process ...... 409 Figure 160 - Project Operating Cost Distribution ...... 423 Figure 161- Operating Cost by Cost Centre ...... 428 Figure 162- Cumulative Cashflow ...... 429 Figure 163– Project Sensitivity ...... 431 Figure 164 - Grade Control Drilling ...... 435 Figure 165 - Diesel Consumption ...... 435
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1 Summary
1.1 Description of Property
1.1.1 Location
The Agata Nickel Laterite Project (ANLP) is located within the norrthern part of Agusan del Norte province in Northeastern Mindanao, Republic of the Philippines. It lies within the Western Range approximately 10 km south of Lake Mainit. The Project falls within the political jurisdiction of the municipalitties of Tubay, Santiago and Jabonga. The Project is located 47 km north of Butuan City and 73 km south of Surigao City. The ANLP iis centred at 125o32’, 9o17’.
Figure 1 - Project Location
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1.1.2 Project Ownership
MRL Gold Phils., Inc a Philippine subsidiary of Mindoro Resources Limited a company incorporated in Alberta, Canada are listed on the TSX Venture Exchange (MIO) and subsequently the Australian Securities Exchange (MDO) and Frankfurt Stock Exchange (WKN 906167). MRL has been working in the Philippines since 1997 in partnership with various Philippine companies. MRL entered into an agreement in 1997 with Minimax Mineral Exploration Corporation (Minimax) on several projects in the Philippines. MRL subsequently generated 20 porphyry copper-gold prospects, 5 epithermal gold prospects and five nickel laterite prospects, which are at various stages of evaluation of development.
The Agata nickel laterite deposit is secured by the Mineral Product Sharing Agreement MPSA 134-99-XIII and Exploration Permit EP 00021-XIII registered to Minimax and Estrella Bautista respectively. Application has also been made for the Agata Extension EP 107-XIII to the south and east of the Agata MPSA. The MPSA is a form of Mineral Agreement for which the government grants the contractor exclusive right to conduct mining operations within, but not title over, the contract area during a defined period. An Exploration Permit (EP) is an initial mode of entry in mineral exploration allowing a Qualified Person to undertake exploration activities for mineral resources in certain areas open to mining in the country.
1.1.3 Seismicity
Mindanao is located in the southern portion of the Philippine Archipelago. Two main fault systems: the Philippine Fault and Mindanao Fault and hundreds of fault splay and lineaments criss-cross the region. The Philippine Trench borders the eastern side of the archipelago and the Philippine Fault traverses the Philippines in a north-west direction. The presence of tectonic structures within and around Mindanao accounts for intense seismic activities in the island.
At the proposed plant site, ground shaking effects on the rock and soil components are estimated to yield Peak Ground Acceleration (PGA) values ranging from 0.38g in rock and 0.87g in soft soil.
1.2 Geology and Mineralisation
The Agata north lateritic nickel resource in the Philippines forms part of the resource base of Mindoro Resources Limited and has been under active exploration by this company since 1997, with the first lateritic nickel resource drilling program completed in 2006. This is the fourth mineral resource estimate for the ANLP located within the northern areas of Mindanao, the southernmost Island within the Philippines (Figure 2).
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Figure 2 - Map of the Philippines Showing MRL Project Areas
1.2.1 Mineralisation
Nickeliferous laterite deposits in the Agata Projects area are a series of mineralised plateaus along the western range of the Surigao region of Mindanao Islannd. They form specific terrains within the range atop of the predominant underlying ultramafic rocks.
The laterites have been developed over ultramafic rocks that lie along the Western Range and are variably mineralized. Thhe rock types within the ultramafics are harzburgite, serpentinised harzburgite, peridotite, serpentinised peridotite, pyroxenite, serpentinised pyroxenite, serpentinite with localised lenses of dunite or serpentinised dunite.
Nickel laterites are the products of intense chemical weathering of the ultramafic rocks, especially the olivine-rich varieties like harzburgite and dunite. The high rainfalls and intense weathering breaks down the easily weathered harzburgite and dunite and the more mobile elements of Mg and Si tend to leave the profile at a much faster rate than the less mobile Fe and Ni or Co. Thus high Fe laterite and limonite zones overlie the weathered saprolite of the ultramafic rocks and, where erosion of the upper Fe lateritee is low, significant depths of weathering (>10m) can occur within the saprolitic zone.
Nickel mineralisation is predominantly at the base of the Fe laterrite and the top of the saprolite and in more primary, Mg rich clays (saponite and stevensite) in the ultramafic saprolite. When weathering is very deep then more Ni can be located in the Fe laterite, but the greatest Ni enrichment is predominantly within the saprolite of the underllying ultramafic rock near the contact zone with the Fe lateerite.
1.2.2 Deposit type
The ANLP deposits located along the western range of the Surigao region, Mindanao Island all have had significant laterite formation and consequent nickel enrichment. The mineralisation
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can occur in both low and high relief terrains with the high relief terrains generally having lower limonite thicknesses and some exposure of bedrock. The low relief terrain however has no exposures of bedrock on its hillcrests, with the laterite being well developed and containing thick and highly mineralised limonite or saprolite and on occasions a transitional unit. Some boulders occur within the laterite profile and this is predominantly related to harder residual rocks within the laterite profile.
1.2.3 Exploration
Lateritic nickel mineralisation was known within the ANLP area since the early 1990s and grades were confirmed in the development of test pits in 1997. In June 2004, Taganito Mining Corporation was selected from several interested parties and granted the non-exclusive right to assess the nickel laterite potential of the Agata Project. Taganito carried out two phases of evaluation and reported encouraging results. Subsequently, MRL elected to allow Queensland Nickel Phils., Inc. (QNPH) to proceed with a reconnaissance drill program in 2006 under an option arrangement. QNPH elected not to exercise the option. Subsequently MRL has conducted four drilling programs, the initial three testing the Agata North nickel laterite only and the most recent 2010/2011 program also testing regional prosepects up to 20 km to the north of Agata including definition of new resources at Bolobolo and Karihatag, and 5 km to the south of Agata North at Agata South
All drilling to date has been completed by the use of small open-hole NQ coring rigs, which are highly mobile in difficult to access terrain. Recovery from these drill rigs is high, with losses generally occurring where there are changes in the hardness of the drilled material. A variety of contractors have been used over time, with the drilling rate being the only variation with regards to their performance and sampling rate.
1.3 Minerals Resource Estimates
The ANLP has estimated combined measured and indicated resources of 43 Mt at 1.0% Ni using a cut-off grade of 0.5% Ni for limonite and 0.8% Ni for saprolite.
Table 1 – Agata Mineral Resource Estimates 20 September 2011, includes Bolobolo-Karihatag, Agata South
Classification Horizon dMt Ni Co Fe Al Mg SiO2
Limonite 0.25 1.0 0.12 48 2.9 1.0 4.7 Saprolite 0.54 1.2 0.03 11 0.4 18 42 Measured Sub Total 0.78 1.1 0.06 23 1.2 13 30
Limonite 13 0.95 0.10 45 3.8 1.3 7.3 Saprolite 29 1.1 0.03 12 0.7 17 40 Indicated Sub Total 42 1.0 0.05 22 1.7 12 29
Limonite 14 0.95 0.10 45 3.8 1.3 7.3 Measure + Saprolite 29 1.1 0.03 12 0.7 17 40 Indicated Total 43 1.0 0.05 22 1.7 12 29
Limonite 0.68 0.8 0.09 40 4.8 1.8 14 Saprolite 1.7 1.1 0.03 12 0.7 17 40 Inferred Total 2.4 1.0 0.04 20 1.9 12 33
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1.4 Mineral Reserve Estimates
The Mineral Reserve is based on the designed pits at Agata North, Agata South and Bolobolo- Karihatag. The Proven and Probable Reserves are shown in Table 2.
The Proven and Probable reserves are based on cut-off grades of 0.5 Ni% and 0.8 Ni% for limonite and saprolite respectively.
Table 2 – Mineral Reserves
TOTAL Horizon dMt Ni% Co% Fe% Al% Mg% Si02%
Proven Limonite 0.25 1.0 0.12 48 2.9 1.0 5
Saprolite 0.46 1.2 0.03 11 0.4 17.9 41
Subtotal 0.70 1.1 0.06 24 1.3 11.9 29
Probable Limonite 12 0.90 0.11 45 3.8 1.3 7
Saprolite 23 1.1 0.03 12 0.7 16.6 40
Subtotal 35 1.0 0.06 23 1.8 11.4 28
Proven + Probable Limonite 12 0.90 0.11 45 3.8 1.3 7
Saprolite 23 1.1 0.03 12 0.7 16.6 40
TOTAL 35 1.0 0.06 23 1.8 11.4 28
1.5 Mining
The Mining Inventory was limited to a subset of the available proven and probable mineral reserves within designed pits, and consisted of 35M dmt of ore at 1.0 Ni%, 0.06 Co% and 23 Fe%, and 4.7M dmt of waste at a 0.13:1 strip ratio.
The primary mining fleet selected consists of 46 t hydraulic excavators and 35 t capacity articulated trucks in the pit, and a secondary fleet consisting of a Front End Loader and 25 t capacity on-highway trucks for haulage to the Processing Plant. The ancillary fleet includes dozers, graders and a water truck. Ore from Bolobolo will be hauled to a port stockpile and barged to the Agata processing facility.
Pit areas were split into 250m x 250m mining panels for scheduling. A total of 63 mining panels at Agata North were scheduled over the 15 year period, followed by Agata South and Bolobolo through to Year 19. The mining schedule was smoothed over quarterly periods with an average mine production rate of 5,100 bcm per day from Year 3.
The mining fleet will also operate in the limestone quarry near Agata North to produce up to 170k dmt of limestone per annum.
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Figure 3 - Mine Operations Total Movement
The Mining Inventory was categorised into 6 materiial types and blended to meet Plant Feed targets for High Pressure Acid Leach (HPAL), Atmospheric Leach (AL) and Saprolite Neutralisation (SN) circuits.
The Plant Feed schedule allows for the ramp-up of throughput over the first 3 years of operations from 60% and 90%, to 100% in Year 3 at a rate of 1,786,000 dmt per annum, which was maintained for the duration of the schedule. Plant Feed rates from Year 3 are shown in Table 3.
Table 3 - Plant Feed Rates
Plant Feed Targets Material Code d Mt/yyear
Limonite to HPAL HFE, MFE, LFE 0.67
Saprolite to HPAL LMG 0.34
Subtotal 1.00
Saprolite to Atmospheric Leach (AL) MMG 0.42
Saprolite to Saprolite Neutralisation (SN) HMG 0.36
TOTAL 1.8
1.6 Metallurgy
1.6.1 Metallurgical testing programs
The first phase of metallurgical testing of ores from the Agata North ore deposit was performed by Enlin Stainless Steel Corporation (ESSC) in 2008, an unaccreeditated laboratory under NI 43- 101. The ESSC bench scale testwork program included Atmoospheric Leaching (AL), High Pressure Acid Leaching (HPAL), saprolite neutralisation, limestoone neutralisation, iron removal and mixed hydroxide precipitation. While the test results provided an early indication of the excellent metallurgical responnse of the Agata ores, the available rreports by ESSC were found to be lacking test details in most areas.
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A more comprehensive bench scale program was completed by SGS Lakefield Oretest in Perth (SGS Perth) between August 2010 and March 2011. This program included mineralogy, beneficiation (scrubbing), ore slurry settling, AL, HPAL, saprolite neutralisation and CCD settling on composites of different ore types from the deposit, as well as limestone testing.
This program included ore size fraction analysis, ore slurry rheology and settling, AL, HPAL and saprolite neutralisation testing on composites of different ore types from the deposit, CCD settling and locked cycle testing for iron/aluminium removal and mixed hydroxide precipitation, as well as limestone testing.
In support of the prefeasibility study a new bench scale testwork program was undertaken by SGS Minerals Services of Lakefield, Canada between March and September 2011. The main program was based on ore composites representing years 1 to 3 of plant feed, with subsequent variability testing on ore composites representing years 4 to 6 and year 7 onwards. Ore samples for testing were sourced by MRL in early 2011 from the Agata North deposit. Sample locations were selected based on the provisional PFS mining schedule, with the objective of producing plant feed samples representing three periods of plant operation. Nine drums containing 42 individual bags of sample were shipped to SGS for metallurgical testing. The SGS program included the following investigations:
Ore head assaying and size fraction analysis Sample preparation and blending Ore slurry settling properties and rheology HPAL testing of a limonite and low magnesium saprolite blend AL testing of a medium magnesium saprolite ore composite SN testing of combined HPAL and AL pulps using a high magnesium saprolite composite SN pulp (CCD) settling properties and rheology Iron/aluminium removal stages 1 and 2 locked cycle testing Mixed hydroxide precipitation stages 1 and 2 locked cycle testing Limestone characterisation and calcinations; and Variability testing on ore composites representing years 4 to 6 and years 7 onwards of plant feed, including ore head assaying and size fraction analysis, ore slurry settling properties, HPAL testing of a limonite/low magnesium saprolite blend and AL testing of medium magnesium saprolite ore.
A comminution and scrubbing testwork program was undertaken by ALS Ammtec of Perth, Western Australia between July and September 2011. This program included the following investigations:
Limonite Scrubbing Testwork Bond Abrasion Index (Ai) determination Bond Crushing Work Index (CWi) determination Bond Ball Mill Work Index (BWi) determination Bond Rod Mill Work Index (RWi) determination Assay Analysis, including X-Ray Fluorescence (XRF) Analysis.
A flow properties and conveyability testwork program was undertaken by TUNRA Bulk Solids Handling Research Associates (TUNRA) of Newcastle, NSW, Australia between August and
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October 2011, to determine the flow properties limonite and saprolite ore samples in order to provide relevant parameters for the design of efficient and reliable bulk storage and handling facilities. This testwork was incomplete at the time of writing.
1.6.2 Key Results
1.6.2.1 Process Plant
The key testwork results used in the process design criteria are summarised in the following tables.
Table 4 - Ore Feed (Year 1-3) Slurry Settling Results
Ore Type Flocculant Flocculant Feed % U/F % Solids Unit Area Dose g/t Solids by CSD m2/t/d
HPAL Feed Magnafloc 919 160 7 39 0.20 AL Feed Magnafloc 156 220 3 38 0.57 SN Feed Magnafloc 156 90 9 45 0.11
HPAL tests were conducted on the Limonite/LMS blend sample at varying acid additions to examine extraction response with retention time and acid addition.
Table 5 - HPAL Test Results at 255°C (Limonite/Low Mg Saprolite Blend at 6% Mg)
HPAL Results SN-3 BULK-2 BULK-3 Average *
Acid Addition (kg/t ore) 489 485 486 487
PLS Free Acid (g/L) 52.2 54.1 50.5 52.3
Nickel Extraction (%) 98.8 97.0 97.0 97.6
Cobalt Extraction (%) 99.4 97.0 97.0 97.8
* SN-1, SN-2 and BULK-1 excluded from analysis due to low residual FA.
Scoping tests on composites of limonite ore and LMS ore representing Years 4-6 and Years 7+ demonstrated that similar nickel and cobalt extractions could be achieved at lower acid addition rates than those required by the Year 1-3 samples.
Atmospheric Leach tests were conducted on the medium magnesium saprolite composite sample at varying acid additions to examine extraction response with retention time and acid addition.
Table 6 – Confirmatory Atmospheric Leaching Test Results
AL Results SN-1 SN-2 SN-3 BULK-1 BULK-3 Avge
Acid Addition (kg/t ore) 970 960 960 960 958 962
PLS Free Acid (g/L) 40.3 31.8 23.4 32.6 21.7 30.0
Nickel Extraction (%) 99.2 99.3 98.2 99.1 98.4 98.8
Cobalt Extraction (%) 95.2 95.0 89.5 93.2 88.9 92.4
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Scoping tests on composites of medium magnesium saprolite ore representing Years 4-6 and Years 7+ for the Agata North deposit demonstrated that similar nickel and cobalt extractions could be achieved at lower acid addition rates than those required by the Year 1-3 samples.
SN scoping tests were conducted on the Year 1-3 high magnesium saprolite composite sample to examine extraction response and acid neutralisation with retention time.
Table 7 – Saprolite Neutralisation Test Results
SN Results SN-2 SN-3 BULK-2 BULK-3 Average
Final PLS Free Acid (g/L) 14.7 16.7 12.3 11.3 13.7
Nickel Extraction (%) 94.7 89.5 62.8 61.4 77.1
Cobalt Extraction (%) 124.5 91.8 75.3 69.5 90.3 (75*)
Residual Iron (III) (mg/L) 4 348 4 750 1 910 2 500 3 377
* Co revised to 75% based on all 3 bulk tests (Co mass too small in scoping tests to produce meaningful results)
Results of SN-1 and BULK-1 tests ignored as SN-1 had no addition of acid to HPAL pulp to simulate acid concentration due to flashing and BULK-1 had a low residual free acid concentration due to addition of an excessive quantity of HPAL feed pulp (incorrect ore feed ratios).
Settling testwork was undertaken on the pulp from the confirmatory saprolite neutralisation tests to investigate slurry thickening characteristics.
Table 8 - Settling Tests on CCD Feed Slurry at SGS Perth
Sample Flocculant Dose Settled Underflow Unit Area m2/t/d g/t Pulp Density
Test SN.02 Final Pulp 80 35.7 0.24
Feed diluted to 4% Solids 160 38.5 0.09
Test SN.03 Final Pulp 100 40.2 0.09
Feed diluted to 4% Solids 120 38.1 0.09
Table 9 - Settling Tests on CCD Feed Slurry at SGS Lakefield
Coagulant Flocculant U/F % Solids Unit Area Sample Dose g/t Dose g/t by CSD m2/t/d
2L Cylinder Test 144 96 26 0.32
2m Raked Column Test 141 141 26 1.21
Rheology (CSD) 141 141 28-29 -
The CCD settling tests at SGS Perth established that a slurry density of 38-40% solids could be achieved. Poor underflow densities were achieved at SGS Lakefield. Due to significant
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changes in feed solids density and flocculant selection from the SGS Perth program, and issues with cooling of pulp samples, a decision was taken to adopt the low end underflow density of 38% solids achieved in the SGS Perth settling program as the PFS process design criteria.
A Stage 1 Iron/Aluminium Removal scoping test was performed during which the slurry pH was increased by incremental limestone slurry additions to determine the effect of pH on residual ferric iron concentration.
100 90 80 70 mg/L
60 50 Conc,
40
Fe(III) 30 20 10 0 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 pH
Figure 4 – Effect of pH on Residual Fe(III) Concentration in Stage 1 Iron/Aluminium Removal
Locked cycle testing failed to achieve the desired ferric iron concentration. The limestone dosage was about 10% lower in the locked cycle tests than in the scoping test. A higher pH (3.9) was used in the PFS process design and this should be satisfactory.
A Stage 2 Iron/Aluminium Removal scoping test was performed during which the slurry pH was increased by incremental limestone slurry additions. A target pH of 4.7 was selected for the locked cycle tests. Locked cycle testing achieved the targeted residual iron and aluminium concentrations at pH 4.7 and at 112% seed recycle.
A series of Mixed Hydroxide Precipitation (MHP) Stage 1 scoping tests were performed using magnesia samples from three potential suppliers. These tests established that the EMAG 45 magnesia product from Queensland Magnesia (QMag) is a superior reagent. Locked cycle testing produced results that are superior to the PFS process design criteria, exceeding the nickel precipitation extent with lower manganese co-precipitation.
A Mixed Hydroxide Precipitation (MHP) Stage 2 scoping test was performed during which the slurry pH was increased by incremental hydrated lime slurry additions and the results are summarized by Figure 5 below.
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1200 240
1000 200 mg/L
mg/L
800 160 Conc,
Conc,
600 120 Ni Mn
400 80 Residual Residual 200 40
0 0 6.0 6.5 7.0 7.5 8.0 8.5 pH Manganese Nickel
Figure 5 – Effect of pH on Residual Fe(III) Concentration in Stage 2 Iron/Aluminium Removal
The scoping test results at pH 7.95 are superior to the PFS process design criteria, exceeding the nickel precipitation extent (98.4% vs. 96%) with lower manganese co-precipitation (12.3% vs. 21%).
1.6.2.2 Limestone Testing
The head assays and reactivity of the limestone samples from two locations are reported in Table 10.
Table 10 - Limestone Head Assays
t Acid / Source % Ca % CaCO % Fe % Mg % Si 3 t L/S
Payong Payong 39.4 97.1 0.07 0.38 0.39 0.95
Lawigan 39.9 97.9 <0.01 0.38 0.10 0.96
Limestone calcination test results are reported in Table 11.
Table 11 - Limestone Calcination Results
Reactivity Time Weight Source LOI (%) % Ca % CaO t acid /t (min) Loss (%) lime
Payong-Payong 120 41.8 6.4 63.5 90.8 1.22
Lawigan 120 41.5 6.9 62.7 90.2 1.22
1.6.2.3 Comminution and Scrubbing Testwork
Comminution testwork was carried out at ALS Ammtec on limonite and saprolite composites. The limonite sample was identical to that used in scrubbing testwork. The results of the comminution testwork are summarised in Table 12.
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Table 12 – Comminution Indices
Index Limonite Saprolite
Ai (g) 0.0020 0.0167
CWi (kWh/t) - 9.21
RWi (kWh/t) - 8.1844
BWi (kWh/t) 3.1588 8.1026
Scrubbing of limonite samples was performed in a 1 m diameter drum scrubber with two sets of interchangeable lifters on opposite sides of the drum. At 0.25mm and smaller cut sizes there is progressively larger rejection of magnesium and chromium with some upgrade of nickel. Mass recoveries at the screen sizes of interest are summarised in Table 13 and Table 14.
Table 13 – Limonite Scrubbing – Elemental Recoveries, 4 Minutes Scrubbing (LIM1)
Passing Mass Ni Mg Cr Co Size % % % % %
Total 100 1.04 1.01 2.27 0.12
-0.25mm 96.03 98.38 75.90 74.37 94.04
-0.15mm 94.00 96.99 64.97 62.44 86.94
-0.075mm 91.46 94.88 55.42 52.28 77.86
-0.038mm 89.26 92.97 50.30 46.48 71.78
Table 14 – Limonite Scrubbing – Elemental Recoveries, 8 Minutes Scrubbing (LIM2)
Passing Mass Ni Mg Cr Co Size % % % % %
Total 100 1.04 1.01 2.27 0.12
-0.25mm 96.91 98.95 78.82 76.91 95.56
-0.15mm 95.54 98.20 69.83 66.85 91.45
-0.075mm 92.94 95.80 59.17 55.93 80.79
-0.038mm 90.90 93.83 54.34 50.80 74.52
1.6.2.4 Flow Properties and Conveyability of Ores
At the time of writing the TUNRA program was incomplete.
1.7 Ore Processing
The laterite profile in the ANLP deposit consists of limonite and saprolite zones. The limonite zone is characteristically iron oxide-rich, where the predominant minerals are hematite, goethite and clays, and with moderate nickel content (<1%). The limonite overlies the saprolite zone, which is less oxidised and is magnesium-rich with slightly higher nickel content. Due to the
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magnesium and iron content of the ore types, the process route is based on leaching limonite and saprolite ores via different processes.
The process plant design basis is 18 000 t/y nickel in a Mixed Hydroxide Product (MHP) and 7 600 operating hours per year.
The ore processing plant will comprise:
Crushing, grinding, thickening - saprolite ore preparation Crushing, scrubbing, grinding - limonite ore preparation High pressure acid leaching – limonite and low magnesium grade saprolite Atmospheric leaching – medium magnesium grade saprolite Saprolite neutralisation – high magnesium grade saprolite CCD thickening – seven stage CCD washing circuit, combined ore types Iron / aluminium removal – precipitation circuits using limestone and lime Mixed hydroxide precipitation -precipitation circuits using magnesia Final neutralisation – lime Sulphuric acid production – sulphur burning acid plant Reagents and services facilities
1.7.1 Process plant site location
The plant site is situated on the side of a steep sloping mountain at Tagpangahoy which extends down to the coast at Butuan Bay. Due to the arduous terrain, 3D modelling was conducted to situate the plant and determine earthworks quantities.
Preliminary geotechnical information indicates the Tagpangahoy site material is mostly fine, silty, oxidised soil material (weathered schist), typical of landslide material, with minimal rock observed. The soft material impacts cut and fill earthworks quantities and concrete quantities in the plant site due to increased seismic factors required when locating plant equipment in soft soil. The Tagpangahoy plant site location is considered sub-optimal for the project as the area is considered prone to land slips, unstable and requiring significant quantities of earthworks to situate the plant and port site. It is recommended to progress plant site location studies prior to the feasibility study in an endeavour to reduce geotechnical risk and earthworks costs for the project.
1.8 Environment
The Agata Nickel Project is planned to develop into an integrated mining and processing project which will involve potential social and environmental impacts. These will require comprehensive assessment and planning of mitigating measures to ensure they are appropriately managed. The Company shall implement this in accordance with the International Finance Corporation Performance Standards on Social and Environmental Sustainability and the requirements under Philippine law.
1.8.1 International Finance Corporation (IFC) Performance Standards on Social and Environmental Sustainability
The Company commits to manage the potential social and environmental impacts in a manner consistent with all applicable Performance Standards in addition to the requirements under
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Philippine laws, regulation, and permits that pertain to social and environmental matters. The performance standards are as follows:
PS1: Social and Environmental Assessment and Management Systems
PS2: Labor and Working Conditions
PS3: Pollution Prevention and Abatement
PS4: Community Health, Safety and Security
PS5: Land Acquisition and Involuntary Resettlement
PS6: Biodiversity Conservation and Sustainable Natural Resource Management
PS7: Indigenous Peoples
PS8: Cultural Heritage
MRL has committed to a Health, Safety, Environment and Community Policy (HSEC) document jointly developed with IFC. The Company has also agreed on an ‘Environmental & Social Action Plan’ to cover all HSEC aspects related to exploration activities, feasibility work and potential future mine development. MRL, with IFC’s assistance, is developing an Environmental Management System (EMS) to adequately manage, plan and document the environmental and social issues relating to their activities in the Philippines. The Company is also preparing a Stakeholder Engagement Plan which will describe their strategy and program for engaging with stakeholders in a culturally appropriate manner.
1.8.2 Philippine Environmental Impact Statement System
The Philippine Environmental Impact Statement System (PEISS), established through Presidential Decree (PD) 1586 in 1978, sets a systematic Environmental Impact Assessment (EIA) System. It requires Environmental Impact Statements (EIS) to be submitted to the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR) for review, evaluation, and approval. It further stipulates that the President or his duly authorised representative issues the Environmental Compliance Certificate (ECC) for a positive review of the EIA Report for Environmentally Critical Projects (ECP) and projects within Environmentally Critical Areas (ECA). Administrative Order No. 42 specifies that the DENR Secretary has the power to grant or deny ECCs on behalf of the President and further designates the EMB Central and Regional Directors as approving authorities for ECC applications.
1.9 Economic Analysis
The PFS economic model prepared by Mindoro has confirmed that hydrometallurgical processing of the Agata resource is economically feasible.
The economic analysis using the discounted cashflow (DCF) methodology has been prepared based on the high pressure acid leach (HPAL), atmospheric leaching (AL) and saprolite neutralisation (SN) hydrometallurgical processes. The financial model used for the analysis was audited by external consultants Deloitte Touche Tohmatsu.
The project has an after tax and un-geared net present value (NPV) of US$380 million, with an internal rate of return (IRR) of 14% using an 8% discount rate and the mining schedules, capital and operating costs estimates provided in this report together with and a long term nickel price of USD10 per pound.
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A summary of the PFS financial model is presented Table 15.
Table 15 - Summary of Financial Analysis Results
Nickel Price USD/lb USD 9 USD10
NPV (8% discount rate) USD M 190 380 Post Tax
IRR Post Tax % 11% 14%
Sensitivity analysis also shows that the project is robust to changes in economic modelling assumptions. The analysis has identified that the project is most sensitive to factors which impact on revenue (nickel price, feed grade and recovery) followed by capital costs. The project is least sensitive to operating cost estimates.
1.9.1 Capital Costs
The project capital costs presented in Table 16 were estimated by Ausenco and are expressed in US dollar (USD) values. The base date of the estimate is September 2011. Mining costs were estimated by Crystal Sun Consulting.
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Table 16 - Capital Cost Estimate for the Agata Nickel Project PFS
Capital Costs Description (Million USD)
Mining 6.3
Ore Preparation & Leaching 123
Products Section & Neutralisation 103
Plant Development 57
Acid Plant 135
Services and Utilities 24
Power Station, Auxilliary & Distr 70
Process Plant Infrastructure 26
General Infrastructure 118
Total Direct Cost 660
EPCM 124
Other Construction Services 26
Owners Cost 22
Total Indirect Cost 170
Direct + Indirect Cost 830
Contingency 110
Total Project Cost 940
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1.9.2 Operating Costs
Operating costs presented in Table 17 were estimated by Ausenco and are expressed in US dollar (USD) values. The base date of the estimate is September 2011. Mining costs were estimated by Crystal Sun Consulting
Table 17 - Operating Cost Estimate
Average Annual USD/lb Ni USD M
Mining 12.5 0.33
Labour 13.2 0.35
Sulphuric Acid 28.3 0.75
Processing 33.0 0.87
Utilities 4.3 0.11
Maintenance 14.0 0.37
G&A 10.9 0.28
Royalties 11.2 0.30
Total Operating Costs before by-products 130 3.4
Cobalt by-product Credits 17.4 {0.46}
Power by-product Credits 11.3 {0.30}
Total Operating Costs after by-products 100 2.6
1.9.3 Sensitivity Analysis
Sensitivity analysis shows that the project is robust to changes in economic modelling assumptions. The analysis has identified that the project is most sensitive to factors which impact on revenue (nickel price, feed grade and recovery) followed by capital costs. The project is least sensitive to operating cost estimates. The relative sensitivity of the project to revenue, capital and operating cost estimates is illustrated in the sensitivity chart below.
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900 Project Sensitivity 800
700
600
500
400
300
200
100
0 80% 90% 100% 110% 120%
Capex Revenue Operating Cost Acid Cost
Figure 6 - Sensitivity Analysis
The sensitivity analysis undertaken on the financial model has identified revenue assumptions as the highest risk factor in the financial performance of the Agata Project.
A summary of risks identified and strategy to mitigate risk is provided in Table 18.
Table 18 - Risk Assessment and Mitigation
Risk Factor Mitigant
Revenue
Commodity Price Robust project with significant operating margin
Exchange Rate Operating costs and revenue denominated in USD – self hedging
Undertake additional drilling and resource modelling Feed grade Mine scheduling Ore pre-treatment
Further metallurgical test work to confirm assumptions Recovery Trade-off analysis of acid consumption vs recovery
Royalties Negotiate agreements with federal , state & local jurisdictions
Capital Cost
Exchange Rate Hedging of currency at time of purchase
Design Undertake pre-feasibility and feasibility study
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Risk Factor Mitigant
Contingency Maintain a high level of contingency
Operating Cost
Installation of a sulphur/pyrite burning sulphuric acid plant which can Sulphuric acid price use multiple sources of sulphur including Mindoro’s own pyrite sourced from the Pan de Azucar Project
Sulphuric acid Undertake further metallurgical studies and pilot plant testing consumption
Power price Negotiation HoA for power off-take agreement
Labour costs Increased level of detail in manpower requirements and labour costs
Taxes & compensation Negotiate agreements with Federal, State and local jurisdictions
Permitting & Approvals
Mining permit Company to continue with permitting and land access applications land access
2 Introduction
2.1 For Whom the Report Has Been Prepared
This Techical Report has been prepared at the request of Mindoro Resources Ltd.
2.2 Purpose of the Report
This Technical Report has been prepared for the sole use of MRL to provide MRL with an estaimte of the capital and operating costs to a level of ± 20 - 25% for the Agata Nickel laterite Project. MRL intends to use this report as an input to its decision on the future of the Project. MRL’s reliance on, or use of, this report extends to the whole of the report and not any part or parts thereof.
2.3 Sources of Information
Five consultants have been involved in the preparation of this report, each acting as independent qualified persons in their respective areas. Each is listed below with their respective items of responsibility and sources of information.
2.3.1 Mark Gifford Consulting
Mark Gifford, a geological consultant, is the independent qualified person responsible for geological and resource estimation aspects of the report.
2.3.2 Crystal Sun Consulting
Dallas Cox of Crystal Sun Consulting, is the independent qualified person responsible for mine design and planning aspects of the report.
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2.3.3 Ausenco Vector
Monte Christie of Ausenco Vector, is the independent qualified person responsible for the residue storage facility design aspects of the report.
2.3.4 Ausenco
Ruth Sherrit of Ausenco is the independent qualified person responsible for supervision of the report and the metallurgy, process plant, services and infrastructure design and capital and operating cost estimates.
2.4 Scope of Personal Inspections
2.4.1 Mark Gifford Consulting
Mark Gifford has visited the project area numerous occasions since February 2010, with the last visit to site in July 2011.
2.4.2 Crystal Sun Consulting
Dallas Cox visited the project area in 2007 (July), 2008 (January and November), 2010 (July, August and December) and 2011 (January, April and May).
2.4.3 Ausenco Vector
Monte Christie visited the project area for two days in May 2011.
2.4.4 Ausenco
Ruth Sherrit visited the project area for two days in May 2011.
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3 Reliance On Other Experts
3.1 Mindoro Resources Limited
3.1.1 Ownership, land tenure
Edsel Abrasaldo, Vice President of MRL Gold Phils., Inc provided corporate overview, property description and location, ownership and land tenure information. These are found in Section 4 of this report, dated 20 December 2011.
3.1.2 Tax information
Michael Conan-Davies, Business Development Consultant of MRL provided the economic modelling and analysis, including tax information. This information is found in Section 22 of this report, dated 20 December 2011.
3.2 Mineral Commerce Services
3.2.1 Mixed hydroxide product marketing
Chris de Guingand, Managing Director of Mineral Commerce Services provided the marketing terms for mixed hydroxide product, a commodity for which pricing is not publicly available. Chris provided the information in Section 19 of this report, dated 20 December 2011.
Marketing of Mixed Hydroxide Product has its risks because there is a limitation of offtake partners who can accept nickel in that form. The payability for nickel may potentially be lower than the predicted 75-80% and will depend on the availability of alternative nickel feedstock. This can only be ascertained with any confidence once a concerted marketing programme is undertaken and individual buyers have been approached.
Chris has had a long career in the mining industry in financial and marketing roles as an executive, trader, director and consultant. He joined CRA in 1960 where he held senior management positions in marketing non ferrous metals and iron ore over 13 years. In 1969 he became marketing manager for Hamersley Iron, while in 1974 he joined Metals Exploration as commercial manager responsible for the financing and marketing of the Greenvale Nickel project which is now Queensland Nickel Ltd. In 1982 he formed his own consultancy Mineral Commerce Services Pty Ltd to provide marketing and shipping services to the Phosphate Mining Corporation of Christmas Island.
He has held board positions with Allegiance Mining NL, Grimwood Davies Holdings Ltd and Consolidated Minerals Ltd, and has made a number of presentations at various nickel conferences.
3.3 Gaia South, Inc. - Environmental Consultants
Ebert Bautista, Project Director of Gaia South Inc completed the environmental baseline study for the prefeasibility study and completed Section 20 of this report on Environmental Studies, dated 20 December 2011.
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4 Property Description and Location
4.1 Location
The Agata Nickel Project is located within the northern part of Agusan del Norte province in Northeastern Mindanao, Republic of the Philippines. It lies within the Western Range approximately 10 km south of Lake Mainit. The Project falls within the political jurisdiction of the municipalities of Tubay, Santiago and Jabonga. The Project is located 47 km north of Butuan City and 73 km south of Surigao City. See Figure 1.
The Agata Nickel Project’s resources are located in barangays Lawigan and Tinigbasan in the municipality of Tubay, barangay E. Morgado (formerly Agata) and La Paz in the municipality of Santiago and barangay Colorado in the municipality of Jabonga, all in the province of Agusan del Norte. The majority of MRL’s exploration activities on the Project are located in barangays Lawigan and E. Morgado. The Agata Nickel Laterite Project is centred at longitude 125° 31’ 9” / latitude 9° 17’ 20”.
The location offers several advantages including proximity to established infrastructure, fresh water supply from Tubay River, several sources of limestone supply in close proximity, protected deep ocean access and a short shipping distance to China and other Asian locations.
MRL’s exploration applications total 4 995 hectares.
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Figure 7 - Project Location
4.2 Land Tenure
The Agata Project (including Agata North and Agata South Laterites) was explored under a Memorandum of Agreement signed on 19 January, 1997 between Mindoro and Minimax Mineral Exploration Corporation (Minimax), a 100% Filipino company owned by the De Guzman family of Quezon City and Atty. Roberto San Jose of Manila. Thhe operating rights of Mindoro under the said MOA were evventually assigned to MRL by virtue off a Deed of Assignment by and between Mindoro and MRL, dated 27 June, 1997. Minimax graanted MRL the right to operate and conduct exploration activities on its Contract/Permit Areas in Surigao del Norte, Agusan del Norte, and Iloilo. Through this, MRL acquired the option to earn varying percentages of
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economic interest in Minimax’ Projects. Said Agreements were registered with the Mines and Geosciences Bureau in accordance with the Mining Law of the Philippines.
Minimax applied for a Mineral Production Sharing Agreement with the Mines and Geosciences Bureau Region XIII, denominated as MPSA-XIII-007 (Agata MPSA), on 04 July, 1997, covering an area of 1 620 ha located in the Municipality of Santiago, Agusan del Norte. The mineral commodities applied for were gold, copper and other minerals. MPSA-XIII-007 was amended on 28 August, 1997 to include additional areas covering 6 480 ha contiguous to the proposed original area (an increase from 1 620 to 8 100 ha). On 26 May, 1999, The Philippine Government, represented by Department of Environment and Natural Resources (DENR) Secretary Antonio H. Cerilles, and Minimax executed MPSA-134-99-XIII (Agata MPSA). This Agreement covers a total area of 7 679 ha situated in the Municipalities of Jabonga, Santiago, and Tubay, Province of Agusan del Norte and was registered with the Mines and Geosciences Bureau Region XIII on 17 June, 1999. On 18 May, 2000, a Notice of Relinquishment for a portion of the Agata MPSA was issued. 2 684 ha was relinquished from the total contract area of 7 679 ha retaining 4 995 ha.
The second and third Exploration Periods for the MPSA were July 23, 2004 to July 22, 2006 and February 7, 2007 to February 6, 2009, respectively. The fourth and last Exploration Period was granted on June 19, 2009 and expired on June 18, 2011. MRL on behalf of Minimax requested for an extension of the Exploration Period, prior to the expiry, on the grounds that it was not economically feasible to conduct mining operations on the ANLP during the fourth Exploration Period. On September 13, 2011, MGB-CO approved the extension for another two (2) years. However, it required MRL/Minimax to submit a Declaration of Mining Project Feasibility on or before the fifth Exploration Period’s expiry on September 12, 2013. Since the first Exploration Period in 1999, submission of all quarterly and annual accomplishment reports and quarterly drilling reports, and the payment of the mandated occupation fees, were accomplished by MRL on behalf of Minimax.
The Bolobolo and Karihatag Resources are are held within Exploration Permit of Apical Mining Corporation denominated as EP-XIII-027 and approved by the Department of Environment and Natural Resources (DENR) on November 5, 2010.
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography
5.1 Topography
Within the ANLP mine area, the nickel laterite is developed on a broad ridge bounded by the east and west by steep slopes incised by gullies and ravines. Elevations on the plateau range from 200 m to 320 m. The plateau on which the laterite is developed was formerly rainforest. Since being logged it is now open grassland, with a few secondary growth trees lining the streams along the lower levels.
Figure 8 is a photograph taken from the north of the deposit, looking south with Butuan Bay lying along the west.
The photograph in Figure 9 is taken from Butuan Bay, showing limited flat coastal area with steep terrain up to the ANLP deposit and surrounding mountains.
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Figure 8 - Agata Nickel Deposit – View to the South
Figure 9 - Agata Nickel Deposit - View from Butuan Bay
5.2 Accessibility
The Agata laterite deposit is accessible by any land vehicle from Surigao City, Butuan City or Davao City via the Pan-Philippine Highway (AH26). Daily flights are available from Manila and Cebu City to either Butuan or Surigao City. Commercial sea transport is available from Singapore, Jakarta, Manila, Batangas and Cebu to Surigao City or Nasipit ports.
5.3 Climate
The climate of Jabonga, Santiago and Tubay municipalities where the project area is situated belongs to Type II on the Philippines Atmospheric Geophysical & Astronomical Services Administration (PAGASA) Modified Coronas Classification. It has no dry season with very pronounced rainfall months. Climate averages from 1981-2000 show that peak rainfall months are from October to February. The highest mean monthly rainfall is 308 mm during January and the lowest mean monthly rainfall is 104.8 mm during May while mean annual rainfall is 2027 mm.
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1 Table 19 - Climate Averages and Extremes 1961 - 2000
Temperature Wind Cloud RH Month Rainfall Dry Wet Dew Amt Max Min Mean % Dir Spd Bulb Bulb Pt (okta) Jan 308 21 30.1 22 26.1 25.7 24.2 23.6 88 NW 1 6 Feb 212 15 30.8 22 26.4 26.0 24.2 23.5 86 NW 1 6 Mar 150 16 31.8 22.4 27.1 25.7 24.5 23.7 83 NW 1 5 Apr 107 12 33.1 23.1 28.1 27.7 25.2 24.3 82 ESE 1 5 May 105 14 33.8 23.8 28.8 28.3 25.8 25 82 ESE 1 6 Jun 135 16 33 23.6 28.3 27.8 25.5 24.7 83 ESE 1 6 Jul 158 16 32.5 23.3 27.9 27.5 25.3 24.5 84 NW 1 6 Aug 105 12 32.8 23.5 28.1 27.8 25.4 24.6 82 ESE 2 6 Sep 140 14 32.8 23.3 28.1 27.7 25.4 24.6 83 NW 2 6 Oct 195 17 32.3 23.2 27.8 27.4 25.3 24.6 84 NW 1 6 Nov 194 18 31.6 22.9 27.2 26.9 25.1 24.5 86 NW 1 6 Dec 218 19 30.8 22.5 26.7 26.3 24.7 24.1 88 NW 1 6 Annual 2,027 190 32.1 23 27.6 27.1 25.1 24.3 84 NW 1 6
6 History
The earliest recognised work done within the area is mostly from government-related projects including:
The Regional Geological Reconnaissance of Northern Agusan reported the presence of gold claims in the region (Teves et al. 1951). Mapped units include sedimentary rocks (limestone, shale and sandstone) of Eocene to mid-Tertiary age. Geologists from the former Bureau of Mines and Geosciences Regional Office No. X (BMG-X) in Surigao documented the results of regional mapping in the Jagupit Quadrangle within coordinates 125°29´E to 125°45´ east longitude and 9°10´ to 9°20´ north latitudes. The geology of the Western Range was described as a belt of pre-Tertiary metasediments, metavolcanics, marbleized limestone, sporadic schist and phyllite and Neogene ultramafic complex. (Madrona, 1979) This work defined the principal volcano- sedimentary and structural framework of the region and recognised the allochtonous nature of two areas of ultramafic rocks that comprise serpentinized peridotite in the Western Range, one between the Asiga and Puya rivers in the Agata project area and the other west of Jagupit. These were mapped by Madrona (1979) as blocks thrust westward, or injected into the metavolcanics between fault slices.
1 Based on Butuan City Synoptic Station
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The United Nations Development Program (UNDP, 1982) conducted regional geological mapping at 1:50,000 scale and collected stream sediment samples over Northern Agusan. The UNDP report of 1984 described the geological evolution of this region and included a detailed stratigraphic column for the Agusan del Norte region. Two anomalous stream sediment sites were defined near the Agata project during this phase of work. The Asiga porphyry system that lies east of the Agata tenements was explored by Sumitomo Metal Mining Company of Japan in the 1970’s and 1980’s (Abrasaldo 1999).
La Playa Mining Corporation, financed by a German company in the late 1970’s, explored within the Agata Project area for chromiferrous laterite developed over weathered ultramafic rocks. There were five (5) test pits dug in the area.
In 1987, Minimax conducted reconnaissance and detailed mapping and sampling. Geological mapping at 1:1,000 scale was undertaken in the high-grading localities, and an aerial photographic survey was conducted and interpreted. MRL established a mining agreement with Minimax in January 1997, and commenced exploration in the same year.
Several artisanal miners are active within the project site since the 1980’s up to the present. These miners are conducting underground mining operations at the Assmicor and American Tunnels area and gold panning of soft, oxidised materials within Assmicor and Lao Prospect areas and of sediments in major streams including that of Tubay River. The region of small- scale mining activity was later named “Kauswagan de Oro” (translated: “progress because of gold”). The majority subsequently left the region for other high-grading areas in Mindanao. In more recent years, a group of copper “high-graders” emerged in the American Tunnels area mining direct-shipping grade copper ore. However, this new trend waned due to the softening of metal prices in the latter part of 2008.
7 Geological Setting and Mineralisation
7.1 Introduction
The Agata north lateritic nickel resource in the northern part of the Agata MPSA in the Philippines forms the bulk of the resource base of MRL and has been under active exploration by this company since 1997, with the first lateritic nickel resource drilling program completed in 2006 and subsequent programmes in 2007/2008 and 2010/2011. The latter program also drilled laterite targets and defined resources at Bolobolo and Karihatag located 20km to the north of Agata North, and at Agata South, 5km south of Agata North, which have been recently reported.
This portion of the report provides comprehensive discussion of the Agata North resource as it forms the bulk of the resource and resultant reserves. The resource estimate reports for Bolobolo and Karihatag have recently been posted on SEDAR and only a summary of the report is presented below.
Since resource drilling has commenced there have been 4 further drill programs completed, with this report summarising and re-evaluating all the historic data as well as including the latest infill drilling results into the resource estimate.
This technical report was prepared at the request of Mr Jon Dugdale, CEO of Mindoro Resources Limited of Canada [TSX – Venture Exchange]. This is the fourth mineral resource estimate for the Agata Nickel Laterite Nickel Project (ANLP) located within the northern areas of Mindanao, the southernmost island within the Philippines (Figure 10). The first four technical reports were completed from 2008 – 2009 and were compiled by Dallas M. Cox BE (Min) a qualified person as defined by National Instrument 43-101. All drilling programs have been completed so as to aid in the better estimation of the global lateritic nickel resource at Agata–
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this information is to aid MRL in determining the best approach to exploiting the resource in the short to long term.
Figure 10 – Map of the Philippines showing MRL Project Areas
The resource estimate presented in this report has been comppleted by Mike Job, a qualified geological statistician and Principal Consultant for Quantitative Group (QG) – a geological consulting firm based in Perth, West Australia. The estimation methodology and geochemical modelling used on the resource was defined by discussions witth the author and QG so as to provide the most comprehensive and accurate resource estimate possible considering the data spacing and continuity.
The author has visited site on numerous occasions, has seen the exploration drilling in progress and has been able to review all aspects of the operation. Tony CClimie, President of MRL Gold Phils., Inc,. based in Manila has visited site on numerous occasions and was in charge of all drill programs completed upon the Agata Project since 1997. He and his technical staff have provided significant detail to this report and this has ensured the accuracy and completeness of the dataset upon which the author has made few changes or alterrations.
7.2 Geological Setting
The principal tectonic element of the Philippine archipelago is tthe elongate Philippine Mobile Belt (PMB – Rangin, 1991) which is bounded to the east and wwest by two major subduction zone systems, and is bisected along its north-south axis by the Philippine Fault (Figure 11). The Philippine Fault is a 2000 km long sinistral strike-slip wrench faault. In the Surigao district, this fault has played an important role in the development of the Late Neogene physiography, structure, magmatism and porphyry copper-gold plus epithermal gold metallogenesis. There has been rapid and large-scale uplift of the cordillera in the Quaternary, and limestone of Pliocene age is widely exposed at 1000-2000 meters elevation (Mitchell and Leach 1991). A
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cluster of deposits on the Surigao Peninsula in the north consists chiefly of epithermal gold stockwork, vein and manto deposits developed in second-order splays of the Philippine Fault (Sillitoe 1988). The mineralisation-associated igneous rocks in Surigao consist mostly of small plugs, cinder cones and dikes dated by K-Ar as mid-Pliocene to mid-Pleistocene (Mitchell and Leach 1991; Sajona et al. 1994; B.D.Rohrlach, 2005).
The basement rocks consist of the Concepcion greenschist and metamorphic rocks of Cretaceous age overthrusted by the pillowed Pangulanganan Basalts of Cretaceous to Paleogene age, which in turn, were overthrust by the Humandum Serpentinite. Its emplacement probably occurred during the late Cretaceous. The Humandum Serpentinite occupies a large part in the tenement area, and through its subsequent weathering the area has a high potential for nickel laterite mineralisation. (Tagura, et.al., 2007).
The Humandum Serpentinite is overlain by Upper Eocene interbedded limestone and terrigenous clastic sediments of the Nabanog Formation. These are in turn overlain by a mixed volcano-sedimentary package of the Oligocene Nagtal-O Formation, which comprises conglomeratic andesite, wacke with lesser pillow basalt and hornblende andesite, and the Lower Miocene Tigbauan Formation. The latter is comprised of conglomerates, amygdaloidal basalts, wackes and limestones. Intrusive events associated with the volcanism during this period resulted in the emplacement of plutons and stocks that are associated with porphyry copper-gold and precious metal epithermal mineralisation in the region. (Tagura, et.al., 2007)
Lower Miocene Kitcharao Limestone and the lower part of the Jagupit Formation overlie the Tigbauan Formation. The Jagupit Formation consists of conglomeratic sandstone, mudstone and minor limestone. The youngest stratigraphic unit is the Quaternary Alluvium of the Tubay River floodplain.
Mineral deposits within the region are dominated by epithermal precious metal deposits and porphyry copper-gold. There is a rather close spatial and probably genetic association between epithermal precious metals and porphyry deposits. These deposits exhibit strong structural control. First order structures are those of the Philippine Fault system, which play a role in the localisation of the ore deposits, while the second order structures that have developed as a result of the movement along the Philippine Fault system are the most important in terms of spatial control of ore deposition (Tagura, et.al., 2007)
Other mineral deposits are related to ultramafic rocks of the ophiolite suite and comprise lenses of chromite within harzburgite and lateritic nickel deposits that have developed over weathered ultramafic rocks.
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Figure 11 - Geological Map of Surigao Mineral District
8 Deposit Types
The widespread occurrence of harzburgite, peridotite, pyroxenite, their serpentinised equivalents, serpentinite, and localised lenses of dunite/serpentinised dunite comprise the lithology in the project area. These rocks are confined to broad ridges extending down to the footslopes of the Western Range. The ultramafic bodies are of probable late Cretaceous age,
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and were emplaced as part of an ophiolite sequence during thhe Upper Eocene (Abrasaldo, 1999). Schists are also present in the extremities of the lateritte area. Several of these rock types were likewise identified in petrographic/mineragraphic analyses of drill core and rock samples as wehrlite (peridotite), serpentinised wehrlite, serpentinnised websterites (pyroxenite), websterites, serpentinites and cataclasite. The location of these samples is shown in Figure 15. Lineaments trending NE within the ultramafic (and underlying grreen schist) are interpreted as either fault splays or zones of weakness in the area.
Figure 12 - Local Geological Map of Agata North Project Area
Geological mapping in the project area showed favorable deveelopment of laterite along the broad ridges characterised by peneplane topography. These areas are where the drilling activities are concentrated. In areas with moderate to semmi-rugged topography, erosion proceeds much faster than soil development, hence the laterite iss thinner.
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The ANLP deposits located along the western range of the Surigao region, Mindanao Island all have had significant laterite formation and consequent nickel enrichment. The mineralisation can occur in both low and high relief terrains with the high relief terrains generally having lower limonite thicknesses and some exposure of bedrock. The low relief terrain however has no exposures of bedrock on its hillcrests, with the laterite being well developed and containing thick and highly mineralised limonite or saprolite and on occasions a transitional unit. Some boulders occur within the laterite profile and this is predominantly related to harder residual rocks within the laterite profile.Test pits that were previously excavated by a previous company showed a maximum depth of 9.40 m and an average depth of 4.96 m. All these test pits have bottomed in limonite. Drilling by QNI, Phils. (QNPH) and MRL showed a thicker laterite profile than what was revealed by previous test pitting.
9 Exploration
Lateritic nickel mineralisation was known within the ANLP area since the early 1990’s and grades were confirmed with the development of test pits in 1997. The project since this initial definition has moved ahead so as to better define the resource and to provide better technical information with regards to eventual exploitation.
In June 2004, Taganito Mining Corporation (Taganito) was selected from several interested parties and granted the non-exclusive right to assess the nickel laterite potential of the Agata Project. Taganito carried out two phases of evaluation and reported encouraging results. Forty- eight surface laterite and rock samples were collected from an area of about 300 ha within a much more extensive area of nickel laterite mineralisation. Nickel contents range from very low to a high of 2.09%, with most of the values exceeding 0.5%. Taganito considered these values to be within the range that normally cap the secondary nickel enriched zone and recommended a detailed geological survey and drilling. However, MRL elected to allow Queensland Nickel Phils., Inc. (QNPH) to proceed with a reconnaissance drill program in 2006 under an option arrangement. QNPH did not exercise the option.
Subsequent MRL exploration has been carried out by the use of open core drilling on a drill pattern that has been successively closed down with each subsequent drill program so as to enhance the accuracy of the future reported lateritic Ni resource. All drilling to date has been completed by the use of small mobile open hole NQ coring rigs, which are highly mobile in difficult to access terrain. Recovery from these drill rigs is high, with losses generally occurring where there are changes in the hardness of the drilled material, causing material to be disrupted at the bit face. The major ore zone is generally a softer material and losses within the ore zones have been minimal at all stages of the drilling programs. A variety of contractors have been used over time, with the drilling rate being the only variation with regards to their performance and sampling rate.
10 Drilling
Each of the individual drill programs will be discussed and summarised.
10.1.1 BHP-Billiton (2006)
QNPH, then a subsidiary of BHP-Billiton, conducted reconnaissance drilling over the ANLP from January 23, 2006 to April 26, 2006 at an initial drilling grid of 200m x 200m followed by in-fill drilling at 100-metre grid spacing. A full report of the drilling program entitled “Evaluation of Preliminary Exploration on Agata Nickel Laterite Prospect of MRL Gold Philippines, Inc,,
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Agusan del Norte, Philippines” was completed by QNPH in June 2006 and submitted to MRL immediately thereafter. A total of 35 holes were drilled over an area of approximately 80 ha, which is 21% of the 340-hectare ANLP. The drillhole locations are incorporated in the MRL’s AGL Drillhole Location Map (Figure 13).
Figure 13 - ANLP Drillhole Location Map – BHP-Billiton and MRL (2007) Drilling.
This drilling program was subsequent to a Memorandum of Understanding (MOU) signed between MRL and QNPH on December 5, 2005. The MOU allowed QNPH to conduct exploration in the property, which also include technical review and geological mapping. It was intended to evaluate and establish resource potential of the area and as a possible Yabulu Refinery ore source, and to present a resource model. QNPH were looking for high Ni/high Fe ore and were not intending to formalise any agreements with MRL until the results of the exploration proved positive.
To evaluate the potential of the ANLP for the Chinese market, MRL commissioned Denny Ambagan to re-evaluate QNPH’s data with the aim of estimating low-grade resources for the Chinese market. Ambagan is a geologist, who worked for Crew Minerals in its Lagonoy and Mindoro nickel laterite exploration areas for three years. An in-house estimate was tabled and QNPH did not take up an option with MRL with regards to the ANLP.
10.1.2 MRL phase 1 (2007)
The first drilling program in the ANLP managed and developed by MRL was conducted from February 22 to August 3, 2007 with 100 holes completed and a total meterage of 2267.12. Drilling was confined to the area defined for an initial DSO operation. The drilling area related to areas covered by initial Exploration Targets A and B. The drilling rate averaged 3.8 m/day per drill rig and the recovery of drill core over the program was 88.2%.
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10.1.3 MRL phase 2 (2007/08)
A follow-up infill drilling program in ANLP was conducted from December 17, 2007 to May 30, 2008, completing 773.12 m in 48 drill holes (37 new drill holes and 11 twin holes). The purpose of this exercise was to better define the mineralisation and extend the initial resource. The drilling rate averaged 4.6 m/day per drill rig and the recovery of drill core over the program was 93.9%.
10.1.4 MRL phase 3 (2008)
From June 18, 2008 to September 26, 2008, step-out drilling was carried out with hole spacing widened to 100 m by 100 m centres. Drilling totalled 3,601 meters in 225 holes. This program was aimed to drill out the greater part of Agata North resource potential based on areas covered by Exploration Targets C and D. The drilling rate averaged 11.5 m/day per drill rig and the recovery of drill core over the program was 95.0%.
A total of 408 vertical holes were completed during the first 4 phases of drilling in the ANLP, including the previous BHP-Billiton drilling. The drilling patterns are all located on a 50 m- to 100 m spaced grid. Total meterage is 7,300.83 with an average depth of 17.89 m/per hole, a maximum of 46.6 m, and a minimum of 4.35 m.
10.1.5 MRL phase 4 (2010)
During 2010 the program MRL continued to infill the resource so as to gain both a greater level of accuracy for the resource estimate, but also to be able to study the variography of the resource within a close spaced pattern combining both high grade limonite and saprolite ores. From April 23, 2010 to July 10, 2010 infill drilling totalled 147 drill holes for 2682 m of drilling. The drilling rate averaged 13.6 m/day per drill rig and the recovery of drill core over the program was 91.5%. Lower recovery is explained by the variably lithified ultramafic in the close spaced pattern to be used for variographical purposes, this is not common throughout the deposit but the location weighting in this program has skewed the recovery data.
For the resource being compiled in this report the total number of drill holes completed is 593 for 10,851.84 m of drilling with an average drill hole depth being 18.30 m. All drill holes completed within the ANLP area are located on Figure 14.
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Figure 14 - ANLP Drillhole Location Map – All Drilling
10.1.6 Summary
All exploration completed to date has been systematic and appropriate with regards to the development of a resource estimate. The author considers the drilling methodology used within the ANLP area, and the various sample recovery rates, appropriate and accurate with regards to providing a sampling platform for resource estimation.
10.1.7 Bolobolo and Karihatag resource estimate summary
The Bolobolo and Karihatag deposits are located about 73 km north-northwest of Butuan City and 47 km southwest of Surigao City, Mindanao Island, Philippines. These two deposits are part of the projects located within the overall Agata Project. They are held within Exploration Permit of Apical Mining Corporation denominated as EP-XIII-027 and approved by the Department of Environment and Natural Resources (DENR) on November 5, 2010. Mindoro has ownership of the tenement via an MOA with Apical Mining Corp owners, Minimax, and this MOA gives Mindoro 75% ownership with a further 25% earned through exploration, which to date has been completed.
The Bolobolo and Karihatag deposits are situated along the central part of the uplifted and fault- bounded Western Range on the northern end of the east Mindanao Ridge. Greenschists, ultramafics, limestones, andesite and tuff, younger limestones, intrusive, and alluvium are present within the area. The widespread occurrence of ultramafics and serpentinized ultramafics, especially along the broad ridges characterized by peneplaned topography provide a favourable environment for the development of nickel laterites.
The laterite profile in the Bolobolo and Karihatag deposits consists of the ferruginous laterite, limonite, saprolite grading to the ultramafic rock, from surface to increasing depth. The limonite zone is iron oxide-rich, where the predominant minerals are hematite, goethite and clays, and
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with moderate nickel content (over 1%), while the saprolite zone has much less iron-oxide, is magnesium-rich, and has a slightly higher nickel content than the limonite horizon in its upper portion.
This report is based on the exploration data that were produced and compiled by MRL. Data verification performed by the author found no discrepancies. Hence the database is considered adequate to meet industry standards to estimate mineral resources.
The resource was estimated by Mike Job, Principal Consultant, Quantitative Group Perth, using the Ordinary Kriging method. The data was domained into 3 ore types, Limonite, Saprolite and Bedrock and within each domain 6 individual elements were estimated and reported upon.
The cut-offs applied to the resource were 0.5%Ni for Limonite and 0.8%Ni for Saprolite (as per the previous estimates completed upon the Agata North Laterite Project, (Cox, 2008 2009a 2009b; Gifford 2010)).
10.1.8 Agata South resource estimate summary
The Agata South deposit is located about 30 km north-northwest of Butuan City and 64 km southwest of Surigao City, Mindanao Island, Philippines. This deposit is part of the projects located within the overall Agata Project. The Agata South deposit is held by the approved MPSA of Minimax Mineral Exploiration Corp (Minimax), denominated as MPSA-134-99-XIII, which is comprised of 61.5 blocks covering an area of 4,995 hectares (ha). The MPSA-134-99- XIII was approved on May 26 1999 by the Department of the Environment and Natural Resources (DENR) and was registered on June 17, 1999 with the Mines and Geosciences Bureau (MGB) Regional Office No. XIII in Surigao City. A MOA was signed by Mindoro and Minimax on January 19, 1997. Mindoro assigned all its rights in the MOA to MRL on June 27, 1997.
The Agata South deposit is situated within the southern portion of the uplifted and fault-bounded Western Range on the northern end of the east Mindanao Ridge. Greenschists, ultramafics, limestones, andesite and tuff, younger limestones, intrusive, and alluvium are present within the area. The widespread occurrence of ultramafics and serpentinized ultramafics, especially along the broad ridges characterized by peneplaned topography provide a favourable environment for the development of nickel laterites.
The laterite profile in the Agata South deposit consists of the ferruginous laterite, limonite, saprolite grading to the ultramafic rock, from surface to increasing depth. The limonite zone is iron oxide-rich, where the predominant minerals are hematite, goethite and clays, and with moderate nickel content (over 1%), while the saprolite zone has much less iron-oxide, is magnesium-rich, and has a slightly higher nickel content than the limonite horizon in its upper portion.
This report is based on the exploration data that were produced and compiled by MRL. Data verification performed by the author found no discrepancies. Hence the database is considered adequate to meet industry standards to estimate mineral resources.
The resource was estimated by Alastair Cornah and Mike Job, Principal Consultants, Quantitative Group Perth, using the Ordinary Kriging method. The data was domained into 3 ore types, Limonite, Saprolite and Bedrock and within each domain 6 individual elements were estimated and reported upon.
The cut-offs applied to the resource were 0.5%Ni for Limonite and 0.8%Ni for Saprolite (as per the previous estimates completed upon the Agata North Laterite Project, (Cox, 2008 2009a 2009b; Gifford 2010)).
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11 Sample Preparation, Analyses and Security
11.1 Sampling Method and Approach
The ANLP QA/QC Procedures for the whole ANLP drilling program were set up by MRL geologists and followed by all personnel involved in all stages of the program. These were adapted from the QA/QC Protocols of QNPH for the 2006 drill program carried out on the ANLP. Periodically, the protocols were evaluated and improvements implemented. The core handling, logging and sampling procedures applied in the program are briefly described below.
Core checkers, under the supervision of MRL technical personnel, are present on every drill rig during operation. This is to record drilling activities from core recovery, core run, pull-out and put-back, casing and reaming at the drill site. Once a core box is filled, it is sealed with a wooden board then secured with a rubber packing band. This is placed in a sack and manually carried to the core house some 300 m to 1 km m from the drill area.
Core logging was carried out in the core shed by MRL geologists. For standardisation of logging procedures, the geologists are guided by different codes for laterite horizon classification, weathering scale, boulder size, and colour.
After logging, the geologist determines the sampling interval. The core sampling interval is generally at 1-metre intervals down the hole, except at laterite horizon boundaries, when actual boundaries are used. The sample length across the boundaries is normally in the range of 1.0 ± 0.30 m to avoid excessively short and long samples. In the saprolitic rocks and bedrock layers, some sample intervals have lengths greater than 1.30 m to a maximum of 2.00 m.
11.1.1 MRL sampling protocols
As in all stages of the program, the ANLP QA/QC Procedures were diligently followed during the sample preparation and security procedures. The analyses for the first 2,689 core samples were performed by McPhar Geoservices (Philippines), Inc. (McPhar), which follows internationally-accepted laboratory standards in sample handling, preparation and analysis.
For the rechecking of the integrity of laboratory assays, independent consultant Dr. Bruce D. Rohrlach, also a qualified person, provided MRL geologists with sampling procedures in May, 2007 after several site visits. These were incorporated into the QA/QC Procedures.
Following the recommendations of another qualified person, F. Roger Billington in May, 2008, the sampling protocols were slightly modified. The most important modification was the insertion of pulp rejects in the same batch as the mainstream samples. This is to ensure that all conditions in assaying are similar, if not completely the same, for both the mainstream and check samples. All of the analyses are completed by Intertek Testing Services, Phils., Inc. (ITS) for analysis using the XRF analytical method, and thus all 8,411 core samples since have been analysed by this group.
The ITS Phils. facility is among Intertek’s global network of mineral testing laboratories. It provides high quality assay analysis of mineral samples for nickel deposit exploration projects. Intertek mineral testing laboratories implement quality protocols.
11.1.2 MRL core sampling
During the first two phases of drilling, whole core sampling was conducted for 132 drill holes, and 17 holes were split-sampled. Whole core was used, considering the relatively small core diameter, and to achieve better precision by assaying the largest possible sample.
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Whole core splitting was manually performed. The core was laid on a canvas sheet, pounded and crushed by use of a pick, thoroughly mixed, quartered, then the split sample is taken from two opposite quarter portions. The other two quarters are combined and kept as a duplicate in a properly sealed and labelled plastic bag and arranged in core boxes according to depth. The duplicates are stored in the core house at the Agata Base Camp, some 1.5 km from the drill area.
For the third and latest drilling phase, split-sampling was conducted to ensure the availability of reference samples in the future (except for 45 drillholes from the third drilling phase). The cores were cut in half using either a core saw or spatula. The remaining half is stored in properly labelled core boxes at the Mindoro Camp site in Agata.
The sampling interval is marked in the core box by means of masking tape/aluminium strip labelled with the sampling depth. The sample collected is placed in a plastic bag with dimension of 35 cm x 25 cm, secured with a twist tie. The plastic bag is labelled with the hole number and sample interval.
After the samples are collected, they are weighed then sun-dried for about 5 hours and weighed again before final packing for delivery to the laboratory. In cases where there is continuous rain, the samples are pan-dried for 5-6 hours using a constructed drying facility or wood-fired oven.
MRL prepared its own sample tags for all samples including pulp repeats, pulp standards, and coarse rejects samples. The samples were placed in a rice sack and then in a crate to ensure the security of the samples during transport.
For all of the 2007 cores and batch 2008 AGL 10, the prepared samples were sent to the McPhar laboratory in Makati City, Metro Manila via a local courier (LBC Express). The samples were carefully packed in crates with proper labels, and accompanied by an official Submission Form and a Courier Transmittal Form. The crates were transported to Butuan City where LBC Express branches are present. The transportation of the crates containing the samples is always accompanied by designated MRL staff. The courier received the package and provided MRL with receipts indicating contents. For batches 2008 AGL 1, 3 and 6, the samples were delivered by MRL to McPhar’s sample preparation facility in General Santos City. The assaying was performed in their laboratory in Makati City.
Counting and cross-checking of samples vis-à-vis the McPhar Submission Form were performed by McPhar supervisors. Notice is given to MRL if there are discrepancies, otherwise it is understood that sample preparation and analysis will be carried out as requested. A sample tracking, quality control and reporting system was maintained between MRL and McPhar.
For batches 2008 AGL-13, 16, 18 and onwards, the core samples were delivered to Intertek’s sample preparation facility in Surigao City. Likewise, checking of samples against the list was done upon submission. Once prepared, Intertek-Surigao sends the samples to their assay laboratory in Muntinlupa City, Metro Manila.
The core sampling and logging facility was under the supervision of an MRL geologist or mining engineer at all times. This facility was originally within the drill area and is about 300 m to 1 km from the drill pads, however although logging of the core was completed at the drill rig for the phase 4 drilling, core trays were delivered to barangay E. Morgado base camp for sample splitting preparation under the guidance of MRL staff. A civilian guard secures the base camp premises during the night.
The ANLP drilling was under the direct supervision of James A. Climie, P. Geol., President of MRL Gold Phils., Inc.
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11.2 Sample Preparation, Analysis and Security
In addition to stringent sampling protocols, QA/QC procedures were also employed following Dr. B. Rohrlach’s and F.R. Billington’s (MRL independent consultants) guidelines. Standard reference materials, field duplicates, coarse rejects and pulp rejects were resubmitted to the analysing laboratory to check the accuracy of the primary laboratory results. A total of 1269 analyses of check samples were used in confirming the accuracy and repeatability of all assays to be used within the resource estimation of the ANLP. Selection of check samples were spread throughout all holes and in various laterite horizons.
The field duplicates totalled 325 or 2.93% of the 11,100 mainstream core samples of MRL. Normally, 1 in every 20 core samples is duplicated. The duplicate sample is selected to ascertain that the full range of different laterite horizons is systematically covered. The samples were selected to cover the full range of Ni grades at Agata, and to extensively cover the different stages and spatial distribution of the drill program, so as to provide a representative check on the reliability of the original sample splitting process undertaken by MRL at Agata North. Originally, the splitting method is the same as for obtaining duplicates for storage but ¼ part of the prepared sample represents the field duplicate while the ¾ part is the regular sample. For the half-core sampling, the field duplicates were taken by cutting the remaining ½ core into 2. These samples were sent to the laboratory in the same batch and were treated in the same way as the mainstream core samples.
A set of 81 coarse reject samples, comprising 0.73% of the 11,100 core samples, were submitted to the laboratory where the original samples were analysed for resampling and assaying. Resampling was done by taking a duplicate split from the coarse rejects and then placing it back into the assay stream for analysis. Again, as in all duplicates, the submitted samples were chosen to cover the natural range of assays. The reanalysis of the coarse reject samples was undertaken as an internal check on the crushing and sub-sampling procedures of the laboratory to ensure that the samples taken for analysis were representative of the bulk sample.
There were two sets of pulp rejects sent for re-assaying. One was sent to the laboratory where it was originally analysed. A total of 250 pulp rejects were sent under this category. The other set was sent to an umpire laboratory wherein a total of 319 pulp rejects were analysed. This is to establish reproducibility of analysis and determine the presence or absence of bias between laboratories. Samples were taken on all of the different laterite horizons. Originally, pulp rejects were collected and sent in separate batches. Starting on June 2008, pulps were inserted together with the mainstream samples (1 in each set of 40 samples). The pulp rejects for inter- laboratory checking were sent at a later date.
The umpire laboratory for the 2007 drilling program was Intertek in Jakarta. Selected pulp samples were sent by MRL to Intertek’s Manila office, after which they forward the samples to Jakarta at Intertek Cilandak Commercial Estate 103E, JI Cilandak KKO, Jakarta 12560. Intertek (Jakarta) acquired an ISO 17025 2005 accreditation from KAN (National Accreditation Body of Indonesia) denominated as LP 130_IDN, valid until 2010. With the change of primary laboratory to Intertek Phils., McPhar becomes the umpire laboratory. In 2008, McPhar samples/assays were checked by Intertek Phils. and vice-versa.
Nickel standards or certified reference materials are routinely inserted to the batches of core samples sent for assaying. This is done as a double check on the precision of the analytical procedures of McPhar and Intertek on a batch by batch basis. The standards, which have known assay values for Ni, were provided by Geostats Pty Ltd of Australia in pulverized (pulp) form weighing about five grams contained in 7.5 cm X 10 cm heavy duty plastic bags. Originally, one standard sample is inserted for every batch of 40 to 45 samples. However, there were some standards inserted in smaller intervals of 25-35 samples. Starting with Batch 2008 AGL-
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18, one standard sample was included in every set of approximately 40 samples. In all, 294 standards equivalent to 2.65 % of the core samples were used.
Eighteen types of Ni standards were used with grade ranging from 0.01% to 2% Ni. Each one comes with a certificate that shows the accepted mean Ni value and standard deviation, which are available on the website of Geostats (www.geostats.com.au). The specific nickel standards and the frequency of using each one are listed in Table 20.
Table 20 - Ni Standards used at ANLP and frequency
Ni Standard # Assays %Ni Ni Standard # Assays %Ni
GBM305-9 32 0.25 GBM906-7 6 0.56
GBM307-13 16 2 GBM996-1 5 1.27
GBM901-1 55 0.8 GBM302-8 6 1.08
GBM903-2 27 0.11 GBM397-6 5 0.03
GBM905-13 41 1.51 GBM901-4 6 0.02
GBM906-8 44 0.55 GBM903-5 10 0.18
GBM398-4 5 0.41 GBM995-4 10 0.03
GBM900-9 5 1.16 GBM997-4 5 0.01
GBM901-2 8 0.88 GBM998-3 8 0.03
9 Standards 233 9 Standards 61
11.2.1 Laboratory protocols
11.2.1.1 McPhar Geoservices (Phil.), Inc.
McPhar carries out high quality sample preparation and analytical procedures. It is an ISO 9001-2000 accredited laboratory and has been providing assay laboratory services to both local and foreign exploration and mining companies for more than 35 years. It served as the primary laboratory for the ANLP drilling. Its address is 1869 P. Domingo St., Makati City, Metro Manila.
At McPhar’s Geoservices each sample is analysed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminium (Al), silica (SiO2) and some samples for phosphorous (P). The Ni, Co, Fe, Mg and Al are assayed by dissolving a 25 g charge with a two acid digest using hot hydrochloric (HCl) and nitric acid (HNO3) and reading the results by Atomic Absorption Spectroscopy (AAS). The SiO2 and P are analysed by a gravimetric process.
McPhar has its own Quality Assurance/Quality Control (QA/QC) program incorporated in their sample preparation and analyses procedures. Every tenth sample and samples with "anomalous" results, i.e., samples having abnormally high or low results within a sample batch, are routinely checked. This is done by preparing a solution different from the solution on the regular sample taken on the same pulp of a particular sample.
11.2.1.2 Intertek Testing Services Phils., Inc.
Intertek Testing Services Phils., Inc. is among Intertek’s global network of mineral testing laboratories. It provides quality assay analysis of mineral samples for nickel deposit exploration
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projects. Measures are taken by Intertek mineral testing laboratories to ensure that correct method development and quality protocols are in place to produce good quality results.
Each sample is analysed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminium (Al), silica (SiO2), CaO, Cr2O3, K2O, MnO, Na2O, P2O5, and TiO2. Whole rock analyses are performed by XRF. The samples are fused using lithium metaborate. XRF analysis determines total element concentrations that are reported as oxides.
For its internal QA/QC, Intertek performs repeat analyses plus split sample analyses every 15-20 samples. Furthermore, on the average, one sample of standard reference material is inserted in every 40 samples, and one blank in every 60 samples.
11.2.2 Internal check assays (McPhar and Intertek)
The laboratories of McPhar and Intertek in Manila have QA/QC programs incorporated into their sample preparation and analyses procedures. The two laboratories regularly conduct duplicate analysis of Ni and other elements as a check on analytical reproducibility within their own laboratories. Repeats are routinely conducted on all elements being analysed and are typically on every 10th sample for McPhar and on every 20th sample for Intertek. All in all there are 770 (6.94%) repeat analyses that are spread evenly throughout the entire database.
In analysing the correlation between the original and duplicate sample, the Variance between the primary assay and the duplicate was computed as follows:
Var = (a – b) x 100 a
Where: a - is the original sample analysed b - is the duplicate sample analysed Var - is the percentage relative difference.
To interpret the Variance value, a value of zero means the two values are identical and the duplication is perfect, a negative value means the duplicate is higher, while a positive value means the original is higher. Values less than 10% variance (either negative or positive), are considered excellent when reviewing comparative samples within lateritic Ni deposit assays.
There is an excellent correlation for all of the elements within an internal repeat with all below Variances <1% (0.03 – 0.28%) as shown in Table 21, which is consistent with high precision repeatability. There is generally a very even spread of the check assay being both higher and lower than the primary assay which indicates that there is no systematic bias occurring in the check analyses routine.
Table 21 - Variance of Original and Internal Laboratory Duplicate Analyses
Ni Co Fe Al Mg Si
McPhar
Variance from 1st Assay 0.05% -0.26% -0.15% -0.08% 0.28% 0.03%
Duplicates = 1st Assay 98 204 4 98 23 16
Duplicates < 1st Assay 84 38 146 94 137 120
Duplicates > 1st Assay 90 30 122 80 112 136
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Intertek
Variance from 1st Assay -0.06% 0.36% 0.09% -0.04% 0.33% 0.01%
Duplicates = 1st Assay 15 74 0 5 0 2
Duplicates < 1st Assay 100 73 98 107 105 115
Duplicates > 1st Assay 117 85 134 120 127 115
11.2.3 External check assays (MRL)
MRL has also set up its own QA/QC protocols vis-à-vis the laboratories’ sample preparation and analytical procedures, which the author has observed in the field and analysed the results for this report. The external laboratory checks determine the assaying laboratories to replicate a known standard, the repeatability of the assay from the field splitting and the pulp repeats (i.e. external and internal repeats of the primary assays), the consistency of grade between laboratories, and the determination of any bias within the sample preparation process through the analyses of the coarse rejects. It is a comprehensive series of analyses compiled to ensure grade estimates are of the highest calibre.
11.2.4 Nickel standards
As a double check on the precision of the analytical procedures of both McPhar and Intertek laboratories, nickel standards were inserted by MRL into the sample runs at approximately 1 to 45 samples on average. A total of 303 nickel standards, representing 2.73% of the 11,100 core samples were sent. These standards were purchased from Geostats Pty. Ltd of Australia. Twelve types of standards were used for the whole drilling course to date, with grade ranging from 0.11 to 2.00% nickel.
Table 22 presents the data standards for nickel for two of the Ni standards used by MRL which were lateritic nickel standards and most closely related to the ANLP samples submitted. From the statistical analyses it is confirmed that the external standards submitted by MRL fell within a small range from the accepted mean, and that comparative statistics were well within acceptable standards. A point to note is that both McPhar and Intertek consistently underestimated Fe for both standards, and although the variation is <3.2% of the Ni standards for Fe grade, it was the only example of a systematic variation encountered within the dataset.
Table 22 - Variance of Ni Standard and Laboratory Assays
Ni Standard GBM901-1 Ni Standard GBM905-13
Ni Co Fe Ni Co Fe
Variance from -1.7% -8.6% 3.15% Variance from -0.3% -4.25% 1.92%
Standard Standard
# Assays = Std 0 0 0 # Assays = Std 0 2 0
# Assays > Std 46 45 0 # Assays > Std 25 20 0
# Assays < Std 9 10 55 # Assays < Std 16 19 41
The graphical representation of the standards data shows that the Ni grade is extremely consistent within the standard, and within both standards the check assays vary above and
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below the standard’s value (Figure 15). However, when a new batch of the same standard was put into the sample runs the minor elements within the standard varied (especially Co), and this indicates the difficulty of ensuring an even spread of the minor elements within a product like a Ni standard. The variation for the minor elements can therefore be explained by batch variation rather than a systematic error within the assaying process.
11.2.5 Field duplicates
The analytical reproducibility of field duplicate samples is a measure of the representativity of the original split of the sample, a check on the reliability of the sample reduction procedure (splitting) undertaken by MRL at the field area.
The field duplicates were sent together with the regular core samples for assaying. A total of 325 core field duplicates (2.93% of the 11,100 core samples) were analysed. Of these, 134 were analysed by McPhar (1 in 20 cores) while 191 duplicates were analysed by Intertek (1 in every 40 samples).
Table 23 - Variance of Field Duplicate and Original Assays
Ni Co Fe Al Mg Si
Variance from Assay -0.16% -2.1% 0.1% 0.3% -0.6% -0.9%
(Abs Variance from Assay) 3.30% 7.2% 3.1% 6.1% 9.5% 6.2%
Duplicates = 1st Assay 22 81 0 28 9 1
Duplicates < 1st Assay 164 133 157 163 154 171
Duplicates > 1st Assay 139 111 168 130 158 149
The results presented in Table 23 range from 0.3% to -2.1% for all elements, which indicates that there is an extremely high repeatability for all field samples. When reviewing the Absolute Variance, i.e. the maximum variance from the sample average, all values for all elements are still under 10% of the average grade which supports the consistency of the splitting method and the reliability of the assays. Reviewing the split of duplicate samples being higher or lower in grade on average, the total count indicates that there is an equal chance of any duplicate being higher or lower than the original assay.
The author confirms that the field splitting and sampling protocol was excellent and supports the validity of the samples to be assayed for use in estimation purposes for all elements.
11.2.6 Coarse rejects
The re-analysis of the coarse reject samples was undertaken as an internal check on the crushing and sub-sampling procedures of McPhar and Intertek to ensure that the samples taken for analysis were representative of the bulk sample. The Variance results for the coarse fraction post crushing in comparison to the primary assay are shown in Table 24.
Table 24 - Variance of Coarse Reject and Original Assays
Ni Co Fe Al Mg Si
Variance from Assay -0.04% 4.0% -0.4% -0.6% 1.9% -0.9%
(Abs Variance from Assay) 3.38% 10.0% 2.9% 11.3% 13.5% 4.8%
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Coarse Rejects = Assay 5 19 0 3 1 0
Coarse Rejects < Assay 42 38 45 46 45 39
Coarse Rejects > Assay 34 24 36 32 35 42
The results presented in Table 24 range from 4.0% to -0.9% for all elements, which indicates that there is an extremely good correlation of the coarse rejectss with the passing material that formed the pulp for assayiing. When reviewing the Absolute Variance, i.e. the maximum variance from the sample average, there are 3 elements (Co, Fe and Mg), that are more variable and this may be due to specific minerals that may crush less evenly due to hardness or platiness (Corundum for Al as an example) – but even with theese minor variances for some minor elements the coarse sample rejects are very similar to the fines material. Reviewing the split of coarse rejects being higher or lower in grade on average, the total count indicates that there is an equal chance of any duplicate being higher or lower thhan the original assay.
The author confirms that the protocol for crushing of the primary sample was excellent and supports the validity of the resultant pulps to be assayed for use in estimation purposes for all elements.
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Figure 15 - Graphs of Nickel Standards Assays.
11.2.7 Pulp rejects analysed by primary laboratory
A total of 30 of the McPhar pulp rejects during the first and second drilling phases were re- sampled and analysed, representing 1.07% of the 2,793 core samples. These were selected from previously submitted batches covering a range of sample grrades, a range of horizons and a range of holes from the core drilling programs, so as to be representative of all the samples.
The method of pulp reject sampling for Intertek Laboratory was modified in June 2008. Starting with batch 2008 AGL-18, pulp rejects were randomly selected one in every set of 40 and were pre-numbered. These pulps were inserted to their assigned numbers right after sample preparation and were analysed in the same batch as their sources. A further 220 pulp rejects were submitted to the completion of the 2010 drill program.
The duplicate pulp analyses were conducted to test for homogeneity of the pulps generated by the two laboratories. Insufficiently milled samples will lead to multiple assaying of pulps with poor precision (i.e. poor repeatability). Inversely, agreement beettween assays of duplicates of the pulp would indicate that the milling procedure in the laboratory was efficient and generated a suitably homogeneous pulp.
Table 25 - Variance of Pulp Duplicate and Original Assays
Ni Co Fe Al Mg Si
Variance from Assay 0.59% -2.6% 0.0% -0.6% -0.3% 0.4%
(Abs Variance from Assay) 1.97% 6.0% 1.3% 3.2% 4.5% 2.2%
Pulp Duplicates = Assay 13 58 0 8 1 1
Pulp Duplicates < Assay 102 108 117 147 119 117
Pulp Duplicates > Assay 135 84 133 95 130 132
The results presented in Table 25 range from 0.59% to -2.6% for all elements, which indicates that there is an extremely high correlation of the repeat pulp assay with the primary assay. When reviewing the Absolute Variance, i.e. the maximum variannce from the sample average,
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the range is extremely small at 1.3-6.0% which indicates an extremely good repeatability for the pulps presented to the laboratories prior to assaying. Reviewing the split of pulp repeats being higher or lower in grade on average, the total count indicates that there is an equal chance of any pulp duplicate being higher or lower than the original assay.
The author confirms that the pulp repeatability was excellent and supports the validity of the primary pulps to be assayed for use in estimation purposes for all elements.
11.2.8 Pulp rejects analysed by umpire laboratory
Two laboratories have been used since the inception of the laterite Ni exploration at ANLP, and during the drilling programs check pulps have been forwarded to the alternate laboratory to confirm assay reliability. There are minor issues for some element analyses due to the varying assay methodologies (McPhar use an AAS method and Intertek use an XRF method), but this is predominantly within the minor elements and not the Ni assay.
The results presented in Table 26 range from -0.9% to 2.7% for all elements, which indicates that there is an extremely high correlation of the interlab repeat pulp assay with the primary assay, and in fact are very similar to the range of variance encountered within the single lab pulp repeats. When reviewing the Absolute Variance, i.e. the maximum variance from the sample average, the range is larger at 1.0-20.5% which indicates that although there is good repeatability for the pulps, the differing methodologies do provide some contrast in the minor elements (Al and Mg especially). Reviewing the split of pulp interlab repeats being higher or lower in grade on average, the total count indicates that there is an equal chance of any pulp duplicate being higher or lower than the original assay.
Table 26 - Variance of Pulp Duplicate and Interlab Assays
Ni Co Fe Al Mg Si
Variance from Assay 1.97% -0.9% 1.2% 2.7% 2.4% 0.0%
(Abs Variance from Assay) 5.04% 10.4% 6.7% 20.5% 17.8% 1.0%
McPhar = Intertek 9 60 0 7 1 1
McPhar < Intertek 117 127 135 140 129 74
McPhar > Intertek 193 132 184 172 189 81
The author confirms that the pulp interlab repeatability was excellent and further supports the validity of the primary pulps to be assayed for use in estimation purposes for all elements.
11.2.9 Summary
In the author’s opinion the sampling protocols, procedures and methods performed by MRL, and their implementation, are of acceptable standards. Assays performed by McPhar and Intertek in Metro Manila are also of acceptable standards. Variations encountered in the McPhar and Intertek QA/QC program on the Agata samples were all within acceptable limits.
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12 Data Verification
12.1 Data Verification
The author has visited site numerous times in the past 18 months and on each occasion has reviewed protocols and processes set in place at the Mindoro base camp in Agata. The datasets provided by Mindoro were checked and verified by comparing a random portion against original field sheets and official Certificates of Analytical Results. Selected core trays were visually inspected against the logs. In addition, the core photos were viewed and compared with the cross sections showing laterite horizons generated by MRL. The lithology was checked in the field and in the drill cores. The digital file was checked for logical errors or data entry errors. There were a few but very minor errors found.
Previously Dallas Cox, who has compiled the four previous resource reports, also completed a series of random checks made in the field, to corroborate the acceptable quality of the data. As a further test, he collected twelve field duplicate samples and sent them to the same laboratory at which they were originally assayed. Five samples came from the limonite horizon, six from the saprolite and one from the saprolitic rock horizon. Table 27 and Figure 16 show the results and the correlation vis-à-vis the original MRL assay values.
Table 27 - Results of Independent Check on Drill Core Assays TO RUN FROM MRL Ni % MRL Al % DMC Ni % DMC Al % MRL Fe % DMC Fe % MRL Co % DMC Co % MRL Mg %
HOLE ID DMC Mg %
AGL 2008-281 1.00 2.00 1.00 1.46 1.43 0.09 0.09 38.94 39.75 2.45 2.64 1.07 1.13
AGL 2008-355 2.00 3.00 1.00 1.02 0.91 0.07 0.07 30.47 31.55 2.57 2.61 2.28 1.44
AGL 2008-175 2.60 3.45 0.85 1.59 1.58 0.05 0.05 23.32 23.60 0.74 0.66 10.51 10.32
AGL 2008-194 6.00 7.25 1.25 0.92 0.95 0.03 0.03 15.22 15.89 0.71 0.69 12.93 12.64
AGL 2008-174 3.40 4.20 0.80 1.31 1.35 0.03 0.03 14.45 15.25 0.46 0.45 15.57 15.63
AGL 2008-297 8.00 9.00 1.00 1.27 1.25 0.14 0.13 52.05 50.62 3.88 3.36 0.36 0.42
AGL 2008-299 1.00 2.00 1.00 1.20 1.32 0.14 0.13 47.57 44.50 1.82 1.69 2.75 3.89
AGL 2008-355 2.00 3.00 1.00 0.87 0.92 0.03 0.03 14.24 14.64 0.52 0.55 15.89 15.65
AGL 2007-17 27.00 28.00 1.00 1.33 1.31 0.02 0.02 6.38 8.14 0.11 0.21 15.02 17.24
AGL 2008-135 5.55 6.45 0.90 1.03 1.12 0.12 0.11 50.10 50.73 2.46 2.12 0.71 0.77
AGL 2008-74A 17.40 18.40 1.00 0.46 0.51 0.01 0.01 5.40 6.07 0.15 0.16 14.66 15.43
AGL 2008-14A 13.55 14.85 1.30 0.80 0.97 0.02 0.02 8.48 10.20 0.16 0.19 14.53 15.15
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* DMC - Dallas M. Cox
Figure 16 - Comparison of Indepeendent Checks and MRL Assays
The graphs show good correlation between the MRL assays and those of Dallas Cox’s samples. This is attested by the values of the coefficient of deterrmination R2, which range from 0.947 for nickel to 0.996 for irron.
The author has verified all aspects drill hole collar locations, saampling and assay procedures, examined mineralised material in the field and in drill core, as well as the geological and assay databases during two site visits in the Agata Project and meetings with MRL staff and Dallas Cox, a previous independent analyst of the Agata north Resource. With these factors, as well as the evaluation of the results of assay rechecking, the writer is satisfied that all data utilised in the resource estimate can be relied upon.
12.2 Bulk density determinations
MRL have completed a significant number of bulk density tests so as to provide data for estimating the tonnages of each specific mineralised zone within the ore body. Samples were predominantly taken from test pits prepared for the taking of density samples. A total of 30 samples from 15 test pits were used for the ferruginous laterite horizon; 37 samples from 19 pits for limonite; and 17 pit samples from 6 pits for saprolite. In addition 19 core samples were tested from the saprolite zone.
For BD measurements done on site, large samples ranging in volume from 0.005 m3 to 0.08 m3 were collected from twenty test pits. The locations of these test pits are distributed around the drilling area (Figure 42). Thhe bulk samples were measured forr volume, wet weight, and dry weight.
The BD and moisture content were computed using the following formulae.
Weight (kg) Bulk Density = ÷ 1000 (kg/ton) Volume (m3)
Weight wet – Weight dry % Moisture Content = x 100 Weight wet
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For the drill cores, relatively solid, less compressed portions of 10 cm - 20 cm lengths were selected from drill holes that are spatially distributed and coated in paraffin wax to preserve the moisture. These were then dispatched to McPhar Laboratories where the samples were tested using the water displacement method. It is standard practice for McPhar to check the wax coating and perform re-waxing if needed.
Table 28 - Summary of Bulk Density Measurements
Moisture No. of Horizon Wet Density Dry Density Content % Samples
FERRUGINOUS LATERITE 1.72 1.20 30.49 30
LIMONITE 1.81 1.24 31.74 37
SAPROLITE (Pit Samples) 1.98 1.46 26.11 17
SAPROLITE (Core Samples) 1.82 1.45 20.60 19
Table 28 shows the summary results of these measurements, and the dry density values used in the resultant block model were 1.24 dt/m3 for limonite and 1.45 dt/m3 for saprolite. A dry density of 1.8 dt/m3 for bedrock has been applied in the model, but there is no mineralised ore within this defined region and as such is simply a differential figure to aid in planning and design.
Figure 17 - Agata North Bulk Density Test Pit Location Map
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13 Mineral Processing and Metallurgical Testing
13.1 Introduction
This section discusses the metallurgical testwork data and key assumptions adopted as inputs to the process design criteria for the PFS.
The first phase of metallurgical testing of ores from the Agata ore deposit was performed by Enlin Stainless Steel Corporation (ESSC) in 2008. The ESSC bench scale testwork program included Atmospheric Leaching (AL), High Pressure Acid Leaching (HPAL), saprolite neutralisation, limestone neutralisation, iron removal and mixed hydroxide precipitation. While the test results provided an early indication of the excellent metallurgical response of the Agata ores, the available reports by ESSC were found to be lacking test details in most areas.
A more comprehensive bench scale program was completed by SGS Lakefield Oretest in Perth (SGS Perth) between August 2010 and March 2011. This program included mineralogy, beneficiation (scrubbing), ore slurry settling, AL, HPAL, saprolite neutralisation and CCD settling on composites of different ore types from the deposit, as well as limestone testing.
In support of the prefeasibility study a new bench scale program was undertaken by SGS Minerals Services of Lakefield, Canada (SGS Lakefield) between March and September 2011. This program included ore size fraction analysis, ore slurry rheology and settling, AL, HPAL and saprolite neutralisation testing on composites of different ore types from the deposit, CCD settling and locked cycle testing for iron/aluminium removal and mixed hydroxide precipitation, as well as limestone testing. The main program was based on ore composites representing years 1 to 3 of plant feed, with subsequent variability testing on ore composites representing years 4 to 6 and year 7 onwards.
13.2 Previous Testwork Program
A preliminary metallurgical testwork program investigating the metallurgical characteristics of Agata ore samples was undertaken between August 2010 and March 2011. This work was performed at the SGS Lakefield Oretest facilities in Perth, Western Australia.
13.2.1 Testwork samples
The samples were sourced as intervals from the walls of three metallurgical test pits located to target three ore types. The intervals used, and test pit identifications, are presented in Table 29. The samples are all located in the Agata North resource area. The samples were blended in a manner to target elemental composite grades similar to that of global resource values, especially those elements with greatest influence on leaching properties such as iron and magnesium.
Table 29 - Source of Metallurgical Samples Tested at SGS Perth
Location Zone Pail No Interval m Weight kg Total Weight ID/Pit kg
1 1.00-1.40 42.50
AGL 281 Limonite 2 1.40-1.70 35.36 118.21
3 1.70-2.00 40.35
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Location Zone Pail No Interval m Weight kg Total Weight ID/Pit kg
4 1.20-1.70 32.00
AGL 373 Transition 5 1.10-1.70 36.05 109.30
6 1.10-1.70 40.25
7 2.00-5.00 36.36
AGL 300 Saprolite 8 5.00-8.00 32.69 108.57
9 8.00-11.00 36.52
Three composites were initially prepared and these were identified as Limonite, Transition and Saprolite. In the proposed operations it is planned to treat transition ore with limonite ore in HPAL processing. A fourth composite was therefore prepared as a blend of limonite and transition ore, and was identified in testwork as the L/T Blend. The L/T Blend sample was mixed in the ratio of 95% limonite and 5% transition based on the established distribution in the orebody.
Two limestone samples, identified as Agata LS-01 and Agata LS-02, were sourced from the Payong-Payong limestone deposit near the mine area for evaluation by SGS. The two samples were blended to form a Limestone Composite sample for testwork.
13.2.2 Mineralogy
Mineralogical testing on limonite and saprolite was conducted during the 2010 testwork program at SGS Lakefield Oretest in Perth. Mineralogical examinations of size fractions from the Limonite and Saprolite composites were undertaken by SGS South Africa. A subsample of each composite was screened into four size fractions (+212 μm down to -38 μm) for examination. The main aim of the work was to investigate mineral liberation and nickel deportment in the samples.
The investigations included qualitative X-ray Diffraction (XRD) analysis, chemical analysis, electron microprobe analysis of the mineral phases present and Quantitative Evaluation of Materials by Scanning Electron Microscopy (QEMSCAN) employing the Bulk Mineral Analysis (BMA) and Particle Mineral Analysis (PMA) types of measurement.
Some key observations from the work on the Limonite sample fractions were:
The ore is predominantly of made up of quartz, chromite and iron hydroxides. The amount of quartz present decreases with decreasing screen size. Almost all of the quartz is rimmed by Fe-hydroxides. The amount of chromite present decreases with decreasing screen size. The chromite is mostly well liberated. The amount of iron hydroxides present increases with decreasing screen size. The Fe- hydroxides are well liberated in the -75 μm fractions but relatively poorly liberated in the +75 μm fractions. Most of the unliberated iron hydroxides in the +75 μm fractions are intergrown with Mn-wad, magnetite-hematite and/or contain silicate inclusions. Most of the nickel is hosted by the iron hydroxides. The manganese wad in limonite is poorly liberated and is closely associated with the iron hydroxides. The manganese wad contains significant nickel.
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Some key observations from the work on the Saprolite sample fractions were:
The saprolite size fractions consist primarily of altered serpentine and saponite clay (an alteration product of serpentine). The Mg:Si ratios of the serpentine and saponite are on average 1.1 and 0.9 respectively as the magnesium is leached from the serpentine during alteration. The iron hydroxides present in the size fractions are poorly liberated in the serpentine. Approximately 50-60% of the serpentine is liberated. The saponite is mostly well liberated. Unliberated saponite is mostly associated with iron hydroxides as rims. The serpentine is nickel rich.
The mineralogical work suggested that moderate upgrading may be able to be achieved by rejection of quartz in coarse fractions. Removal of chromite in coarse fractions by magnetic separation was suggested by SGS.
SGS also considered that the saprolite sample would be amenable to atmospheric sulphuric acid leaching as none of the fractions were observed to contain excessive iron oxide/hydroxides or high iron content.
13.2.3 Head analyses
Head analyses were conducted on the four samples. The samples were subjected to a four acid digest and metal elemental compositions determined by Inductively Coupled Plasma Mass Spectroscopy (ICP-MS). Analyses for silicon and chromium were determined by X-Ray Fluorescence (XRF).
The analytical results are presented in Table 30.
Table 30 - Head Analyses of Metallurgical Composites Tested at SGS Perth
Ni % Co % Al % Mg % Si % Cr % Ca % Fe % Mn %
Limonite 1.32 0.087 2.37 1.00 7.4 1.97 0.08 42.7 0.76
Saprolite 1.29 0.024 0.40 14.7 18.1 0.61 0.16 12.9 0.18
Transition 1.52 0.048 1.08 6.78 14.4 1.42 0.41 26.6 0.41
L/T Blend 1.33 0.086 2.39 1.35 7.7 2.00 0.10 41.8 0.75
The sample blends were prepared with the main objective of achieving similar grades to the 2010 scoping study mine schedule in species significant to leach chemistry, particularly iron, magnesium and aluminium. The nickel grade in the limonite sample was determined to be 1.32% Ni and is approximately 30% higher than the limonite nickel grade in the scoping study mine schedule, however nickel itself has little impact on overall leach chemistry which is dominated by species such as iron, magnesium and aluminium. The saprolite sample is similar in nickel and iron grade to that reported in the scoping study mine schedule, but the test sample is significantly lower in magnesium.
13.2.4 Ore scrubbing and head sizing
A sub-sample of each composite was lightly scrubbed to assist in removing iron hydroxides from silica particles, and then wet screened to examine potential for ore beneficiation by sizing.
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Scrubbing was achieved by soaking a 10 kg subsample of ore in water overnight and then bottle rolling the slurry for one hour prior to wet screening.
The mass, grade and metal recovery via wet screening for a reject screen size of 0.25 mm are summarised in Table 31.
Table 31 - Scrubbing Test Results at SGS Perth
Mass Nickel Cobalt Magnesium Sample Fraction % Grade Distrib Grade Distrib Grade Distrib % % % % % %
-0.25 mm 88.6 1.47 95.6 0.097 93.2 1.02 74.9 Limonite Feed 100 1.36 100 0.092 100 1.21 100
-0.25 mm 75.2 1.84 86.6 0.050 76.5 5.26 50.8 Transition Feed 100 1.59 100 0.049 100 7.78 100
The limonite and transition sample test results demonstrated that some upgrading of nickel could be achieved by rejection of coarse fractions. The upgrading of nickel was accompanied by a significant rejection of magnesium. Cobalt exhibited a poorer response than nickel.
Saprolite ore showed no potential for upgrading by beneficiation via scrubbing and sizing.
13.2.5 Ore slurry settling testwork
Settling testwork was undertaken on the L/T blend and saprolite samples to investigate requirements for thickening of leach feed. A flocculant screening program was first undertaken resulting in selection of Magnafloc 10 for the settling trials.
The settling tests were conducted in 2-metre raked columns. The key test parameters and test results are presented in Table 32.
Table 32 - Ore Slurry Settling at SGS Perth - Key Parameters
Parameter Limonite Saprolite
Floc Dosage g/t 150 200 150 200
Initial Density % Solids 4.0 4.0 4.0 4.0
Final Density (24 h) % Solids 39.9 40.4 33.8 35.9
Unit Area (m2/t/d) 30% Solids 0.59 0.57 1.11 0.54
35% Solids 0.67 0.65 - 0.58
The settling tests showed that a slurry density of over 40% solids for limonite ore and over 35% solids for saprolite ore could be achieved with flocculant additions in the range 150 to 200 g/t. Thickener unit area requirements were high, at almost 0.6 m2/t/d.
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13.2.6 High Pressure Acid Leach (HPAL) testing
HPAL tests were conducted on the L/T blend sample at varying acid additions to examine extraction response with retention time and acid addition. All tests were conducted with slurry made up to 29% solids with a mix of seawater and fresh tap water blended in a ratio of 1.33 of sea to fresh. The target water composition was established by METSIM® modelling and reflects ore slurrying using seawater, adjusted for the impact of ore moisture and process dilution by gland water, screen sprays, flocculant make-up water and condensation of live steam during slurry heating. All tests were conducted in a mechanically stirred laboratory batch autoclave at a temperature of 255°C. Acid addition rates varied between 276 and 368 kg per tonne of feed ore.
Some key results from the HPAL testwork program are presented in Table 33.
Table 33 - HPAL Test Results on L/T Blend Samples at SGS Perth
Free Extraction Time ORP Test Conditions Acid mins mV g/L Ni (%) Co (%)
20 33.3 459 96.9 95.5
255°C 30 36.4 466 97.4 96.0 300 kg/t acid addition 0 kPa air overpressure 40 37.6 467 97.5 95.9
60 36.8 170 97.6 96.1
20 32.9 467 98.0 95.6
255°C 30 31.7 468 98.2 95.4 325 kg/t acid addition 0 kPa air overpressure 40 33.1 468 98.4 95.7
60 33.0 469 98.4 95.3
20 42.7 461 98.2 94.1
255°C 30 46.4 462 98.5 95.9 351 kg/t acid addition 0 kPa air overpressure 40 42.9 472 98.7 95.9
60 43.9 479 98.8 96.2
20 32.2 487 97.9 96.1
255°C 30 35.7 501 98.2 94.8 276 kg/t acid addition 200 kPa air overpressure 40 38.5 500 98.5 96.6
60 38.3 496 98.7 96.4
20 42.4 486 998.4 96.1
255°C 30 42.4 482 98.4 95.5 325 kg/t acid addition 250 kPa air overpressure 40 43.0 476 98.5 95.6
60 43.4 485 98.7 95.5
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Free Extraction Time ORP Test Conditions Acid mins mV g/L Ni (%) Co (%)
5 36.4 515 95.2 91.5
255°C 10 37.5 493 97.1 93.4 351 kg/t acid addition 500 kPa air overpressure 15 42.1 487 97.9 94.3
20 44.9 499 98.2 94.9
255°C, 368 kg/t acid addition 30 41.1 461 97.9 92.1 0 kPa air overpressure
255°C, 350 kg/t acid addition 30 47.0 564 98.0 96.5 500 kPa air overpressure
The results reveal that the ore exhibits very fast leaching kinetics with 97-99% of the nickel and 95-96% of the cobalt extracted within 20 minutes of leaching time. Free acid levels at the end of the tests amounted to approximately 35-45 g/L for acid additions ranging between 276 and 368 kg per tonne of feed ore. Ferrous iron concentrations were generally high (up to 9.6 g/L) but with air overpressure in the autoclave the ferrous iron concentration in leach solution was decreased to 4.7 g/L. In the last HPAL test in the table, HPAL.08, conducted as part of the integrated HPAL/AL/SN test SN.03, a higher air overpressure (500 kPa) resulted in a ferrous iron concentration of just 270 mg/L.
13.2.7 Atmospheric Leach (AL) testing
Atmospheric Leach (AL) tests were conducted on Saprolite samples in stirred vessels at 95°C and at acid addition rates from 850 to 1000 kg per tonne of feed ore. The samples were prepared using a sea water/fresh water mix in the ratio 3.8:1. The water blend was established by METSIM® modelling and reflects ore slurrying using seawater, adjusted for the impact of ore moisture and process dilution by gland water, screen sprays and flocculant make-up water.
The key results from the AL tests are presented in Table 34.
Table 34 - AL Tests on Saprolite Samples at SGS Perth
Free Extraction Time ORP Test Conditions Acid mins mV g/L Ni (%) Co (%)
30 24.7 525 90.4 86.5
60 14.1 550 92.9 86.8
850 120 15.0 547 93.3 87.7
180 15.3 544 93.5 87.8
240 17.2 542 93.9 88.3
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Free Extraction Time ORP Test Conditions Acid mins mV g/L Ni (%) Co (%)
30 56.1 565 91.5 85.2
60 40.8 558 95.7 88.0
900 120 30.2 557 93.6 88.6
180 26.3 554 94.5 89.3
240 24.1 548 94.9 89.1
30 73.1 562 92.0 84.6
60 47.6 560 93.7 89.1
950 120 37.2 563 95.4 90.4
180 32.3 558 96.3 91.5
240 28.2 556 96.6 91.9
30 78.4 547 93.7 87.6
60 57.8 535 95.8 89.5
1000 120 47.4 521 96.6 91.3
180 41.7 519 97.4 94.3
240 39.2 509 97.6 93.6
240 26.9 553 97.4 94.1
950 240 27.1 557 96.8 92.7
240 29.3 561 96.4 92.7
949 240 27.1 557 96.8 92.7
950 240 29.3 561 96.4 92.7
The results indicated favourable leaching kinetics with 4 hour extractions of around 94 to 98% for nickel and 88 to 94% for cobalt. Final free acid concentrations ranged between 17 and 39 g/L. Ferric and ferrous iron concentrations were shown to significantly increase with increasing acid addition rates. Leach PLS magnesium concentrations were very high at 65-75 g/L.
13.2.8 Saprolite Neutralisation (SN) of combined HPAL and AL slurry
A combined leach pulp for the SN testwork was prepared from two separate leach tests as follows:
AL test on saprolite sample at a pulp density of 35% solids for 240 minutes at an acid addition of 950 kg/t at and a temperature of 90-95°C HPAL test on L/T blend sample at a pulp density of 29% solids for a leach time of 30 minutes at an acid addition of 350 kg/t and temperature of 255°C.
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Saprolite ore for neutralisation was added the combined pulp in varying ratios. In each test the slurry was agitated for six hours and subsamples taken to monitor solution acidity and elemental concentrations, as well as solids samples to monitor metal extraction.
Results from SN are summarised in Table 35.
Table 35 - Saprolite Neutralisation Testing at SGS Perth
Ratio of Feed Ore Saprolite Residual Total Fe Extraction HPAL:AL:SN Addition Free Acid g/L kg/t acid g/L Ni (%) Mg (%)
1.00:0.79:0.26 1600 19.6 8.10 87 83
1.00:0.79:0.31 1900 10.3 6.84 80 79
1.00:0.79:0.36 2200 11.2 5.15 82 86
1.00:0.79:0.48 2950 7.5 4.65 79 85
1.00:0.79:0.36 2740 6.3 4.72 83 90
1.00:0.79:0.31 1850 16.0 2.84 89 93
A scoping test (SN.01), during which saprolite ore was progressively added in the SN step to establish the optimum conditions for subsequent confirmatory tests, produced the first four test results presented in Table 7. The last 2 tests performed (designated as SN.02 and SN.03) were confirmatory tests in which all of the SN feed ore was added at the beginning. The confirmatory tests showed that neutralisation of a combined HPAL and AL pulp with saprolite ore resulted in the dissolution of 83-89% of the nickel and 78-87% of the cobalt contained in the neutralising saprolite. Concentrations of total iron in solution decreased with residual free acid concentration due to precipitation of sodium jarosite, a benefit of using seawater for ore slurrying. Final ferrous concentrations ranged from 1.1 to 4.5 g/L.
The kinetics of the neutralisation reactions for the test at a ratio of 1.00:0.79:0.36 are illustrated by Figure 18.
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100 50 90 45 80 40
70 % Ni Extraction 35 60 30 % Mg Extraction 50 25 Total Fe Conc, g/L g/L Extraction 40 20
% Residual Acid, g/L 30 15 20 10 10 5 0 0 0123456 Time, hr
Figure 18 - Saprolite Neutralisation Test Results at SGS Perth
The reported test results demonstrate a high extraction of nickel from the saprolite ore used for neutralisation.
13.2.9 CCD settling (SN discharge slurry)
Settling testwork was undertaken on the pulp from the confirmatory saprolite neutralisation tests to investigate slurry thickening characteristics. Tests were conducted in 2-metre raked columns using Magnafloc 10 flocculant.
Test parameters and test results for the HPAL/AL/SN pulps are presented in Table 36.
Table 36 - Settling Tests on Saprolite Neutralisation Slurry at SGS Perth
Sample Flocculant Dose Settled Underflow Unit Area m2/t/d g/t Pulp Density
Test SN.02 Final Pulp 80 35.7 0.24
Feed diluted to 4% Solids 160 38.5 0.09
Test SN.03 Final Pulp 100 40.2 0.09
Feed diluted to 4% Solids 120 38.1 0.09
The settling tests established that a slurry density of 38-40% solids can be achieved at flocculant additions in the range 100-160 g/t.
13.2.10 Limestone calcination and activity
Samples were collected from the limestone deposit at Payong Payong, on the mining lease, and a composite sample prepared.
A sub-sample of the limestone was crushed to -25 mm +9 mm and then calcined in a furnace at 1050°C for varying residence times from 30 to 120 minutes. The mass loss of sample was
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monitored and the available lime determined. The test results showed that after 60 minutes the mass loss was 44% with an available lime of 92%. The neutralising capacity of the lime was reported at 1.26 t acid/ t hydrated lime.
A test on a sub-sample of limestone was undertaken to investigate the neutralisation activity. Tests were undertaken by neutralising a 48 g/L sulphuric acid solution with staged additions of dry ground limestone and pH monitoring. The neutralising capacity of the limestone was reported at 0.94 t acid/ t limestone.
13.3 PFS Testwork Program
A new bench scale testwork program was undertaken by SGS Minerals Services of Lakefield, Canada between March and September 2011. This program included the following investigations:
Ore head assaying and size fraction analysis Sample preparation and blending Ore slurry settling properties and rheology HPAL testing of a limonite/low magnesium saprolite blend AL testing of a medium magnesium saprolite ore composite SN testing of combined HPAL and AL pulps using a high magnesium saprolite composite SN pulp settling properties and rheology Iron/aluminium removal stages 1 and 2 locked cycle testing Mixed hydroxide precipitation stages 1 and 2 locked cycle testing Limestone characterisation and calcinations; and Variability testing on ore composites representing years 4 to 6 and years 7 onwards of plant feed, including ore head assaying and size fraction analysis, ore slurry settling properties, HPAL testing of a limonite/low magnesium saprolite blend and AL testing of medium magnesium saprolite ore.
Other planned work was cancelled due to program schedule slippages at SGS Lakefield that would have resulted in the receipt of results after the conclusion of the PFS. Planned work that was not performed included:
Recycle leach testing Final neutralisation and manganese removal testing Settling testwork on iron/aluminium removal and mixed hydroxide precipitation slurries Saprolite neutralisation variability testing
13.3.1 Ore samples
13.3.1.1 General
Ore samples for testing were sourced by MRL in early 2011. Sample locations were selected based on the provisional PFS mining schedule, with the objective of producing plant feed samples representing three periods of plant operation. Nine drums containing 42 individual bags of sample were shipped to SGS for metallurgical testing, including:
15 bags of limonite ore totalling 128 kg (wet)
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27 bags of saprolite ore totalling 219 kg (wet)
The samples were collected from five drill sites identified in Figure 19 below. Sites 1 to 3 represent ore to be processed during years 1 to 3 of plant operation, whilst sites 4 and 5 represent later years of plant feed. All samples were collected by drilling with HQ core barrel. This translated to a total of 5 holes with 84.8 metres of core.
Ausenco has not audited the suitability of samples selected for testing, or the methods used for sample storage and handling.
Figure 19 - Ore Sampling Locations
13.3.1.2 Selection of drill site locations
Based on the provisional 10 year mine schedule distributted in December 2010, five metallurgical sample drill sites were nominated (Figure 2). Factors considered when selecting the drill sites included:
These sites meet many of the product and geological specifications that will need to be studied prior to the commencement of mining Three of the sites are located within the year 1 to 3 pit miine shells, and two are located within the indicated 10 year mine location (generic). Also note that the saprolitic ore from the primary year 1 to 3 pit shells appears to also include a significant volume of saprolitic ore that will be used during the processing period proposed within the provisional schedule (years 4-7), and as such covers a significant proportion of the various ore types that will be utilised over the first 10 years of plant operations.
The 5 drill site locations were:
Site 1: West Pit: 9700mN/9250mE
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Site 2: Centre Pit: 9700mN/10300mE Site 3: East Pit: 10200mN/10800mE Site 4: NW Pit: 10250mN/9550mE Site 5: NE Pit: 10700mN/10700mE
13.3.1.3 Sampling procedure
The field geologist defined the oxidation contact (limonite/saprolite) and sampling was performed in 1-metre increments of whole core sample, taken both up and down from the oxidation contact. All samples were immediately placed in sample bags, sealed and labelled. After weighing, the samples were put inside tightly sealed drums to prevent loss of moisture.
13.3.2 Ore types and composite samples
Ore samples were collected in three categories: limonite ore, low magnesium saprolite ore and high magnesium saprolite ore.
At the time the samples were collected the proposed flowsheet incorporated HPAL of a limonite and low magnesium saprolite ore blend and saprolite neutralisation of HPAL pulp using high magnesium saprolite ore. Prior to the commencement of the testwork program Mindoro elected to add atmospheric leaching to the flowsheet. This necessitated the addition of a medium magnesium saprolite category to the plant feeds. The 27 individual bags of saprolite ore samples sent to SGS were consequently reassessed and reclassified to enable the preparation of three saprolite ore composites with low, medium and high magnesium grades.
The make-up of the limonite composite samples is summarised in Table 37.
The make-up of the saprolite composite samples is summarised in Table 38.
Table 37 - Make-up of Limonite Ore Composites
Type Period Pail No. Hole ID Interval (m) Ni (%) Mg (%)
PAIL 2 AGL 16A-1 5-6 1.20 0.23
PAIL 2 AGL 16A-1 6-7 1.18 0.18
PAIL 2 AGL 16A-1 7-8 1.37 0.21 Year 1-3 PAIL 3 AGL 513-A 3-4 1.03 0.66
PAIL 3 AGL 513-A 4-5 1.14 0.83
PAIL 3 AGL 513-A 5-6 1.31 3.67
PAIL 3 AGL 172-A1 4-5 1.27 0.63 Limonite
PAIL 3 AGL 172-A1 5-6 1.40 2.22
PAIL 3 AGL 172-A1 6-7 1.52 3.66 Year 4-6 PAIL 1 AGL 287A 5.05-6.05 1.25 0.28
PAIL 1 AGL 287A 6.05-7.05 1.24 0.69
PAIL 1 AGL 287A 7.05-8.05 1.38 1.97
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PAIL 2 AGL 224-1 4.75-5.75 1.35 0.80
Year 7+ PAIL 2 AGL 224-1 5.75-6.75 1.32 0.83
PAIL 2 AGL 224-1 6.75-7.75 1.31 0.96
Table 38 - Make-up of Saprolite Ore Composites
Type Period Pail No. Hole ID Interval (m) Ni (%) Mg (%)
PAIL 5 AGL 16A-1 11-12 1.45 10.24
Year 1-3 PAIL 5 AGL 16A-1 12-13 1.42 12.08
PAIL 6 AGL 513-A 8-9 1.62 14.13
PAIL 4 AGL 287-A 12.75-13.75 1.33 8.49
Year 4-6 PAIL 4 AGL 172-A1 13-14 1.89 13.36
PAIL 6 AGL 172-A1 12-13 2.08 11.95
PAIL 4 AGL 287-A 13.75-14.75 1.20 10.52 Low Magnesium Saprolite Year 7+ PAIL 5 AGL 224-1 8.75-9.75 1.66 14.46
PAIL 5 AGL 224-1 9.75-10.75 1.57 13.13
PAIL 7 AGL 16A-1 13-14 1.49 16.33
Year 1-3 PAIL 7 AGL 16A-1 15-16 1.47 17.21
PAIL 9 AGL 513-A 11-12 1.31 17.65
PAIL 4 AGL 287-A 9.05-9.75 1.05 12.81
Year 4-6 PAIL 6 AGL 172-A1 11-12 2.10 14.77
PAIL 8 AGL 172-A1 14-15 1.76 16.57
PAIL 8 AGL 224-1 10.75-11.75 1.31 17.10 Medium Magnesium Saprolite Year 7+ PAIL 8 AGL 224-1 12.75-13.75 1.39 15.52
PAIL 7 AGL 16A-1 14-15 1.56 17.41
Year 1-3 PAIL 9 AGL 513-A 9-10 1.23 20.87
PAIL 9 AGL 513-A 10-11 1.58 18.50
PAIL 7 AGL 172-A1 16-17 1.69 18.02
Year 4-6 PAIL 8 AGL 172-A1 15-16 1.75 18.75
PAIL 9 AGL 513-A 12-13 1.16 19.98 High Magnesium Saprolite Year 7+ PAIL 8 AGL 224-1 11.75-12.75 1.08 20.04
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13.3.3 Head analyses
Composites were prepared as described in section 5.3.2 and head analyses were conducted. The analytical results are presented in Table 39. Copper, zinc, sodium and sulphur were also reported.
Table 39 - Head Analyses of Metallurgical Composites Prepared at SGS Lakefield
Sample Years Ni % Co % Fe % Mg % Al % Cr % Mn % Ca % Si %
1-3 1.16 0.110 45.3 3.01 2.26 2.46 0.92 0.56 5.29
Limonite 4-6 1.20 0.110 45.9 0.97 2.52 2.20 0.80 0.02 4.85
7+ 1.09 0.230 49.0 1.09 1.98 3.13 1.51 <0.01 2.10
1-3 1.65 0.032 12.6 14.80 0.66 0.60 0.21 0.31 18.90 Low Magnesium 4-6 1.78 0.032 17.9 12.00 0.66 1.14 0.28 0.12 16.80 Saprolite 7+ 1.23 0.030 14.2 12.70 0.43 1.14 0.23 0.02 19.30
1-3 1.65 0.021 12.0 16.10 0.56 0.58 0.19 0.25 18.70 Medium Magnesium 4-6 1.20 0.024 13.0 16.10 0.65 0.72 0.21 0.29 19.10 Saprolite 7+ 1.30 0.026 11.6 15.10 0.17 0.79 0.18 0.02 19.60
1-3 0.98 0.018 9.97 19.10 0.61 0.47 0.15 0.57 19.10 High Magnesium 4-6 1.20 0.020 10.8 18.10 0.42 0.57 0.17 0.26 18.30 Saprolite 7+ 1.20 0.025 10.9 15.30 0.27 0.64 0.18 0.08 20.00
It is evident that the magnesium grade of the Year 1 to 3 limonite composite is non- representative (approximately 3 times the run-of-mine grade), caused by an anomalous +6.7mm fraction of 15.1% by weight grading 23.3% magnesium and just 6.6% iron, later deemed to consist of serpentinized ultramafic rock. The other limonite composites did not contain any +6.7mm material. This resulted in a high magnesium grade in the Year 1 to 3 HPAL feed (limonite/low magnesium saprolite blend) and this was dealt with during the HPAL scoping tests by removing the anomalous coarse fraction, as discussed in section 5.3.6.2.
13.3.4 Size fraction analyses and beneficiation potential
Size fraction analyses were performed on all of the composite samples. Samples were wet screened and washed to provide an indication of potential scrubbing response.
The limonite sample test results demonstrated some potential for upgrading of nickel by rejection of coarse fractions. The upgrading of nickel was accompanied by significant rejection of magnesium and chromium. Further scrubbing testwork was subsequently undertaken by Ammtec (section 5.4.1).
The three saprolite samples exhibited a relatively even distribution of nickel across all size fractions, with significant nickel rejection indicated at even very coarse reject sizes.
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13.3.5 Ore slurry settling testwork
13.3.5.1 General
Settling tests were performed on three samples:
HPAL Feed (limonite/low Mg saprolite blend) Atmospheric Leach Feed (medium Mg saprolite) Saprolite Neutralisation Feed (high Mg saprolite)
For each sample, the test program included flocculant scoping, optimum pulp dilution, optimum flocculant dosage and determination of the critical solids density (CSD).
The flocculant scoping program investigated a range of flocculants (anionic, cationic, non-ionic) based on 100 mL cylinder tests. The objective was to determine the optimum flocculation regime by evaluating flocculant structure, settling rate and clarity to provide a guideline for a series of 2-litre cylinder tests.
The first 2-litre cylinder test series investigated the effect of pulp dilution under constant flocculant dosage using starting parameters based on the flocculant scoping test results. The second 2-litre cylinder test series investigated the effect of varying flocculant dosage under constant pulp dilution (as determined in first series).
Subsequently a rheology test program was conducted to determine the CSD of the feed pulp. The CSD is defined as the solids density at which a relatively small increase in % solids leads to a large increase in yield stress and is considered to represent the optimum (or highest) thickener underflow density that can be accomplished with the given solids.
The settling test data used to develop the process design criteria for the PFS are summarised in Table 40.
Table 40 - Year 1-3 Ore Feed Slurry Settling Results
Ore Type Flocculant Flocculant Feed % U/F % Solids Unit Area Dose g/t Solids by CSD m2/t/d
HPAL Feed Magnafloc 919 160 7 39 0.20
AL Feed Magnafloc 156 220 3 38 0.57
SN Feed Magnafloc 156 90 9 45 0.11
13.3.5.2 HPAL feed settling tests
Figure 3 summarises the feed % solids optimisation tests for HPAL feed slurry. SGS selected 6% solids density as the optimum feed solids density.
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Figure 20 - Feed % Solids Optimisation – HPAL Feed
Figure 21 summarises the flocculant dosage optimisation testts for HPAL feed slurry. The optimum flocculant dosage is approximately 160 g/t of feed solids.
Figure 21 - Flocculant Dosage Optimisation – HPAL Feed
Figure 22 summarises the CSD determination for HPAL feed slurrry. The results indicate that the optimum underflow density is approximately 39% solids.
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35
Unsheared 30 Sheared 25
20 1CSD = ~28% 15 solids
Yield Stress, Pa Stress, Yield 10
5
0 23 24 25 26 27 28 293031323334353637 38 39 40 41 42
Figure 22 - CSD Determination – HPAL Feed (Year 1-3)
13.3.5.3 AL feed (medium magnesium saprolite) settling tests
Figure 23 summarises the feed % solids optimisation tests for AL feed slurry. SGS selected 3% solids density as the optimum feed solids density.
Figure 23 - Feed % Solids Optimisation – Medium Mg Saprolite
Figure 24 summarises the flocculant dosage optimisation tests for AL feed slurry. The optimum flocculant dosage is approximately 220 g/t of feed solids.
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Figure 24 – Flocculant Dosage Optimisation – Medium Mg Saprolite
Figure 25 summarises the CSD determination for AL feed slurry. The results indicate that the optimum underflow density is approximately 38-39% solids.
140 130 Unsheared 1CSD = 120 Sheared ~38% 110 solids 100 90 80 70 60 50
Yield Stress, Pa Stress, Yield 40 30 20 10 0 30 31 32 33 34 35 36 37 38 39 4041 Solids density, % wt.
Figure 25 – CSD Determination – Medium Mg Saprolite (Year 1-3)
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13.3.5.4 SN Feed (High Magnesium Saprolite) Settling Tests
Figure 26 summarises the feeed % solids optimisation tests for SN feed slurry. SGS selected 9% solids density as the optimum feed solids density.
Figure 26 – Feed % Solids Optimisation – High Mg Saprolite
Figure 27 summarises the flocculant dosage optimisation tests for SN feed slurry. The optimum flocculant dosage is approximately 90 g/t of feed solids.
Figure 27 – Flocculant Dosage Optimisation – High Mg Saprolite
Figure 28 summarises the CSD determination for SN feed slurry. The results indicate that the optimum underflow density is approximately 45% solids.
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140 1 130 Unsheared CSD = 120 ~45% Sheared 110 solids 100 90 80 70 60 50
Yield Stress, Pa 40 30 20 10 0 35 36 37 38 39 40 41 42 43 44 45 46 47 Solids density, % wt.
Figure 28 – CSD Determination – High Mg Saprolite (Year 1-3)
13.3.5.5 Variability
Settling tests (2-litre cylinder scale only) were performed on the Year 4-6 and Year 7+ composites to investigate variability. Table 41 compares the 2-litre cylinder scale tests on Year 4-6 and Year 7+ composites with the equivalent data for the Year 1-3 feeds. In general, the results demonstrate similar settling performance can be achieved during later periods of plant operation. There are possible concerns with regard to saprolite slurry settling during the later years and this will require further investigation prior to commencing the DFS. This future testing would involve vendor settling tests using bench scale high rate thickener test rigs for better simulation of full scale performance.
Table 41 - Ore Feed Variability – Comparison of 2-litre Cylinder Settling Results
Feed Floc Underflow Unit Area Type Period Floc Type % Solids Dosage g/t % Solids m2/t/d
Year 1-3 7 162 32 0.17 Magnafloc HPAL Feed Year 4-6 5.5 262 29 0.11 919 Year 7+ 6 263 28 0.18
Year 1-3 3 218 26 0.44 Magnafloc AL Feed Year 4-6 3 190 26 0.78 156 Year 7+ 2.5 484 * 20 * 0.44
Year 1-3 9 87 41 0.10 Magnafloc SN Feed Year 4-6 8 150 41 0.09 156 Year 7+ 8.5 191 36 0.23
* flocculant changed in error to Magnafloc 919, results not valid.
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13.3.6 HPAL
13.3.6.1 General
HPAL tests were conducted on the Limonite/LMS blend sample at varying acid additions to examine extraction response with retention time and acid addition. All tests were conducted with feed pulp made up to 30% solids using a mix of seawater and fresh tap water blended to achieve 7.8 g/L chloride in HPAL feed. The target feed pulp % solids and water composition were established by METSIM® modelling. The water composition reflects ore slurrying using seawater, adjusted for the impact of ore moisture and process dilution by gland water, screen sprays, flocculant make-up water and condensation of live steam during slurry heating. All tests were conducted in a mechanically stirred laboratory batch autoclave at a temperature of 255°C.
13.3.6.2 Scoping tests - year 1 to 3 feed
Initial tests were performed using a feed blend with a high magnesium content of 8.1%. Slow turnaround on laboratory solids assays meant that four HPAL tests were conducted before this situation was highlighted. It was established that the source of the unexpectedly high magnesium grade was an anomalous coarse fraction, with over 23% magnesium content, in the Year 1-3 limonite composite. The +4.75 mm fraction in the Year 4-6 and Year 7+ limonite composites amounted to less than 0.5% of the total mass, however the same fraction accounted for 15.6% of the Year 1-3 composite. Upon further investigation this fraction was deemed to consist of serpentinized ultramafic rock, probably from a single pail of limonite. Subsequent scoping tests and the confirmatory tests (part of the SN test series) used a HPAL feed blend prepared using a “coarse removed” limonite fraction in order to better replicate the Year 1-3 HPAL Feed magnesium grade predicted by the mining schedule.
Table 42 summarises key results from the HPAL tests conducted using the 8.1% magnesium feed blend.
Table 42 - HPAL Test Results on Year 1-3 Limonite/Low Magnesium Saprolite Blends (8.1% Mg)
Free Extraction Time ORP Fe (III) Test Conditions Acid mins mV mg/L g/L Ni (%) Co (%)
10 30.9 509 1 059 90.4 87.1
PAL-1 20 29.1 492 669 95.1 87.5 Feed Mg 8.1% 255°C 30 25.3 497 618 95.2 86.9 464 kg/t acid addition 208 kPa air overpressure 40 29.8 495 762 96.0 87.6
Final 26.1 494 580 95.5 87.3
10 - - 479 58.0 64.5
PAL-2 20 - - 581 83.8 86.6 Feed Mg 8.1% 255°C 30 - - 533 88.9 87.7 401 kg/t acid addition 300 kPa air overpressure 40 4.2 512 395 91.4 87.6
Final 2.1 498 364 91.4 87.5
PAL-3 10 31.3 530 1 362 86.7 86.1 Feed Mg 8.1% 255°C 20 39.3 524 1 180 94.9 86.9
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501 kg/t acid addition 30 38.8 525 1 042 95.2 86.9 286 kPa air overpressure 40 37.6 526 1 022 96.3 87.1
Final 32.8 526 855 95.1 87.2
10 37.7 541 2 423 90.1 92.6
PAL-4 20 43.6 529 2 428 96.3 96.3 Feed Mg 8.1% 255°C 30 42.5 528 2 243 96.6 97.6 503 kg/t acid addition 253 kPa air overpressure 40 42.8 530 2 043 96.8 97.6
Final 41.4 530 1 858 96.5 96.3
10 50.5 461 1 509 96.7 96.3
PAL-5 20 48.4 452 1 311 97.4 97.6 Feed Mg 8.1% 255°C 30 45.8 443 1 121 97.4 97.6 524 kg/t acid addition 204 kPa air overpressure 40 44.3 442 1 118 97.4 97.5
Final 43.4 443 1 002 97.4 97.6
10 49.8 480 2 257 91.9 94.9
PAL-6 20 57.0 473 1 694 96.6 97.4 Feed Mg 8.1% 255°C 30 55.0 472 1 503 96.7 97.5 544 kg/t acid addition 234 kPa air overpressure 40 55.5 476 1 482 97.3 97.5
Final 56.2 480 1 321 97.4 97.5
Tests PAL-1 to PAL-4 resulted in low residual free acid concentrations as initially the acid dosages used were based on an expected lower magnesium grade. Nevertheless good leaching results were obtained, with only test PAL-2 failing to achieve 95% nickel extraction within 20 minutes.
Figure 29 presents the effect of leaching time on nickel extraction. Figure 30 presents the effect of residual free acid concentration on nickel and cobalt extraction for a leach duration of 40 minutes. The trend lines demonstrate that residual free acid levels of >45 g/L are required to achieve high extractions of both nickel and cobalt.
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100
(%) 95
90 Extraction
85 Nickel
80 10 15 20 25 30 35 40
Leach Time (min)
PAL‐1 PAL‐2 PAL‐3 PAL‐4 PAL‐5 PAL‐6
Figure 29 – Effect of Leach Time on HPAL Nickel Extractions (Limonite/Low Mg Saprolite Blend at 8.1% Mg)
100
95 (%)
90 Ni Extraction
Extraction Co Extraction 85
80 0 102030405060
Residual Free Acid (g/L)
Figure 30 – Effect of Residual Free Acid on HPAL Extractions (Limonite/Low Mg Saprolite Blend at 8.1% Mg)
Prior to the confirmatory HPAL tests two scoping tests, PAL-7 and PAL-10, were performed on a HPAL feed blend prepared using a “coarse removed” limonite fraction. Table 43 summarises key results from the HPAL scoping tests conducted on the blend prepared using the coarse removed limonite ore composite.
Table 43 - HPAL Test Results on Year 1-3 Limonite/Low Magnesium Saprolite Blends (5.9-6.1% Mg)
Time Free Acid ORP Fe (III) Extraction Test Conditions mins g/L mV mg/L Ni (%) Co (%)
PAL-7 10 37.4 801 1 745 86.8 80.8
Feed Mg 5.88% 20 41.0 750 1 845 95.4 94.0
255°C 30 37.5 567 1 550 95.4 96.5
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437 kg/t acid addition 40 37.9 490 1 333 96.0 96.4
265 kPa air overpressure Final 37.9 478 1 319 94.8 95.3
PAL-10 20 46.9 454 1 474 93.7 96.9
Feed Mg 6.07% 30 46.1 451 1 188 96.2 97.9
255°C 40 45.1 449 1 040 96.2 97.9
482 kg/t acid addition Final 42.8 445 1 101 96.2 97.9
13.3.6.3 Effect of temperature on HPAL performance
Tests PAL-8 and PAL-9 were performed at 250°C and 245°C respectively, with other test conditions generally the same as test PAL-5 (255°C). Collectively the results of these three tests provide a comparison of three leaching temperatures. The key test results are presented in Table 44.
Table 44 - HPAL Test Results at Different Leach Temperatures
Time Free Acid ORP Fe (III) Extraction Test Conditions mins g/L mV mg/L Ni (%) Co (%)
10 50.5 461 1 509 96.7 96.3
255°C (PAL-5) 20 48.4 452 1 311 97.4 97.6
Feed Mg 8.09% 30 45.8 443 1 121 97.4 97.6 524 kg/t acid addition 204 kPa air overpressure 40 44.3 442 1 118 97.4 97.5
Final 43.4 443 1 002 97.4 97.6
20 39.4 440 2 184 91.1 94.0 250°C (PAL-8) 30 48.4 440 2 178 96.2 97.6 Feed Mg 8.09% 514 kg/t acid addition 40 48.1 438 2 001 96.9 97.7 262 kPa air overpressure Final 46.9 439 1 943 96.9 97.7
20 39.9 454 2 296 91.0 93.9 245°C (PAL-9) 30 50.3 451 1 979 96.3 97.7 Feed Mg 8.09% 522 kg/t acid addition 40 49.3 449 1 950 96.8 97.6 244 kPa air overpressure Final 49.1 445 1 735 96.8 97.6
The test results demonstrate that leach kinetics are considerably faster at 255°C than at 245 or 250°C, as illustrated by Figure 31. After 40 minutes of leaching however, there is little difference in the final nickel extraction.
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100 (%)
95 Extraction
Nickel
90 10 15 20 25 30 35 40
Leach Time (min)
255°C 250°C 245°C
Figure 31 – Effect of Temperature on HPAL Nickel Extractions – Limonite/Low Mg Saprolite Blend
The higher leaching temperature has an even more significant impact on iron hydrolysis, as illustrated by Figure 32. The residual iron(III) concentration in leach PLS is almost halved at 255°C compared to 245 and 250°C.
2500
(mg/L) 2000
Conc
1500 Fe(III)
1000 Residual 500 10 15 20 25 30 35 40
Leach Time (min)
255°C 250°C 245°C
Figure 32 – Effect of Temperature on HPAL Iron Hydrolysis
13.3.6.4 Confirmatory HPAL tests
Confirmatory HPAL tests were performed as part of the SN Scoping and SN Bulk Test programs. In the confirmatory HPAL tests a residual free acid concentration of 50 g/L was targeted and, based on scoping tests PAL-7 and PAL-10, a residence time of 30 minutes was selected. The tests were performed on a Year 1-3 Limonite/LMS feed blend prepared using a “coarse removed” limonite composite.
Tests SN-1 and SN-2 had very low sodium concentrations in HPAL feed pulp, resulting in unsatisfactory natro-jarosite chemistry and low residual free acid concentrations (45-46 g/L) due to lower iron precipitation, and test BULK-1 had a low residual free acid concentration due to the addition of an excessive quantity of HPAL feed pulp. The results of these three tests were excluded from the HPAL evaluation, and averages for the HPAL step in the remaining tests (SN-3, BULK-2 and BULK-3) were used to generate HPAL process design criteria.
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The effect of sodium concentration on iron precipitation is illustrated by Figure 33 below.
2200 3.5‐4.0 g/L Na in Feed Pulp 2000 (mg/L) 4.5‐5.0 g/L Na in Feed Pulp 1800
1600 Concentration
1400 Fe(III) 1200
Residual 1000 35 40 45 50 55
Residual Free Acid Concentration (g/L)
Figure 33 – Effect of Sodium Concentration on HPAL Residual Iron Concentration
Figure 34 below uses data from eight HPAL tests (PAL-7, PAL-10, SN-1, SN-2, SN-3, BULK-1, BULK-2 and BULK-3) and presents nickel extraction as a function of residual free acid concentration. The trend line ignores tests SN-1 and SN-2 which are clearly compromised by the low sodium concentration in the feed pulp.
100.0 (%)
95.0 Extraction
SN‐1 & SN‐2 (low Na in feed) Nickel
90.0 35 40 45 50 55 60
Residual Free Acid Concentration (g/L)
Figure 34 – Effect of Free Acid on HPAL Extractions (Limonite/Low Mg Saprolite Blend at 6% Mg)
The HPAL results from tests SN-3, BULK-2 and BULK-3 were used to generate HPAL process design criteria. Table 45 summarises leaching conditions and metal extractions for these tests.
Table 45 - Confirmatory HPAL Test Extractions (Limonite/Low Mg Saprolite Blend at 6% Mg)
SN-3 BULK-2 BULK-3 Average *
Acid Addition (kg/t ore) 489 485 486 487
PLS Free Acid (g/L) 52.2 54.1 50.5 52.3
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SN-3 BULK-2 BULK-3 Average *
Nickel (%) 98.8 97.0 97.0 97.6
Cobalt (%) 99.4 97.0 97.0 97.8
Magnesium (%) 98.0 86.8 86.8 90.5
Manganese (%) 98.1 90.4 90.4 93.0
Copper (%) 98.6 90.1 90.1 92.9
Zinc (%) 98.6 94.9 94.9 94.9
* SN-1, SN-2 and BULK-1 excluded from analysis due to low residual FA.
The process design criteria for the leach reactions of several elements in HPAL are based on solubility limits (residual concentrations) in HPAL discharge. These are reported in Table 46 below.
Table 46 – Confirmatory HPAL Test Residual Concentrations (Limonite/Low Mg Saprolite Blend at 6% Mg)
SN-3 BULK-2 BULK-3 Average
Iron (III) (mg/L) 2 089 1 419 1 489 1 666
Iron (II) (mg/L) 211 81 81 124 (82)
Aluminium (mg/L) 338 216 223 259
Sodium (mg/L) 1 920 2 170 2 000 2 030
Chromium (mg/L) 213 113 113 146
Calcium (mg/L) 482 454 511 482
Silicon (mg/L) 417 149 177 248
Residual iron (II) levels were considerably lower in the HPAL PLS produced in the bulk tests, and this was attributed to improved gas-liquid mass transfer in larger autoclaves. The process design criteria value for residual iron (II) concentration was revised to 82 mg/L, based on the average result of all 3 bulk tests.
13.3.6.5 HPAL variability tests Composites of limonite ore and LMS ore representing Years 4-6 and Years 7+ of plant feed were prepared. These were blended in the proportions applied in the mining schedule to prepare Years 4-6 and Year 7+ HPAL feed blends. Scoping tests on these samples demonstrated that similar nickel and cobalt extractions could be achieved at lower acid addition rates than those required by the Year 1-3 samples. The HPAL variability test results are compared with the Year 1-3 results in
Table 47.
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Table 47 – Key Results from HPAL Variability Tests
Year 1-3 Avg Years 4-6 Years 7+
Acid Addition (kg/t ore) 487 400 426
PLS Free Acid (g/L) 52.3 55.9 59.7
Nickel (%) 97.6 96.7 95.7
Cobalt (%) 97.8 96.9 97.1
Magnesium (%) 90.5 88.4 89.7
Iron (III) (mg/L) 1 666 1493 1255
Aluminium (mg/L) 259 161 128
Silicon (mg/L) 248 154 148
13.3.7 Atmospheric leaching
13.3.7.1 General
Atmospheric Leach tests were conducted on the medium magnesium saprolite composite sample at varying acid additions to examine extraction response with retention time and acid addition. Tests were initially conducted on ore pulp samples made up to 35% solids. It was observed in the early tests that considerable crystallisation was occurring upon cooling of the leach pulp samples, causing assaying difficulties. Dilution of hot pulp samples was trialled however this resulted in very low solution tenors of key species, introducing inaccuracies into the mass balancing. Subsequent tests were conducted on feed pulps made up to 30% or 25% solids, however this approach meant that higher acid dosages were required to achieve the same residual acid concentrations.
The AL feed pulp was prepared using a mix of seawater and fresh tap water blended to achieve 15 g/L chloride in AL feed. The target feed slurry % solids and water composition were established by METSIM® modelling. The water composition reflects ore slurrying using seawater, adjusted for the impact of ore moisture and process dilution by gland water and screen sprays. All tests were conducted in a mechanically stirred reactor at a temperature of 95- 100°C.
13.3.7.2 Year 1 to 3 feed
Table 48 summarises key results from the AL scoping tests conducted using Year 1-3 medium magnesium saprolite composite feed.
Table 48 – AL Test Results on Year 1-3 Medium Magnesium Saprolite Composite
Extraction Time Free Acid Fe (III) Mg Test Conditions hr g/L mg/L mg/L Ni (%) Co (%)
AL-1 1 77.2 44.5 72.2 90.8 70.8 35% solids feed 95-100°C 2 49.5 56.3 94.8 98.1 76.9
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Extraction Time Free Acid Fe (III) Mg Test Conditions hr g/L mg/L mg/L Ni (%) Co (%) 940 kg/t acid addition 4 34.0 50.6 86.3 88.9 71.1
6 23.2 45.4 79.7 97.8 79.6
1 64.2 48.4 83.6 90.3 69.4 AL-2 2 48.6 51.1 86.2 83.9 69.2 30% solids feed 95-100°C 4 40.3 51.8 83.2 89.6 71.6 1000 kg/t acid addition 6 30.7 44.2 72.6 97.3 100.0
1 - 47.3 60.2 91.6 76.1 AL-3A 2 - 41.4 56.9 89.7 76.4 35% solids feed 95-100°C 4 43.1 43.2 83.1 95.6 76.9 900 kg/t acid addition 6 36.9 37.5 79.1 96.4 77.6
1 47.6 38.2 75.3 90.9 67.0 AL-4 2 24.8 39.4 82.1 93.8 79.1 35% solids feed 95-100°C 4 23.6 30.4 77.4 93.3 76.2 850 kg/t acid addition 6 31.5 24.6 87.6 93.7 74.4
1 33.1 21.9 48.4 93.5 82.7 AL-5 2 28.7 24.5 49.8 94.5 83.1 25% solids feed 95-100°C 4 22.6 24.0 49.0 96.0 83.6 975 kg/t acid addition 6 22.6 22.3 45.0 95.8 84.8
1 44.5 24.9 46.9 96.7 85.5 AL-6 2 37.4 26.9 47.7 97.4 87.7 25% solids feed 95-100°C 4 32.4 27.2 46.2 98.1 90.1 1025 kg/t acid addition 6 29.6 27.5 46.4 98.5 90.2
The reported cobalt extractions are generally low however the mass balancing is inaccurate as both PLS and residue samples contained <5 mg of cobalt, quoted to just one significant figure.
Due to the varied feed % solids used in these tests the residual free acid concentrations are not meaningful in terms of the acid addition rate, as illustrated by Figure 35. As a consequence it was necessary to select the results of individual tests and model these in METSIM® to select an appropriate acid addition rate for the confirmatory AL tests.
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45 (g/L) 40
35 Concentration 30 Acid
Free 25
20 Residual 800 850 900 950 1000 1050
Acid Addition Rate (kg/t ore)
Figure 35 – AL Scoping Tests – Effect of Acid Addition Rate on Residual Free Acid Concentration
13.3.7.3 Confirmatory AL tests
Confirmatory AL tests were performed as a part of the SN Scoping and SN Bulk Test programs. In the confirmatory AL tests a residual free acid concentration of 30 g/L was targeted and, based on the last 3 scoping tests, a residence time of 4 hours was selected. The chosen acid addition rate was 960 kg/t of ore. The tests were performed on a Year 1-3 medium magnesium saprolite composite.
Test BULK-2 had an inexplicably low residual free acid concentration of just 16 g/L and was consequently excluded from the data analysis. The averages for the AL step in the remaining tests (SN-1, SN-2, SN-3, BULK-1 and BULK-3) were used to generate process design criteria for AL. Table 49 summarises leaching conditions and metal extractions for these tests.
Table 49 – Confirmatory Atmospheric Leaching Conditions and Extractions
SN-1 SN-2 SN-3 BULK-1 BULK-3 Average
Acid Addition (kg/t ore) 970 960 960 960 958 962
PLS Free Acid (g/L) 40.3 31.8 23.4 32.6 21.7 30.0
Nickel (%) 99.2 99.3 98.2 99.1 98.4 98.8
Cobalt (%) 95.2 95.0 89.5 93.2 88.9 92.4
Iron (%) 87.4 88.9 75.7 86.0 77.5 83.1
Magnesium (%) 96.0 97.1 94.2 96.0 94.3 95.5
Aluminium (%) 70.7 79.1 63.4 68.6 61.7 68.7
Chromium (%) 34.4 61.7 20.9 36.6 23.2 35.3
Sodium (%) 99.5 99.1 98.6 99.4 98.1 98.9
Manganese (%) 95.4 96.4 90.9 95.1 94.7 94.5
Copper (%) 87.8 57.6 93.6 87.0 94.4 84.1
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SN-1 SN-2 SN-3 BULK-1 BULK-3 Average
Zinc (%) 92.2 91.8 93.2 86.2 91.0 90.9
It was evident from the confirmatory tests that high nickel extractions could be achieved across a range of residual free acid concentrations. Cobalt was more sensitive to residual free acid concentration, as illustrated by Figure 36.
100.0
98.0
96.0 (%)
94.0
Extraction 92.0
Nickel 90.0 Cobalt 88.0 15 20 25 30 35 40 45
Resiudal Free Acid Concentration (g/L)
Figure 36 – Effect of Residual Free Acid Concentration on AL Extractions
The process design criteria for the leach reactions of calcium and silicon in AL are based on solubility limits (residual concentrations) in AL discharge. There is some precipitation of sodium in natro-jarosite and sodium alunite, resulting in a net drop in sodium concentration across AL. These are reported in Table 50 below, along with other species of interest.
Table 50 – Confirmatory Atmospheric Leaching Residual Concentrations
SN-1 SN-2 SN-3 BULK-1 BULK-3 Average
Iron (III) (mg/L) 42 843 33 181 41 108 39 292 44 845 40 254
Aluminium (mg/L) 1 513 1 271 1 612 1 441 1 677 1 503
Chromium (mg/L) 656 527 696 614 703 639
Calcium (mg/L) 473 404 482 475 511 469
Silicon (mg/L) 93 77 85 118 118 98
∆ Sodium (mg/L) (Na in-Na out) 1 999 2 289 1 364 1 991 658 1 660
Figure 37 illustrates the effect of residual free acid concentration on the sodium drop in AL. Higher acid concentrations promote increased iron and aluminium extractions, and subsequently more sodium precipitation in natro-jarosite and sodium alunite, resulting in increased drops in sodium concentration. Greater dilution due to higher acid addition also contributes to this behaviour.
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3000
2500 (mg/L) 2000
1500
1000 Concentration
Na
Δ 500
0 10 15 20 25 30 35 40 45 50
Residual Free Acid Concentration (g/L)
Figure 37 – Effect of Free Acid Concentration on Decrease in Sodium Concentration
13.3.7.4 AL variability tests
Composites of medium magnesium saprolite ore representing Years 4-6 and Years 7+ of plant feed were prepared. Scoping tests on these samples demonstrated that similar nickel and cobalt extractions could be achieved at lower acid addition rates than those required by the Year 1-3 samples. The AL variability test results are compared with the confirmatory Year 1-3 results in Table 51 below.
Table 51 – Key Results from AL Variability Tests
Year 1-3 Avg Years 4-6 Years 7+
Acid Addition (kg/t ore) 962 935 920
PLS Free Acid (g/L) 30.0 20.9 37.9
Nickel (%) 98.8 99.0 98.8
Cobalt (%) 92.4 90.5 93.7
Iron (%) 83.1 59.1 79.5
Magnesium (%) 95.5 96.3 97.2
Iron (III) (mg/L) 40 254 53 954 51 814
Aluminium (mg/L) 1 503 1 556 137
13.3.8 Saprolite neutralisation of combined HPAL and AL slurry
13.3.8.1 General Combined feed pulps for each saprolite neutralisation (SN) test were prepared from two separate leach tests as follows:
AL test on medium magnesium saprolite sample at a pulp density of 35% solids for 240 minutes at an acid addition of 960 kg/t at and a temperature of 95-100°C
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HPAL test on limonite/LMS blend sample at a pulp density of 30% solids for a leach time of 30 minutes at an acid addition of 475-485 kg/t and temperature of 255°C.
SN tests were conducted using a fixed ratio of feeds to each leach stage based on the mining schedule, as follows:
HPAL feed : AL feed : SN feed = 1.0 : 0.42 : 0.35
SN tests were conducted using the Year 1 to 3 high magnesium saprolite composite samples made up to 35% solids. The SN feed pulp was prepared using a mix of seawater and fresh tap water blended to achieve 15 g/L chloride in SN feed. The water composition was established by METSIM® modelling. The water composition reflects ore slurrying using seawater, adjusted for the impact of ore moisture and process dilution by gland water, screen sprays and flocculant make-up water. All tests were conducted in a mechanically stirred reactor at a temperature of 92-97°C.
13.3.8.2 SN scoping tests SN scoping tests were conducted on the Year 1-3 high magnesium saprolite composite sample to examine extraction response and acid neutralisation with retention time. In each test the slurry was agitated for six hours and kinetic subsamples were taken at intervals to monitor free acid and elemental concentrations, along with solids assays to monitor metal extraction. After the first scoping test the acid concentration of the HPAL pulp was boosted prior to the addition of SN feed to simulate the concentrative effect of slurry flashdown on the acid concentration (37% increase in free acid concentration).
The scoping tests established that nickel extraction continued to a significant extent between 4 and 6 hours of leaching, and accordingly 6 hours was selected as the residence time for the SN bulk tests.
13.3.8.3 SN bulk tests
The SN bulk tests were performed on a larger scale than the SN scoping tests, in order to produce sufficient pulp for settling testwork. Ore feed ratios and test conditions were the same as those used in the scoping tests, and the slurry was agitated for six hours without kinetic subsamples. In each of the bulk tests the acid concentration of the HPAL pulp was boosted prior to the addition of SN feed to simulate the concentrative effect of slurry flashdown on the acid concentration.
13.3.8.4 SN data analysis
All of the SN scoping and bulk tests were considered when developing the process design criteria. The results of the SN-1 and BULK-1 tests were ignored as SN-1 had no addition of acid to HPAL pulp to simulate acid concentration due to flashing and BULK-1 had a low residual free acid concentration due to the addition of an excessive quantity of HPAL feed pulp (incorrect ore feed ratios). Table 52 summarises the operating conditions of the remaining SN tests.
Table 52 – Saprolite Neutralisation Test Conditions
Test No. SN-2 SN-3 BULK-2 BULK-3 Average
Temperature (°C) 97.7 95.0 93.4 94.0 95.0
Final PLS Free Acid (g/L) 14.7 16.7 12.3 11.3 13.7
The metal extractions from SN feed ore (high magnesium saprolite) are presented in Table 53. In some cases the calculated results represent the net result of extraction followed by re-
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precipitation as the free acid concentration decreased. Where appropriate the extraction extent has been adjusted to exclude re-precipitation based on extractions achieved at low free acid concentrations in the AL scoping tests. Notes below the table explain the adjusted results.
Table 53 – Saprolite Neutralisation Test Extractions
Test No. SN-2 SN-3 BULK-2 BULK-3 Average Adjusted
Nickel (%) 94.7 89.5 62.8 61.4 77.1 -
Cobalt (%) 124.5 91.8 75.3 69.5 90.3 75 1
Iron (%) -41.7 57.5 -89.9 -185.4 -64.9 57 2
Magnesium (%) 68.2 75.7 70.9 66.8 70.4 -
Aluminium (%) 27.3 86.8 -5.4 -100.0 2.2 47 3
Chromium (%) -94.6 89.7 -35.5 -145.3 -46.4 1 4
Manganese (%) 123.2 119.1 77.3 66.4 96.5 69 5
Copper (%) 195.4 90.7 83.8 81.1 112.7 75 6
Zinc (%) 99.1 74.3 88.6 59.1 80.3 75 7
Table Notes:
1. Based on bulk tests only (Co mass too small in scoping tests to produce meaningful results) 2. Negative value due to precipitation of Fe contained in HPAL and AL solutions; adjusted SN stage extraction based on lowest extraction achieved in atmospheric leach scoping tests 3. Low value due to precipitation of Al contained in HPAL and AL solutions; adjusted SN stage extraction based on lowest extraction achieved in atmospheric leach scoping tests 4. Negative value due to precipitation of Cr contained in HPAL and AL solutions; adjusted SN stage extraction is an allowance (observing low residual concentration) 5. Based on bulk tests only (Mn mass too small in scoping tests to produce meaningful results) 6. Based on bulk tests only (Cu mass too small in scoping tests to produce meaningful results) 7. Based on bulk tests only (Zn mass too small in scoping tests to produce meaningful results) As the free acid concentration decreases, iron and aluminium precipitate as natro-jarosite and sodium alunite respectively, resulting in significantly lower discharge concentrations of these elements. The sodium concentration also decreases as it is consumed by these reactions. The residual concentrations of these elements are reported in
Table 54.
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Table 54 – Saprolite Neutralisation Test Residual Concentrations
Test No. SN-2 SN-3 BULK-2 BULK-3 Average
Iron (III) 4 348 4 750 1 910 2 500 3 377
Aluminium 634 668 537 580 605
Sodium 2 810 3 420 2 990 3 000 3 055
13.3.9 CCD settling (saprolite neutralisation discharge slurry)
Settling testwork was undertaken on the pulp from the SN bulk tests to investigate slurry thickening characteristics. The tests were conducted in a 2-metre high raked column. A feed solids density of 6.2-6.5% was selected and the flocculant used in the testing was Magnafloc 333 in combination with Magnafloc 368 coagulant. These selections contrast with the selection of 4% feed solids density and Magnafloc 10 flocculant during the previous program at SGS Perth.
The 2-litre cylinder tests achieved an optimum underflow density of 26% solids. Curiously, the raked column test achieved only the same underflow density (26%) despite the considerably higher compression. It is highly unusual for the 2-metre raked column not to significantly outperform a 2-litre cylinder. It was noted that the raked column test was performed at 30°C compared to 60°C in the 2-litre cylinder tests, and the low temperature was considered to be very detrimental to the settling performance as the liquor density and viscosity were high. Settling will take place at 75-80°C in the full scale plant.
Subsequently a rheology test program was conducted to determine the CSD of the SN pulp. The CSD is defined as the solids density at which a relatively small increase in % solids leads to a large increase in yield stress and is considered to represent the optimum (or highest) thickener underflow density that can be accomplished with the given solids. A slightly improved underflow density of 28-29% solids was achieved by this method, however the slurry samples were aged by this time and the quality of these results is also dubious.
The various SN slurry settling test results are reported in Table 55.
Table 55 - Settling Tests on Saprolite Neutralisation Slurry
Coagulant Flocculant U/F % Solids Unit Area Sample Dose g/t Dose g/t by CSD m2/t/d
2L Cylinder Test 144 96 26 0.32
2m Raked Column Test 141 141 26 1.21
Rheology (CSD) 141 141 28-29 -
Given the poor underflow densities achieved, the changes in feed solids density and flocculant selection from the SGS Perth program, and the issues with sample temperature, a decision was made to adopt the low end underflow density of 38% solids achieved in the SGS Perth settling program (Table 36) as the PFS process design criteria. A unit area requirement of 0.09 m2/t/d was obtained in the SGS Perth testwork, however a more conservative value of 0.18 m2/t/d was selected for the PFS process design criteria, based on testwork results achieved with a similar SN pulp for another Philippine nickel laterite project.
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13.3.10 Iron/aluminium Removal
13.3.10.1 General
In order to meet the PFS schedule, process design criteria for Iron/Aluminium Removal were developed in advance of any testwork. The process design criteria used for the PFS were derived from the results of continuous pilot testwork performed in 1998 to support the Ramu Nickel Project feasibility study (mixed hydroxide flowsheet).
13.3.10.2 Stage 1 Iron/Aluminium Removal
Testwork for Stage 1 Iron/Aluminium Removal was carried out in two parts. A synthetic feed solution was prepared based on a stream composition predicted by METSIM® modelling. All tests used a limestone sample sourced from the Payong-Payong deposit, ground to -38 µm and pulped to 30% solids using a synthetic process barren solution.
Firstly a scoping test was performed during which the slurry pH was increased by incremental limestone slurry additions. Solution and solids were assayed at each pH increment to determine residual aluminium and ferric iron concentrations, and the extent of nickel co-precipitation.
Excessive nickel co-precipitation occurred at above pH 3.6 (4.9% at pH 3.8). Consequently a target pH of 3.6 was selected, corresponding to less than 75 mg/L ferric iron in solution, as illustrated by Figure 38. Aluminium was less than 10 mg/L under these conditions.
100 90 80 70 mg/L
60 50 Conc,
40
Fe(III) 30 20 10 0 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 pH
Figure 38 – Effect of pH on Residual Fe(III) Concentration in Stage 1 Iron/Aluminium Removal
The second phase of testing involved performing “locked cycle” testwork at the selected terminal pH, wherein the solids collected in each test were utilised as seed for the subsequent test. The results of the locked cycle testing are reported in
Table 56.
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Table 56 - Stage 1 Iron/Aluminium Removal Locked Cycle Testing
% Seed Test No. Final pH Fe(III) mg/L Al mg/L Ni Ppt’n (%) Recycle
IAR1-2A 0 3.61 340 28 1.5
IAR1-2B 86 3.63 470 54 1.6
IAR1-2C 209 3.62 308 36 1.2
IAR1-2D 241 3.61 338 44 1.2
IAR1-2E 451 3.61 230 48 1.7
Unfortunately the desired ferric iron concentration was not achieved in these tests. Slow receipt of assay results meant that by the time the residual ferric iron concentrations were known the locked cycle testing was too far advanced to vary the pH target. The synthetic solution had a high background concentration of ferrous iron (1850 mg/L) and there is some concern that this has interfered with the ferric iron chemistry. Also the limestone dosage was about 10% lower in the locked cycle tests than in the scoping test. A higher pH (3.9) was used in the PFS process design and this should be satisfactory.
Nickel co-precipitation of 1.2% was reported at 209-241% seed recycle, compared to the value of 0.9% used in the process design criteria at 250% seed recycle. Higher than expected nickel losses can be caused by the formation of localized high pH regions during limestone slurry addition, and this can be a concern with bench scale testing.
More work will be needed at DFS level to establish the optimum pH for maximum iron removal and minimum nickel co-precipitation.
13.3.10.3 Stage 2 Iron/Aluminium Removal
Testwork for Stage 2 Iron/Aluminium Removal was carried out in two parts. A synthetic feed solution was prepared based on a stream composition predicted by METSIM® modelling. All tests used a limestone sample sourced from the Payong-Payong deposit, ground to -38 µm and pulped to 30% solids using a synthetic process barren solution.
Firstly a scoping test was performed during which the slurry pH was increased by incremental limestone slurry additions. Solution and solids were assayed at each pH increment to determine residual aluminium and ferric iron concentrations, and the extent of nickel co-precipitation.
Unfortunately the residue mass balancing in the scoping test was poor, with very poor accountability of all key elements and negative co-precipitation extents reported. Based on PLS tenors, excessive nickel co-precipitation occurred at pH 4.8 (the nickel tenor dropped by 7.3% between pH 4.6 and pH 4.8). However the aluminium tenor was still too high (16 mg/L) at pH 4.6 and consequently a target pH of 4.7 was selected for the locked cycle tests.
The second phase of testing involved performing “locked cycle” testwork at the selected terminal pH, wherein the solids collected in each test were utilised as seed for the subsequent test. The results of the locked cycle testing are reported in Table 57 below.
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Table 57 - Stage 2 Iron/Aluminium Removal Locked Cycle Testing
% Seed Test No. Final pH Fe(III) mg/L Al mg/L Ni Ppt’n (%) Recycle
IAR2-2A 0 4.71 2 12 1.8
IAR2-2B 46 4.70 2 8 2.9
IAR2-2C 68 4.72 <2 6 4.2
IAR2-2D 86 4.70 2 8 2.7
IAR2-2E 112 4.74 <2 4 6.1
The targeted residual iron and aluminium concentrations were achieved at pH 4.7 and at 112% seed recycle. Higher recycle rates may be necessary to achieve satisfactory settling properties and more work will be needed at DFS level to establish the optimum seed recycle rate.
Nickel co-precipitation averaged 3.5% (compared to 3% in the process design criteria). Higher than expected nickel losses can be caused by the formation of localized high pH regions during limestone slurry addition, and this can be a concern with bench scale testing. Nickel precipitated here is recovered via the recycle leach
13.3.11 Mixed Hydroxide Precipitation (MHP)
13.3.11.1 General
In order to meet the PFS schedule, process design criteria for Mixed Hydroxide Precipitation were developed in advance of any testwork. The process design criteria used for the PFS were derived from the results of continuous pilot testwork performed to support the Ravensthorpe Nickel Project feasibility study (mixed hydroxide flowsheet).
13.3.11.2 Mixed Hydroxide Precipitation (MHP) Stage 1
Testwork for MHP Stage 1 was carried out in two parts. A synthetic feed solution was prepared based on a stream composition predicted by METSIM® modeling.
Firstly a series of scoping tests were performed using magnesia samples from three potential suppliers, during which the MgO:(Ni+Co) mass ratio was increased by incremental magnesium hydroxide slurry additions. Solution and solids were assayed at each reagent dosage increment to determine the extent of nickel and cobalt precipitation.
The sources of the three magnesia samples evaluated were:
Queensland Magnesia, Australia (EMAG 45, as used by established MHP projects) Nedmag Industries, Holland Shenyang Yifengrong Refractory Materials, China
The results of the three scoping tests are reported in Table 58.
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Table 58 - Comparison of Magnesia Products for MHP Stage 1
% Ni in % Mg in MgO:(Ni+Co) Ni Precipitated Residual Ni Supplier Product Product Mass Ratio (%) Conc (mg/L) Solids Solids
Nedmag 1.01 87.4 300 34.1 7.1
QMag 0.95 97.0 70 33.9 2.5
Shenyang 0.95 9.7 3180 14.7 24.7
Using Nedmag magnesia, the nickel concentration in solution is lowered to 300 mg/L and there is 87.4% nickel precipitation. The final solids contain 34.1% nickel and 7.12% magnesium (i.e. there is a large portion of unreacted MgO contaminating the product solids).
Using Shenyang magnesia, the nickel concentration remaining in solution is 3180 mg/L and there is just 9.7% nickel precipitation. The final solids contain only 14.7% nickel and a huge 24.7% Mg (i.e. most of the MgO is unreacted). There is obviously a major problem with the reactivity of the Shenyang magnesia product.
Using QMag magnesia (the product traditionally used by the nickel industry), the nickel concentration in solution is lowered to just 70 mg/L and there is 97% Ni precipitation. The final solids contain 33.9% nickel and only 2.54% magnesium (i.e. most of the MgO has been consumed). Based on these results, the locked cycle tests were conducted using the EMAG 45 magnesia product from QMag at a MgO:(Ni+Co) mass ratio of 0.95.
The second phase of testing involved performing “locked cycle” testwork at the selected MgO:(Ni+Co) mass ratio, wherein the solids collected in each test were utilised as seed for the subsequent test. The results of the locked cycle testing are reported in Table 59 below.
Table 59 - MHP Stage 1 Locked Cycle Testing
Ni Mn % Ni in % Mn in % Seed Test No. Precipitated Precipitated Product Product Recycle (%) (%) Solids Solids
MHP1-4A 0 97.8 28.1 30.9 4.4
MHP1-4B 87 97.7 29.5 30.5 4.4
MHP1-4C 185 97.6 32.3 32.0 4.7
MHP1-4D 232 97.5 33.3 29.8 4.6
MHP1-4E 486 98.0 50.1 33.7 5.6
The results at 87% and 185% seed recycle are superior to the PFS process design criteria (at 100% seed recycle), exceeding the nickel precipitation extent (97.6-97.7% vs. 95%) with lower manganese co-precipitation (29.5-32.0% vs. 32.4%). More work will be required at DFS level to establish the optimum seed recycle rate to achieve satisfactory settling properties.
13.3.11.3 Mixed Hydroxide Precipitation (MHP) Stage 2
Testwork for MHP Stage 2 was carried out in two parts. A synthetic feed solution was prepared based on a stream composition predicted by METSIM® modeling.
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Firstly a scoping test was performed during which the slurry pH was increased by incremental hydrated lime slurry additions. Solution and solids were assayed at each pH increment to determine residual nickel and manganese concentrations. The scoping test results are summarized by Figure 39 below.
1200 240
1000 200 mg/L
mg/L
800 160 Conc,
Conc,
600 120 Ni Mn
400 80 Residual Residual 200 40
0 0 6.0 6.5 7.0 7.5 8.0 8.5 pH Manganese Nickel
Figure 39 – Effect of pH on Residual Fe(III) Concentration in Stage 1 Iron/Aluminium Removal
A pH target of 7.80-7.85 was selected for the locked cycle tests based on the scoping test findings. This pH range precedes the commencement of rapid manganese precipitation whilst simultaneously achieving a high nickel precipitation extent.
The second phase of testing involved performing “locked cycle” testwork at the selected terminal pH, wherein the solids collected in each test were utilised as seed for the subsequent test. The results of the locked cycle testing are reported in Table 60.
Table 60 - MHP Stage 2 Locked Cycle Testing
% Seed Test No. Final pH Ni mg/L Ni Ppt’n (%) Mn Ppt’n (%) Recycle
MHP2-2A 0 7.84 32 60 5
MHP2-2B 62 7.84 34 57 5
MHP2-2C 135 7.82 12 74 -7
MHP2-2D 147 7.83 40 71 14
MHP2-2E 213 7.80 26 50 7
Evidently the target pH selected from the scoping test results proved to be too low. Nickel precipitation was in the 50-74% range, falling well short of the 96% figure (from Ravensthorpe piloting) used in the process design criteria. Slow receipt of assay results meant that by the time the nickel precipitation extents were known, the locked cycle testing was too far advanced to vary the pH target. It is noted, however, that the scoping test results at pH 7.95 are superior to the PFS process design criteria, exceeding the nickel precipitation extent (98.4% vs. 96%) with lower manganese co-precipitation (12.3% vs. 21%).
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More work will be needed at DFS level to establish the optimum pH target for nickel recovery and manganese rejection.
13.3.12 Limestone
13.3.12.1 Samples
Limestone samples were collected from two locations: Payong-Payong and Lawigan.
13.3.12.2 Head assays and reactivity
The head assays of the limestone samples are reported in Table 61.
Table 61 - Limestone Head Assays
Source % Ca % CaCO3 % Fe % Mg % Si % Al
Payong Payong 39.4 97.1 0.07 0.38 0.39 0.06
Lawigan 39.9 97.9 <0.01 0.38 0.10 0.02
Reactivity was determined by making incremental additions of 30% limestone slurry to a 1N sulphuric acid solution heated to 70°C, until pH 6 was achieved. The reactivity was reported in terms of tonnes acid neutralized per tonne of limestone added and the results are presented in Table 62.
Table 62 - Limestone Reactivity
Source t Acid/t Limestone
Payong Payong 0.95
Lawigan 0.96
It is evident that the limestone from both sources is of a high quality.
13.3.12.3 Limestone calcination
Limestone calcination tests were performed on samples from Payong-Payong and Lawigan. Tests were conducted at 30, 60 and 120 minutes calcination time, and the results are reported in Table 63.
Table 63 - Limestone Calcination Results
Weight Reactivity Source Time (min) LOI (%) % Ca % CaO Loss (%) t acid / t lime
30 30.3 20.6 55.3 63.0 - Payong- 60 39.9 11.5 60.7 86.0 - Payong 120 41.8 6.4 63.5 90.8 1.22
30 28.9 22.8 50.0 54.6 - Lawigan 60 40.4 7.3 61.0 86.9 -
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Weight Reactivity Source Time (min) LOI (%) % Ca % CaO Loss (%) t acid / t lime
120 41.5 6.9 62.7 90.2 1.22
The product quicklime has high reactivity and 120 minutes is required for maximum calcination.
13.4 Comminution and Scrubbing Testwork
13.4.1 General
A testwork program was undertaken by ALS Ammtec of Perth, Western Australia between July and September 2011. This program included the following investigations:
Limonite Scrubbing Testwork Bond Abrasion Index (Ai) determination Bond Crushing Work Index (CWi) determination Bond Ball Mill Work Index (BWi) determination Bond Rod Mill Work Index (RWi) determination Assay Analysis, including X-Ray Fluorescence (XRF) Analysis.
13.4.2 Ore samples
Samples of limonite and saprolite ore were collected from test pits at the locations given in Table 64 and shipped to ALS Ammtec. The two limonite drums were combined and split for testwork.
The combined limonite composite was split into two identical scrubber feeds, which were designated LIM1 and LIM2.
Table 64 – Ore Samples for Ammtec
Type Drum Source No. Bags From (m) To (m) Mass (kg)
AGL-427 4 0.00 0.70 50.57
Limonite 1 AGL-213 4 0.00 0.55 60.92
AGL-498 4 0.00 1.10 50.175
AGL-181 4 3.00 4.50 50.76
Limonite 2 AGL-493 4 2.20 2.80 50.455
AGL-451 4 2.75 3.80 51.035
AGL-227 5 2.00 2.75 63.285
Saprolite 3 AGL-500 5 4.40 5.25 61.355
AGL-227 5 2.75 3.70 62.165
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13.4.3 Comminution testwork
Limonite and saprolite samples were treated separately and combined and homogenously split to create material for comminution testwork.
From this material, 20 specimens were selected for CWi testwork, if available. These specimens were selected such that they passed through a 75 mm square hole, but not through a 51 mm square hole.
Upon completion of CWi testwork, all testwork products were recombined with the unused sample and the total sample was control crushed to 100% passing 35 mm. This material was homogenized and rotary split into 15 kg lots.
50 kg sub-samples were weighed, dried at 105°C then weighed again to calculate the percent moisture of the composite. This dried sample was then control crushed to 100% passing 25 mm. The sub-samples were homogenized and rotary split into a 10 kg, 15 kg and 25 kg sub- sample.
The 25 kg sub-sample was screened to create four samples of approximately 400 g for Ai testwork, 100% of which passed through a square 19mm hole but not a square 12.5 mm hole.
The 15 kg sub-sample was control crushed to 100% passing 12.5 mm. From this material, a feed was split out for use in RWi testwork.
The 10 kg sub-sample was control crushed to 100% passing 3.35 mm. From this material, a feed was split out for use in BWi testwork.
In the Bond Index test procedure, four 400 g sub-samples of ore are stage crushed and sized into the range -19.0 +12.5 mm. A standard weighted test paddle and enclosure are used and the paddle is abraded by rotation in contact with the ore sample for 15 minutes at 632 rpm. This procedure is repeated four times and on completion the paddle is re-weighed and the loss in weight in grams is the Abrasion Index (Ai).
In the Bond Crushing Work Index (CWi) test, twenty representative rock specimens in the size range -75 +51 mm are broken under the impact of twin pendulums. The input energy is increased until rock breakage occurs and the Bond Crushing Energy (Eb) is related to a constant for the apparatus and the angle through which the twin pendulums fall, and this is used in the calculation of the CWi.
In the determination of Bond Rod Mill Grindability (RWi) 12 kg of representative ore is stage crushed to 100% passing 12.5 mm. A standard volume is added to a standard RWi mill and ground dry at 46 rpm. The product is sized on a closing screen selected to be close to the design rod mill product size which will be in the range -4700 +208 µm, and is typically 2100 µm. New feed is added to replace the screen undersize and the procedure is continued until a 100% circulating load builds up. The rod mill grindability (Grp) is the average of the product of the last three cycles, expressed as grams per revolution, and this is used in the calculation of the RWi.
In the determination of Bond Ball Mill Work Index (BWi) 15 kg of representative ore at 100% +3.35 mm is stage crushed to 100% passing 3.35 mm. In a similar manner to the RWi a standard volumetric charge is placed in a standard mill and dry ground. A closing screen is selected to target the desired product size and grinding cycles are continued until a 250% circulating load is achieved. The average of the last three net grams per revolution is the ball mill grindability (Gbp), and this is used in the calculation of the BWi.
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Comminution testwork was carried out on limonite and saprolite composites. The limonite sample was identical to that used in scrubbing testwork. The results of the comminution testwork are summarised in Table 65.
Table 65 – Comminution Indices
Index Limonite Saprolite
Ai (g) 0.0020 0.0167
CWi (kWh/t) - 9.21
RWi (kWh/t) - 8.1844
BWi (kWh/t) 3.1588 8.1026
13.4.4 Scrubbing testwork
Scrubbing of limonite samples was performed in a 1-metre diameter drum scrubber with two sets of interchangeable lifters on opposite sides of the drum. The scrubber is connected to a meter box with which the power draw for the scrub was measured.
Composites for scrubbing were created using the contents of the limonite drums, which were combined, homogenised and split. The percent moisture of the material was determined so that two lots of 50 kg dry weight equivalent material could be split out. Samples were re-weighed and water requirements calculated based on percent moisture in the sample and required percent solids for the scrub.
Screening of +250 µm fractions takes place on a custom built shear screen gyrating apparatus. The next smallest screen size is placed on the apparatus and locked in place, while the next smallest screen size to that is placed underneath the apparatus discharge on top of the discharge drum. The apparatus is switched on and sample is wiped over the screen and sprayed with a fine mist until a negligible amount of undersize material is observed exiting with the underflow stream. The screen on top of the drum acts to “pre-screen” the underflow, and once the screening of the larger size is complete, the screen atop the discharge drum is swapped with the coarser screen and screening is completed on that fraction. This process is continued until the content of the discharge drum is -250 µm.
The -250 µm slurry is left to settle naturally for a minimum of 12 hours before supernatant is decanted off to thicken the slurry as much as possible. This thickened slurry is then transferred into a tared plastic drum with volumetric graduations to approximately measure the volume and weight of the slurry.
The slurry is then agitated with a handheld electric stirrer and a 5-litre dip is taken and the weight is recorded. Reserve slurry is homogenously split into 20L buckets.
The 5-litre dip is first screened using the sheer screen gyrating apparatus at 38 µm to remove the bulk of the material. The -38 µm slurry is then filtered. The +38 µm fractions are then screened using a fine mist and smaller hand screens resting on a vibrating apparatus.
Two identical limonite samples were scrubbed under identical conditions, then wet screened and the resulting fractions dried, weighed and assayed. Sample LIM1 was scrubbed for four minutes while sample LIM2 was scrubbed for eight minutes. The results for selected screen sizes are presented in the following tables, with the mass fraction of the oversize and cumulative grade of undersize presented for each screen size.
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Table 66 – Limonite Scrubbing – Passing Grades, 4 Minutes Scrubbing (LIM1)
Passing Mass Al Co Cr Cu Fe Mg Mn Ni SiO2 Zn Size % % % % % % % % % % %
Total 100 3.09 0.12 2.27 0.01 44.75 1.01 0.69 1.04 9.43 0.04
-12.5mm 99.77 3.08 0.12 2.27 0.01 44.75 1.01 0.69 1.04 9.43 0.04
-3.35mm 99.58 3.09 0.12 2.27 0.01 44.80 1.00 0.69 1.04 9.36 0.04
-0.25mm 96.03 2.97 0.12 1.75 0.01 45.55 0.80 0.68 1.06 9.12 0.04
-0.15mm 94.00 2.92 0.11 1.51 0.01 45.89 0.70 0.65 1.07 9.09 0.04
-0.075mm 91.46 2.89 0.10 1.30 0.01 46.14 0.61 0.62 1.08 9.10 0.04
-0.038mm 89.26 2.88 0.10 1.18 0.01 46.20 0.57 0.59 1.08 9.15 0.04
Table 67 – Limonite Scrubbing – Passing Grades, 8 Minutes Scrubbing (LIM2)
Passing Mass Al Co Cr Cu Fe Mg Mn Ni SiO2 Zn Size % % % % % % % % % % %
Total 100 2.98 0.12 2.09 0.01 43.93 0.90 0.67 1.03 11.97 0.03
-12.5mm 100.0 2.98 0.12 2.09 0.01 43.93 0.90 0.67 1.03 11.97 0.03
-3.35mm 99.86 2.98 0.12 2.10 0.01 43.97 0.90 0.67 1.03 11.92 0.03
-0.25mm 96.91 2.88 0.12 1.66 0.01 44.59 0.73 0.66 1.05 11.81 0.03
-0.15mm 95.54 2.84 0.11 1.46 0.01 44.84 0.66 0.65 1.06 11.81 0.03
-0.075mm 92.94 2.81 0.10 1.26 0.01 45.07 0.58 0.61 1.06 11.90 0.03
-0.038mm 90.90 2.80 0.10 1.17 0.01 45.10 0.54 0.58 1.06 12.00 0.03
At 0.25mm and smaller cut sizes there is progressively larger rejection of magnesium and chromium with some upgrade of nickel. The mass recoveries of these elements, as well as cobalt, at the screen sizes of interest are summarised in Table 68 and Table 69.
At a cut size of 75 microns, 95-96% nickel recovery can be achieved with 40-45% magnesium rejection and 44-48% chromium rejection. Unfortunately a 19-22% cobalt loss also occurs. At a 250 micron cut size the cobalt losses reduce to 4-6%, however magnesium and chromium rejection drops to 21-25%.
Table 68 – Limonite Scrubbing – Elemental Recoveries, 4 Minutes Scrubbing (LIM1)
Passing Mass Ni Mg Cr Co Size % % % % %
Total 100 1.04 1.01 2.27 0.12
-0.25mm 96.03 98.38 75.90 74.37 94.04
-0.15mm 94.00 96.99 64.97 62.44 86.94
-0.075mm 91.46 94.88 55.42 52.28 77.86
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-0.038mm 89.26 92.97 50.30 46.48 71.78
Table 69 – Limonite Scrubbing – Elemental Recoveries, 8 Minutes Scrubbing (LIM2)
Passing Mass Ni Mg Cr Co Size % % % % %
Total 100 1.04 1.01 2.27 0.12
-0.25mm 96.91 98.95 78.82 76.91 95.56
-0.15mm 95.54 98.20 69.83 66.85 91.45
-0.075mm 92.94 95.80 59.17 55.93 80.79
-0.038mm 90.90 93.83 54.34 50.80 74.52
13.5 Flow Properties and Conveyability of Ores
13.5.1 General
A testwork program was undertaken by TUNRA Bulk Solids Handling Research Associates (TUNRA) of Newcastle, NSW, Australia between August and October 2011, to determine the flow properties limonite and saprolite ore samples in order to provide relevant parameters for the design of efficient and reliable bulk storage and handling facilities. This program included the following investigations:
Determination of Worst Case Moisture Content Low Consolidation Testing Under Instantaneous Conditions Low Consolidation Testing with Undisturbed Storage Time Low Consolidation Testing with Vibrated Storage Time High Consolidation Testing Under Instantaneous Conditions High Consolidation Testing with Undisturbed Storage Time Static Angle of Repose Conveyor Surcharge Angle Conveyor Inclination Angle Transportable Moisture Limit (TML) Full Size Adhesion and Wall Friction for lining materials: o Bisplate 500 with a smooth surface finish, o Mild Steel 250 with a mill scale surface finish, o Rubber Wear Liner with a smooth surface finish
13.5.2 Ore samples
Samples of limonite and saprolite ore were collected from test pits at the locations outlined in Table 70 and shipped to TUNRA.
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Table 70 – Ore Samples for TUNRA
Type Drum Source No. Bags From (m) To (m) Mass (kg)
AGL-451 4 2.00 3.00 60.14
AGL-493 4 2.00 3.00 60.11 Limonite 1 AGL-23 6 2.00 3.00 79.75
AGL-181 6 2.00 3.00 75.49
AGL-227 10 2.75 3.70 122.62 Saprolite 2 AGL-500 10 2.00 3.00 122.28
13.5.2.1 Testwork and Results
At the time of writing the TUNRA program is incomplete.
14 Mineral Resource Estimates
The resource estimate calculations were completed by Mike Job, Principal Consultant for Quantitative Group based out of Fremantle, Western Australia. All data was checked and forwarded by the author (Mark Gifford, Consulting Geologist), and all modelling methodologies were discussed prior to commencement of developing the resource.
14.1 Geometric Interpretation
The sample dataset provided was loaded into Datamine, along with the new topography points. These topography points were used to construct a wireframe surface. Quantitative Group (QG) performed only cursory validation of the dataset, with no serious issues arising. There are a total of 593 drill holes in the dataset, with 185 of these being drilled between April and July 2010. All of the holes are vertical and relatively shallow, with the deepest hole ending at 46.6 m depth. The UTM coordinates (rather than the local grid) have been used.
The limonite/saprolite contact point was identified in each drill hole by using the Mg assay data. There is an abrupt change in the level of Mg from limonite (usually less than 1% Mg) to saprolite (generally well over 10% Mg, although sometimes down to about 5% Mg), and there is also an abrupt drop of Fe from limonite (~40% to 50%) to saprolite (less than 10%). The saprolite/bedrock contact point in each drill hole was identified by using the Ni assay data (bedrock generally less than 0.25%) and the geological logging. The geological logging provided in the dataset matched these grade-determined boundaries extremely closely.
These points were triangulated to produce 3D surfaces, and these were visualised against drill holes in cross section. Additional control points were inserted at interpreted locations in-between drill holes in order maintain geological consistency and to account for drill holes finishing before hitting bedrock. The triangulations were then updated to incorporate the new control points.
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The topography surface was then used to cut the base of limonite and base of saprolite triangulations (see Figure 40) and these three surfaces were used to generate a 3-D block model. A parent cell size of 50 m x 50 m x 1 m was used with 10 m x 10 m x 1 m sub-blocking (see Table 74 and Figure 41). The model origin was chosen so that the drill holes would mostly be located in the centre of a parent block.
Table 71 - Block Model Properties
Easting (m) Northing (m) RL (m)
Origin 775,625 1,025,225 0
Parent block size 50 50 1
Sub-block size 10 10 1
Extent 778,225 1,029,025 400
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Figure 40 - Bedrock, Saprolite, and Topography triangulations in cross section with drillholes
Figure 41 - Block model, coloured by laterite horizon
1-metre composites were generated from the sample database, as 46% of the raw sample length was on 1-metre intervals, 29% were <1 m and 25% were >1 m. The maximum sample length was 7 m, but there are less than twenty samples that have a raw length of greater than 2 m. These composites and a regularised version of the block model were exported to Isatis for exploratory data analysis.
14.2 Exploratory Data Analysis
Table 72 shows the basic statistics for the limonite, saprolite and bedrock domains for the six variables that were to be estimated.
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Table 72 - Basic Statistics, Agata North Deposit
Variable Count Minimum Maximum Mean Std. Variance CV Dev. Domain Domain
AL_PCT 2615 0.04 10.75 3.36 1.53 2.34 0.46
CO_PCT 2796 0.01 0.71 0.11 0.07 0.00 0.62
FE_PCT 2796 6.00 56.00 45.81 6.32 39.91 0.14
MG_PCT 2615 0.01 19.84 1.02 2.15 4.60 2.10 Limonite Limonite NI_PCT 2796 0.11 2.27 0.96 0.31 0.09 0.32
SIO2_PCT 2615 0.40 61.14 5.33 6.91 47.77 1.30
AL_PCT 6146 0.01 11.82 0.40 0.55 0.30 1.37
CO_PCT 6531 0.01 0.27 0.02 0.02 0.00 0.83
FE_PCT 6531 4.00 55.00 9.75 4.99 24.90 0.51
MG_PCT 6147 0.08 27.99 18.19 4.16 17.33 0.23 Saprolite Saprolite NI_PCT 6531 0.05 3.26 0.87 0.50 0.25 0.57
SIO2_PCT 6147 2.04 76.73 40.99 5.12 26.24 0.12
AL_PCT 1423 0.01 10.05 0.51 1.22 1.48 2.40
CO_PCT 1518 0.01 0.06 0.01 0.00 0.00 0.36
FE_PCT 1521 3.00 25.00 5.76 1.36 1.84 0.24
MG_PCT 1424 1.21 27.66 21.29 3.67 13.45 0.17 Bedrock Bedrock NI_PCT 1521 0.01 1.94 0.26 0.13 0.02 0.49
SIO2_PCT 1424 24.31 68.69 41.57 3.13 9.81 0.08
The six variables that were estimated are heterotopically sampled; more data is available for Ni, Co and Fe than for Al, Mg and SiO2 (approximately 6 to 7% fewer composite values are available for the latter).
QG analysed grades across the limonite/saprolite boundary using contact analysis. The technique analyses two zones at a time (one contact), calculating the distance of each sample from the interpreted contact. Samples are then ‘binned’ according to their distance either side of the contact and the average grade of each bin is calculated for each variable of interest. The mean grades across the contact are plotted, providing a visual guide as to whether the transition is gradational or sharp.
Ni tends to increase in grade with depth through the limonite and decrease in grade with depth through the saprolite; the maximum mean Ni grade is found around the limonite/saprolite contact. The limonite to saprolite contact is marked by a sharp and substantial decrease in Fe and increases in Mg and SiO2. Al decreases in grade with depth steadily through the limonite, flattening out in the saprolite. This analysis supports the use of a hard estimation boundary between limonite and saprolite.
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Note that the variables were to be estimated into the limonite and saprolite domains only – default grades were assigned to the bedrock domain.
14.3 Variography and Estimation
Experimental variograms were generated for the six variables in the two estimation domains. No anisotropy in the horizontal plane was identified, so omnidirectional variograms within the horizontal plane were generated with an additional downhole direction to help model short range structure. A lag value of 50 m in the horizontal plane was used with 1 m in the vertical direction. Using a slicing height of 2 m in the horizontal plane provided an improvement in variogram structure. See Figure 40 to Figure 45, and the models, tabulated in Table 73.
Grade variables tend to have relatively low nugget variance, typically around 10%, with a maximum range of continuity typically around 100 m. This behaviour is relatively consistent between all of the variables and has been modelled as such in order to maintain relativity between variables during independent estimation (therefore maintaining reasonable total assay back calculation). Spatial behaviour of grade does not appear to change dramatically between limonite and saprolite
Downhole drift is evident in many of the variables; this was accounted for in estimation by using Ordinary Kriging with a restricted search in the vertical direction. Ordinary Kriging was carried out independently for each variable in both of the estimation domains using the neighbourhood parameters presented in Table 74 and a block discretisation of 5x5x1.
Table 73 - Limonite and Saprolite Variogram Models
Limonite Variogram Models
ZNugget Range Sill Variable Structure (CO) (as %) Major Semi Minor Sill (as %)
70 70 5 1.32 56.4% 1 AL_PCT 0.5 21.4% 600 600 7 0.52 22.2% 2
7.5 7.5 3.5 0.002 45.8% 1 CO_PCT 0.0007 16.0% 80 80 4 0.00167 38.2% 2
30 30 4 6.5 16.3% 1 FE_PCT 10 23.8% 325 325 10 23.9 59.9% 2
15 15 7 0.58 12.7% 1 MG_PCT 1 21.8% 300 300 12 3 65.5% 2
7.5 7.5 4 0.018 19.4% 1 NI_PCT 0.01 10.8% 110 110 5 0.065 69.9% 2
11 11 3 10.5 22.1% 1 SIO2_PCT 8 16.8% 225 225 7 29 61.1% 2
Saprolite Variogram Models
ZNugget Range Sill Variable Structure (CO) (as %) Major Semi Minor Sill (as %)
13 13 10 0.047 15.8% 1 AL_PCT 0.02 6.7% 300 300 12 0.23 77.4% 2
CO_PCT 0.00008 23.3% 10 10 7 0.000085 24.7% 1
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60 60 11 0.000179 52.0% 2
25 25 9 4.5 18.1% 1 FE_PCT 5 20.1% 115 115 9 15.4 61.8% 2
7.5 7.5 7 4.1 23.7% 1 MG_PCT 2.1 12.1% 100 100 10 11.1 64.2% 2
8 8 8 0.033 13.3% 1 NI_PCT 0.015 6.0% 95 95 9 0.2 80.6% 2
10 10 5 5 19.1% 1 SIO2_PCT 5 19.1% 125 125 14 16.2 61.8% 2
The search ellipses were oriented according to the local dip and dip direction using the Datamine dynamic search feature ,which allows the search neighbourhood ellipse dip and dip direction to be defined separately for each block (in this instance, the variogram was also rotated to align with the search, but this does not always need to occur). This has the advantage of having a locally-varying orientation over a domain, where an ‘average’ dip and dip direction would not necessarily honour the local grade geometry.
The local dips and dip directions were calculated from the orientation of the limonite/saprolite boundary wireframe triangles, approximating the dip of each of the mineralised domains. Note that tolerances can be set during this process, so that ‘erroneous’ points will not be generated, such as vertical dips at the edges of the wireframe.
These points were then used to produce the dip and dip direction for each parent block - essentially the dip and dip direction are treated as variables and estimated into the block model using special parameters (to account for dip between 90° and -90°, and dip direction between 0° and 360°).
Then, during estimation of the grade variables, the search ellipse and variogram orientation is rotated appropriately for each parent block.
Three estimation runs were carried out (the same search was used for all variables in both domains), the second run with less restrictive parameters, attempting to estimate blocks that were not estimated in the first. Any blocks not estimated in the first two runs were estimated using a very large search. Approximately 71% of the model volume was estimated in run 1, and 28% in run 2, so only 1% of the model was estimated using run 3. The run number was recorded during estimation along with various geostatistical metrics such as the slope of regression.
Table 74 - Estimation neighbourhood parameters, Agata North Resource
Estimation X direction Y direction Z direction Minimum Maximum run number (m) (m) (m) number of number of samples samples
Run 1 150 150 5 10 40
Run 2 300 300 10 4 40
Run 3 600 600 20 4 20
To validate the estimate, swath plots were generated. These plots represent E-W and N-S ‘slices’ (at 100 m spacings) through the deposit, and the mean grade of the block model and the composites within each of these slices was reported and compared for all of the variables in limonite and saprolite. An example is illustrated in Figure 42 which compares composites and
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blocks for Ni in saprolite. As expected, in all cases the block model follows the trends of the composites, with less variability.
Figure 42 - Comparison of composites against the block model for Ni in Sapprolite
A limited visual validation of the block model grades against driill hole grades was carried out with no anomalies identified. The estimated block means (above a zero cut-off) match relatively closely to the composite means (Table 75).
Table 75 - Composites vs blocks comparison
Domain Variable Composites Blocks
Limonite Ni 0.96 0.94
Co 0.11 0.11
Fe 45.8 45.5
Saprolite Ni 0.87 0.84
Co 0.02 0.02
Fe 9.8 10.1
Dry bulk density was flagged into the model (Limonite 1.24, Saprolite 1.45, Bedrock 1.8). The default values applied to the bedrock are 0.25% Ni, 0.01% Co, 6% Fe, 0.5% Al, 22% Mg and 42% SiO2.
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14.4 Resource Classification
The resource classification approach reflects confidence in both geometric interpretation and confidence in geostatistical grade estimates, and also classifies the resource in a spatially coherent manner, avoiding small patches of different categories. The vast majority of the deposit is drilled on 50 m x 50 m or 100 m x 100 m grids, which is enough to support a category of Indicated. The only areas of Inferred are around the steep-sided creek systems, where the drilling is on a broader pattern and the laterite horizons thin out. The only Measured part of the resource is where the drilling has been on 25 m x 25 m centres
Figure 43 shows the block model coloured by resource classification.
Figure 43 - Resource Classification, Agata North Deposit
The Mineral Resource Estimate figures above a 0.5% Ni cut-off for limonite and above a 0.8% Ni cut-off for saprolite are presented in Table 76.
Table 76 - Agata Mineral Resource Estimate 20 September 2011
Bolobolo Horizon dMt Ni Co Fe Al Mg SiO2
Limonite 1.4 0.82 0.09 42 4.5 1.6 13 Saprolite 3.2 1.0 0.03 13 1.1 16 39 Indicated Sub Total 4.5 1.0 0.05 22 2.1 11 31
Limonite 0.03 0.75 0.08 39 5.2 1.5 16 Saprolite 0.07 0.92 0.03 15 1.6 14 39 Inferred Sub Total 0.1 0.9 0.05 23 2.8 10 31
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Karihatag Horizon dMt Ni Co Fe Al Mg SiO2
Limonite 0.30 0.62 0.08 38 7.7 1.0 11 Saprolite 0.25 0.91 0.03 12 2.3 16 37 Indicated Sub Total 0.55 0.75 0.06 26 5.2 8 23
Limonite 0.17 0.61 0.07 33 6.6 1.7 19 Saprolite 0.03 0.86 0.03 13 1.9 15 38 Inferred Sub Total 0.20 0.64 0.07 30 5.9 4 22
Agata South Horizon dMt Ni Co Fe Al Mg SiO2
Limonite 1.6 0.66 0.09 42 5.7 1.4 11 Saprolite 3.5 0.95 0.02 13 1.5 17 37 Indicated Sub Total 5.0 0.86 0.04 22 2.8 12 29
Limonite 0.22 0.70 0.08 40 5.4 1.7 14 Saprolite 0.23 0.95 0.02 14 1.4 16 37 Inferred Sub Total 0.45 0.83 0.05 26 3.3 9 26
Agata North Horizon dMt Ni Co Fe Al Mg SiO2
Limonite 0.25 1.0 0.12 48 2.9 1.0 4.7 Saprolite 0.54 1.2 0.03 11 0.4 18 42 Measured Sub Total 0.78 1.1 0.06 23 1.2 13 30
Limonite 10 0.95 0.11 46 3.4 1.3 5.9 Saprolite 22 1.1 0.03 11 0.5 17 40 Indicated Sub Total 32 1.0 0.05 22 1.4 12 29
Limonite 0.26 1.0 0.11 44 3.1 1.9 11 Saprolite 1.4 1.1 0.03 12 0.6 17 40 Inferred Sub Total 1.8 1.1 0.04 17 0.9 14 36
GRAND Horizon dMt Ni Co Fe Al Mg SiO TOTAL 2
Limonite 0.25 1.0 0.12 48 2.9 1.0 4.7 Saprolite 0.54 1.2 0.03 11 0.4 18 42 Measured Sub Total 0.78 1.1 0.06 23 1.2 13 30
Limonite 13 0.95 0.10 45 3.8 1.3 7.3 Saprolite 29 1.1 0.03 12 0.7 17 40 Indicated Sub Total 42 1.0 0.05 22 1.7 12 29
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Limonite 14 0.95 0.10 45 3.8 1.3 7.3 Measure + Saprolite 29 1.1 0.03 12 0.7 17 40 Indicated Total 43 1.0 0.05 22 1.7 12 29
Limonite 0.68 0.8 0.09 40 4.8 1.8 14 Saprolite 1.7 1.1 0.03 12 0.7 17 40 Inferred Total 2.4 1.0 0.04 20 1.9 12 33
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Figure 44 - Grade-tonnage curve, Measured + Indicated, Limonite.
Figure 45 - Grade-Tonnage Curve, Measured + Indicated, Saprolite.
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14.5 Interpretation and Conclusions
The presence of large areas of an exposed Ultramafic along the Western Range, an upthrust ridge east of the Philippine Fault, has provided a location for lateritic weathering of the ultramafic. The area known as Agata North has been enriched within the laterite profile in Ni and Co.
The ANLP has two distinct geomorphic features that have influenced laterite formation and consequent nickel enrichment. The Eastern part of the delineated body has a moderate relief whose bedrocks are exposed in ridge tops and in the nearby creeks. The Western laterite occurs on a low relief terrain and with no exposures of bedrock on its hillcrests. In the Western area, the laterite is well developed and contains thick and highly mineralised limonite/saprolite. The Eastern Laterite Zones contain some boulders within the laterite profile. Its limonite zone is usually thinner.
The laterite profile in the ANLP consists of the ferruginous laterite, limonite and saprolite zones or horizons, and the saprolitic rock, from surface to increasing depth. The limonite zone is characteristically iron oxide-rich, where the predominant minerals are hematite, goethite and clays, and with moderate nickel content (over 1%), which overlies the saprolite zone that has much less oxidised, is magnesium-rich, and has a slightly higher nickel content than the limonite horizon, with grades in both zones generally at their highest near or adjacent to the contact zone.
This report is based on the data that were produced and compiled by MRL. Data verification performed by the author found no discrepancies in the sampling and analyses that biased the data set. Hence the database is considered adequate to meet industry standards to estimate mineral resources.
The resource was calculated by Quantitative Group using Ordinary Kriging as the estimation method. Both the limonite zone and the saprolite zones were estimated independently as the form of mineralisation in both zones were unique and could not be used for comparative statistics. The measured and indicated resource estimated for Agata North is as below:
32,626,000t ore @ 1.05%Ni, 0.05%Co, 22%Fe
The cut-offs applied to the resource were 0.5% Ni for limonite and 0.8% Ni for saprolite as per the previous estimates completed upon the ANLP (Cox, 2008 2009a 2009b).
The latest completed drill programs, in conjunction with exploration ongoing since 2005, have ensured most of the resource within the ANLP has been tested and estimated. It is unlikely within this project area that the resource could be expanded by more than 10-20% if any future drilling was proposed.
15 Mineral Reserve Estimates
15.1.1 Introduction
The Optimised Pit shells were used as a basis for the pit designs for the Pre-Feasibility Study. Prior to designing the pits, the optimised pit surface was filtered for areas in which the optimised pit depth below natural surface was less than the minimum bench height for mining (considered 1.5 metres), and these areas were removed. Small outlier areas not contiguous with the main mining areas were also removed.
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15.1.2 Pit Design Parameters
The pit optimisation results yielded excessive amounts of high magnesium & medium magnesium saprolite ore with respect to the processing constraints that were governed by the amount of available limonite.
An iterative process was used by way of lowering the nickel revenue (to USD 6.35/lb) to elevate the pit floor; minimising the amount of saprolite ore that would have ordinarily been mined and stockpiled, but not processed. The pits designs were designed based on this elevated floor.
Whilst the depth from natural surface to the base of pit varies up to 20 metres at Agata North, the height of the outer pit walls at Agata North, Agata South and Bolobolo are generally below 5 metres.
Overall pit wall slopes were designed at 36o. Allowance has been made for 45o batter slope in saprolite and a 2 metre catch berm at the saprolite contact. The design parameters of interim pit walls for future pit staging will require additional geotechnical investigation.
Most of the roads and ramps are of a temporary nature, and have been predominantly confined within the pit extents. All roads within the pit were designed at a width of 16 metres (including safety berm and drain) at a maximum gradient of 10%.
Pit designs for Agata North, Agata South and Bolobolo are shown in Figure 46, Figure 47 and Figure 48.
Figure 46 – Agata North Pit Design (3m benches) and Road Network
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Figure 47 – Agata South Pit Design (3m benches)
Figure 48 – Bolobolo Pit Design (3m benches)
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15.1.3 Mineral Reserves
The Mineral Reserve is based on the designed pits at Agata North, Agata South and Bolobolo. The Proven and Probable Reserves are shown in Table 77.
The Proven and Probable reserves are based on cut-off grades of 0.5 Ni% and 0.8 Ni% for limonite and saprolite respectively.
Table 77 – Mineral Reserves
Agata North Horizon dMt Ni% Co% Fe% Al% Mg% Si02%
Proven Limonite 0.25 1.0 0.12 48 2.9 1.0 5
Saprolite 0.46 1.2 0.03 11 0.4 18 41
Subtotal 0.70 1.1 0.06 24 1.3 12 29
Probable Limonite 9.2 0.95 0.11 46 3.4 1.2 6
Saprolite 18 1.1 0.03 12 0.5 17 40
Subtotal 27 1.1 0.06 23 1.5 11 28
Proven + Probable Limonite 9.4 0.95 0.11 46 3.4 1.2 6
Saprolite 18 1.1 0.03 12 0.5 17 40
TOTAL 27 1.1 0.06 23 1.5 11 28
Agata South Horizon dMt Ni% Co% Fe% Al% Mg% Si02%
Proven Limonite ------
Saprolite ------
Subtotal ------
Probable Limonite 1.4 0.66 0.09 42 5.6 1.4 11
Saprolite 2.8 0.95 0.02 13 1.6 17 37
Subtotal 4.2 0.85 0.04 23 2.9 12 28
Proven + Probable Limonite 1.4 0.66 0.09 42 5.6 1.4 11
Saprolite 2.8 0.95 0.02 13 1.6 17 37
TOTAL 4.2 0.85 0.04 23 2.9 12 28
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Bolobolo Horizon dMt Ni% Co% Fe% Al% Mg% Si02%
Proven Limonite ------
Saprolite ------
Subtotal ------
Probable Limonite 1.2 0.82 0.09 42 4.4 1.6 13
Saprolite 2.5 1.0 0.03 13 1.2 16 39
Subtotal 3.8 0.95 0.05 23 2.3 11 30
Proven + Probable Limonite 1.2 0.82 0.09 42 4.4 1.6 13
Saprolite 2.5 1.0 0.03 13 1.2 16 39
TOTAL 3.8 0.95 0.05 23 2.3 11 30
Horizon dMt Ni% Co% Fe% Al% Mg% Si02% GRAND TOTAL
Proven Limonite 0.2 1.0 0.12 48 2.9 1.0 5
Saprolite 0.5 1.2 0.03 11 0.4 18 41
Subtotal 0.7 1.1 0.06 24 1.3 12 29
Probable Limonite 12 0.90 0.11 45 3.8 1.3 7
Saprolite 23 1.1 0.03 12 0.7 17 40
Subtotal 35 1.0 0.06 23 1.8 11 28
Proven + Probable Limonite 12 0.90 0.11 45 3.8 1.3 7
Saprolite 24 1.1 0.03 12 0.7 17 40
TOTAL 35 1.0 0.06 23 1.8 11 28
16 Mining Methods
MRL will employ a contour mining system that involves several phases including the following:
Pre-mining drainage works and land clearing
Overburden Removal and Storage Ore Mining, Ore Stockpiling and Ore Rehandling Progressive Rehabilitation
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16.1.1 Introduction
Mining will commence from the lowest bench progressing upwards, subject to ore production requirements and project economics. In this way, the lower mined-out benches can be backfilled with overburden or waste from the upper benches, and then rehabilitated as early as possible to achieve the progressive rehabilitation concept.
Mining operations will be maximised in the dry season, and no areas will be disturbed until drainage control measures and erosion control facilities such as settling ponds, fascines and/or mini rock dams have been installed to minimise erosion and siltation.
16.1.2 Site preparation
Land clearing will commence ahead of mining and includes clearing of shrubs, and removal of humus (where possible) just ahead of overburden removal. Dozers, excavators and trucks will undertake this work. This material will be stockpiled at designated areas for use in future rehabilitation works.
Prior to any earthworks being carried out, excavators and dozers will be used to construct drainage and diversion channels to direct runoff into settling and sedimentation ponds.
16.1.3 Grade control
To ensure that optimal material classification will be implemented during the pre-development and mining stages, considerable attention will be committed to grade control prior to and during mining operations.
Pre-mining grade control drilling will be carried out using an RC drill rig in either air core or face hammer configuration, depending on the nature of the ore and thickness of the laterite profile. RC air core is suited to the upper laterite profile which will be mined in benches to the top of saprolite. Below this level, RC face hammer drilling is more appropriate. One meter intervals will be sampled and these samples will be assayed at an onsite laboratory. This practice will reduce the requirements for face sampling and allow more forward planning in regard to material type categorisation and stockpile management issues.
Face/slope sampling at 3-5 meter intervals between sample channel/cut and/or XRF grade control monitoring will be carried out during mining. One sample/reading shall be collected for every one meter at the channel. Colour coded ribbons will be installed at the face and on benches signifying the grade and classification of the ore thus aiding the excavator operators and grade control personnel on the type of material being excavated.
Grade control personnel will be assigned to active mining areas as required.
16.1.4 Excavation and haulage
Mining is planned initially, as simple benching operations using hydraulic excavators. Generally an area to be mined will be developed with an on-contour terrace, bench or road. After a series of benches, the lowest saprolite zones will be mined by top-loading to complete mining of the laterite profile.
The ore will be loaded into 35 tonne capacity articulated mining trucks. The trucks will operate on unsheeted bench roads and sheeted permanent mine haul roads with gradients up to 12%, but generally between 5-10% gradients. The trucks will haul ore to either interim stockpiles adjacent to the pit area and later rehandled, or else hauled direct to the Run of Mine (ROM) stockpile where it will be dumped on the appropriate stockpile finger according to its material type categorisation.
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A lower bench will be developed once the bench above has advanced sufficiently to allow for a 20 m working bench width. The excavator will retreat to the position where initial bench development commenced to develop the new bench.
The mining schedule is based on 2-3 areas being mined at any given time; however one or more fleets could work on separate benches within one area, depending upon operational and blending requirements.
16.1.5 Ore stockpiling
Stockpiling will be done at the initial In-Pit stockpile, interim stockpiles adjacent to the active pit area, or the ROM stockpile. The In-Pit Stockpile and the ROM stockpile will consist of at least four separate stockpiles to segregate Limonite and the three Saprolite categories (low, medium and high magnesium).
The initial In-Pit stockpile will be segregated into four fingers allowing for stockpiling of the various material type categories, and allowance for one additional finger designated for limestone from the limestone quarry.
16.1.6 Topsoil and overburden disposal
Topsoil and overburden material removal will be carried out by hydraulic excavators, loading 35 tonne capacity articulated mining trucks for transport to overburden dumps, stockpiles, or mined out areas.
The initial topsoil and overburden dumps will be located adjacent to the In-Pit Ore Stockpile. Throughout the mine life, the location of topsoil and overburden dumps will be optimised to minimise erosion, runoff, and rehandle haulage distances.
16.1.7 Road sheeting
Road sheeting will be sourced from suitable sub-grade material from the limestone quarry which is approximately 3.5 km from the pit. The road sheeting material will be loaded into either 35 tonne capacity articulated trucks or 25 tonne capacity on-highway trucks, and hauled/placed/compacted in 300 mm thick layers using dozers, graders, water truck and a roller.
Table 78 shows the allowance for road sheeting materials over the life of the project.
Table 78 - Road Sheeting
Year 0 1 2 3 - 20
Sheeting km 3.6 2.4 4.3 4.5
16.1.8 Fleet selection
Fleet selection was based on a combination of criteria with consideration to production requirements, operational flexibility, minimum mining widths and ability to operate continuously in light to moderate wet weather conditions.
The primary fleet will consist of a 46 tonne (239 kW) hydraulic excavator loading unit and 35 tonne (240 kW) articulated dump trucks. The secondary fleet will consist of a 22 tonne (185 kW) Front End Loader and 25 tonne on-highway (240 kW) trucks. A second 46 tonne (239 kW) hydraulic excavator will provide backup support for the primary and secondary loading
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units as well as providing loading capacity at the limestone quarry and functioning as an ancillary unit for drainage, environmental and rehabilitation works.
Trucking requirements, cycle times and average truck speeds were determined using Caterpillar Fleet Production Cost (FPC) software. The trucking requirements increase throughout the mine life due to gradually increasing haulage distances.
Two tracked dozers (150 kW) will be utilised for pit development and floor maintenance, and stockpile and dump maintenance, and rehabilitation works.
Two motor graders (145 kW) and a Water Truck will be utilised to maintain pit haul roads, the Mine-ROM haulage road and all access roads on the project site.
16.1.9 Ore haulage
The secondary fleet (22 tonne Front End Loader and 25 tonne on-highway trucks) will be primarily used for haulage from the In-Pit stockpile to the ROM stockpile.
The ROM stockpile is located 8 km from the In-Pit ore stockpile. A tracked dozer (150 kW) has been allocated to maintain the ROM stockpile.
The mine department will maintain the Mine-ROM haulage road for the duration of the mine life.
16.1.10 Drainage and sediment control
During construction, diligent effort will be made to minimize the duration of soil exposure by scheduling earthworks during the dry season and completing remedial works as soon as possible after grubbing, retaining existing vegetation where possible, and grading disturbed areas to a stable slopes.
Drains will be developed to divert water from entering disturbed areas. The general channelling of the water from benches and mine roads will be toward areas with space and elevation adequate for settling ponds or sumps. These ponds and sumps will be positioned as close as possible to the disturbed area.
Reduced runoff velocities will be achieved by using gentle drainage grades, lining erodible soils with suitable material (riprap or brush), construction of check dams in ditches, and sizing the ditches to handle the expected runoff from precipitation.
A critical element of the storm water and runoff management is the maintenance of the drains and sediment retention structures. This entails periodic removal of sediment load, proper disposal and encapsulation of the sediment.
16.1.11 Environment and rehabilitation
Rehabilitation will commence after mined-out excavations are backfilled and in-pit dumps are established. The details of the work programme within a given area will depend on the local bench configurations and ultimate landform design. Some small steep benches will be left exposed, while mined areas will be backfilled and graded to long-term stable slopes.
Buffer zones will be set up along the slopes of haul roads and at the margins of the pit extents. The buffer zones will perform filter, barrier, and sink functions for the projects emissions and effluents.
The progressive rehabilitation methodology will minimise the extent of disturbance and the time of exposure of disturbed areas.
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Mitigating measures such as sumps, fascines, mini rock dams, and settling ponds will be constructed to minimize the impact of erosion. The fascines and mini rock dams will prevent sediments from moving downhill and impacting areas adjacent to the construction or mining sites. The settling ponds will slow down water and provide some time for the sediment to drop out of suspension leaving a cleaner water effluent.
17 Recovery Methods
17.1 Process Plant
This section describes the process plant and associated facilities proposed for the Agata Nickel Project. The design basis is outlined together with a detailed process description of each plant area, an outline of the major equipment within each area and ancillary facilities such as utilities and reagents.
Engineering deliverables produced for the study include the Process Design Criteria, Process Flow Diagrams (PFDs), Mass and Energy Balance, Equipment List and Layout Drawings.
17.1.1 Design basis
The process flowsheets presented in the PFS were developed from:
The results of high pressure acid leach tests and atmospheric leach tests on composites and individual ore types The results of settling tests for ore preparation and leach residues Ausenco and BWHC’s experience with other similar nickel laterite projects
17.1.1.1 Key operating parameters
The key operating parameters for the selected process flowsheet considered in this pre- feasibility study are outlined Table 79.
Table 79 - Key Operating Parameters
Item Description Data
HPAL: Limonite + Low Mg Saprolite, Mt/y (dry) 1.0
AL: Medium Mg Saprolite, Mt/y (dry) 0.4 Ore Feed to Plant SN: High Mg Saprolite Mt/y (dry) 0.4
TOTAL, MT/y (dry) 1.8
Nickel, % 89.3 Overall Recovery Cobalt, % 91.1
Mixed Hydroxide Precipitate, kt/y (wet) 78 Products Mixed Hydroxide Precipitate, kt/y (dry) 47
Contained Metal Nickel contained in MHP, kt/y (dry) 18
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Item Description Data
Cobalt contained in MHP, kt/y (dry) 0.95
Ore for the Project is sourced from the Agata nickel laterite deposit. The laterite profile in the ANLP deposit consists of limonite and saprolite zones. The limonite zone is characteristically iron oxide-rich, where the predominant minerals are hematite, goethite and clays, and with moderate nickel content (<1%). The limonite overlies the saprolite zone, which is less oxidised and is magnesium-rich with slightly higher nickel content. Due the magnesium and iron content of the ore types, the process route is based on leaching limonite and saprolite ores via different processes.
Limonite and saprolite ore will be mined and stockpiled separately at the processing facility at Tagpangahoy, in Butuan Bay. The two ore types will be fed to the process plant in separate ore preparation circuits. Saprolite ore is stockpiled according to magnesium content (low, medium, high) and is processed in batches in the saprolite ore preparation circuit. Table 80 summarises the average grades in ore feed to the plant for the first 8 years of the project and for the Life of Mine (LOM) extracted from the ‘Agata Nickel Project Mining & Plant Feed Schedule, Rev 10f.
Table 80 - Average Plant Feed Grades (Years 1 to 8 and LOM)
Ore Type Period Ni % Co % Fe % Mg % Al % Si% Cr % Mn % Ca %
Y 1-8 1.0 0.11 46 1.1 3.4 2.5 2.4 0.86 0.1 Limonite LOM 0.9 0.10 44 1.3
Low Mg Y 1-8 1.3 0.03 14 14 0.6 19 0.6 0.15 0.3 Saprolite LOM 1.2 0.03 14 14
Medium Mg Y 1-8 1.2 0.03 12 17 0.5 19 0.6 0.19 0.2 Saprolite LOM 1.1 0.03 12 17
High Mg Y 1-8 1.1 0.02 10 19 0.4 19 0.5 0.15 0.6 Saprolite LOM 1.0 0.02 10 19
The selected processing route consists of a high pressure acid leach (HPAL) circuit and parallel atmospheric leach (AL) circuit. The combined discharge of the HPAL and AL circuits will then be processed in a Saprolite Neutralisation (SN) circuit followed by counter-current decantation and sections to neutralise excess acid and precipitate iron and aluminium. Metal recovery is achieved by hydroxide precipitation in an intermediate product using magnesia.
17.1.2 Design concepts
17.1.2.1 Location
The PFS is based on the process plant and port facilities located at barangay Tagpangahoy on the coast at Butuan Bay. Advantages of the process plant location at Tagpangahoy include deep water access for adjacent port facilities, a relatively short haulage route from the mine located north of the process plant, close proximity to limestone resource, minimal requirement to relocate villagers and only 3 km to the RSF located south of the plant site at barangay Binuangan.
Due to the undulating terrain a preliminary 3D model was developed to determine the earthworks quantities required for the process plant and port facilities. The plant site location is considered sub-optimal due to poor geotechnical conditions and mountainous terrain resulting
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in significant risk of land slip failures and high earthworks costs. An opportunity exists to identify an alternate plant site location and reduce the geotechnical risk and earthworks costs
The PFS commenced with the plant site location at Binuangan. However, due to poor Residue Storage Facility (RSF) foundation conditions at Payong Payong and low dam efficiency, the RSF location was moved to Binuangan.
17.1.2.2 Operating hours and throughput
All processing from ore preparation to MHP packaging, residue discharge and the sulphuric acid plant will operate on a continuous basis of 24 hours per day, 7 days per week. Allowing for downtime for maintenance and unscheduled stoppages in the operation, the long term availability is expected to be 87%. Therefore the operating time is 7,600 hours equivalent to a total plant throughput of 232 tonnes per hour (t/h).
17.1.2.3 Design allowance
Most major process equipment is sized with a 15% design allowance. Exceptions to this include the ore preparation, limestone and lime facilities which are designed with 33% design allowance to provide catch-up capacity, based on consideration of surge capacity between unit operations; and the autoclave which is based on a direct 30 minutes residence time, based on a relatively flat leach curve from 20 to 30 minutes of leaching time.
17.1.3 Design criteria
17.1.3.1 Flowsheet Development
The proposed process plant design is based on a metallurgical flowsheet with unit operations that are proven in the nickel laterite industry. See Figure 49 for the overall block flowsheet.
In the process plant, limonite ore is treated by conventional high pressure acid leaching (HPAL) and saprolite ore is treated by a parallel atmospheric leach (AL) circuit.
Typically, nickel laterite limonite ore contain mainly fines that require scrubbing of the clay material prior to screening. Scrubbing testwork conducted at Ammtec showed some magnesium rejection and hence nickel upgrade in the product. In addition, the clay composites were difficult to break up in the laboratory scrubbing process. A small media charge in the scrubber or an attritioner should be considered to assist with producing a product amenable to screening.
The saprolite ore contains a rock component and is processed through a single stage SAG mill. Physical testwork data on ore was limited and communition circuit design was based on criteria for similar ore preparation processes. The ore preparation scrubbing and grinding design should be re-evaluated, following a metallurgical testwork programme.
The process design for the leach plant is based largely on the hydrometallurgical route commercially proven at Moa Bay in Cuba since the early 1960s and at the Sumitomo/Nickel Asia operated Coral Bay Nickel Project (CBNC) in the South Palawan Island in the Philippines since 2005. The leach flowsheet incorporates high pressure acid leaching and counter-current decantation.
Limonite and low magnesium ore will be treated by conventional HPAL and medium magnesium saprolite ore will be treated by a parallel AL circuit. The PFS design throughput has been based on one million dry tonnes per year of ore feed to HPAL (resulting in a HPAL circuit smaller in scale than that employed at CBNC). This was selected because both autoclave trains at CBNC had very fast ramp-ups to full production. Autoclave throughput is based on 30% solids in the autoclave feed slurry (after direct steam heating).
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Additionally, the recent start of construction at the Taganito Nickel Project (a sister company of CBNC) in the Surigao District, also employing the HPAL process, is considered to be a major step towards launching the region into the ranks of globally important nickel laterite processing zones.
A parallel atmospheric leaching circuit will treat about 38% of the saprolite ore fed to the process. Atmospheric acid leaching is a well-established technology practised in the processing of numerous commodities over several decades. Atmospheric Leaching of nickel laterites has gained recognition recently as an alternative to the high capital cost HPAL route, and was operated in parallel to the HPAL circuit at Ravensthorpe. The process is currently being investigated by Weda Bay Nickel (Eramet) in Indonesia, Berong Mining in the Philippines and BHP Billiton nickel projects to treat their high grade saprolitic material.
An innovation in the proposed processing route will be the inclusion of saprolite neutralisation. This will involve pre-neutralisation of the residual free acid in the combined leach discharge streams using the balance of the saprolite ore. This process, performed at atmospheric pressure, will consume much of the free acid while recovering additional nickel and cobalt values from the saprolite ore. Neutralisation of the remaining acid will be achieved using limestone.
The concept of saprolite neutralisation was first established in testwork conducted on Philippine laterite ores in 1998. Recovery of 60–65% of the nickel and cobalt contained in the high magnesium saprolite ore was achieved. In recent years, much higher recoveries have been achieved in testwork for the Weda Bay (Indonesia), Sulawesi (Indonesia) and Mindoro (Philippines) nickel projects. Bench-scale testwork at SGS using Agata saprolite ore has demonstrated that recoveries of 75-77% are achievable. Higher recoveries may be possible and ongoing testwork on the Agata ores may improve upon the PFS assumptions.
Metal recovery will be by a two-stage MHP circuit similar to that operated for several years at the Cawse Nickel Project in Western Australia and more recently at Ravensthorpe Nickel Operation, also in Western Australia.
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Figure 49 – Overall Block Flowsheet
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17.1.3.2 Key Assumptions
A review of bench-scale leaching and settling testwork performed by SGS Perth (Western Australia) and SGS Lakefield (Canada) was conducted to select key design criteria for the leach plant.
As of August 2011, ore characterisation and scoping level iron / aluminium removal and mixed hydroxide precipitation tests were being performed by SGS Lakefield; however the results were not available for the PFS. For this PFS, the design criteria for the Fe/Al removal circuit are based on the Ramu Nickel Project pilot plant data and the design criteria for the precipitation circuit are largely based on the Ravensthorpe MHP circuit.
The design criteria for the final neutralisation circuit are based on the Gladstone Pacific Nickel Limited Project testwork on manganese removal.
The key process plant assumptions are listed in Table 81 below:
Table 81 - Key Process Design Assumptions
Item Selected Value HPAL: Autoclave Residence Time, min 30 Temperature, °C 255 Nickel Extraction, % 97.5 Cobalt Extraction, % 97.5 Acid Addition, kg/t ore (METSIM® calc) 454 Terminal Sulphuric Acid Concentration, g/L 50 Atmospheric Leaching: Nickel Extraction, % 98.5 Cobalt Extraction, % 92 Acid Consumption, kg/t ore (METSIM® calc) 1022 Terminal Acid Concentration, g/L 30 Saprolite Neutralisation: Saprolite Nickel Dissolution, % 77 Saprolite Cobalt Dissolution, % 75 Terminal Acid Concentration, g/L 12.3 Iron / Aluminium Removal: Target pH Stage 1 3.9 Nickel Losses via Co-precipitation 0.9% Target pH Stage 2 4.7 Residual Iron in solution, mg/L 1 Residual Aluminium in solution, mg/L 4 Mixed Hydroxide Precipitation: Precipitant Magnesia MHP Stage 1 Nickel Precipitation, % 95 MHP Stage 1 Cobalt Precipitation, % 97 MHP Overall Nickel Recovery, % 99.8 MHP Overall Cobalt Recovery, % 99.4
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Item Selected Value Final Neutralisation: Target pH 7.5 Residual Manganese in solution, mg/L 5
17.1.3.3 Product Specification
The product generated by the process plant is a filter cake containing nickel and cobalt metal in the form of a mixed hydroxide. This is bagged and containerised for onward shipment and export. The mixed hydroxide filter cake (product) moisture level is expected to be 40% and the calculated chemical component analysis (dry basis) is shown in Table 82.
Table 82 - Mixed Hydroxide Product (based on year 1 to 8 average feed data METSIM)
Metal Wt % Ni 38.2 Co 2.03 Fe 0.06 Mg 0.006 Mn 5.5 Al 0.2 Zn 0.8 Cr 0.02 Cu 0.4 Si 0.3 S 4.7
The assays of the product are generated from the METSIM model using the process design criteria data identified for the basic residual concentration and extent of hydroxide precipitation.
17.2 Plant Site Infrastructure
17.2.1 Earthworks
The plant site is situated on the side of a steep sloping mountain at Tagpangahoy which extends down to the coast at Butuan Bay. Due to the arduous terrain, 3D modelling was conducted to situate the plant and determine earthworks quantities.
Cut-off drains are required to divert the upstream water flow around the plant site. The valley catchment run-off separates the process plant and port facilities, with access provided by culverts. Gaia South (Environmental consultant) indicated the plant should be located at a minimum of 10 mRL to avoid increased wave height from storm surge or tsunami.
The process plant is tiered to make use of the terrain, with main features:
Haul road and truck dump access at 4 mRL to ROM ore stockpile at 30 mRL Ore preparation, HPAL, acid plant, power station, water services and sulphur stockpile at 25 mRL CCD, iron/aluminium removal, MHP, neutralisation and control room/lab/offices/change- house and canteen all located at 40 mRL
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Limestone facilities and workshop/maintenance/stores at 50 mRL Port facilities for container handling at 25 mRL Port area buildings ranging from 30 to 40 mRL Provision for thermal upgrading area at 25 mRL (earthworks cost excluded)
Significant retaining structures are required on some of the cut slopes associated with the plant site. Some slopes are suitable for gabion walls, with a 5 m high gabion wall required through the centre of the process plant and a two tiered gabion wall across the top of the process plant to minimise layout area requirements.
Haul road access from the mine is from the north to the ore ROM pad which extends along the top of the process plant to the limestone ROM pad. A ring road enables turnaround for the return trip.
Site roads link the plant site, the port site facilities and the RSF.
Excess spoil from the port and plant site shall be transported within 4 km for use in the RSF embankment wall or stockpiled adjacent to the RSF.
Preliminary geotechnical information indicates the Tagpangahoy site material is mostly fine, silty, oxidised soil material (weathered schist), typical of landslide material, with minimal rock observed. The soft material impacts cut and fill earthworks quantities and concrete quantities in the plant site due to increased seismic factors required when locating plant equipment in soft soil. The Tagpangahoy plant site location is considered sub-optimal for the project as the area is considered prone to land slips, unstable and requiring significant quantities of earthworks to situate the plant and port site. It is recommended to progress plant site location studies prior to the feasibility study in an endeavour to reduce geotechnical risk and earthworks costs for the project.
17.2.2 Plant site buildings
The assessment of building requirements has been based on the number of personnel and the functions required in each particular area. The following buildings have been allowed for in the plant site.
17.2.2.1 Architectural Buildings
The method of construction assumed for architectural buildings is modular, with prefabricated panels. Shipped to site and erected on site. All buildings will be provided with potable water, sewage connections, internal and external lighting, data-communications cabling, smoke detectors, sinks, toilets and floor covering, where required.
Architectural buildings include:
plant control room electrical substations (x7) laboratory/offices change-house/ablutions canteen
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17.2.2.2 Industrial Buildings
These buildings are generally of a steel frame construction, with galvanised rolled sections for supports, panel cladding and roofing, with concrete flooring. Industrial plant site buildings include:
workshop/maintenance facilities stores/offices MHP filter and product bagging building.
17.2.3 Power distribution
Power supply to the process plant facilities will be provided from the 13.2 kV main switchboard located at the power station and reticulated using underground trenches at the process plant area and/or using overhead lines to the off loads. The power station is located adjacent to the sulphuric acid plant to facilitate steam take-off at close proximity.
Individual plant areas will have designated substations from which plant equipment will be powered. Local substations will consist of step-down transformers, Ring Main Units (RMU) and substation buildings housing low voltage MCC’s, control panels and networking components.
The 13.2 kV power distribution system will consist of:
Ore preparation area substation Leaching area substation CCD area substation Al/Fe removal and MHP substation Sulphur handling and utilities substation Process plant services substation Process plant offices and amenities building RMU Underground cables to feed the sulphuric acid plant and ore preparation mills Medium voltage cables installed in cable trays inside the process plant, to feed various process area unit substations Provision for external power network connection at 13.2 kV as specified by the utility provider (ANECO) The following distribution voltages will be used at site. High and medium voltage distribution o 13.2 kV for plant site distribution and primary feeders to ore preparation mills. o 4.16 kV for motors >= 350 kW rating Low voltage distribution o 460 V for power to all process equipment motors smaller than 350 kW rating o 380/220 V for lighting and small power loads.
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17.2.4 Plant light vehicles and mobile equipment
The plant and service mobile equipment required for the processing plant and support operations are shown in Table 83.
Table 83 - Light Vehicles and Service Equipment
Description Quantity Description Quantity Process Plant Administration Light Vehicle 4×4 4 Light Vehicle 4×4 3 Utility Pick-up 4×4 2 All Purpose Vehicle 4 x 4 2 Front end loader - CAT988 2 External Offices Front end loader - CAT966 3 Light Vehicle 4×4 1 Government & Community Bobcat 2 Relations Rockbreaker 1 Light Vehicle 4×4 1 Trailer/tractor unit 20 m3 1 All Purpose Vehicle 4 x 4 1 Flatbed truck 5 t 1 Security Sludge vacuum truck 2 Light Vehicle 4×4 2 High pressure water spray truck 2 Safety, Health, Environmental Utility truck with 5 t boom hoist 4 Light Vehicle 4×4 2 Utility truck w/ special equipment 1 All Purpose Vehicle 4 x 4 1 Fuelling Truck 1 Utility Pick-up 4×4 3 Cherry Picker 1 Ambulance 2 Fire Engine Truck (Water/Chemical Rough Terrain Forklift 2 t 3 Foam) 1 Forklift 5 t 1 Transport Crane 100 t 1 Passenger bus (60-seater) 3 Crane 150 t 1 Manitou 8 t 1 Franna 1 Manitou MSI 25 Container Rat 1 Hyster HR45 Container Handler 1
The 150 t and 100 t cranes provide construction support and will also be employed to carry out maintenance of items that are either large mass or radius. The Franna and flatbed truck provide general utility use for maintenance and will be used to handle and transport containers from the port to the process plant. Handling of 20 t sea containers will be undertaken with the dedicated container handler. MHP will be bagged and placed in containers at the MHP building by forklift and transported by flatbed truck to the port storage area.
Bulk material handling is covered by the Cat 988 and Cat 966 front end loaders. Under normal operating conditions these will be used for ROM ore handling, sulphur and limestone handling and oversize and scats removal.
General site vehicles are typical for a plant of this size.
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17.3 Utilities and Services
This section describes the services, utilities and plant infrastructure proposed to support the process plant. These are listed below:
Area 3410 – Plant Water Services Area 3420 – Plant Cooling Water Area 3430 – Plant Sea Water Area 3440 – Plant Air Systems Area 3450 – Plant Steam Distribution Area 3510 – Power Station Area 3520 – Auxiliary Boilers Area 3540 – Diesel Generator Sets.
Each area is serviced with:
instrument air plant air safety showers low, medium and/or high pressure water sumps and sump pumps for spillage clean-up other utilities as appropriate.
17.3.1 Design considerations
17.3.1.1 Statutory Authority Requirements
The solid, liquid and gaseous effluents generated from the operation of the Agata process plant must comply or exceed the requirements set by the following standards, regulations and legislation:
Philippine Mining Act 1995 (Republic Act 7942) and DENR Administrative Order 1996-40 Environmental Compliance Certificate DENR/ECC Pollution Control Law (Republic Act 3931) Water Code (Presidential Decree 1067) Clean Water Act (Republic Act 9275) Clean Air Act (Republic Act 8749) Ecological Solid Waste Management Act (Republic Act 9003) Toxic Substances and Hazardous and Nuclear Wastes Control Act(Republic Act 6969) Sanitation Code of the Philippines Solid Waste Management System.
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17.3.2 Water supply
17.3.2.1 Overview
The Project has significant water requirements for mining, processing and other uses. The two main water supplies are raw water and sea water.
Raw water is the freshwater feed to the process plant. It has several purposes. Raw water is filtered and used for cooling water make-up, gland seal water, reagents, fire water, hose stations and general process plant use Demineralised water, produced from filtered water, is used for boiler feed water make-up, auxiliary boilers, hydrogen plant, metals plant and seal water systems Seawater for ore preparation, limestone slurry preparation, and pressure acid leach vent scrubbers Potable water for domestic use, and process plant safety showers/eyewash showers Cooling water, mainly used in the power plant and acid plant, with minor use in process plant and utilities areas.
17.3.2.2 Concept Design (for Raw Water)
The conceptual design for the raw water supply and major distribution system for this project has been divided into the following elements:
Pump station intake structure at the Tubay River, located approximately 3.5 km to the east of the process plant site. Pipeline from pumping station to intermediate water reservoir (geomembrane-lined, capacity: 4000 m3) provided 1.8 km east of the process plant site. Pipeline from reservoir to the process plant Raw Water Surge Tank Process plant water distribution.
17.3.2.3 Water Treatment
The water treatment system produces three streams from raw water feed, namely:
filtered raw water potable water demineralised water.
The water treatment plant design is based on water quality data provided by MRL for Tubay River water sampling from the periods of June 2010 to December 2010. Water quality during these periods is generally good, with suspended solids < 20 mg/L. The PFS is based on this quality of water supply in all seasons.
The proposed treatment consists of the following processes:
microfiltration of raw water reverse osmosis for demineralised water chlorination for potable water
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polishing by softening and oxygen scavenging of condensate.
17.3.2.4 Total Fresh Water Requirements
The fresh water requirements were estimated based on the nominal process plant water balance, other process plant users, intermittent and upset conditions.
The overall nominal water consumptions estimated for the process plant and associated facilities are summarised in Table 84 below.
Table 84 - Nominal Water Consumption Summary
Area Nominal (ML/day)
Raw Water 11.5
Filtered Water 10.6
Fire Water From storage
Demineralised Water 1.1
Potable Water 0.10
17.4 Process Description
17.4.1 Process plant
17.4.1.1 Ore Preparation
The ore treatment plant includes separate circuits to treat crushed limonite and crushed saprolite ores.
Ore is slurried with seawater to minimise fresh water consumption and improve the leaching chemistry. The limonite ore preparation circuit produces fully de-agglomerated limonite slurry for high pressure acid leaching (HPAL) and the saprolite circuit produces three types of ground saprolite slurry for HPAL, atmospheric leaching (AL) and saprolite neutralisation (SN).
The limonite ore preparation plant comprises the following principal operations:
primary crushing to <200 mm by roll sizer, selected to handle sticky, clay ores limonite de-agglomeration by wet rotary drum scrubbing and rejection of coarse oversize fractions (>10 mm) by screening size reduction of limonite slurry product to minus 75 microns in a single stage, closed circuit ball mill. thickening of the de-agglomerated limonite slurry (along with low Mg saprolite slurry) for delivery to the HPAL feed surge tanks.
The saprolite ore treatment plant consists of the following principal operations:
primary crushing to <200 mm by roll sizer single stage, closed circuit saprolite SAG milling to produce ground saprolite slurry
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storage tanks for three types of ground saprolite slurry: low magnesium saprolite, medium magnesium saprolite and high magnesium saprolite thickening of the high magnesium saprolite slurry for delivery to saprolite neutralisation
17.4.1.2 HPAL
HPAL feed is comprised of limonite and low magnesium saprolite ore slurries, which are combined in the required proportions in the HPAL feed thickener.
The high pressure acid leach (HPAL) circuit obtains high nickel and cobalt extractions from the limonite ore while minimising the net extraction of iron and aluminium. This is achieved by performing the acid leach at a temperature of 255°C. A single autoclave train provides the desired ore throughput.
Autoclave feed slurry is heated in three-stagebaffled heater vessels by direct contact with flashed steam from three stages of autoclave discharge slurry letdown flash vessels. The heated slurry is then pumped from the heaters into the HPAL autoclave by positive displacement pumps. The autoclave feed pumps are sized to be operated in parallel at all times.
In the HPAL autoclave, concentrated sulphuric acid (98.5 wt%), high pressure air and high pressure steam are injected to achieve the desired leaching conditions under which almost all of the nickel and cobalt are leached from the ore. The slurry is maintained as a homogeneous fluid by the autoclave agitators.
The hot leached slurry is discharged from the autoclave and let down to atmospheric pressure through three flash vessels by flashing off steam, which is recovered to heat the autoclave feed slurry. The low pressure flash vessel empties into the flash seal tank to ensure that the slurry is at atmospheric pressure. The design terminal acid concentration is 50 g/L.
Samplers at the feed and discharge ends of the HPAL circuit are provided for process control and metallurgical accounting.
The following chemical reactions in HPAL have been assumed for the purposes of developing the METSIM® model:
Dehydration of gibbsite to boehmite during autoclave feed slurry preheating:
Al(OH)3 AlOOH + H2O
Leaching of metal oxides:
NiO + H2SO4 NiSO4 + H2O
CoO + H2SO4 CoSO4 + H2O
2 FeO(OH) + 3 H2SO4 Fe2(SO4)3 + 4 H2O
FeO + H2SO4 FeSO4 + H2O
MgO + H2SO4 MgSO4 + H2O
2 AlOOH + 3 H2SO4 Al2(SO4)3 + 4 H2O
Cr2O3 + 3 H2SO4 Cr2(SO4)3 + 3 H2O
MnO + H2SO4 MnSO4 + H2O
SiO2.H2O SiO2 + H2O
SiO2 + 2 H2O H4SiO4
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Iron precipitation:
3 Fe2(SO4)3 + 2 NaCl + 12 H2O 2 NaFe3(SO4)2(OH)6 + 5 H2SO4 + 2 HCl
3 Fe2(SO4)3 + 14 H2O 2 (H3O)Fe3(SO4)2(OH)6 + 5 H2SO4
Fe2(SO4)3 + 3 H2O Fe2O3 + 3 H2SO4
Under the high pressure leaching conditions, ferric sulphate hydrolyses to form hematite and sulphuric acid which is re-used for leaching.
Aluminium precipitation:
3 Al2(SO4)3 + 2 NaCl + 12 H2O 2 NaAl3(SO4)2(OH)6 + 2 HCl + 5 H2SO4
3 Al2(SO4)3 + 14 H2O 2 H3OAl3(SO4)2(OH)6 + 5 H2SO4
17.4.1.3 Atmospheric Leaching
The Atmospheric Leach (AL), circuit extracts nickel and cobalt from saprolite ore at atmospheric pressure in a single train of four tanks in series.
Thickened medium magnesium saprolite ore slurry is fed to the atmospheric leach where it is blended with concentrated sulphuric acid. The reactors operate at a temperature of approximately 100-105°C to extract nickel and cobalt values from the ore.
Large quantities of iron, aluminium and magnesium also dissolve in AL but, unlike HPAL, where most of the iron and aluminium re-precipitate and regenerate acid at elevated temperature, no acid is regenerated in AL. Consequently acid consumption is high compared to HPAL (approx. 1022 kg per tonne of ore). The residual acid concentration in the AL discharge slurry is 30 g/L. Much of this acid is subsequently consumed in saprolite neutralisation, improving the acid utilisation.
The capability exists to bypass each tank in the series as required.
Samplers at the feed and discharge ends of the AL circuit are provided for process control and metallurgical accounting.
The following chemical reactions in AL have been assumed for the purposes of developing the METSIM® model:
Dehydration of gibbsite to boehmite:
Al(OH)3 AlOOH + H2O
Leaching of metal oxides:
NiO + H2SO4 NiSO4 + H2O
CoO + H2SO4 CoSO4 + H2O
2 FeO(OH) + 3 H2SO4 Fe2(SO4)3 + 4 H2O
FeO + H2SO4 FeSO4 + H2O
MgO + H2SO4 MgSO4 + H2O
2 AlOOH + 3 H2SO4 Al2(SO4)3 + 4 H2O
Cr2O3 + 3 H2SO4 Cr2(SO4)3 + 3 H2O
MnO + H2SO4 MnSO4 + H2O
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SiO2.H2O SiO2 + H2O
SiO2 + 2 H2O H4SiO4
17.4.1.4 Recycle Leach
The Recycle Leach circuit recovers nickel and cobalt values from precipitates formed in Iron/Aluminium Removal Stage 2 and MHP Precipitation Stage 2 circuits.
Sulphuric is fed to the Recycle Leach tank, where it is blended with second stage iron removal thickener underflow slurry and second stage MHP thickener underflow slurry. Sulphuric acid leaches hydroxides contained in the recycle streams, recovering most of the contained nickel and cobalt. The acid concentration in the slurry exiting the recycle leach tank is expected to be about 25 g/L.
The single tank provides a total of 2 hours residence time required to achieve 95% nickel and 95% cobalt extraction.
Samplers at the feed and discharge ends of the recycle leach circuit are provided for process control and metallurgical accounting.
The following chemical reactions in the recycle leach circuit have been assumed for the purposes of developing the METSIM® model:
Leaching of metal hydroxides:
Ni(OH)2 + H2SO4 NiSO4 + 2H2O
Co(OH)2 + H2SO4 CoSO4 + 2H2O
Mg(OH)2 + H2SO4 MgSO4 + 2H2O
Mn(OH)2 + H2SO4 MnSO4 + 2H2O
Cu(OH)2 + H2SO4 CuSO4 + 2H2O
Zn(OH)2 + H2SO4 ZnSO4 + 2H2O
Fe(OH)3 + 4H2SO4 Fe2(SO4)3 + 6H2O
Al(OH)3 + 4H2SO4 Al2(SO4)3 + 6H2O
Cr(OH)3 + 4H2SO4 Cr2(SO4)3 + 6H2O
17.4.1.5 Saprolite Neutralisation
The saprolite neutralisation (SN) circuit uses high magnesium saprolite ore to consume most of the residual sulphuric acid from the HPAL, atmospheric leach, and recycle leach circuits.
The atmospheric leach discharge slurry, HPAL discharge slurry and recycle leach discharge slurry are fed to the SN circuit, where they are blended with highly acid-consuming high magnesium saprolite ore slurry to neutralise some of the residual free sulphuric acid. In addition to consuming much of the free acid, approximately 75–77% of the nickel and cobalt in the saprolite ore is dissolved. The acid concentration in the slurry exiting the saprolite neutralisation circuit is expected to be approximately 10–17 g/L.
The discharge from the last saprolite neutralisation tank is pumped to the CCD circuit.
The capability exists to bypass each tank in the series as required.
The following chemical reactions in SN have been assumed for the purposes of developing the METSIM® model.
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Dehydration of gibbsite to boehmite:
Al(OH)3 AlOOH + H2O
Leaching of metal oxides:
NiO + H2SO4 NiSO4 + H2O
CoO + H2SO4 CoSO4 + H2O
2 FeO(OH) + 3 H2SO4 Fe2(SO4)3 + 4 H2O
FeO + H2SO4 FeSO4 + H2O
MgO + H2SO4 MgSO4 + H2O
2 AlOOH + 3 H2SO4 Al2(SO4)3 + 4 H2O
Cr2O3 + 3 H2SO4 Cr2(SO4)3 + 3 H2O
MnO + H2SO4 MnSO4 + H2O
SiO2.H2O SiO2 + H2O
SiO2 + 2 H2O H4SiO4
Iron precipitation:
3 Fe2(SO4)3 + 2 NaCl + 12 H2O 2 NaFe3(SO4)2(OH)6 + 5 H2SO4 + 2 HCl
3 Fe2(SO4)3 + 14 H2O 2 (H3O)Fe3(SO4)2(OH)6 + 5 H2SO4
Fe2(SO4)3 + 3 H2O Fe2O3 + 3 H2SO4
Aluminium precipitation:
3 Al2(SO4)3 + 2 NaCl + 12 H2O 2 NaAl3(SO4)2(OH)6 + 2 HCl + 5 H2SO4 2 H OAl (SO ) (OH) + 5 H SO 3 Al (SO ) + 14 H O 3 3 4 2 6 2 4 2 4 3 2
17.4.1.6 CCD Thickening
Slurry from the SN circuit is fed to a seven-stage CCD circuit where leached residue is washed counter-currently to recover soluble nickel and cobalt values. The residue is thickened to reduce the volume of material reporting to the final neutralisation (FN) area. FN thickener overflow and PAL vent gas scrubber package bottoms are mixed with sulphuric acid (for pH adjustment) and used as wash solution in the CCD area.
17.4.1.7 Iron / Aluminium Removal
The Iron/Aluminium Removal circuit neutralises the residual free sulphuric acid contained in the CCD overflow and precipitates impurities such as iron, aluminium, chromium and silica by reaction with limestone slurry.
Overflow solution from CCD Thickener 1 is fed to the Stage 1 iron/aluminium removal circuit where it is blended with limestone slurry, reducing the acidity to pH 3.9. A large proportion of the iron and aluminium are precipitated, with some co-precipitation of nickel (0.8%) and cobalt (0.7%).
The capability exists to bypass each tank in the series as required.
The discharge slurry is thickened to 45% solids. Flocculant is mixed with the slurry to improve the settling characteristics. Stage 1 iron/aluminium removal thickener underflow slurry is directed to the CCD Thickener no.3 to recover soluble nickel and cobalt values.
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Overflow solution from the stage 1 iron/aluminium removal thickener is fed to the Stage 2 iron/aluminium removal circuit where it is blended with limestone slurry, reducing the acidity to pH 4.7. Almost all of the residual iron and aluminium are precipitated, along with significant quantities of nickel (3%), cobalt (0.7%) and other metals.
The discharge slurry is thickened to 40% solids. Flocculant is mixed with the feed slurry to improve the settling characteristics. Stage 2 iron/aluminium removal thickener underflow slurry is recycled to the recycle leach tank where precipitated nickel and cobalt are re-dissolved using sulphuric acid.
The following iron/aluminium removal chemical reactions were assumed for the purposes of developing the process METSIM® model.
Sulphuric acid reacts with limestone as shown below:
H2SO4 + CaCO3 + H2O CaSO4·2H2O + CO2
Metal species in solution react as shown below:
Fe2(SO4)3 + 3 CaCO3 + 9 H2O 2 Fe(OH)3 + 3 CaSO4·2H2O + 3 CO2
2 FeSO4 + 5 H2O + ½ O2 2 Fe(OH)3 + 2 H2SO4
Al2(SO4)3 + Na2SO4 + 12 H2O 2 NaAl3(SO4)2(OH)6 + 6 H2SO4
Al2(SO4)3 + 3 CaCO3 + 9 H2O 2 Al(OH)3 + 3 CaSO4·2H2O + 3 CO2
Cr2(SO4)3 + 3 CaCO3 + 9 H2O 2 Cr(OH)3 + 3 CaSO4·2H2O + 3 CO2
NiSO4 + CaCO3 + 3 H2O Ni(OH)2 + CaSO4.2H2O + CO2
CoSO4 + CaCO3 + 3 H2O Co(OH)2 + CaSO4.2H2O + CO2
n H4SiO4 (SiO2)n + 2n H2O
17.4.1.8 Stage 1 Mixed Hydroxide Precipitation
Approximately 95% of the nickel, 97% of the cobalt, and 32% of the manganese into the liquor from the Stage 2 Fe/Al removal circuit are precipitated by addition of magnesia slurry in the first two MHP stage 1 reactor tanks.
The capability exists to bypass each tank in the series as required.
The slurry discharge from the final MHP Stage 1 reactor tank is directed to the MHP Stage 1 thickener. The MHP stage 1 thickener underflow is equally divided between seed recycle to either the first or second MHP Stage 1 tanks, and the MHP Wash Filter. MHP Stage 1 thickener overflow is pumped to MHP Stage 2, with a portion recycled back to the thickener for flocculant dilution.
The MHP wash filter removes chlorides from the product slurry by washing the slurry using wash filtrate from MHP Product Filter. The washed filter cake is re-pulped with demineralised water and batch-fed to MHP Product Filter.
Primary filtrate from the MHP product filter is returned to the Stage 1 MHP thickener, whilst wash filtrate is directed to the MHP wash filter. MHP filter cake is discharged in a bunker, conveyed to MHP Bagging Plant Package, where it is packed in 2-tonne bulk bags, and loaded onto containers for shipment.
The following chemical reactions in Stage 1 MHP precipitation have been assumed for the purposes of developing the METSIM® model.
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Precipitation of metal hydroxides:
NiSO4 + Mg(OH)2 Ni(OH)2 + MgSO4
NiSO4 + Mg(OH)2 + 6H2O NiSO4Ni(OH)2.6H2O + MgSO4
CoSO4 + Mg(OH)2 Co(OH)2 + MgSO4
Co2(SO4)3 + 3Mg(OH)2 + 6H2O 2Co(OH)3 + 3MgSO4
MnSO4 + Mg(OH)2 Mn(OH)2 + MgSO4
CuSO4 + Mg(OH)2 Cu(OH)2 + MgSO4
ZnSO4 + Mg(OH)2 Zn(OH)2 + MgSO4
Fe2(SO4)3 + 3Mg(OH)2 2Fe(OH)3 + 3MgSO4
FeSO4 + Mg(OH)2 Fe(OH)2 + MgSO4
Al2(SO4)3 + 3Mg(OH)2 2Al(OH)3 + 3MgSO4
Cr2(SO4)3 + 3Mg(OH)2 2Cr(OH)3 + 3MgSO4
17.4.1.9 Stage 2 Mixed Hydroxide Precipitation
In the second stage of nickel and cobalt precipitation, slaked lime is added from a ringmain to precipitate the remainder of the nickel and cobalt from solution. The slurry discharge from the final MHP Stage 2 tank is directed to the MHP stage 2 thickener and thickened to 20% solids.
The MHP stage 2 thickener underflow is equally divided between seed recycle to either the first or second MHP Stage 2 tank, and the recycle leach tank for recovery of the precipitated nickel and cobalt.
MHP Stage 2 thickener overflow is pumped to the final neutralisation circuit, with a portion recycled back to the thickener for flocculant dilution.
The capability exists to bypass the first tank in the series as required.
The following chemical reactions in Stage 1 MHP precipitation have been assumed for the purposes of developing the METSIM® model.
Precipitation of metal hydroxides:
NiSO4 + Ca(OH)2 + 2H2O Ni(OH)2 + CaSO4.2H2O
NiSO4 + Ca(OH)2 + 2H2O NiSO4Ni(OH)2 + CaSO4.2H2O
CoSO4 + Ca(OH)2 + 2H2O Co(OH)2 + CaSO4.2H2O
Co2(SO4)3 + 3Ca(OH)2 + 6 H2O 2Co(OH)3 + 3CaSO4.2H2O
MnSO4 + Ca(OH)2 + 2H2O Mn(OH)2 + CaSO4.2H2O
CuSO4 + Mg(OH)2 Cu(OH)2 + MgSO4
Fe2(SO4)3 + 3Mg(OH)2 2Fe(OH)3 + 3MgSO4
FeSO4 + Mg(OH)2 Fe(OH)2 + MgSO4
Al2(SO4)3 + 3Mg(OH)2 2Al(OH)3 + 3MgSO4
17.4.1.10 Final Neutralisation
The Final Neutralisation circuit neutralises the final CCD thickener underflow slurry, Stage 2 MHP thickener overflow and other minor waste streams, precipitating most of the heavy metals from the entrained solution.
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Limestone slurry and air are added as reactants to the first reactor, raising the pH of the slurry to 4.5. At this pH, free acid is neutralised and heavy metals such as Fe, Al, Cu, Ni, Co, Zn and some Mg and Mn are precipitated as per the following reactions.
Air is sparged into the first two final neutralisation tanks to aid agitation and to oxidise the divalent metals in the solution into trivalent species, which are removed as stable hydroxide precipitates.
Sulphuric acid reacts with limestone as shown below:
H2SO4 + CaCO3 + H2O CaSO4 ·2H2O + CO2
Metal species in solution react as shown below:
Fe2(SO4)3 + 3 CaCO3 + 9 H2O 2 Fe(OH)3 + 3 CaSO4·2H2O + 3 CO2
4 FeSO4 + O2 + H2SO4 2Fe2(SO4)3 + 2 H2O
Al2(SO4)3 + 3 CaCO3 + 9 H2O 2 Al(OH)3 + 3 CaSO4·2H2O + 3 CO2
Cr2(SO4)3 + 3 CaCO3 + 9 H2O 2 Cr(OH)3 + 3 CaSO4·2H2O + 3 CO2
NiSO4 + CaCO3 + 3 H2O Ni(OH)2 + CaSO4.2H2O + CO2
CoSO4 + CaCO3 + 3 H2O Co(OH)2 + CaSO4.2H2O + CO2
CuSO4 + CaCO3 + 3 H2O Cu(OH)2 + CaSO4.2H2O + CO2
ZnSO4 + CaCO3 + 3 H2O Zn(OH)2 + CaSO4.2H2O + CO2
4 MnSO4 + O2 + 8H2O 2Mn2O3 + CaSO4.2H2O
MgSO4 + CaCO3 + 2H2O MgCO3 + CaSO4.2H2O
Milk of lime slurry is added as reactant to the second tank, raising the pH of the final slurry to 7.5.
A 2% SO2 in air mixture is sparged into the remaining six final neutralisation tanks to precipitate a proportion of the manganese as manganese dioxide, reducing lime consumption. Under these conditions, manganese is effectively precipitated with a residual solution concentration of approximately 5 mg/L. Manganese levels are not stipulated in the Philippines DENR standard and world’s best practice should be considered in further studies.
Sulphuric acid reacts with milk of lime as shown below:
H2SO4 + Ca(OH)2 + H2O CaSO4·2H2O
Metal species in solution react as shown below:
Fe2(SO4)3 + 3 Ca(OH)2 + 6 H2O 2 Fe(OH)3 + 3 CaSO4·2H2O
Cr2(SO4)3 + 3 Ca(OH)2 + 6 H2O 2 Cr(OH)3 + 3 CaSO4·2H2O
NiSO4 + Ca(OH)2 + 2 H2O Ni(OH)2 + CaSO4.2H2O
CoSO4 + Ca(OH)2 + 2 H2O Co(OH)2 + CaSO4.2H2O
2 MnSO4 + 2SO2 + 1.5O2 + 6 H2O Mn2O3 + 2H2SO4 + 2H2O
4MnSO4 + O2 + 4 H2O 2Mn2O3 + 4 H2SO4 + 4 H2O
MgSO4 + Ca(OH)2 + 2 H2O Mg(OH)2 + CaSO4.2H2O
n H4SiO4 (SiO2)n + 2n H2O
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The neutralised slurry is thickened prior to being pumped to the residue surge tank for disposal. The final neutralisation thickener overflow is re-used in various areas of the plant as process water and the excess is pumped to the residue storage facility for disposal.
17.4.1.11 Sulphur And Sulphuric Acid Plant
Sulphur is delivered to the wharf by ship and conveyed to the process plant onto a Sulphur Stockpile. The sulphur stockpile is sized for a total capacity of 14 days of nominal sulphur consumption to the acid plant (13 100 tonnes) plus one Handymax-sized shipload (42 000 tonnes) for a total of 55 100 tonnes.
Front-end loaders reclaim the sulphur from the stockpile and transfer it into two Sulphur Feed Conveyor Feed Bins, where it is transported by a series of conveyors to the Sulphuric Acid Plant. Runoff and cleanup effluent from the sulphur handling area gravitate into Process Plant Containment Pond No 4.
Sulphuric Acid Plant Package provides the following services to the metallurgical processing plant:
3,000 t/d of sulphuric acid for the pressure leach and atmospheric leach circuits and minor plant users
16 t/day of SO2 as 2 % (v/v) in air 145 t/h (nominal) of high pressure steam for use in the pressure leach plant and turbine generators 6 t/h (nominal) of medium pressure steam for use in the sulphuric acid plant for sulphur melting
The principal steps in the process consist of burning sulphur in air to form sulphur dioxide; combining the sulphur dioxide with oxygen to form sulphur trioxide; and combining the sulphur trioxide with water to form a solution containing sulphuric acid.
The chemical reactions are:
S + O2 SO2
SO2 + ½O2 SO3
SO3 + H2O H2SO4
The oxidation and absorption steps in the manufacture of sulphuric acid from sulphur are all highly exothermic. The excess heat generated at each step of the process is recovered in a waste heat boiler, superheater, economisers, and a heat recovery system (HRS). The heat is recovered in the form of high pressure superheated steam and low pressure saturated steam which is exported to meet process requirements. Any excess of steam is used for power generation. The process is designed to give a conversion of sulphur dioxide to sulphuric acid of more than 99.5%.
The sulphuric acid produced is transferred to four Sulphuric Acid Storage Tanks, which provide up to 14 days of storage capacity. The acid is pumped to the various areas of the plant via Sulphuric Acid Pump.
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17.4.1.12 Limestone Facilities
The limestone plant supplies ground limestone in slurry form, for neutralisation of acidic process liquors.
17.4.1.13 Lime Facilities
Slaked lime, or milk of lime, is used in the Stage 2 MHP precipitation circuit to precipitate the remainder of the nickel and cobalt from solution and in the final neutralisation area to treat process plant effluent streams prior to discharge to the residue storage facility.
17.4.1.14 Magnesia Facilities
The purpose of the magnesia facilities is to produce up to 2 dry tonnes per hour of magnesia, which is in the Stage 1 MHP precipitation circuit to precipitate nickel and cobalt from solution.
17.4.2 Utilities and services
17.4.2.1 Process Plant Raw Water
Raw water for the process plant is pumped by vertical pumps from the Tubay River intake system and transported through a pipeline and intermediate reservoir to the River Water Surge Tank situated at the plant site. The Process Plant Raw Water Pump feeds the Water Treatment Package.
There is provision to pump raw water to the Ore Preparation Process Water Tank in the PAL slurry thickening area and to the Residue Storage Tank, if required.
17.4.2.2 Process Plant Fire Water
The process plant fire water system design has been developed from previous studies and is not based on a fire consultant report. Ausenco scope for fire water includes only the process plant. Other fire water distribution systems (wharf, office/workshops, village, light industrial end users) are covered in Section 8.
The Process Plant Fire Water Pump Package supplies up to 120 m3/h of firewater to the process plant through a ring main connecting fire hydrants. Up to 480 m3 (4 hours) of raw water is stored in the Fire Water Storage Tank. Fire water distribution is by the Process Plant Electric Fire Water Pump, the Process Plant Diesel Fire Water Pump, and the Process Plant Fire Water Jockey pump to the fire water reticulation system.
17.4.2.3 Primary Water Filtration and Distribution
The primary filtration unit in the Water Treatment Package is designed to remove contaminants from the raw water supply. The water treatment package would be either a microfiltration or a multi-media filtration system, based on Tubay River water analysis. Following filtration, the filtered water is stored in the Filtered Water Tank prior to being pumped by three main distribution systems.
17.4.2.4 Demineralised Water
Following demineralisation, the purified water is stored in the Demineralised Water Tank for distribution via the Demineralised Water Transfer Pump as follows:
boiler feed water
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acid plant dilution water HPAL autoclave barrier seal water make-up various other areas in the process plant
17.4.2.5 Condensate Polishing
It was assumed that the condensate polishing system would consist of softening by addition of Sodium Polyphosphate/Trisodium Polyphosphate and oxygen scavenging of return condensate.
Following polishing, the polished condensate is stored in the Condensate Storage Tank and pumped to the Sulphuric acid plant and power station via boiler feed water pumps that are part of the Auxiliary Boiler Package.
17.4.2.6 Potable Water
A single potable water system will produce a total of 4 m3/h of potable water for use in the process plant, port facilities, workshops, light industrial areas and the accommodation village.
17.4.2.7 Gland Seal Water
Filtered water is supplied to the Gland Seal Water Tank for use in the process plant for flushing, cooling and sealing of gland packings in centrifugal slurry pumps. The gland seal water tank allows for up to 8 hours of gland seal water storage.
17.4.2.8 Waste Water
Waste water is pumped to the Waste Water Tank from the following sources:
Auxiliary boilers RO/demineralised water unit Condensate polishing unit Sulphuric acid plant
17.4.2.9 Sea Water Distribution
Sea water for the process plant is screened and then pumped from a pumping station near the wharf area to the Sea Water Tank, which feeds the Ore Preparation Sea Water Tank via the Ore Preparation Sea Water Tank Feed Pump.
17.4.2.10 Steam Distribution
Steam is produced from two sources, namely the acid plant and the auxiliary boilers. During normal operations, the auxiliary boilers are not used.
The major source of high pressure steam is from the acid plant, a result of the exothermic reaction in the production of sulphuric acid. The high pressure (HP) steam production (6 100 kPa) is an integral part of the acid plant operation and is fed into a high pressure header at the power station.
The secondary source of HP steam is from the auxiliary boilers contained in the power station package that produce supplementary steam into the same HP header for the steam distribution system.
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A minor source of medium pressure (MP) steam is from the sulphuric acid plant which is produced by letdown of HP steam. The steam is exported to the MP steam header for use in sulphur melting.
From the HP header a quantity of the HP steam is bled off to the HPAL section of the process plant, with the remainder distributed to the steam turbine generators (STG’s) in the power station.
17.4.2.11 Power Station
The power station utilises steam turbine generators to provide electrical power to the process plant, services and utilities, as well as the mine site, the accommodation village and all other related infrastructure.
The plant configuration comprises three 14 MW extraction steam turbine generators (two operating and one standby) to deliver the 26 MW required for normal plant operations, with all three turbines operating at a reduced capacity to deliver peak power demand of 35 MW. Two package boilers supplement power when the acid plant is offline.
In addition, for emergency conditions and the black start of the acid plant/power station, there are six 1.32 MW diesel powered generators located within the power station complex.
Electric power will be generated at 13.2 kV, 60 Hz with the generators connected to a main distribution substation for supply to the various process and infrastructure substations.
17.4.2.12 Plant Run-Off Containment
There are four Process Plant Containment Ponds positioned to capture process and rainwater from the plant areas
Each pond has a Process Plant Containment Pond Pump. The pumps are sized to empty the ponds as quickly as the process plant can reclaim rain water.
17.4.2.13 Bulk Materials Handling
Reagents and consumables needed for the operation of the process plant arrive by container ship and are received and stored in the Container/Commodity Storage Area prior to delivery to the relevant process area.
If required during plant start-up, bulk liquids (sulphuric acid and demineralised water) arrive by tanker ship and are delivered to the relevant storage tank by road tanker.
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18 Project Infrastructure
18.1 Introduction
This section presents infrastructure requirements for the proposed Agata Nickel project.
Infrastructure is defined as all facilities (on-site and off-site) of a non-production nature required to support the process or production plant. On-site infrastructure comprises facilities of a non- production nature which are proposed to be located on land controlled or owned by Mindoro Resources Ltd. (MRL) and generally located with the production or process plant. Off-site infrastructure comprises facilities of a supporting services proposed to be located away from the on-site area, often remote from the production facilities and may be leased or provided by third parties.
There is no existing infrastructure in the vicinity of the proposed process plant site except for a gravel road of about 5 m width which provides access to the Tagpangahoy area from Tubay in the south and Jabonga in the north. Due to the relatively remote location of the ore bodies and the “greenfield” nature of the proposed site the provision and placement of infrastructure will be an important factor for both capital and operational costs of the overall development of this project.
Key factors that have influenced the current proposed location and layout of the infrastructure for the project include:
the location of the ore bodies the proposed location of the process plant the site topography and current land usage the anticipated impact of development on surrounding settlements accessibility to the Pan-Philippine highway national road
The infrastructure study has been developed on the following basis:
Location Study which examines viable alternatives for location of the infrastructure required for this pre-feasibility phase. Process Plant Related Services analysis such as raw and sea water supply, fuel storage at the port and power distribution beyond the process facilities, which have been carried out, but further work is required in the next phase. Process Plant Support Infrastructure requirements identification - such as port facilities, sulphur material handling facilities, administration and medical buildings and roads. General Infrastructure requirements assessment; such as an accommodation village, off- site roads, ore transport road and communications. Temporary Construction Facilities assessment; such as the construction camp, warehousing, lay down areas, temporary power supply and waste disposal which will be required during construction of the process plant and associated facilities.
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18.2 Scope and Status of the Infrastructure Study Table 85 - Infrastructure Study Status
Task Comment
Port and LCT landing capabilities to handle reagent and Port requirements for import of sulphur, material import quantities have been assessed. equipment, materials and consumables Reagent, sulphur, diesel fuel, exported product and plus export of product. general cargo have been assessed in terms of handling, storage and tranport.
Preliminary design for upgrade of existing road between Establishment of new and upgrade to Binuangan and process plant site has been completed & existing roads for site access, delivery of costed to the required Study level. equipment, materials and consumables. Construction of new site access roads have been designed & costed to meet the Study level.
Preliminary designs developed for ore haulage route Delivery of ore to plant site including access road to ROM pad.
Raw water requirement has been determined and supply Fresh water storage, supply and sources identified. distribution Requirements in terms of mass balance and storage capacities and storage options have been developed.
Preliminary power distribution to the plant facilities, generated from the acid plant’s waste heat and steam turbine system, to all facilities including; port, buildings, village, mining area and raw water intake, with the posibility to export power to the national electric grid, has Power distribution been developed. Emergency generators will be provided for power outages to supply key nominated loads as detailed in the report. This includes scheduled maintenance periods for the acid plant, though auxiliary oil fired boilers have been included to help minimise any interruptions.
Two plant air compressors will be provided operating in Air supply and distribution parallel, supplying different plant areas and each discharging into an air dryer and filter system.
Fuel storage requirements have been determined based on potential disruption of supply to the mining fleet and Fuel storage, supply and distribution general site support vehicles for one month. This is additional to the short term fuel tanks provided with the backup emergency generators.
Civil works including accommodation and transport for workforce, site offices, Preliminary sizing of service buildings, construction warehouse, stores and maintenance village and miscellaneous infrastructure has been workshops and miscellaneous undertaken infrastructure identified during the study
Preliminary design of a valley dam with maximum Residue storage facility capacity of 27 Mm3.
Preliminary design for communication and IT facilities for Communication & IT facilities buildings, port, village and other facilities including the mine support facility, have been completed.
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Task Comment
These have been briefly outlined and costed in the capital Temporary construction facilities estimate.
The overall plan layout was developed during the prefeasibility study as follows:
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Figure 50 - Overall Layout Plan
18.3 Transport Infrastructure
18.3.1 Road summary
An existing gravel road of approximately 5 m width provides access to the Tagpangahoy area from the main sealed road at Tubay. This road passes through LLa Fraternidad and Binuangan villages and continues on to Jabonga at an elevation varying from 20 to 60 m above sea level.
This existing road will be upgraded to be 6 m for two lanes of light vehicle traffic. Some parts of the road will be occupied by tthe facilities and a diversion road has been designed. This road will
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be the public road as before since the mining and process plant activity will have an exclusive operational road as the MRL owned private road.
18.3.2 Access road
The project’s mine site and the proposed process plant site are all accessible by any land vehicle from Butuan City or Surigao City via the Pan-Philippine Highway (AH26) and the connecting municipal roads.
The Agata Nickel project lease will encompass the area from the mining site at Agata North to the process plant at Tagpangahoy, which is close to the Agata South mining area.
Previously MRL had commissioned GHD to conduct an access road and river study to connect Agata North mine site / base camp at E. Morgado and the Pan Philippine Highway at Tagbuyakan.
The access road to the Agata Nickel project could therefore be:
Northern access which is from Lawigan/Jabonga to the mine site by municipal road. Eastern access road as per GHD Road and River study which connects Agata North mine site to Tagbuyakan. Southern access road from La Fraternidad/Tubay through Agata South via the municipal road.
It was mentioned in the Scoping Study report that Agata Nickel resources are close to the sea on the western side, which provides significant advantages for logistics. Commercial sea transport is available regionally with hubs in Singapore, Jakarta, Manila, Batangas, Cebu, Surigao City and Nasipit (west of Butuan City) ports. Therefore, sea transportation will become the major line for logistics of the plant operation.
Road assessment in this prefeasibility study was mainly preparing the alternatives for access to the facility and the logistics route for mining and plant operation as a back-up to sea transportation.
The GHD report mentioned that the flooding which covers the area from Lake Mainit, Kalinawan and Tubay rivers in the eastern area is a routine phenomena in the region. This fact was also taken into consideration for the access road study with respect to road heights and culverts and bridges.
A dedicated southern access road was identified as an alternative route to reach La Fraternidad and Tubay without interfering with other third party mining operations in the vicinity.
The proposed process plant at Tagpangahoy would be connected with a road diversion from the existing municipal road.
18.3.3 Site roads
Site Roads are described as the roads connecting facilities and areas for the Agata Nickel project on-site. These roads include the haul road which is used for transporting the ore from the mine site to the process plant area and the service roads connecting the raw water intake facility to the process plant and the RSF area.
The sulphur supply will be conveyed to the site by a transfer conveyor from the wharf. Personnel from the company town-site/village and nearby villages will be transported to the process plant by company buses or boats.
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The road sections are as per the following figure:
Figure 51 - Road Section
Road Section :
Section 1: Haul road Mine Site Agata North – Process Plant Tagpangahoy Section 2: Access Road Payong-Payong – Process Plant Tagpangahoy Section 3: Service Road Process plant – Village – RSF Section 4 Access Road Locban Daku – Top of Ridge junction Diversion Road Section 5 Access Road Section 4 – Village Section 6 Service Road Top of Ridge junction – Water intake location Section 7 Service Road Port – Wharf Section 8 Access Road Top of Ridge junction – La Fraternidad
The prefeasibility study is based on information supplied by MRL and an initial site visit. Where information was not available, the Resindo (sub-consultant) database from previous similar projects in the region was used with the necessary adjustments tailored to this project and conditions.
The road study was focused on Section 1 new ore haul road and Section 3 new construction road with the following deliverables developed:
Road corridor alignment Longitudinal and typical cross section Earthworks analysis, optimisation and bulk quantity take-off
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For the remaining road sections, only corridor alignment and the earthworks/bulk quantities were developed.
Haul road
The purpose of the Haul Road is for the transport of nickel ore and limestone (hauling) from the mine site to the ROM at the process plant area. It will also be used as a service road for the mining operations activities.
Public use will be prohibited in this area with the concern for HSEC and incidents with large haulage trucks and mine support vehicles. The interaction with the local people and general public must be carefully considered in the next detail phase to minimise incidents and maintain safe and efficient operations.
Haul truck
The major vehicles using this haul road would be Volvo Truck FMX type or similar type with a 25.2 ton pay-load capacity, gross vehicle weight (GVW) of approximately 48 metric tons.
Typical haul truck type, axle load configuration and dimensions are shown in Figure 52.
Figure 52 - Typical Haul Truck
Figure 53 - Road Development Summary
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Table 86 - Road Development Summary
Existing Design Section Description Category Width Length Width Pavement
base course = road = 9 m 15 cm Mine site- New Haul Section 1 - 5017 m Road Process plant shoulder = 2x1.5 subbase course = m 30 cm
Payong – subbase course = Upgraded road = 6 m Section 2 4 m 6171 m 25 cm Process plant access road
shoulder = 2x1 m
Process base course = Plant- road = 9 m Upgraded 15 cm Section 3 Village- access road - 3882 m
RSF shoulder = subbase course = 2x1.5 m 30 cm
Locban Daku- New access subbase course = road = 6 m road 25 cm Section 4 Top of Ridge - 5816 m Junction (diversion) shoulder = 2x1 m
Section 4 – subbase course = New access road = 6 m Section 5 25 cm Village road - 1700 m
shoulder = 2x1 m
Top of Ridge subbase course = road = 6 m junction – New access 25 cm Section 6 Raw water road - 4333 m intake shoulder = 2x1 m
Concrete New access road = 9 m pavement 30 cm Section 7 Port - Wharf - 479 m road thickness
shoulder = 2x1.5 m
Top of Ridge subbase course = Upgraded road = 6 m Section 8 junction – 4 m 7408 m 25 cm access road La
Fraternidad shoulder = 2x1 m
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Haul Road parameters
Road chamfer : 3% Roadside drains : V shape, unlined with ratio Horizontal : Vertical 2:1 Batter slope : Cut Horizontal : Vertical 1:1 Fill Horizontal : Vertical 2:1 Maximum road gradient : 8% for loaded direction 10% for unloaded direction Maximum design speed : 40 km/hour Road design life : 10 years without major repairs, though regular Maintenance
18.4 Water Supply
The Raw Water System and the associated facilities to support the process plant operation and construction activities were assessed for the prefeasibilty study. Raw water for process plant requirements was based on the information supplied by Ausenco and BWHC.
Raw water infrastructure was developed for both industrial requirements, process plant and mining, as well as domestic requirements such as administration facilities, village and construction camp.
18.4.1 Fresh water – Tubay River
Preliminary raw fresh water requirements are:
880 m3/h for Process Plant 30 m3/h for construction camp 100 m3/h for village
The Tubay River is the fresh raw water source for process plant operation. It flows from Lake Mainit at the north to Tubay bay at the south. The Kalinawan River meets the Tubay River near Santiago Municipality.
The GHD road and river survey mentioned the Tubay River advantages were:
Fresh water Adequate flow rates Water available in all seasons
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Figure 54 - Tubay River with Lake Mainit in background
As Tagpangahoy is the proposed process plant location for the study, the water intake location was planned to be to the south with access from Santiago municipality road.
The location surveyed is approximately 4 km from the Process Plant location.
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Figure 55 - Tubay River at the proposed water intake location
For the anticipated routine floods in the area, as stated in GHD’s Hydrological Study report for the Tubay (Kalinawan) River, the intake pump will be mounted on a pontoon and will pump the water to a pond at higher ground level nearby. From this point water will be pumped to the intermediate pond at the top ridge and then flow through gravity feed to the process plant and other facilities.
Reservoir capacity will be minimum of 6 hours water requirement. This reservoir could serve as preliminary sedimentation pond before the water treatment plant at the process plant.
The pump system has redundancy built in with duty and standby pumps allocated for all areas with remote monitoring and start capacity provided and priced accordingly in the capital estimate.
18.4.2 Sea water supply – Main Wharf – South Tagpangahoy
The Sea water requirement for the process facility is about 1000 m3/h.
The sea water intake pump will be located at the main wharf at South Tagpangahoy. The pump house will be roofed together with a fire pump package in the area. Sea water will be transferred by pipeline through the causeway structure to the process plant.
The system intake is screened prior to the pumps to reduce the possibility of contaminants entering the seawater system.
Similarly to the raw water system, duty and standby pumps have been included with remote monitoring and start capacity.
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18.4.3 Decanted water discharge - residue storage facility
The initial concept was for decant water from the RSF was to be pumped back to the process plant for reuse. The option of an ocean outfall was later considered and has been assessed on the basis of conforming to the requirements of the Philippines environmental or International (World Bank/IFC) Standards.
18.5 Power Distribution
Power will be supplied from a dedicated power plant using waste steam from the acid plant. During normal operation, the acid plant will supply the bulk of the steam required for the turbine generators and this will supply the power for the process plant and all other infrastructure.
Transformers will step up the power plant voltage to 13.2 kV for local distribution to the water supply pumps, village and mining areas.
Auxiliary HFO fired steam boilers will be provided to generate power in the early stages of the project before the acid plant is commissioned and particularly for the following conditions:
during start up or “black start” of the power station power for commissioning of the process plant during construction stages of the project in the first year of operation of the process plant, where the acid plant will be ramping up acid plant out of service for maintenance and shutdowns
Power requirements during construction and before commissioning of the auxiliary boilers will be supplied by diesel generators.
The Power plant study and electrical power distribution for the process plant were prepared by Ausenco and Ausenco Vector were responsible for power distribution outside the process plant facilities.
18.5.1 Preliminary electrical load distribution
Electrical power distribution to the infrastructure can be summarised as follows:
Table 87 - Preliminary power distribution list
Area Connected Power General Description
13.2 KV transmission line General 1 MW Distribution Transformer TR-03,1250 KVA, 460 Infrastructure (assumption) V 60 Hz infrastructure facility inside process plant area.
13.2 KV transmission line 0.5 MW Distribution Transformer TR-04, 750 KVA, 460 Mining Facility (assumption) V 60 Hz 5.9 km to the mine site along haul road
500 KW for the 13.2 KV transmission line Wharf - port sea water pump Distribution Transformer TR-01,2000 KVA, 460
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Area Connected Power General Description
and fire pump V 60 Hz 620 KW for the 1.25 km transmiision line sulphur conveyor
13.2 KV transmission line Distribution Transformer TR-02, 1250 KVA, 1 MW Village 460 V 60 Hz (assumption) 400 m transmiision from sea water pump power line
13.2 KV transmission line 1.3 MW for the Distribution Transformer TR-06, 2000 KVA, Raw Water Intake raw water pump 460 V 60 Hz 3.8 km transmiision line along pipeline
13.2 KV transmission line
15 MW export of Step Up Transformer TR-06, 20 MVA, 69 excess power to KV/60 Hz Jagupit - Santiago the national 1.85 km transmission line. electric grid Cross the Tubay River using dedicated steel structure.
18.5.2 Distribution line
The distribution line will be overhead distribution type with All Aluminium Alloy (AAAC) bare conductors of 150 mmsq.
Concrete Poles will be 14 m height and 500 daN capacity.
There will be 4 feeders. Each feeder is individually isolated at the generation substation through HV switchgear.
Each distribution leg can be isolated using ground mounted enclosed switchgear in substations for main lines, or pole mounted air break switches where they tee-off from the main line to their nominated infrastructure supply.
18.5.3 Transformer
Power transformers will be of the oil filled type, installed outdoors near the Switchgear Room.
Transformers will be naturally cooled (ONAN), but shall allow for future addition of cooling fans.
Transformer tanks shall be the hermetically sealed type.
One primary distribution transformer sized for full load and generation capacity will be provided with a second backup transformer, connected in parallel, with the appropriate switchgear to enable changeover and isolation in the event of a transformer fault.
Power distribution design and deliverables are as per document AGT-DOC-E-0001 Technical Memorandum – Electrical Power Distribution.
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18.6 General Service Buildings and Ancillary Facilities
General service buildings and ancillary facilities have been assessed for supporting the process plant operation, maintenance, administration and amenities.
These buildings are categorized as:
Process Plant Buildings
Buildings which are required in the specific process plant areas such as the control room, test room, laboratory and operations room.
Service Buildings
These buildings are related to service functions for the Process Plant such as electrical substation buildings, chemical treatment facilities building and the emergency generator building.
General Buildings
These general buildings include offices, medical centre, canteen, workshop and warehousing.
18.6.1 Buildings
In general all the buildings and facilities at the plant site will be located within the integrated industrial area. The overall plant layout has been prepared by Ausenco and includes the process facilities.
Refer to plant layout and manpower data from Ausenco summarised in Table 88.
Table 88 - Building Facility
Location Building Requirement General Description
General
Administration Offices Designed for 65 persons o 5 manager rooms o 10 senior staff rooms o Open plan cubicle for the staff
Medical and First Aid Centre Building Designed for 25 beds
Gate house Building Security Office area for 20 staff
HSEC and HRD Building Designed for 64 personnel o 4 manager rooms o Open plan cubicle for the staff
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Location Building Requirement General Description
Other facility: ablutions, conference room, meeting room. Area allocated 100 m x 50 m.
The building size is 45 x Laboratory and Operations Laboratory and offices 30 m
The building size is 45 x Building and office 30 m
Area allocated 100 x 50 m
Canteen with 600 seating capacity Canteen Change house comprising 100 lockers Kitchen Change House and canteen 40 showers male Food storage 10 showers female Change house Ablution facilities Area allocated 100 x 50 m
Maintenance Workshops The building will house a machine shop, fabrication shop, welding bays, steel stores, tools stores, offices (10 units) and shower and toilet facilities. The building size will be 75 m by 60 m by 20 m high and will be provided with a 20 t maintenance overhead rail crane.
Warehouse 40 x 60 m Area allocated 150 m x 100 m
The vehicle maintenance workshop will include areas for heavy vehicles and trucks, mobile maintenance equipment, light vehicles, stores and 8 Vehicle Maintenance Workshop offices for staff and the vehicle planned maintenance group. The building size will be 80 m by 50 m by 15 m high. Area allocated 100m x 80m
The building will include a vehicle bay, an office, Fire Station Fire station shower and toilet facility. The building size will be 25 m by 20 m
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Location Building Requirement General Description
The weighbridge will be equipped with a small Weighbridge Weighbridge office for measurement registration. The size will be 15 m by 5 m.
In general, the buildings will use prefabricated material and were based on the following:
100 mm reinforced concrete slab, based on waffle POD foundation system. Walls constructed from 75 mm prefabricated sandwich panel forms, with PVC window and door frames. Light metal truss roof structure with 50 mm sandwich panel roofing with accoustic dampening ceiling.
18.6.2 Village accommodation
Village means the permanent accommodation facilities for the company employees who are working at the process plant and mining operations.
The village will cater for both expatriate and local staff. It is expected that some of the more senior locally recruited staff will stay in the existing nearby towns with their families.
The following formed the basis for the PFS:
Current indications are that there will be 900 to 1000 people in the process plant and mining operations. The Village was designed to accommodate 400 to 500 employees The remainder would stay in surrounding towns and barangays like Butuan, Tubay or even Surigao. Construction Camp post construction may have some facilities utilised for temporary residential uses/guest house with the others dismantled and the area reinstated. Consideration of an adequate boat for the daily transportation of employees to and from the MRL port to La Fraternidad/Tubay or Butuan needs to be considered in the next phase and has not been included in this Study’s capital costs, though the wharf facilities are designed to accommodate such a vessel.
The village would be located in an area to the west of Binuangan, on the ridge top between the tailings dam and process plant at Tagpangahoy.
18.6.2.1 Village Buildings
The buildings for the Village are proposed as follows:
Table 89 - Village Buildings
Building Quantity Description
VIP Housing 1 building 125 m2 (4 rooms)
General Manager 2 buildings 80 m2
Manager Housing 2 buildings 260 m2
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Building Quantity Description
Senior Staff accommodation 6 buildings 520 m2 (20 persons capacity per building)
Junior Staff accommodation 10 buildings 520 m2 (40 persons capacity per building)
Emergency Clinic 1 building 168 m2
Office Warehouse 1 building 150 m2
Mess Hall & Kitchen 2 buildings 500 m2
Chapel 1 building 100 m2
Sports facility 1 complex Tennis and basket ball court
Recreation facilities 3 buildings 3 x 160 m2
Indor Sports Area 1 building Basket ball/volley ball court of 1000 m2
Workshop – Warehouse 1 building 300 m2
Accommodation room arrangements are proposed as follows:
One (1) house for General Manager process plant and mining operations One (1) house which consists of 4 apartments for 4 managers One (1) room per 1 senior staff One (1) room per 2 junior staff
The building type will be prefabricated material and was based on the following:
Floor system – reinforced concrete with ceramic tile Structure – lightweight prefabricated steel framing and zincalume light truss with PVC window and door frames Wall - typical prefabricated gypsum PVC piping and plumbing Insulation – insulation and buiding foil wrapping to roofs.
18.6.3 Village services
Village services are provided to support the village daily activities and summarised as follows:
Building/Plant Quantity/Capacity Description
Raw water supply
Raw water storage 10 m x 10 m x 3 m Underground, concrete, total enclosed
Deep well source with 100 m3/day capacity Average 100 m depth, submersible pump submersible
Domestic water system
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Building/Plant Quantity/Capacity Description
Transfer pump from 100 m3/day capacity Including piping – valve storage to WTP
Water Treatment Plant 100 m3/day capacity Clean water product into 4x 10,000 L PE tank
Water reticulation By gravity feed to buildings HDPE piping– throughout the village building Roofed WTP area – 100 m2
Sewage water system
STP Plant 100 m3/day capacity STP Plant – 40 x 40 m area
Wastewater reticulation PVC piping Throughout the village STP effluent pond before discharge to the environment
Solid waste management system
Waste collecting area Open yard 50 x 50 m concreted with drains to collect run-off water at a sedimentation pond enabling test and neutralisation if necessary prior to discharge.
Fire fighting system
Portable fire extinguisher 3 kg general purpose 2 units for each house 6 units for each staff buildings
10 kg general purpose 2 units for each kitchen and genset room
Power supply 1 building Substation building and panels
Communication system Telephone system Throughout the village distributed via the power poles and based on fiber optic tied into the public exchange network. The process plant will have its own dedicated PABX system to enable coordination and transfer of calls throughout the facility. Data network based on a fibre optic broadband system connected to external service provider/telecommunications network for the village and the plant via an internal secure system.
Security 1 gate post
3 security post Security building for 5 personnel for each shift (50 m2)
Fencing in the perimeter Barbed wire with timber pole
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Building/Plant Quantity/Capacity Description
CCTV camera on several position
18.6.4 Construction camp
It is envisaged that some of the buildings from the construction camp may be retained to be used for the permanent village during the operations phase. Under this scenario surplus buildings not required during plant operation would be dismantled and removed from the site.
The construction camp provides the temporary construction accomodation facilities for all personnel who would be engaged on-site during the construction phase.
The camp has been designed to accommodate initially 1600 then later expanding to 2500 personnel as construction activities increase.
The camp would be located adjacent to the Village area to the western end of Binuangan, on the ridge top between the tailings dam and process plant at Tagpangahoy.
The accommodation camp consists of:
Manager/expatriate accommodation Staff accommodation Non-staff accommodation Mess hall Recreation hall Camp office, HSE, Security Emergency clinic Chapel Food preparation and storage facility Maintenance, warehouse and power generator set (diesel) Fire fighting equipment and shelter Water treatment plant with storage ponds Sewage treatment plant with storage ponds
Camp Buildings
The buildings will be typical prefabricated material and were based on the following:
Floor system – raised on concrete stumps, 0.6 m above ground, light steel framing and plywood flooring. Structure; lightweight prefabricated steel framing and zincalume light truss with PVC window and door frames Wall’s - typical prefabricated gypsum PVC piping and plumbing
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Insulation - insulation and building foil wrapping to roofs.
Accommodation room arrangements are proposed as follows:
Manager and expatriates will have 1 room per person Staff will have 1 room per 2 personnel Non-staff will have 1 room per 4 personnel utilising bunks
Figure 56 - Typical Camp (Courtesy of BHP Billiton Bumbun Camp- Central Kalimantan)
18.6.5 Water
Construction water supply will be sourced from water extraction wells drilled to a nominal depth of 50 m in the area of the plant site. This source is not sufficient for operations raw water requirements based on current hydrological investigations undertaken.
Raw water will be pumped from the Tubay River to the combined raw and fire water tank and distributed to the following areas:
potable water treatment plant cooling water makeup system reagent preparation area plant utility wash down hose stations various service points throughout the process plant
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18.6.6 Sewerage
It is envisaged that two (2) pre-fabricated packaged stand-alone Sewage Treatment Plants (STP’s) will be installed; one located at the process plant and the other at the construction/permanent village. These units would comprise primary settlement, aerobic zone, final settlement (humus tank) and sludge storage. The units are designed to accept raw (unsettled) sewage and produce high quality final effluent without the need for ancillary tankage or equipment. The units are covered to prevent noise and fly nuisance. The system may be partially buried to minimise the visual impact. Final effluent would be discharged to a containment pond and chlorinated before release. These units are modular and are well-suited to future expansion or relocation.
Design flow has been based on an assumed 200 litres/day/person. Estimated loads are therefore 18 m3 /day and 8kg BOD for the process plant and 54 m3 /day and 31 kg BOD for the village.
18.6.6.1 Sewerage Reticulation System
It is proposed to construct a sewerage reticulation system collecting sewage from buildings, services and process plant which would gravity flow to the sewage treatment plant with no additional pumping required. The processed effluent would be collected in a settling/checkpoint pond for testing and chlorination before discharge to the drainage system.
A sewerage pump station would conform with standard reinforced concrete designs for these types of facilities with a submersible duty and standby pumps contained in a wet well with standard float switches controlling pump start and stops. Where possible these pumps would be standardised to allow for rotation during maintenance. Alarms and warning sirens would be installed to alert staff in the event of pump failure.
18.6.6.2 Bio-Septic Tank Concept
Wastewater treatment for the distant/remote areas such as toilet/ablutions throughout the process plant, or mine site etc. would use bio-septic tanks with transpiration beds to absorb the partially treated effluent. Alternatively, the septic tanks could be increased in size to form holding tanks and effluent could be pumped to a tanker and carted on a periodic basis to the main sewerage treatment plant for further processing and treatment.
18.6.6.3 Plant Operations
The sewerage reticulation and treatment system will require various full time maintenance personnel to be in attendance for a single shift per day to ensure that the plant is working in accordance with the design intent with regular monitoring and testing. As the plant relies on biological processes, process upsets are not easily remedied and early intervention is essential to maintain an optimum system. Upsets may be caused by inflows of toxic wastes, excess rainfall, incorrect operating conditions, equipment failure, large hydraulic variations in inflow, variations in pH, etc.
To minimize bacterial damage in the Sewage Treatment Plant (STP), pre-treatment facilities are to be used prior entering the STP. A grease trap will help to catch and minimise dirt from the kitchen waste water and a grey water settlement tank will separate detergent from laundry water disposal.
Activities will include monitoring plant operations, sample collection, laboratory testing and reporting, general maintenance and equipment testing, repair and replacement, etc. It is likely that well trained personnel will be able to maintain both the water supply system and the sewerage treatment system concurrently. Staffing levels would typically require a supervisor (a
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qualified industrial chemist), two qualified and experienced water and wastewater plant operators and several plant operations assistants and maintenance workers. Consumables at the treatment plant are minimal.
18.6.6.4 Solid Municipal Waste Management
Infrastructure facilities will be developed to support the disposal of solid wastes generated by (a) the process plant, (b) the permanent accommodation facilities and construction camp and (c) workshop and warehouse areas, etc. across the sites. These solid waste disposal facilities will most likely be located in a remote valley within the lease boundaries. The area would be provided with secure access to ensure safe operation and storage.
18.7 Communications & IT Summary
Communication and IT systems were provided for the following areas:
Process plant area including buildings, offices and facilities Mining area including buildings, offices and facilities Port area Distance facilities such as RSF, water intake and others
The communication infrastructure scope provided is as follows:
UHF/VHF radio communications and repeater system Voice Dispatching System. Conventional multi service network. Fibre optic cable network. VSAT connection
As summarised earlier the accommodation village will be connected to the external public service provider networks via a fibre optic network distributed via the power distribution poles.
The plant areas will operate within a plant wide controlled network that will have secured external public network links, however internal communications and data management will have a firewall from external access.
Mobile vehicles for maintenance and operations, together with mining operations, will utilise the radio and repeater network.
The following describes the use in detail per area and system.
18.7.1 Radio communications
A conventional UHF/VHF radio communication system is provided for communications within the process plant area. The radio coverage is assumed to cover the mine area as well with coverage areas to be confirmed in follow up studies.
One radio communication tower has been provided for mounting the radio antenna. Radio base station equipment is located in an equipment shelter at the base of tower. The final location of radio communication tower antennae would be determined in further studies to maximise coverage between the areas.
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Three (3) radio repeaters have been allowed to be installed in the process plant area. One repeater will be set up for a process plant operations channel, one repeater for a dispatching channel and one repeater for security as per drawing AGT-DWG-I-0001
The dispatch repeater will allow radio users to communicate with the dispatch controller in the main communication room in the plant administration building.
18.7.2 Voice dispatching system
A Voice Over Internet Protocol (VoIP) telephone system has been provided for fixed telephone communications throughout the process plant area.
An IP-PBX based call manager will be located in the main communications room at the plant administration building to provide controlled and supported communications management throughout the plant, integrating both voice and data applications, hardwired and wireless.
The network will be a fully switched network with all switches and routers, with in-line power for the VoIP phones.
The use of analogue telephones will be limited to minimise operations costs and to serve as a backup for VoIP systems in selected locations.
The dispatch call manager attendant console will accept inbound calls in analogue and VoIP protocol via operator, and manually route and dispatch the call to users.
A Public Address (PA) over VoIP system has been provided to broadcast audio for announcements including emergency situations throughout the plant, both indoor and outdoor. Fifteen (15) Public Address broadcast zones have been provided in the capital estimate.
18.7.3 Conventional multi service network
All offices and amenities buildings will be internally connected with TCP/IP Ethernet Local Area Network system.
Computers within the buildings are connected to the Local Area Network by Ethernet copper cables. The type of cabling used will be determined on a case-by-case basis to meet cabling standards for the communications protocol.
Allowance has been made for wireless local area networking using industrial type Wi-Fi Routers for all areas in the process plant.
Building to building data communication is via Local Area Network by multimode fibre optic cables.
The data centre will be located in the main communications room in the plant administration building.
Un-interruptible power supplies (UPS) are provided for IT and communications, switches, routers, servers, radio and microwave equipment for a limited time during power outages. UPS systems are designed to allow telephone and radio communications to continue during these outages.
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18.7.4 Fibre optic network
The multimode fibre optic cable network is provided for uniform physical communication medium for data, voice and video communications between different physical locations in the process plant.
The followings buildings have been interconnected with fibre optic cables:
Administration Buildings Medical Building Laboratory Building Port Buildings Village Buildings HSE and Security Buildings Fire Station Building Workshop and Stores Buildings Main Control Room General Stores Building Vehicle Maintenance Building Diesel Supply Facility Water & Wastewater Treatment Plant
All buildings will be connected with the main communications room in the plant administration building in a star or central hub topology.
A reserve fibre optic line is installed between buildings to provide a backup line in case of primary line failure.
18.7.5 Wireless radio connection
Where distances are great and fibre distribution is not practical, towers with microwave or radio links are installed to provide connectivity with the main plant hub. This also provides a backup for the fibre optic network if necessary.
18.7.6 VSAT connection
As the local area service providers may not have sufficient bandwidth initially, a VSAT system for broadband interconnection has been included. Bandwidth of 512 kbps is sufficient for this size of operations workforce with commonly available data compression software, subject to confirmation of the requirements of specific company enterprise reporting systems that may be utilised.
18.8 Port
The MRL team reviewed and selected several areas in the earlier scoping study for preliminary bathymetric surveys to support the pre-feasibility study.
Locations that were investigated and data provided for are:
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Payong-Payong Binuangan North Tagpangahoy South Tagpangahoy
The South Tagpangahoy port location was classified as an alternative site due to the requirements of the local municipality and their preference that the area at North Tagpangahoy be utilised for tourism.
As mentioned earlier, one of the main advantages of the Agata Nickel development is that it is located on the coast, which provides a significant advantage for logistics.
A purpose built dedicated wharf with associated facilities for offloading construction and operations supplies and consumables, bulk materials such as sulphur and fuel was developed for this study.
A heavy lift ramp for unloading autoclave and other heavy modules during the construction phase has been considered and incorporated into the design. This ramp will be suitable to be utilised as a permanent facility for heavy loads for construction in future expansions and/or for operations uses as may arise.
Figure 57 - Port location - South Tagpangahoy
Further comprehensive surveys for hydrology, bathymetry, oceanic data; tide levels, currents, water depth, winds and waves will be required for the next study phases of the project. This would also include climatology research for rainfall and extreme events such as typhoons and tsunamis.
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Geotechnical investigation will also be required to ensure suitable ground conditions to accommodate the permanent facilities. This investigation will also confirm ground and sub- surface soil stability (i.e. settlement, consolidation, landslide, etc.) and be utilised to size piles, foundations and mitigation methods as may be necessary.
The Port location will also need to include a review of accessibility for the selected ships that will be utilised for export and import of materials.
For this phase, port design was based on typical, similar applications with Handymax vessel sizes (up to 50 000 DWT).
Preliminary port and the associated facility layout is shown in Figure 58
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Figure 58 - South Tagpangahoy Port Lay Out
18.8.1 Freight data
Based on the data provided by Ausenco, the major export and import material utilising the Port can be summarised as follows:
Import/Export
Sulphur – bulk Diesel Fuel for Mining and ore hauling – bulk HFO for auxiliary boilers – bulk General cargo and passengers Nickel intermediate product of MHP – bulkbags inside containers
Estimated annual volumes for Port operations are summarised in the following section.
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18.8.2 Berth occupancy analysis
A berth occupancy analysis has been developed and is presented in
Table 90- Berth Occupancy
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18.8.3 Port facilities
Port facilities provided are summarised in Table 91.
Table 91 – Port Facilities
Item Specification Qty Remark
Onshore (Land) Facilities
Port Offices 10 m x 15 m each 3 Includes area lighting, lightning protection plumbing Steel structure frame and air conditioning Corrugated metal sheet roofing Prefabricated material Ceramic floor Concrete spread footing Includes toilets and pantries/small canteen
Container yard 150 m x 120 m area for about total 1 Heavy duty pavement. No 720 unit TEU cranes are included, Reachstacker unit would deposit and load containers. Empty container to be 4 unit stacked configuration.
Workshop & warehouse 30 m x 20 m 1 Include area lighting, lightning protection, Steel structure frame plumbing and air Corrugated metal sheet roofing and conditioning walling No crane Concrete floor slab 200 mm thick Concrete pile foundation, length 20 m 50 m2 office and toilet inside
Fire Fighting System Fire pump system 1000 gpm capacity, ringmain 150 mm x 2000 m with hydrants and hose reel. In addition, foam generator provided at tank farm area.
Safety & Environment Spillage handling equipment, etc. Includes floating water Facility booms to be deployed for Storm water ponds for all run-of marine spills collection and testing prior to discharge.
Tank Farm 500 m3, carbon steel, API 630 4 Including bunded area and standard. API separator 2 units for diesel fuels 2 units for HFO for boiler use.
Fuel Dispensing Heavy and light vehicle and road 4 Pump system and Facilities tanker loading dispensers for the respective vehicles.
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Item Specification Qty Remark
Offshore (Marine) Facilities
Jetty 177 m length x 25 m width wharf, 1 Designed for berthing forces concrete reinforced with mooring of 50,000 DWT Handymax dolphins and fenders. Wharf deck is bulk ships/vessels. designed for the dynamic and bearing capacity of Reachstacker for loading operations.
Causeway – trestle 200 m x 13 m width, reinforced 1 concrete, designed for loaded truck capacity as per government design guidelines for public bridges.
Movable hopper and Approx. 1500 m conveyor, 400 t/h. 1 From wharf to sulphur conveyor The unit is covered to avoid marine stockpile spillage, walkway and spaced lighting along full length for maintenance.
Sulphur stockpile 2 x 35 000 tonnes capacity, 300 mm 1 Reclaim by FEL and trucks reinforced concrete with boom stacker conveyor. Area is not covered, drainage provided to storm water pond.
Fuel unloading facility Dual 1500 m x 150 mm pipelines, Fuel pumped by ship/tanker carbon steel for diesel fuel and HFO pump transfer. Includes buffer tank, filters and booster pumps.
Personnel Jetty Causeway 60 m
Sulphur will be transported by 50 000 DWT Handymax bulk carriers which are geared vessels (equipped with on-board grab crane). The ship’s gear will transfer to the wharf discharge hopper which feeds the conveyor to the shore stockpile.
No permanent port cranes are required for the wharf. Loading and unloading of goods and containers, etc. are generally anticipated to be via geared vessels or cranes engaged for specific shipments as necessary.
No tug boat facilities have been provided for bulk carrier positioning and these would be provided by the local port authority together with pilots as required.
18.9 Residue Storage Facility
18.9.1 Introduction
This section presents the base case residue storage and water management option for the Agata Project. The base case consists of a residue storage facility (RSF) located south of the proposed mine.
The RSF is designed to store approximately 27 Mt of residues, or approximately 15 years of the project life. Water storage is proposed to be in lined ponds near the plant site. No other water storage reservoir is proposed. Process water will be from collected rainfall and surface water from the vicinity. The operation will discharge water from the RSF to an ocean outfall; therefore, no return water line from the RSF will be necessary. Furthermore, no detailed water balance is necessary as the RSF water will not be part of the process.
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The optimum site is proposed in the Binuangan Valley north of Tubay. The Binuangan Valley is an ocean-side valley with the proposed dam less than 200 m from the shore line. The valley currently has a population consisting of fishing and agriculture. This village will be relocated by MRL prior to construction of the RSF. Therefore, the potential risks involved with the RSF being above a population centre are removed.
Futhermore, the site has yet to be drilled for condemnation.
A limited geotechnical campaign was performed by MRL to assess the geotechnical and hydrogeological characteristics of the RSF area (August 2011). Ausenco Vector has reviewed this work and verified that the test pits were completed within the RSF area. However, more detailed work must still be done on the proposed RSF site. In particular, the dam source materials must still be verified, including the waste rock proposed as rock fill, and the filter/transition materials.
This study considers a rock fill downstream raise dam as the main viable option. Centre raise dams or use of cyclones for sand separation are not feasible with the nickel process.
18.9.2 General description
The base case consists of a RSF south of the mine site that consists of a rock fill downstream raise dam that encompasses one drainage off of the local foothills to the east, as shown in the drawings.
The RSF includes a starter dam for storing at least 2 years of residues. The starter dam crest will be raised in stages by the downstream method to contain the residues within the current permitted boundary limits to year 15 of operations. The plant operations will have a backup fresh water supply pond at the plant site.
18.9.3 Site visit
Ausenco Vector’s senior geotechnical engineer, Monte Christie, attended the project kick-off meeting and site visit during the week of 2 May 2011. The site visit consisted of 2 days, the first day was a walk to the proposed mine site and views of the originally proposed RSF valley, Payong-Payong. The second day was a boat trip for coastal access of the potential locations of the plant site, port, storage areas, and RSF valleys (Binuangan and Payong-Payong).
The mine site area is characterised by a ridge line that runs north to south along the northeast of the Mindanao Island. The ridge line extends up eastward from the shoreline to an approximate maximum elevation of 400 m within the mine area and then back down to a valley. The alluvial valley to the east has a large river. The valley was formed by the Philippines Fault, a fault structure associated with significant seismic activity. In fact, on day 2 of the trip, we experienced a M4.6 earthquake with an epicentre just off the coast from the mine site.
The proposed RSF at the Binuangan valley consists of steep slopes incised by drainages, flattening out to a bottom floor near the coast. The slopes are covered by thick vegetation, including grasses, shrubs and trees. The valley is mainly grasses and low lying vegetation with occasional trees. The bedrock consists of metamorphosed serpentinite, shale, and limestone. The river cuts through the slopes and valley, and the river bed consists of large rocks. At the mouth of the valley exists a small village on the beach consisting of local farmers and fishermen that appear to use the valley for agriculture and grazing. Limited access roads were cut into the valley from the north and south ridges.
The design criteria for the RSF include a downstream raise dam with 3 m freeboard. The RSF will be fully lined with a geomembrane liner. The RSF will include subdrains and overdrains. The current mine life is 1.8 Mtpa for 15 years for a total of 27 Mt, however, this study will
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maximise the potential for the Binuangan and Payong-Payong valleys. In-pit backfill is not an early stage option due to mine scheduling and lack of sufficient space within the excavated pits for conventional tailings disposal. Given that the deposit sits on top of the ridges, there is not sufficient excavation to place tailings back into the relatively shallow pits.
Discussions with the client suggest placing the downstream toe of the RSF dam at or above elevation 10 m, to mitigate the potential for tsunami damage. The valleys are fairly flat and do not reach elevation 10 m until approximately 50 m back from the beach. Furthermore, access to the dam toe must be maintained, and the steep ridges right to the ocean’s edge will make access difficult to maintain a maximum 10% slope access road.
The river within the valley will require diversion and temporary construction of coffer dam(s) to provide constructability of the main RSF dam. The RSF will require an underdrain to divert groundwater flows. Perhaps the underdrain will be used to also divert the river.
The main source of dam fill will come from within the RSF valley to allow for ease of construction and to maximise RSF storage capacity. The ridges within the valley will be maximised for excavation. The next phase of design must include a geotechnical investigation to determine the quantity and quality or rock fill available. In particular, the limestone and shale will not make suitable rock fill. Therefore, the serpentinite and other rock sources must be verified for use as rock fill.
There is a potential limestone source on the southern ridge of the Payong-Payong valley that may be used for plant processing in the nickel HPAL circuit. This source will impact the RSF dam wall for the Payong Payong RSF option. MRL will provide a quarry excavation plan of this limestone source to be incorporated into the RSF dam design.
Serpentinite and Shale Bedrock
The presence of serpentinite raises issues that must be addressed. Serpentinites are an ultramafic rock that are low in silicas and degrade into clays. “Serpentinites… are often remarkably broken and crushed, containing seams and masses of serpentine-rich clay that offer real potential for shearing and mass sliding”, Goodman (1993). In fact, sheared serpentinites have been the root cause for preferred dam alignments being moved to different locations.
Shales are often associated with landslides. During the site visit, a shale outcrop was observed towards the back of the Payong-Payong valley. The shale is degrading and falling out of the slope. The location of this shale should not pose an issue for dam foundation stability nor RSF volume, but it is noted that this is associated with serpentinites and should be considered during the next level of design.
There are two main issues with the serpentinite bedrock that exists in the Payong-Payong and Binuangan valleys. The first issue is poor dam foundation conditions, and the second is use as rock fill.
As a foundation, the steep north and south ridges in both valleys must be understood so that a proper foundation is viable for dam construction. Sheared serpentinites, once loaded, could shear causing dam instability.
The second issue arises if this serpentinite and/or shale end up being source for fill. The proposed rock fill source will come from within the valley, since there is little to no waste rock to be removed from the pit, and since removal of rock fill from within the valley will also increase the RSF storage volume. As noted above, the serpentinite and shale rocks break down to clay rather easily. For the steep dam fill slopes required to make both valleys a suitable RSF, the dam fill must be rock, as anything finer will not stand up sufficiently steep. If the proposed rock source, serpentinites or shales, breaks down then they are not a suitable source, which is
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required to maintain the steep 2:1 downstream slope. Poorer rock degrading to soil would require a much flatter slope, thereby rendering the valleys useless as wall fill due to drastically reduced storage volumes resulting from the flatter dam.
18.9.4 Site selection
The previous study by Golder identified the Payong-Payong valley as the selected valley for the RSF. Ausenco Vector has studied both the Payong-Payong and Binuangan Valleys for potential storage capacity and associated dam volumes, as shown in the drawings. We understand that the Payong-Payong valley is the preferred location for the RSF; however it is warranted to at least review the Binuangan valley for RSF since the valley will contain a larger volume and smaller dam. The design criteria considered for the initial comparison studies were as follows:
2:1 slope on outside of embankment 2:1 slope on inside of embankment 25 m top crest width Tailings capacity approximated using horizontal surface at embankment crest elevation. This is unconservative as it does not contain necessary freeboard, but is reasonable when comparing sites. Table 92 - Valley Comparisons
Dam Volume Dam Height RSF Capacity Dam Valley (Mm3) (masl) (Mm3) Efficiency
Payong-Payong 19.0 175 29 1.5
Binuangan 15.1 141 28 1.8
Dam efficiency is a way to measure the storage volume gained by the size of the dam (storage volume divided by dam wall volume). Most dams aim for efficiencies greater than 5, but in this case, the efficiencies are below 5 showing the limited volume available with these valleys. However, the Binuangan valley has efficiencies nearly double that of Payong-Payong valley, depending on the dam height. The comparison also favors the Binuangan valley in terms of total storage.
To compare for anticipated RSF size requirements based on a production of 27 Mt at an approximate settled density of 1.08 t/m3 requires a volume of 25 Mm3. The Binuangan site would require a dam of approximately 141 m high and approximately 15.1 Mm3, whereas the Payong-Payong site would require a dam 175 m high and 19 Mm3 for similar storage. The Binuangan site has much great expansion potential, as discussed below. If design volumes were set at 15 years, the Binuangan site could be optimised by moving the dam downstream towards the ocean and thereby gaining more storage upstream of the dam.
For potential expansion, the Binuangan valley has approximately double the storage capacity for smaller dams and can be expanded to contain significantly more volume than the Payong- Payong valley.
Furthermore, the serpentinite exposed on the northern ridge in the Payong-Payong valley, as well as the limestone borrow source on the southern ridge, and make the Payong-Payong valley less favourable and more difficult to coordinate.
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During the July progress meeting, the client and engineering teams decided to locate the RSF in the Binuangan valley due to complications with serpentinite and lower volume available in the Payong-Payong valley.
18.9.5 Natural hazards
The types of natural risks observable in the studied area are mainly related with morphology and weather. Eventual intense rainfalls can potential cause large flows down the valleys. In general terms, for the Project area, no natural risks are known that should imply the adoption of special protection measures. The area most exposed to alluvial risk or flooding by water risings is the zone where a RSF is projected to be built, but mitigation measurements could be easily put into practice. As such, an upstream diversion channel has been proposed to divert these flows around the RSF.
18.9.5.1 Seismic Shaking and Faulting
The site is located near the Philippine Fault; therefore earthquakes and seismic shaking are a known hazard. The Philippine fault is capable of a magnitude 8.7 earthquake capable of producing peak ground acceleration in rock of 0.38g. Depending on soil conditions at the site, the site soils could amplify the rock acceleration as high as 0.87g over soft soils. Soft soils will be removed from the RSF dam foundation; therefore 0.38g should be the design event.
The Philippine fault is less than 1 km from the RSF dam site; therefore the site should be mapped for off-shoots from the main fault.
18.9.5.2 Tsunami
Associated with large earthquake events around the Pacific are large tsunami waves, such as that which affected Japan in 2011. Since the RSF and associated facilities are along the shoreline, tsunamis are a possibility. Therefore, the RSF dam structure shall be located a minimum 10 m above mean sea level.
18.9.6 Geotechnical conditions
18.9.6.1 General
The RSF site is currently populated with thick tropical vegetation. Heavy rain fall and local streams and seeps are present. Significant stream flows are likely during the heavy rain fall. The topography consists of steep terrain running north-south incised by river channels running from east to west.
The general ground elevations are from sea level up to 300 m above mean sea level (amsl) with the RSF starter dam at a crest of 88 m. The plant site is located north of the RSF between the mine and RSF. Subsoil of the RSF area is characterised by fine grained, low permeability laterite soils underlain by bedrock. The bedrock varies from limestones, andesites, and serpentinised ultramafics (JCP Geo-Ex Services, Inc., 2011).
Results of the unconfined shear tests range from 1 to 1,700 kg/cm2, which is a wide range. Therefore, for detailed engineering, the weaker soils must be removed from the RSF dam foundation.
18.9.6.2 Serpentinite Summary
Serpentinite consists primarily of the minerals lizardite, chrysotile, or antigorite, with smaller amounts of magnetite, brucite, and Mg and Ca-Al silicates (O’Hanley 1996). Due to significant hydration during formation of serpentinite, the unit weight of the material is approximately 2.7
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g/cm3 (O’Hanley, 1996). Serpentinite formations are highly fractured and sheared and are often characterised as block in matrix formations. The matrix typically consists of a mixture of sand or silt sized serpentinite particles as well as highly plastic montmorillonite or chlorite clay (e.g. Liquid Limit of 83-95, Plasticity Index of 60-68, and clay-size fraction of 55-60% (from Stark et al., 2011)). The edges of the block material are highly sheared and slickensided (Goodman, 1993). The matrix material has a very low shear strength, which dominates shear behaviour if the proportion of competent serpentinite blocks is less than roughly 25%. Otherwise the interlocking of the serpentinite blocks determines local shear behaviour. Serpentinite rock can typically be excavated using a pick or even by hand and the material is highly friable. Serpentinite formations commonly contain planes of weakness which may not be identified during field or laboratory testing. Therefore, these characteristics must be studied for two factors affecting the RSF dam design: as a foundation material and as rock fill material.
18.9.6.3 Serpentinite as a Foundation Material
Structural Characteristics
Peridotite hydrates during serpentinisation, resulting in significant volume increase (roughly 40%). In tropical regions the serpentinite dissolves forming talc and other nickel-poor minerals. In semi-arid regions serpentinite forms secondary chrysotile, Mg-carbonates and iron oxides (O’Hanley (1996) after Coleman and Jove (1992)). Weathering of serpentinite produces clay minerals in the chlorite and montmorillonite families.
Goodman (1993) states that dams should not be placed on serpentinite due to the frequently low shear strength of the rock formation due to soft, compressible, slippery seams associated with the serpentinite clay seams. Goodman notes that the south pier of the Golden Gate Bridge is successfully founded on serpentinite, though this ended up being justified after investigating rock exposed prior to caisson construction. Goodman cites two dam failures in Italy which were founded on serpentinite, including a 47 m high arch-gravity dam near Ovada, Italy which failed due to overtopping, killing 100 people. The poor condition of the serpentinite foundation, even after grouting, was identified as a contributing factor to the failure. The second example cited by Goodman is the Gleno Dam in the Italian Alps. Poor workmanship was the probable cause for this failure, but Goodman includes this as evidence that serpentinite makes an extremely poor foundation material for dams.
Case Studies
Shallow translational landslide resulting from fill placement as an embankment (Stark et. al., 2011)
The site is located in a region known to have colluvial landslides, as well as deep-seated bedrock slides, which underlie the surficial colluvial slides. The bedrock slide, in this case, occurred within the Franciscan Melange, which is characterised as containing a mixture of sandstone, claystone, mudstone, shale, conglomerates and serpentinite. The serpentinite formation at the case-study site is characterised as having large blocks of serpentinite surrounded by a matrix of clay. The reported friction angles for the slide failure range from 7 to 10 degrees. The slide appears to have been induced by the placement of 22 m of fill atop the slope. Geotechnical investigation conducted prior to construction of the housing development did not extend through the depth of influence of the placed fill. As a result, the geotechnical investigation did not take the presence of the block-in-matrix serpentinite layer 30 m below the surface of the hill slope into account prior to fill placement. Damages incurred as a result of this slope failure were approximately USD 20 million.
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Design and construction of a high concrete dam on serpentinite (Glawe and Linard, 2003)
This case study describes the successful design of a high concrete dam (Kusan Dam) in the southern part of the Meratus Mountain Range in South Kalimantan, Indonesia. The left abutment of the dam is underlain by serpentinite, while the center of the dam and the right abutment are underlain by pyroxenite and biorite/microdiorite. Significant field and laboratory investigation was conducted in order to establish that the serpentinite local to the dam construction site was suitable as a foundation material for the dam. Special care was taken to ensure that the highest portions of the dam are not founded on serpentinite, thereby limiting the potential for failure associated with imparted loads on the serpentinite formation. In addition, the dam footprint on the serpentinite formation was minimised. The authors note that the serpentinite encountered at this site was, perhaps, atypical, as evidenced by the comparison of serpentinite collected from the Kusan Dam site to much weaker serpentinite collected from a hydropower site in SE Turkey. The site in SE Turkey is noted to have suffered from serious rock-mass deformation problems resulting from the low strength of the local serpentinite. The authors suggest that highly-localised lithologic factors such as differing micro and macro structures and/or different mineralogical compositions of the serpentinite samples result in the significant differences in structural strength and stability parameters between the types of serpentinite. As a result, significant local investigation is required in order to validate the use of serpentinite as a foundation material for construction.
Serpentinite as Rock Fill
Serpentinite degradation/weathering
Weathering of serpentinite is characterised by development of calcite, hydromagnesite, and chalcedony in veins or as a replacement of serpentinite. Weathered serpentinite is characteristically friable (O’Hanley, 1996). This presents two notable concerns in using serpentinite as rock fill for embankment dams. First, the friable nature of weathered serpentinite suggests that over time consolidation of the rock fill will become an issue. What is unknown at the moment is whether this weathering will take place, or be accelerated, in the presence of air/oxygen or water within the rock fill portion of the embankment dam. The second potential issue is the transformation of serpentinite to calcite over time. Given that the RSF dam is to contain nickel mine tailings, the chemical composition of the pore water within the tailings may contribute to accelerated degradation of the rock fill or underlying serpentinite, should leaks be present, or develop in the impoundment liner. The inherent low density and strength as well as the friability of the serpentinite rock may also cause issues during placement and compaction of the rock fill.
In addition, the highly hydrated nature of serpentinite causes the rock material to be subject to shrinkage and swelling effects. While the processes may take a significant amount of time, the impact of swelling associated with serpentinisation of host rock, or more importantly shrinkage associated with dehydration of the serpentinite minerals, may be expected to result in increased consolidation of fill materials, as well as breakdown of the rock fill internal to the embankment dam. Weathering of the serpentinite, as well as olivine, results in clay consisting primarily of chlorite and montmorillonite, iron oxy-hydroxide, carbonate minerals, and quartz (O’Hanley (1996).
Clay Fill
Serpentinite clay may be particularly useful as clay fill within the proposed dam structure. The presumed presence of montmorillonite within the serpentinite clay is expected to aid in reducing the permeability of the clay fill region of the dam.
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Serpentinite Summary and Conclusions
Dam construction using serpentinite as a foundation is questionable. The large number of dam failures associated with construction using serpentinite as the foundation material is of concern. Proper design and construction requires extensive field and laboratory testing in order to validate the stability of the serpentinite foundation material. Serpentinite is characterised as having a low density and a block in matrix assemblage with notably low shear strength in the matrix. The matrix typically consists of weak clay material (montmorillonite) or talc which can dominate the global stability of the foundation material. These weak regions can be difficult to identify during field investigations. If using serpentinite as a foundation is unavoidable, the footprint of the dam on serpentinite should be minimised, with the bulk of the dam footprint being located on more competent rock.
Using serpentinite as rock fill for the dam is questionable due to 1) the low density of the serpentinite rock, 2) the friability of the rock, which may result in problems during fill placement and compaction, and 3) open questions about weathering rates and characteristics of serpentinite when used as rock fill. The overall percentage of serpentinite used as rock fill should probably be minimised, with the bulk of the material consisting of more durable rock.
Serpentinite clay is probably a suitable material for the clay fill portion of the proposed dam. The typical mineral characteristics of serpentinite clay are expected to serve as a good low permeability clay fill core.
Payong-Payong versus Binuangan Valleys:
The northern ridge in the Payong-Payong valley is mainly serpentinite, and the dam would be required to found on this ridge. Therefore, the serpentinite in the Payong-Payong valley is adverse to dam foundation condition. The Binuangan valley also shows some serpentinite and limestone that must be addressed.
18.9.7 RSF Design
18.9.7.1 General
The RSF is designed as a water storage facility for the first several months of the project. Therefore, a robust dam suitable for water storage is necessary. For the subsequent years of operation, years 1 through 15, the RSF is designed with a downstream raise embankment to provide stability in a seismically active area.
18.9.7.2 Design Criteria
The design criteria for the RSF are described in Table 93. Assumed values were chosen on a conservative basis and may be further refined in the further studies when additional testing and site investigations have been performed. It is noted that the residues volume calculations are designed on assumptions, rather than actual test data, as residues data was not available at time of this report.
Table 93 – Summary of RSF Design Criteria
Design Item Criteria Reference
Total Residues 27 Mt from nickel laterite BWHC
4 950 tonnes per day Residues Production 365 days per year BWHC 1.81 Mtpa
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Design Item Criteria Reference
Residues solids specific 2.8 – to be confirmed Estimate gravity
Residues percent solids 30% BWHC (during pipeline transport)
Expected Residues Beach 0.5% (0% used in PFS) Estimate
1.00 to 1.26 t/m3 Residues dry density BWHC (2011) Average = 1.08 – must be verified
Target Facility Capacity 28 Mt (25.1M m3) Ausenco
Facility Service Life Approximately 15 years Ausenco
Residues start-up dam Approximately 2 years Needed for start-up storage requirement
Environmental Issues No ARD, no restrictions, no issues Ausenco
RSF Dam Criteria Reference
20 m. Must be verified during Feasibility Residues dam crest width Study to be able to support the use of Ausenco haul trucks placing rock fill.
Residues dam upstream 2:1 (horizontal:vertical) Ausenco Vector slope, downstream raise
Residues dam downstream 2:1 (horizontal:vertical) Ausenco Vector slope
3 m above operating water pool and Dry Freeboard Capacity Estimate designed storm level
Residues impoundment Upstream diversion to mitigate flash Requirement diversion floods
3m freeboard easily contains limited Storm Storage Capacity Ausenco Vector storm events
Residues impoundment Beach slope away from dam at start-up Ausenco Vector storage transitioning to full perimeter deposition
Material Rock fill with transition zones Ausenco
18.9.7.3 RSF Dam Considerations
Several key design aspects of the design are listed below:
Rock fill sourced from local borrow sources. Mine overburden and waste rock are not available due to the lack of overburden and waste rock associated with the near surface nickel laterite deposit. Transition materials to provide bedding for geomembrane liner and water cut-off on upstream side of dam. Cut-off trench cut into the foundation as needed to further reduce foundation seepage losses
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geomembrane liner of entire RSF decant pool at east end of RSF allow sufficient dam freeboard for 100% containment and harvesting of upstream undiverted natural flows and design storm events for use in plant operations.
There will be a sub drain system that will capture seepage beneath the liner system. There will be an overdrain in the Stage 1 area that will facilitate drainage of the residues.
Since water return from the RSF will not be necessary, a start up water pool within the RSF will not be necessary. However, the decant system must be in place at start up so as to begin discharging decant water from the RSF.
18.9.7.4 Residues Density
The key component for sizing the RSF is the achieved residues density. Slight variations in the density can significantly impact the size of the RSF and dam volumetrics. Currently, little to no data exists on the residues density. BWHC provided a summary table showing variations from 1.00 to 1.26 t/m3. We have assumed an average density of 1.08 t/m3. If this value varies, then the RSF storage capacity and associated dam volumetrics will change. Therefore, it is critical that testing of the residues be completed as soon as possible for the next stage of design.
18.9.7.5 RSF Dam Design
Starter Dam
The starter dam will be constructed to crest elevation 88 m, which will allow for approximately 2 years of residues disposal. The starter dam consists of a geomembrane lined impervious upstream face, transition zone filter layers beneath the geomembrane, and a rock fill downstream main section. The entire RSF will also be lined to contain the residues.
The upstream and downstream slopes were selected as 2H:1V to accommodate potentially lower strength rock fills. Should a suitably stable rock fill source be identified during the next phase of design, then perhaps the downstream slope could be steepened. However, the upstream slope should remain at 2H:1V to accommodate liner installation.
This dam is designed for water storage to allow residues to be initially deposited in the upstream portions of the impoundment. During this time the water pool will be located at the upstream dam face. Residues disposal will be required from the west, north, and south sides of the impoundment, including the dam. A beach slope of approximately 0.5% is anticipated.
18.9.7.6 Downstream Raise Dam
The RSF expansion dam will be constructed as a downstream raise dam on top of the 2-year starter dam from 88 m to 141 m. The expansion dam consists of a rock fill and transition zone materials similar to the starter dam. The upstream face of the expansion dam will continue to be lined for each new raise. The drawings show the expansion dam section and details.
18.9.7.7 Foundation Preparation
Foundation preparation will be performed for the entire footprint area for both the 2-year and the expansion embankments. Grubbing will occur to remove all vegetation and organic material from the footprint area including trees, shrubs, and roots up to 19 mm in size. Topsoil will be removed from the area.
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18.9.7.8 Liner system
The 2-year starter dam contains a composite liner system on the upstream face which consists of a geomembrane underlain by low-permeability soils. This liner system provides for a layer of hydrologic containment to prevent seepage from migrating through the dam face.
18.9.7.9 Internal drains
Both the 2-year and the expansion embankments contain a filter drain system beneath the dam, which conveys any seepage through the embankment to the blanket drain located on the valley floor. The intent of this drainage system is to provide a seepage path through the embankments and prevent seepage from saturating the downstream dam fill section for enhanced slope stability.
18.9.7.10 Seepage Cut-off
A seepage barrier is provided at the upstream toe of the starter dam. This cut-off consists of a 5 m deep trench at the base of the upstream toe of the dam.
18.9.7.11 Seepage Collection
A seepage collection pond will be located on the downstream side of the embankment. This pond will collect seepage from the RSF to prevent contaminants from leaving the RSF permit boundary limits.
18.9.7.12 Water Pool and Decant Water
A water pool will be located within the RSF on the east side. Access will be provided along the perimeter of the RSF. This road will act as the access road to the pipeline from the impoundment water return pump. The planned alignment of the water pool access road will be determined during the DFS. The decant water from within the RSF will be disposed off site and into the ocean.
18.9.7.13 Expansion Potential
The 15-year RSF will only have limited expansion potential, as the nature of the steep, short valleys do not lend much storage capacity. Therefore, expansion beyond 15 years will most likely make use of mined out pits.
18.9.7.14 Residues Delivery System
The residues delivery system considered the worst case for both the start-up and expansion RSF. This included pumping residues to 88 m for the start-up RSF and to 141 m for the expansion RSF.
18.9.7.15 Water Balance
A detailed water balance model was not created for the project, as the decant water will be disposed in the ocean. Therefore, water return is not necessary. Furthermore, the plant designers will provide the amount of water necessary for process, which will be provided from local rivers.
The river water quality should be verified as part of the detailed design.
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18.9.7.16 Hydrogeology
Groundwater conditions at Agata will need to be assessed prior to commencement of excavation. The continuous evaluation of groundwater conditions at the site will be required as excavation proceeds and additional rock fracture and groundwater data becomes available. No work has been completed in this regard. Therefore this section summarises the required actions to complete a hydrogeologic study of the project site.
Four issues in particular need to be addressed:
the current elevation of the groundwater table, and the location of any confined aquifers in the area of expansion the stratigraphic, structural and geologic characterisation of the geology around the proposed pits the prevalence of water bearing fractures in the rock structures to be excavated and the associated impact on pit dewatering efforts slope stability issues associated with seepage and dewatering rate in and around the pit excavation.
Prior to preparation of a workplan for the field investigation, information that has been gathered as part of the ore model on the stratigraphic and structural geology in the vicinity of the site should be evaluated and incorporated. Valuable information on lithology, induration, porosity, fracture spacing and orientation, depth of weathering, depth of water, and so forth, may already be available. In addition, drilling logs should be reviewed for information on zones where drilling activities encountered circulation problems.
In order to address the issues listed above, groundwater monitoring wells will need to be installed around the proposed excavation to a depth below the anticipated bottom of the pit. During well installation the occurrence of groundwater and intersection with water bearing fractures will need to be logged, along with the final water level in the wells after well development is complete. The number of wells required for the groundwater monitoring program will depend on the number of water bearing zones that will be intersected by the excavation, and the thickness of the aquifers. Separate wells or screened sections (if nested wells are to be used) should be installed to monitor each aquifer. Ideally, these wells should be installed prior to final design.
The presence of water bearing fractures may significantly increase the volume of water entering the mine pit, and will increase the scope of the pit dewatering program since water bearing fractures can reduce pit slope stability.
Once the aquifers in the area of expansion have been characterised, further evaluation of seepage and slope stability in the pit area is required. This will allow further refinement of the dewatering program, if necessary, during the detailed design.
Any water being pumped from around or within the pit will be used by operations, either at the primary crushers for dust control and/or at the plant sites for process. The amount of this pit water available will be estimated during the detailed design.
18.9.7.17 Closure Requirements
The RSF will require a closure cap at the end of the project life. Final waste pile slopes and materials with potential to produce ARD will be covered by a minimum 5 m of inert waste fill by selective placement at the final fill levels. The top surfaces will be graded to drain and capped with 1.0 m of waste rock and soils and another 0.3 m of topsoil. The residues should be placed
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to accommodate long term settlement without ponding, and graded to drain to the natural drainages. A detailed closure plan for each facility will be completed during the detailed design.
18.9.8 Quantity and cost estimation
18.9.8.1 General
This section provides a general summary of the capital costs for the base case. The costs are summarised in Table 94.
Table 94 – Summary of RSF Capital and Deferred Costs
Starter Dam Stage 2 Stage 3 Closure
Year 0 3 12 15
Capital USD M Deferred USD M Deferred USD M Deferred USD M
Earthworks 44 70 44 6.3
Geosynthetics 2.2 1.8 1.2 - and Piping
Diversion Works 0.84 - - -
Miscellaneous 0.05 0.05 0.05 0.20
Total 47 72 46 6.5
18.9.8.2 Base Case RSF
The base case RSF consists of a 2-year starter dam combined with a 13-year expansion dam located south of the process plant.
Total deferred capital costs for the RSF are estimated at USD 124M
18.9.9 Recommended future work
18.9.9.1 General
The analysed soils are mainly related with their reactivity to chemical/water components/conditions (and cementation degree) instead of their bearing capacity. For this reason, and in addition to the information previously emphasised, it is recommended to develop an adequate system for controlling the superficial drainage and eventual leakages for all facilities, including perimeter drainage and sub-drainage.
Regarding hydrogeological aspects, drillholes with permeability and pumping tests in the rock aquifer are recommended to be carried out, so as to know the hydraulic properties of this aquifer. In addition, drillholes and/or geophysics exploration are recommended to recognise the thickness of the different hydrogeological units in the various sites where mine facilities will be located. Finally, it is recommended to obtain chemical analysis of water present in different sectors in order to check the chemical quality and observe possible water correlations.
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In the Residues area, a more detailed investigation program is suggested to be developed to improve the characterisation of these materials and to develop an approximate profile of these clayey/silty soils.
Ausenco Vector recommends hiring an expert familiar with serpentinite to further assess the condition of the serpentinite bedrock within the proposed dam foundation. An engineering geologist would be appropriate to be contacted to further understand the serpentinite. Ausenco Vector’s geotechnical engineer is familiar enough with the issues associated with serpentinite, but the potential impacts on the project are large enough that these issues should be addressed by an expert engineering geologist more familiar with serpentinite.
18.9.9.2 Detailed Design of Preferred Option
Detailed design is recommended to be undertaken. This would include designing the road alignments for the access road, the seepage ponds for the RSF, detailed geotechnical analyses for selected dam cross-sections and existing foundation conditions, and detailed hydrogeology and water supply studies.
Upon detailed design after the field investigations, suggested refinements may be added to the base case design which will be determined through a team review of the design based on field data.
18.9.9.3 Design of Monitoring Systems for RSF
A monitoring system designed to measure the embankment pore pressure and settlement for the RSF is recommended. Both of these structures are designed to store water which can create excess pore pressure within the embankments causing a decrease in stability. In addition, each of these structures should be monitored for settlement so that corrective measures can be taken if excessive settlement is detected.
18.9.9.4 Facility Operation Analysis for RSF
A facility operations analysis for the RSF is recommended. This analysis will go through the details of operations and analyse how residues disposal and water storage affect the construction and operation of the facility at a detailed level.
18.9.9.5 Residues Testing
Residues rheology testing is recommended to provide measured inputs for the residues disposal pumping system and confirm assumptions used in the RSF design with respect to residues density and associated RSF impoundment volumetrics. The residues rheology laboratory testing should be conducted to a sufficient level of effort to confirm the assumed impoundment residues disposal density, beach slopes and pumpability (viscosity and non- segregating laminar flow solids to water density).
18.9.9.6 Geochemical Evaluation of Residues and Waste Rock
A geochemical evaluation of the residues and waste rock is recommended. This will determine what measures are necessary to monitor and contain seepage of residues water into the ground system as well as determine what necessary steps (if any) must be taken to avoid acid rock drainage of waste rock exposed to surface weathering.
18.9.9.7 Waste Rock Facility (WRF) Design and Integrated Mine Waste Scheduling
A waste rock facility design should be completed for the project life. This design will take into account the geochemical analysis of the waste rock ensuring is it disposed of in a manner that
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will not create future problems requiring remediation. This design must also take into account the scheduling of the mine waste rock to ensure that it can be completed as designed.
18.9.9.8 Detailed Geotechnical Investigation of Selected Site
The next geotechnical investigation should focus specifically on the serpentinite issue and verify suitability as a foundation material. An expert should be consulted with specific experience on serpentinite in the Philippines. Furthermore, the rock fill sources should be identified and studied.
The geotechnical site investigations are recommended and necessary. This should include borehole drilling and test pit excavations at the specific dam and plant sites to determine the foundation, borrow and fill placement conditions for design. The borehole drilling can be reduced by adding seismic refraction survey lines. The seismic refraction lines would be tied into a few borehole locations for interpretation of the different wave velocity zones indicating a change in density and the rippability versus blasting requirements for required excavations.
The geotechnical investigation program should include geologic mapping and ground water mapping, based on the owner’s exploration borehole information and the geotechnical boreholes. The borrow investigations should include sampling of representative materials for laboratory testing, if different than the materials sampled and tested in the past site work. Laboratory testing would include gradation testing for soil and rock classification, compaction density, plasticity, natural and optimum compaction moisture content, permeability, and strength testing.
18.9.9.9 Hydrologic Containment Analysis
As stated in the hydrogeology section above, a hydrologic model should be completed to assess the flow of residues seepage into the groundwater system. In addition, this model can predict groundwater inflow during the mining process and determine what type of pit dewatering system (if any) is required. This modelling will depend on the detailed hydrogeology field investigation that will include well installation and pump tests.
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19 Market Studies and Contracts
19.1 Summary Outlook for nickel
It is customary to project nickel demand with a steady growth coupled to an equally steady supply growth leaving the markets in balance. This is unlikely to happen in the current economic climate. Events of the day are showing that if anything supply/demand will be more volatile and the balance will be subject to sudden changes as was witnessed during the global financial crisis of 2008/09. Some things will remain constant: demand for nickel will depend on industrial growth and supply will depend on investment and availability of resources. The following takes a middle view but the expectation is that price volatility is likely to be the order of the day.
Stainless steel will dominate nickel consumption and growth in demand will continue to be driven by increasing consumption in China. Other factors will also have an impact such as a rise in the nickel content of stainless steel as consumers demand higher quality products. The rise in the nickel tenor from the present post GFC 7% Ni back to 8% Ni would result in an increase in nickel demand of 300 000 t/y, more than enough to consume the new supplies of ferro-nickel.
Forecast nickel prices depend on the recovery in the world’s economies. Demand for nickel will be highly dependent on China and the growth experienced in India. Development in Brazil and Russia will also be an important factor in nickel demand as both are major nickel producers.
Forecasts of production and demand for primary nickel worldwide are as follows:
Table 95 - Global Primary Nickel Supply and Consumption Forecasts
Primary Nickel – kt/y 2012 2013 2014 2015 2016
Projected Production 1 750 1 780 1 850 1 950 2 020
Likely production 1 710 1 740 1 820 1 900 1 970
Consumption 1 680 1 750 1 840 1 920 2 000
Consumption could increase further if the nickel tenor in stainless steel increases to 8%.
Based on these factors we see the nickel price trading in a range as follows:
Table 96 - Nickel Price Forecasts
$ per MT 2012 2013 2014 2015 2016
High price range 23 500 23 000 22 500 22 500 25 000
Low price range 18 240 18 000 18 750 20 500 21 500
Median 22 500 21 500 22 000 22 000 23 000
These prices are based on the APEX forecasts published in the Metal Bulletin, which are summary of many analyst’s opinions and tempered by our own research.
19.2 Recent Nickel Market Situation 1. Nickel prices continued to perform strongly in the first half of 2011 due to: Growth of stainless steel production, especially in China
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Slow ramp up and start-up problems at hydrometallurgical projects world-wide. Fall in LME and producer stocks. Investment in nickel inventory by funds 2. Prices softened during the turmoil in financial and commodity markets in August. The outlook is now uncertain in the near term. 3. Supply will be dependent on the performance of a number of start-up projects. HPAL projects currently being developed have not performed well at start-up and as these come on stream any near term supply shortage would be addressed. This extra product could act as a downward influence on future nickel prices. 4. China is the main force in increasing nickel demand. Most of the increase in nickel supply is coming from nickel pig iron production made from imported laterite ores. Today China’s primary nickel consumption is over 50% of world demand. 5. Major ferro-nickel production is forecast to come on stream over the next 24 months. These include Barro Alto (41 000 t/y) and Onca Puma (53 000 t/y) in Brazil, Koniambo in New Caledonia (60 000 t/y), Taiyuang in Burma (20 000 t/y) and the restart of Falcondo (20 000 t/y) in the Dominican Republic. This potential additional supply totals 170 000 t/y or 12% of world nickel capacity.
19.3 Outlook for nickel demand
The major consuming use for nickel is as an alloying element in stainless steel production. This has accounted for between 65-70% over recent years. The major supply source of nickel is and has been stainless steel scrap. In the past most mills use a scrap tenor of greater than 50%. Thus stainless use of nickel is affected by the availability of scrap. Up to this point of the product cycle stainless scrap has not been as important a source of supply in China as in Europe and North America. As the market matures scrap will play an increasing role in Chinese nickel supply. Currently the scrap tenor in China is 38%.
Another major impact on nickel demand for stainless steel has been the type of alloy to be produced.
When the nickel price hit $50 000 per tonne all stainless steel producers sought new ways to find an acceptable nickel replacement while blast and electric furnace processors in China simultaneously commenced production of nickel pig iron (NPI) as a means of avoiding high nickel prices and utilizing out-dated production facilities.
By changing emphasis from 300 series stainless which contains a minimum of 8% nickel and converting users to 200 series where manganese (as an austenite) is used to replace some of the nickel required in the alloys, the stainless steel producers cut their demand for nickel. The extreme high price of nickel therefore had a major effect on nickel end use which is only now being recovered. Nickel demand fell from 1.4 Mt/y in 2006 to 1.24 Mt/y in 2008, a fall of 11%.
The use of 300 series rather than 200 series stainless steel can have major effect on nickel demand. A change of 1% in the average tenor of nickel in stainless steel from the historic level of 8.4% in 2005 to 7.1% today is equivalent to about 300 000 t/y of nickel content. As quality becomes more important in China we can expect a return to the use of 300 series stainless steel. Already there are signs of a return to 300 series alloys.
Low grade NPI’s are an ideal supply source for 200 series nickel as they also contain a small percentage of manganese and chrome. Any return to the extreme high prices of 2006 will see a move back to 200 series stainless steel. If demand in India grows we can also expect, initially at least, that 200 series stainless steel will predominate. In fact India was the first to promote use
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of 200 series as it used less nickel, of which India had none, and promoted manganese of which India was self sufficient.
It is expected that demand for nickel in China will continue to grow and that India will also increase nickel consumption. Should recovery in the USA occur and European demand return we can expect there will be a significant increase in demand for nickel containing products. It is in Europe and the USA where there is underutilised capacity in the production of stainless steel. Should prosperity return to these regions this capacity can be restarted without new capital input.
Growth in demand from other BRIC countries will also occur. Both Brazil and Russia are already significant and growing suppliers of nickel and will not have supply constraints for domestic consumption. To the extent that this constrains exports it will be beneficial to nickel markets in other parts of the world, however they will have to add stainless steel production capacity to meet the demand.
In discussing nickel markets it is important to recognise the importance of the markets which require class 1 nickel products. These include its use in:
Electroplating – long a traditional use of nickel and very important in China where over 50 000 t/y is used for this purpose. Super alloys – there are multiple uses for these alloys for everything from surgical implants to turbine blades for jet engines. Special stainless steel alloys using class 1 nickel are required for use in atomic power stations. Non-ferrous alloys – in combination with copper these alloys are widely used in highly corrosive conditions such as for desalination plants. Also for coinage where resistance to wear and corrosive conditions is a vital consideration. As an active metal for use in rechargeable high performance batteries. Most electric cars are planned on the use of nickel metal hydride batteries. They are also widely used in mobile phones. Nickel Cadmium batteries have long been the major power source for hand held tools. A special pure nickel alloy is used for computer frames.
These uses represent 35-40% of primary nickel use. They cannot be supplied by scrap, ferro nickel or NPI. These uses (other than plating) have potential for higher than normal demand increases because of their leading edge technology. Demand for pure nickel is expected to increase more than for stainless steel. It is interesting to note that virtually all of the LME stocks of class 1 are in the form of full plate cathode, and yet briquettes, crowns and pellets are totally absent in view of their preferred use for the above applications. These uses total approximately 600,000 t/y today while class 1 production is close to 1 million t/y. As there will always be demand for class 1 for balancing stainless steel melts there is a possibility for tightness in the supply of class 1 nickel. As class 1 nickel is the only source on which pricing is based on the LME there may be an underlying support for nickel prices even if ferro nickel and NPI production increases beyond available demand for stainless steel.
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The table below is an estimate of future nickel demand.
Table 97 – Analysis of Global Nickel Demand
2007 2008 2009 2010 2011f 2012f 2013f 2014f 2015f
Stainless Steel Production (‘000 tonnes)
USA 2 171 1 925 1 618 2 201 2 179 2 222 2 267 2 312 2 358
Western Europe 8 100 7 838 5 867 7 472 7 472 7 621 7 736 7 852 7 970
Japan 3 882 3 567 2 607 3 427 3 341 3 475 3 544 3 544 3 544
China 8 045 7 200 9 158 12 500 13 813 15 194 16 713 18 217 19 857
India 1 820 1 650 1 960 2 160 2 322 2 601 2 835 3 175 3 495
RoW 5 047 4 272 4 119 4 781 4 925 5 144 5 277 5 508 5 750
Glogal Melted Stainless Production 29 065 26 452 25 448 32 541 34 052 36 257 3 831 40 608 42 971
%change 3.0% -9.0% -3.8% 27.9% 4.6% 6.5% 5.8% 5.8% 5.8%
Global Austentic Ratio (%) 71.9% 80.8% 74.1% 72.0% 72.4% 73.0% 73.3% 73.4% 73.6%
Global Austenite Production (‘000 tonnes) 20 907 18 738 18 849 23 429 24 649 26 480 28 111 29 815 31 609
Nickel Consumption in Stainless Steel
Average Nickel Content of Austenites (%) 8.1% 7.6% 7.7% 7.4% 7.2% 7.2% 7.1% 7.1% 7.1%
Nickel Units in Austenite (‘000 tonnes) 1 734 1 596 1 441 1 387 1 679 1 769 1 907 2 007 2 109
Primary Nickel Ratio (%) 51.8% 54.0% 53.9% 29.7% 59.6% 59.1% 59.3% 58.9% 59.2%
Primary Nickel Units in Stainless (‘000 tonnes) 862 777 828 1 001 1 045 1 130 1 182 1 249 1 302
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Nickel Consumption in Other Applications (‘000 tonnes)
Alloy Steel 68 71 68 70
Non-Ferrous Alloys 176 183 179 188
Plating 106 104 104 107
Other 50 50 49 48
Primary Nickel Units in Non-Stainless Applications 508 512 500 519 531 551 571 593 616
Global Primary Nickel Consumption (‘000 tonnes) 1 370 1 289 1 328 1 520 1 576 1 681 1 754 1 842 1 918
% change -1.0% -5.9% 3.0% 14.4% 3.7% 6.7% 4.3% 5.0% 4.1%
Source: CRU International, Brook Hunt, GS&PA Research estimates
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The most important variable in determining supply/demand balance will be the availability of scrap. Higher prices generally cause the collection of scrap to increase which in turn reduces nickel demand.
19.4 Nickel Supply
Discussions with major producers indicate that they will not increase supply beyond existing planned production increases as they are concerned that if too many new producers come into the market we will see another extended period of low prices as occurred in the 1980’s and 90’s.
There is massive pent up supply with many laterite projects queuing up for development. The hydrometallurgical production routes tend to be very high capital, requiring major infrastructure support. When demand for the product is uncertain it is hard to justify the major capital expenditure that an HPAL project requires. On the other hand a small more flexible project could command support if:
6. The capital required is less per unit of production than other new projects. 7. The operating cost is controllable and in the bottom half of production costs. 8. A major user or processor can be co-opted into the development process.
Nickel is sourced from sulphide and laterite ores and through a variety of processes. Originally sulphide sources dominated, and Canadian producers Inco and Falconbridge dominated world production until the late 1960’s when Western Mining discovered nickel in Western Australia. The most significant nickel production outside these groups was from Russia and Finland, also from sulphide resources. During the 20th century New Caledonia had been an important source of nickel from the early 1900’s, initially in the form of matte and more recently as ferro nickel.
With stainless steel becoming an important material of construction and manufacturing, new production increasingly came from ferro nickel sourced from laterite sources. The development of Cuban laterites by Freeport led to the development of firstly, the Caron process at Nicaro, and then the acid leach process at Moa Bay. Thus the routes to nickel became more and more complex with a crossover of products from different sources to meet market requirements. Unlike lead, zinc, copper or aluminium which are predominantly sold as 100% metal ingots or cathodes, nickel goes to market in a variety of forms, of which only 60% is a form of pure metal. These products include:
Cathode nickel in full plates or cut to smaller sizes suitable for most applications including electroplating. Nickel briquettes, produced using the Sherritt Gordon ammonia leach refining process, particularly suitable for melting applications. Nickel crowns designed particularly for electroplating. Carbonyl nickel pellets for very high quality applications and particularly super alloys. Utility nickel being a steel making grade but not a class 1 nickel. Nickel oxide both 75% and 90% suitable for steel making only as a limited percentage of the melt. Ferro nickel of various grades sourced entirely from laterite ores using electric arc furnaces and used for stainless steel making. Nickel Pig Iron produced from laterites using electric arc furnace (EAF), or even blast furnaces, and generally only suitable for low grade (200 series) stainless steel production.
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The largest nickel source is scrap and which is used almost exclusively for stainless steel production. This can be in-process scrap, manufacturing scrap, and old scrap. The first is sourced from the steel making process itself; the second is returned scrap from the process of manufacturing; and the latter (old) is collected from obsolete or discarded stainless steel articles which can have an average life of 15 years or more before being collected for remelting. As it already has the exact specifications for stainless steel (i.e. nickel, chrome and iron) it is the preferred base load for steel makers.
With such a varied source of supply it is impossible to predict with any accuracy from where nickel will be sourced. Great store is set by being the in the lowest cost quartile of operating costs. This frankly is a fallacious argument. In the fallout from overproduction in the 1980’s some of the high cost producers were maintained for political rather than cost reasons. Queensland Nickel and BCL in Botswana were such cases.
A major requirement in future will be the need to source nickel intermediates in the form of sulphide concentrates or mixed sulphides from laterite processing for the sulphide smelters and refiners. Most smelters, particularly those in Finland, Brazil and China, face problems finding concentrates. Canadian smelters are in a similar position although there are a number of new deposits under development. There are also new sulphide deposits in Africa and a few in Australia which will be developed preferentially to laterite deposits because their cost of capital is less than laterite processing options and refining capacity is available. The biggest of such new supply sources is Mirabela in Brazil which today produces about 20,000 t/y of nickel and is increasing capacity by 50%. The production is committed to Votorantim and Norilsk. Other new sulphide sources include the expansion at Canadian mines including further development of Voisey’s Bay, new production from Finland and Russia, and the development Xstrata’s operations in Western Australia.
The following table is an estimate of production by sources. It does not however estimate scrap availability. This is almost impossible to provide but will have a significant effect on how much primary nickel will be required.
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Table 98 - Summary of Global Nickel Production
2007 2008 2009 2010 2011f 2012f 2013f 2014f 2015f
Nickel units (‘000 tonnes) in:
Refined metal (ex-Sulphide ores) 917 905 850 868 944 999 1 025 1 049 1 067
Refined metal (ex-Laterites) 101 111 119 119 138 175 208 235 258
Ferronickel (ex-China) 322 286 265 297 324 414 468 501 519
China NPI/FeNi 74 77 96 162 215 217 226 225 239
Pre-disruption Total 1 413 1 379 1 330 1 445 1 621 1 805 1 926 2 011 2 083
Disruption allowance - - - - 2.0% 4.0% 80% 8.0% 8.0%
Post-disruption Production 1 413 1 379 1 330 1 445 1 588 1 733 1 772 1 850 1 916
% change 3.6 -2.5 -3.5 8.7 9.9 9.1 2.2 4.4 3.6
Nickel ex-sulphides (%of total) 64.9 65.7 63.9 60.0 58.2 55.4 53.2 52.2 51.2
Nickel ex-laterites (% of total) 35.1 34.3 36.1 40.0 41.8 44.6 46.8 47.8 48.8
Source: CRU International, Brook Hunt, GS&PA Research estimates
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This table is an attempt to define sources for nickel supply. The biggest increase is from ferro nickel from laterites. As we have already noted this amounts to 170 000 t/y from just 4 projects and a restart of a closed facility. The quality of ferro nickel is such that it will be preferred by stainless steel producers.
The world market for nickel exceeds 1.6 Mt/y and over 60% of this is in China, Korea and Japan. There is also expected to be substantial growth in demand for nickel containing products in India. The estimated production of the Agata Project is less than 2% of world demand. There should little difficulty in placing this output with an appropriate offtake partner.
No review of nickel supply would be complete without a look at NPI (nickel pig iron). Production was started originally to meet demand caused by the nickel shortage and in part to utilize facilities which would otherwise be closed. The government had demanded that blast furnaces producing pig iron below a certain size be closed because they were inefficient and highly polluting. Their operators found that they could feed nickel laterites and produce a product which was suitable for production of low grade stainless steel. Their operations were highly polluting and very inefficient. Most of these producers have now been converted to electric furnaces and are producing a much better product. In fact some producers are making a ferro nickel of 10-12% nickel. This is not surprising as other more sophisticated operators are producing high grade ferro-nickel from similar ore grades. It is a question of adopting the appropriate technology. The figures shown in the table place NPI production in excess of 200 000 t/y of nickel content. Some commentators in China suggest it will rise above 400 000 t/y. If that is the case it is probable that nickel consumption has also been understated.
The NPI market in China is actually made up of three markets. These are:
9. Saprolite Nickel ore imported and sold to NPI producers by traders on a price per ton basis. 10. Low grade limonite ore imported for sale to steel mills as a replacement for iron ore on a price per tonne basis, as well as to produce low grade NPI. 11. NPI sold to steel mills at a price based on nickel content.
Most of the above are priced in Yuan and reflect in part the LME nickel price but also other logistic and Chinese factors. Also if Class 1 or imported ferro-nickel is available at low prices then mills will use them and reduce NPI input.
NPI producers will not be governed by LME prices immediately but will stop producing if they cannot make money! Like all Chinese markets it is very much a day to day thing. In the end if the LME prices are too low for NPI production it will stop. What the cut off point is will vary from producer to producer and take into account logistic costs and availability of electricity. Traders dominate and western style long term projections are hard to establish. It would seem a separate market is developing for this type of nickel supply which may at times divert from the LME pricing model. It is almost certain it will be impossible to get long term sales contracts as it is low capital and will not attract main stream buyers.
It is therefore impossible to predict with any certainty the forward picture of NPI production or the cut off price. The effect of Indonesia and The Philippines stopping the export of unprocessed ore may in the end result in more NPI being imported either as finished product or semi-processed, but is unlikely to slow down the supply. However the continued growth predicted above is unlikely to eventuate as it will require more mines to be opened and more facilities to be installed. On the other hand, the forecasts provided by Antiake, the main forecasting unit of Chinese industry, indicate a massive increase in the supply of NPI.
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19.5 Market for Mixed Hydroxide Product
19.5.1 General
Intermediate products of nickel are widely traded for processing in various refineries around the world. In the processing of laterite mineralisation using hydrometallurgical methods there are a variety of processes that can produce different intermediate products depending on the reagents used. The MHP product to be produced by the Agata Project is potentially a suitable feed for a number of refineries. Mindoro will agree the required product specification with the preferred take-off partner. Mindoro will arrange to place its output with one or more refining companies.
19.5.2 Agata MHP
The quality of the typical intermediate product from the Agata project is presented in Table 5.
Table 99 – Agata Product Quality
Mixed Hydroxide Product Typical Probable Range
Dry Solids Density kg/m3 3231 3220-3240
"As Shipped" Density kg/m3 1704 1650-1750
Percent Moisture % 40.0 35-45
Composition (dry basis):- Typical Probable Range
Nickel wt% 38.15 37-39
Cobalt wt% 2.03 1.5-2.5
Iron wt% 0.06 0-0.1
Silicon wt% 0.29 0-0.4
Magnesium wt% 0.01 0-0.1
Manganese wt% 5.46 4-6
Aluminium wt% 0.18 0.1-0.5
Chromium wt% 0.02 0-0.05
Zinc wt% 0.85 0.5-1.0
Copper wt% 0.32 0.2-0.5
Sulphur wt% 4.65 4-5
Calcium wt% 0.95 0.8-1.2
The product has high manganese content. This will be problematic for some refiners. In the past, these levels of manganese were accepted and treated by the Harjavalta refinery in Finland. It requires the availability of Sherritt style ammonia leaching capacity. Those projects using this process should be able to handle this hydroxide. Whether commercially they will wish to purchase this material is another matter. Those refineries identified with suitable flowsheets include:
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Intercontinental Nickel (Sherritt) at Fort Sakatchewan, Canada. Norilsk (previously Outukumpu) at Harjavalta, Finland. Queensland Nickel, at Yabulu (near Townsville), Australia. Nickel West (BHP Billiton), at Kwinana, W.A. Sumitomo, at Niihama, Japan. Glencore’s Murrin Murrin facility in W.A. Xstrata’s Nickelwerks at Kristiansand in Norway uses a chlorine leach technology and may be able to use this product as feedstock.
Jinchuan has always expressed concern at manganese levels and as currently configured may not be able use this product. Confirmation of their situation is being sought.
Recent negotiations for sale of these products has resulted in metal payments for 75- 80% of the nickel content and between 40-45% of the cobalt content. This has been on the basis that the product is sold on a CIF basis to the customer’s port of delivery.
The packaging in 2 tonne bags has been preferred with the aim to pack 10 bags into each 6 m container. As there are likely customers in China, the cost of transport is expected to range between USD250-400 per container from main port in Mindanao. It should not be necessary to purchase containers as these will be supplied by the shipping company employed to transport the product to market.
Forward prices for nickel are subject to continued review. Cobalt has a less established market and a price USD 17 per lb is the middle of the likely price ranges for this metal. As it is largely a by-product metal it can be subject to sudden price changes however its demand is in sophisticated end uses which are not price sensitive. We confirm that this price is in the likely forecast range.
With the limitation of offtake partners, the payability for nickel may potentially be lower than the predicted 75-80% and will depend on the availability of alternative nickel feedstock. This can only be ascertained with any confidence once a concerted marketing programme is undertaken and individual buyers have been approached.
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20 Environmental
20.1 Introduction
The Agata Nickel Project is planned to develop into an integrated mining and processing project which will involve potential social and environmental impacts. These will require comprehensive assessment and planning of mitigating measures to ensure they are appropriately managed. The Company shall implement this in accordance with the International Finance Corporation Performance Standards on Social and Environmental Sustainability and the requirements under Philippine law.
20.1.1 International Finance Corporation (IFC) Performance Standards on Social and Environmental Sustainability
The Company commits to manage the potential social and environmental impacts in a manner consistent with all applicable Performance Standards in addition to the requirements under Philippine laws, regulation, and permits that pertain to social and environmental matters. The performance standards are as follows:
PS1: Social and Environmental Assessment and Management Systems
PS2: Labor and Working Conditions
PS3: Pollution Prevention and Abatement
PS4: Community Health, Safety and Security
PS5: Land Acquisition and Involuntary Resettlement
PS6: Biodiversity Conservation and Sustainable Natural Resource Management
PS7: Indigenous Peoples
PS8: Cultural Heritage
MRL has committed to a Health, Safety, Environment and Community Policy (HSEC) document jointly developed with IFC. The Company has also agreed on an ‘Environmental & Social Action Plan’ to cover all HSEC aspects related to exploration activities, feasibility work and potential future mine development. MRL, with IFC’s assistance, is developing an Environmental Management System (EMS) to adequately manage, plan and document the environmental and social issues relating to their activities in the Philippines. The Company is also preparing a Stakeholder Engagement Plan which will describe their strategy and program for engaging with stakeholders in a culturally appropriate manner.
A key element is the Social and Environmental Impact Assessment (SEIA), which considers in an integrated manner the potential social and environmental (including labour, health, and safety) risks and impacts of the project. The SEIA will be based on current information, including an accurate project description, and appropriate social and environmental baseline data. The SEIA will consider all relevant social and environmental risks and impacts of the project, and those who will be affected by such risks and impacts.
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The Company completed an SEIA for submission to the Environmental Management Bureau in January 2008, as part of its application for the ECC permit covering DSO operations that was granted on May 19th 2008. Although fully compliant with Philippine regulatory requirements, this SEIA will be upgraded to meet IFC Performance Standards prior to the commencement of any mining and/or processing operations. MRL has committed to the SEIA upgrade and reaching full compliance with IFC Performance Standards.
20.1.2 Philippine Environmental Impact Statement System
The Philippine Environmental Impact Statement System (PEISS), established through Presidential Decree (PD) 1586 in 1978, sets a systematic Environmental Impact Assessment (EIA) System. It requires Environmental Impact Statements (EIS) to be submitted to the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR) for review, evaluation, and approval. It further stipulates that the President or his duly authorised representative issues the Environmental Compliance Certificate (ECC) for a positive review of the EIA Report for Environmentally Critical Projects (ECP) and projects within Environmentally Critical Areas (ECA). Administrative Order No. 42 specifies that the DENR Secretary has the power to grant or deny ECCs on behalf of the President and further designates the EMB Central and Regional Directors as approving authorities for ECC applications.
The implementing rules and regulations (IRR) of the PEISS are defined under Department Administrative Order (DAO) 2003-30. These define the EIA as a process that involves the evaluation and prediction of the potential socio-environmental impacts of a project, including the design of appropriate preventive, mitigating and enhancement measures. The process is undertaken by the project proponent and/or EIA Consultant, EMB, a Review Committee, host communities and other stakeholders.
The Agata nickel project is subject to the PEISS. Pursuant to PD 1586 and its implementing guidelines the EIA for the Agata nickel laterite project was submitted in 2007, after which MRL was granted an ECC on May 20, 2008. This, however, is limited to Direct Shipping Ore (DSO) operations and will need to be revised for processing operations. The ECC certifies that, based on the representations of the proponent, the proposed project or undertaking will not cause significant negative environmental impact. The ECC also certifies that the proponent has complied with all the requirements of the EIS System and has committed to implement its approved Environmental Management Plan. The issuance of ECC does not exempt the proponent from securing other government permits and clearances as required by other laws. The ECC of a project not implemented within five years from its date of issuance is deemed expired. The reckoning date of project implementation is the date of groundbreaking, based on the proponent’s work plan as submitted to the EMB.
20.1.3 Other Philippine Legislation
Apart from the ECC, additional permits/clearances, and compliances are likely to be required under other legislation and regulations. These include (but are not limited to):
Pollution Control Law (1976) (Republic Act (RA) 3931): prohibits disposal into any of the water, air and/or land resources of the Philippines any organic or inorganic matter or any substance in gaseous or liquid form that shall cause pollution. The National Pollution Control Commission has authority to issue permits required to discharge any industrial wastes and other wastes. Water Code (1976) (PD 1067): Control and management of use of water, including change in point or nature of diversion, amount of appropriation, period of use; lowering or raising the level of the water of a lake, river or marsh, or draining the same; trans-basin diversion; and dumping of mine tailings or wastes into a river or a waterway.
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Clean Water Act (2003) (9275): Control and management of water quality in all water bodies, primarily relating to the abatement and control of pollution from land based sources. Permits to discharge are regulated under DAO 2004-25 and DAO 2003-39. Clean Air Act (1998) (RA 8749): Control and management of mobile and stationary sources of air pollution. DAO 2004-26 requires companies to obtain a Permit to Operate for sources that emit various air pollutants. Ecological Solid Waste Management Act (2000) (RA 9003): Control, transfer, transport, processing and disposal of solid waste in the country. Toxic Substances and Hazardous and Nuclear Wastes Control Act (1990) (RA 6969): Control and management of import, manufacture, process, distribution, use, transport, treatment, and disposal of toxic substances and hazardous and nuclear wastes in the country. Sanitation Code of the Philippines Labor Code of the Philippines including occupational safety and health standards for all mining activities Building Code of the Philippines Electrical and Mechanical Installation Code Solid Waste Management System Special Land Use Permit – for temporary use of state-owned lands Foreshore Lease Agreement - It may also cover marshy lands or lands covered w/ water bordering upon the shores or banks of navigable lakes or rivers for commercial, industrial or other productive purposes other than agriculture. Permit to Operate Private Port Local Business Permits Indigenous People’s Rights Act (IPRA) - socio-cultural, economic impacts and benefits on indigenous people for and in consideration of the issuance of Free, Prior and Informed Consent (FPIC) RA 8974 – An Act to facilitate the acquisition of right-of-way or site for National Government Infrastructure Projects – for resettlement of displaced families
In addition, there are environmental and social responsibilities provided for under the Mining Act 1995 (RA 7942) and DAO 1996-40, as shown below:
Environmental Work Program (EnWP) – socio-environmental programs are at least 10% of the estimated exploration cost Initial expenditures for environment-related infrastructures – at least 10% of the estimated project development cost Mine Rehabilitation Fund (MRF) Rehabilitation Cash Fund (RCF) – 10% of Environmental Protection and Enhancement Program (EPEP) cost or PhP 5 million, whichever is lower; to be used for the progressive rehabilitation measures Mine Rehabilitation Fund (MRF) Monitoring Trust Fund (MTF) - Replenishable amount of PhP 150,000; to be used by the Multi-partite Monitoring Team (MMT) Environmental Trust Fund (ETF) - Replenishable amount of at least PhP 150,000; to be used for compensation for damages outside of those caused by mine waste and tailings.
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Mine Waste and Tailings Reserve Fund (MWTRF) – PhP 0.05 for every ton of mine waste and PhP 0.10 for tailings; for compensation for damages as a result of mine waste and mill tailings. Polluter Pays Principle – PhP 50/MT of materials disposed in unauthorised areas. Final Mine Rehabilitation/ Decommissioning Plan (FMRDP) - Cost variable but must include an environmental plan and a social plan plus the cost of a ten year maintenance and monitoring period.
Social Development Provisions include:
Just Compensation to Landowners - Variable; depending on status of land. Social Development and Management Program (SDMP) - At least 90% of 1% of annual direct mining and milling costs (DMMC); for the implementation of sustainable community development projects/programs for the host and neighbouring communities. Royalty to Indigenous Peoples (IP) - At least 1% of gross revenue. Social Plan as part of FMR/DP - Variable; meant to minimise the mine’s economic impact to the host and neighbouring communities and to mine employees and their dependents
20.2 Environmental
Ausenco Vector commissioned Gaia South, Inc. to accomplish this Environmental Baseline Study that will describe the existing environmental and social situation in the area prior to the commencement of the proposed mining project. This report will also serve as reference information for the planning strategy of the company. The facilities that will be included in the site development plan include the tailings storage facility, mine camp, mineral processing plant, and administration building, among others.
The discussion in this report focuses on major environmental and social aspects including Land, Water, Air, and Community. Primary and secondary data gathering were done to comprehend the statements indicated in this document. Secondary data collection involves the acquisition of documents from related institutions or agencies such as the Barangay Offices and Health Centres, Rural Health Units, and Municipal Offices. Primary data gathering was accomplished through the conduct of actual survey on-site. For the physical environment, samples for soils, water, and air were collected for analysis in a DENR-accredited laboratory. Observation, identification, and documentation of flora and fauna species were done. To be able to determine the idea and perception of the local stakeholders regarding the proposed mining operation, Focus Group Discussions and Key Informant Interviews were conducted. This ensures the participation of people in the study by determining their concerns on the project.
20.2.1 Baseline Environmental Conditions
20.2.1.1 Land
20.2.1.1.1 Geology
Regional Geology and Tectonic Setting
The Island of Mindanao is located in the southern portion of the Philippine Archipelago, circumscribed by three active trenches: the Philippine Trench to the east, the Cotabato Trench to the southwest, and the Sulu-Negros Trench-arc system to the northwest. Two main fault systems: the Philippine Fault and Mindanao Fault and hundreds of fault splay and lineaments
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criss-cross the region (Figure 59). The Philippine Fault Zone that cuts through the northern portion of eastern Mindanao can be traced from the Malimono Ridge and extends in a NW direction passing through Agusan Valley towards Davao. A branch of the main fault veers southeast along Lianga Bay and Lamon Point. The presence of these active tectonic structures within and around Mindanao accounts for intense seismic activities in the island
Figure 59 - Regional tectonic setting in the southern portion of the Philippines. The Philippine Trench borders the eastern side of the archipelago. The Philippine Fault (bold line) traced for about 1200 km traverses the Philippines in a NW direction.
Local Geology
Information on the local geology of the project area has been gathered from the reports of MRL, Independent Report on the Nickel Laterite Resource – Agata North, Philippines.
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Conception Greenschist (Cretaceous)
The basement sequence in the area is composed of greenschists that corresponds to the Conception Greenschists of UNDP (1984). This basement unit occurs mostly in the central to the southern portion of the Agata Project area of MRL. Its exposures are observed as elongated bodies in Guinaringan, Bikangkang, and Agata Creek and as narrow, scattered erosional windows as seen in the northern half of Agata Project area. The dominant minerals are quartz, albite, and muscovite with associated chlorite, epidote and sericite. In places, talc and serpentine are the main components (Tagura, et. al., 2007).
Humandum Ultramafic (Cretaceous)
Unconformably overlying the basement schist are ultramafic rocks. These rocks are presumably components of a broader ophiolite sequence, albeit the other sections may not be observable within the vicinity of the minesite. The ultramafic rocks in the area mostly occur as harzburgite although some dunites have been reported.
Nabanong Limestone (Upper Eocene)
The Nabanong Limestone occurs in the central portion of the property, near the Guinaringan- Bikangbikang area, Payong-Payong area and in the Assmicor-Lao prospect region. The limestone units occur as narrow and scattered bodies particularly in the northern half of the property, but were observed to have well-defined beddings crisscrossed by calcite and quartz veinlets in some places. Limestones found near intrusive bodies are highly-fractured with fillings of limonite and fine pyrite. These fracture fillings have been associated with gold mineralisation and seen as green in colour due to chloritisation. In places, the limestone is interbedded with thin sandstone, siltstone, and shale beds.
Andesite and Tuff (Oligocene)
These units are sparsely distributed as narrow bodies within the property. The units are generally fine-grained to porphyritic in texture. The tuff grades from crystal to lithic lapilli. Several exposures of this unit are described by Abrasaldo (1999) as being strongly fractured adjacent to northeast-trending faults.
Volcanic Intrusives (Upper Oligocene to Lower Miocene)
Composed mainly of syenites, monzonites, monzodiorites and diorites, these rocks are generally of alkalic to calc-alkalic composition. These intrusive are known to be associated with gold mineralisation in the area. The syenites consist mostly of potash feldspar. No distinct structural orientation has been reported for these intrusives.
Kitcharao Limestone and associated horizons (Lower Miocene)
Outcrops of Kitcharao limestone are scattered throughout large portions of the Agata Projects area. The limestone areas are observed as densely forested portions that prominently patch the shrub and grass covered landscape. Minor outcrops of the Jagupit Formation lie in the eastern claim block adjacent to barangay Bangonay (Abrasaldo, 1999). This formation has been associated with clastics such as conglomerates, sandstones and mudstones that occur as patches in the rolling hills around Lake Mainit.
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Recent Alluvium
The Quaternary Alluvium is represented by the unconsolidated young sediments found in the Tubay River floodplain and other areas of the valley between the Western Range and the Eastern Highlands. These alluvial materials are mainly composed of sand, clay and gravel shed from the highlands and deposited in the lower elevations by the rivers. Narrow patches of beach sand deposits are also found along the shore on the west.
Seismicity
Mindanao has been more seismically active than the northern islands in the Philippines. It is considered that 49.5% of the medium-sized earthquakes in the archipelago occur in Mindanao. An average of about 60 medium-to-large size earthquakes yearly had been recorded in Mindanao during the past three decades (Mangao et al. 1994).
In the northern portion of eastern Mindanao, historical accounts show that offshore east of Mindanao has been subjected to intense seismic activities with hundreds of small to large magnitude earthquakes. Many of these seismic events are linked to the active subduction of the Philippine Trench that impinges against the overlying crust of the Philippine archipelago. Inland, most of the major earthquakes occurred along the southern segment of the Philippine Fault Zone, most of these fault-related events cluster within the Agusan Valley.
Focal mechanism solutions of earthquakes in the offshore area east of Mindanao show under thrusting process that is likely related to subduction. In the offshore area west of Malimono segment, the mechanism of a shallow earthquake on May 4, 1993 showed thrust faulting (Phivolcs, 2002; Besana and Ando, 2005). The Ms 5.5 earthquake that happened on March 27, 1990 indicated a left-lateral strike slip faulting along a NW-trending fault line. The affected areas included the towns of Jabonga, Santiago and Cabadbaran, and Butuan City (Phivolcs, 2002; Oanes and Salugsugan, 1990). Another event that showed strike-slip faulting mechanism occurred southeast of Lake Mainit in Diwata Range on May 1, 1979. An aftershock few hours after the event showed normal faulting. Bautista (1996) related the earthquake events to pull- apart basin formation.
In Agusan Valley, seismicity is spread all over the area. Most of the events have small magnitudes and shallow depths. Seismicity in the region is lower compared to the offshore area between the PFZ and the Philippine Trench (Phivolcs, 2002).
Historical Earthquakes in Malimono Ridge and Agusan Valley
A plot of earthquakes with magnitudes 2 to 9 from 1907 to 1998 (Figure 60) shows the spatial distribution of earthquakes in Visayas and Mindanao. Figure 61 shows the large-magnitude earthquakes that affected the region. In Malimono Ridge, two major earthquake events with epicentres located southwest of Lake Mainit brought damaging effects in the nearby towns.
The oldest damaging event recorded occurred on July 1, 1879. The magnitude of the earthquake was Ms 6.9 and affected the towns of Jabonga in Agusan del Norte, Mainit Town in Surigao del Norte and possibly the present-day Surigao City (Philvocs, 2002; Bautista, 1999). The affected areas including the lakeshore towns of Jabonga and Mainit were highly disturbed by the ground shaking that resulted to rockslides and landslides. Landslides along the lakeshores caused disappearance of some areas. Several large fissures were observed as much as 3.6 m wide along the coast. At least 12 large aftershocks occurred within the 24 hours of the main shock.
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Figure 60 - Map showing the spatial distribution of seismicity in the eastern portion of Philippine archipelago with Ms 2 to 9 from 1907 to 1998 and a major earthquake event occurred on July 1, 1879.
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Figure 61 - Map showing the major historical earthquakes with Ms 7 to 9 in the eastern portion of Philippine archipelago from 1907 to 1998.
July 11, 1912 event
On July 11, 1912, a damaging earthquake occurred in NE Mindanao Region and recorded Ms 7.5. High intensity ground shaking, liquefaction, landslides and river/lake seiches and structural damages were experienced by towns including La Paz, Bunauan, Vuruela and Talacogon in the Agusan Valley area. The epicentre was instrumentally located in the east of Lake Mainit area, but, intensity data suggest that the epicentre was probably along the Agusan Valley area where the PFZ fault passes through. The accuracy of locating the epicentre in the early 1900s is in the order of ±50 km because of the small number of participating global stations (Phivolcs, 2002).
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June 7 and 9, 1999 event
This event occurred on June 7 at 3:45 PM and was recorded by 20 PHIVOLCS seismic stations even as far as Pasuquin Seismic Station in Ilocos Norte (Philvocs). The depth is about 7 km and the epicentre was determined to be 8.575°N lat, 125.754°E long based on P-wave arrivals. The epicentre was located about 15 km from Bayugan, Agusan. The source of the earthquake is believed to be from the segment of the Philippine Fault in Agusan Valley. The magnitude of the earthquake may be considered as ‘moderate’, but the expected intensity at Bayugan town reached as high as Intensity VII for the medium soil, conforming to the attenuation-relation of Fukushima and Tanaka (1990).
A large aftershock occurred in June 9 at 9:05 AM, severely felt in the town of Talacogon, Agusan. The hypocentral depth was about 14 km and the epicentre was determined to be at 8.604°N lat, 125.648°E long using 11 P-wave and one S-wave arrival readings (PHIVOLCS, 200x).
Based on focal mechanism results, the June 7 earthquake was caused by normal faulting with some strike slip component. This correlates also with the August 12, 1989 event and was attributed to pull-apart conditions common in strike-slip environments. According to the report of Philvocs, the most severely affected place is the town of Bayugan with a recorded intensity of VII. The surrounding areas have the following intensities:
Bayugan, Agusan del Sur - Intensity VII San Francisco, Agusan del Sur - Intensity V Butuan City - Intensity V Hinatuan, Surigao del Sur - Intensity IV Lianga, Surigao del Sur - Intensity II Cagayan de Oro City - Intensity II Bislig, Surigao del Sur - Intensity II Camiguin Island - Intensity I
The June 9 event mostly damaged the town of Talacogon. The following areas have the recorded intensities according to the report of PHIVOLCS (2002).
Talacogon, Agusan del Sur - Intensity VI Bayugan, Agusan del Sur - Intensity V Hinatuan, Surigao del Sur - Intensity IV Butuan City - Intensity IV Bislig, Surigao del Sur - Intensity IV San Francisco, Agusan del Sur - Intensity IV Lianga, Surigao del Sur - Intensity III Prosperidad, Agusan del Sur - Intensity III
Historical records suggest that prior to the 1879 event; no earthquakes have been described in written records. Major catastrophic events may have survived in legends and traditional oral anecdotes, but these would still need to be properly documented.
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Geologic Hazard Assessment
The proposed mine and mineral processing site is located within a seismically active region where the Philippine Fault Zone passes through. The western traces of the Lake Mainit Fault bounds the eastern side of Malimono Ridge, making the area prone to strike-slip earthquakes. Consequently, the northern Mindanao region, including the Agusan and Surigao Provinces is susceptible to earthquake generated by the following structures (Figure 63).
the Philippine Trench and its related subduction zone structures the Philippine Fault System and its associated structures.
The Philippine Trench is considered the most seismically active subduction zone in the Philippines. It is a north-south trending depression located east of Mindanao and the Visayas. The trench marks the boundary of the westward-subducting Philippine Sea Plate as it thrusts under the Philippine Mobile Belt. The trace of the fault has been mapped from Davao, in Mindanao to as far north as the East Luzon Trough.
The Philippine Fault system is a north- and northwest-trending fault system whose branches have been mapped for 1 200 km from the eastern part of Mindanao to northern Luzon. This fault is the biggest active structural element with seismic activity considered to be the most destructive in the country. Its trace passes through Davao, through Agusan and near the Malimono Ridge, through Leyte and Masbate, then through Ragay Gulf and Alabat Island and then into north Luzon. At its closest approach, the fault is only a few kilometres east of the project site.
Slip along the Philippine Fault Zone is left lateral causing the land on its east and northeast to move to the north and northwest. Large historic earthquakes have been clearly associated with this fault, the most recent of which are the 1973 Ragay Gulf earthquake and the 1990 Luzon earthquake.
Seismic Ground Shaking Hazards
The area around Malimono Ridge and the whole Agusan Valley has been host to a number of destructive earthquakes in the past. The proximity of the Philippine Fault to within a 2 km distance from the proposed MRL Plant poses risk of potentially large magnitude earthquakes in the future. The Philippine Trench is another source of earthquakes its events are mostly offshore Mindanao, and when the epicentres move inshore, these tend to be of deeper hypocentral depths due to the inclination of the subduction zone.
To assess seismic risk from the various tectonic structures, the potential maximum magnitude that can be generated by each fault and trench structure is calculated using the magnitude- rupture relationship empirically derived by Wells and Coppersmith (1994). For the project site, the resulting potential maximum magnitude for each seismic generator is shown in Table 100. In this report, two major seismic generators are considered that will affect the project site - the Philippine Fault and the Philippine Trench.
Table 100 - Calculated earthquake magnitude for each seismic generator
Seismic Generator Length (km) Potential Maximum Magnitude
Philippine Fault 1200 8.7
Philippine Trench* About 1300 8.7
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Figure 62 - Distribution of active faults in the Northern Mindanao Region
The potential maximum magnitude for each of the Philippine Fault and Philippine Trench was then used to calculate the PGA for rock, hard, medium and soft soil conditions in that underlain the project site. The attenuation relation used in the calculation is that derived by Fukushima and Tanaka (1990) for Japan and has been applied to western Pacific Island settings (Thenhaus et al., 1994). The distances of the major seismogenic structures from the project site are estimated using the available maps from MRL, PHIVOLCS, and Google Earth.
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The result of the calculations for rock and soil conditions at the project site is shown in Table 101. The values presented in the table have a 10% probability of being exceeded in 50 years.
The deterministic PGA values for rock and medium soil conditions with the Philippine Fault fall within the calculated values by Thenhaus et al (1994). PGA for soft soil conditions has higher values, 0.47g higher than the calculated values by Thenhaus et al (1994). As such, high intensity vibration within areas with soft soil condition is expected. For Philippine Trench, PGA values for each rock and soil conditions in the project site are within the calculated values by Thenhaus et al (1994) as shown in Figure 64, Figure 65, and Figure 66.
Table 101 - Peak Ground Acceleration values for rock and soil conditions at the project site
Peak Ground Acceleration (PGA) Distance Seismic Generator from site Magnitude %g Hard Medium (km) Rock Soft Soil Soil Soil
Philippine Fault* About 1 8.7 0.626 0.38 0.67 0.54 0.87
Philippine Trench* About 155 8.7 0.082 0.05 0.09 0.07 0.11
*Distance of each seismic generator from the project site is estimated from maps of PHILVOCS and Google Earth.
Fault-rupture Hazards
The rupture hazard may arise during large earthquakes, with the ground being displaced along the fault that causes the seismic event. The hazard of rupture therefore is centered expected along the trace of the active fault. In the case of the MRL Project, this hazard can be sited on the trace of the Philippine Fault along the western edge of the valley located east of the project site. Figure 66 shows the trace of the active Philippine Fault along the valley east of the project site, and the trace of the fault according to the structural maps of Phivolcs. Figure 67 and Figure 68 show the details of the structural map shown in the earlier figure.
It is apparent that only the trace of the Philippine Fault on the east side of Malimono Ridge can be confidently identified. The trace of the fault on the west flank of Malimono Ridge cannot be defined due to the lack of any indication of a fault on land. Some published regional geologic maps draw a line along the shore but there are no indications that a fault is present along this alignment. The contrast between the east and west flanks of Malimono Ridge is illustrated in Figure 11, where the trace of the fault on the valley to the east is manifested as a distinct linear edge of the valley floor, while the coastal shoreline shows a jagged and irregular outline that prevents a confident drawing of a fault trace on this position. A large fault may exist underwater, however, and it will require additional bathymetric and/or seismic reflection surveys to determine if such a large structure fault is present on the western flank of Malimono Ridge.
Liquefaction Hazards
The sites of liquefaction hazards are on the alluvial deposits in the valley to the east of Malimono Ridge. Since no facility is to be located on the valley floor, there are no threats of liquefaction on the proposed MRL facilities. There are no significant sand deposits on the west to cause any threat of liquefaction.
Landslide Hazards
Landslide that may accompany intense seismic shaking can potentially occur along steep slopes, particularly in areas where thick soil or deposits of loose rocks may be present. This treat may also be present during intense rainfall events, when the soil is saturated with water,
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and when pore pressure from water percolating into the ground may render some areas unstable. It is therefore expedient to require geotechnical studies prior to committing the space to any development in slopes greater than 15%.
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Figure 63 - PGA values for medium soil components in the Visayas. From Thenhaus, et al, 1994. The PGA value for medium soil in the site is around 0.40 based on this map
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Figure 64 - PGA values for rock components in Visayas. From Thenhaus et al., 1994. The PGA value for rock in the site is around 0.40 based on this map.
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Figure 65 - PGA values for soft soil components in the Visayas. From Thenhaus, et al, 1994. The PGA value for soft soil in the site is around 0.70 based on this map.
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Figure 66 - Active fault maps (PHIVOLCS) superimposed on the satellite image of the northern portion of Eastern Mindanao
Figure 67 - The trace of the Philippine Fault (red line) that pass through the Malimono quadrangle map
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Figure 68 - The trace of the Philippine Fault (red line) that pass through the Jagupit quadrangle map
20.2.1.1.2 Soils and Land-use
Soils of the Project Area
Three soil types and seven (7) soil mapping units were identified, characterised and mapped in the project area.
The three (3) soil types are the Malalag clay loam, Kabatohan sandy clay loam and the Umingan clay loam. Malalag clay loam and Kabatohan sandy clay loam were subdivided into soil mapping units based on the differences in the slope ranges. The soil mapping units are as follows: Malalag clay loam, 8-18% slopes; Malalag clay loam, 30-50% slopes; Kabatohan sandy clay loam, 8-18% slopes; Kabatohan sandy clay loam, 18-30% slopes; Kabatohan sandy clay loam, >50% slopes; and Umingan clay loam, 0-3% slopes
Malalag clay loam developed from the weathering of metamorphic igneous rocks. Kabatohan sandy clay loam developed from the weathering of ultramafic rocks, while Umingan clay loam developed from the weathering of river/alluvial deposits.
Malalag clay loam, 8-18% slopes occurs on the gently sloping to sloping valley of Brgy. Binuangan and on the rolling terrain from Brgy. Tagpangahoy to Brgy. Tinigbasan on the western watershed of the Jabonga-Tubay elongated mountain range.
Malalag clay loam, 30-50% slopes, occurs on the steep hump-like spur between Brgys. Binuangan and Tagpangahoy, and on the steep slopes of Sitio Payong-payong watershed.
Kabatohan sandy clay loam, 8-18% slopes, occurs on the plateau-like sloping ridge top (Resource Area) between Brgy. E. Morgado and Sitio Sua, Brgy. Lawigan, and on the foot slope at Brgy. E. Morgado where the former Agata Camp site is located.
Kabatohan sandy clay loam, 18-30% slopes, occurs on the side slopes of the plateau-like ridge top on both the eastern( E. Morgado) and western ( Sitio Sua, Barangay Lawigan) sides.
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Kabatohan sandy clay loam, 30-50%, slopes occurs on the upper slopes of the watershed from Brgy. Binuangan to Sitio Sua, Brgy. Lawigan on the western side. Also it occurs on the side slopes of the plateau-like ridge top (Resource Area) on the eastern (E. Morgado) side.
Kabatohan sandy clay loam, >50% slopes, occurs on the upper slopes of the watershed from Brgy. Binuangan to Brgy. Tagpangahoy.
Umingan clay loam, 0-3% slopes, occurs on the flat to almost flat river terrace/alluvial plain along the Kalinawan River at Brgy. E. Morgado.
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Table 102 - Soil Physico-Chemical Properties
Malalag Clay Loam Kabatohan Sandy Kabatohan Sandy Umingan Clay Loam, Clay Loam,8-18% Clay Loam, 30-50% Soil Properties Malalag Clay Malalag Clay Malalag Clay 0-3% slopes slopes(Observation slopes (Observation Loam, 8-18 % Loam, 8-18 % Loam,30-50 % (Observation No.6) Slopes Slopes Slopes No. 4 & 5) No.7) (Observation No.1) (Observation No.2) (Observation No.3)
Physical Properties
Moderately Well Moderately Well Moderately Well Moderately Well Drainage Well drained Well drained drained drained drained drained
Texture Clay loam Clay loam Clay loam Sandy clay loam Sandy clay loam Clay loam
Soil Depth (cm) 40cm >100cm 70cm >100cm >100cm >100cm
Slope (%) 8-18 % slopes 8-18 % slopes 30-50 % slopes 8-18 % slopes 30-50 % slopes 0-3 % slopes
Chemical Properties ** ** ** * ** **
pH 6.15 5.4 5.8 5.88 5.88 6.66
Total Nitrogen (%) 0.045 0.056 0.065 0.016 0.046 0.014
Organic Matter (%) 1.6 2.05 2.5 2.19 3.58 1.57
Phosphorus (mg/Kg) 2.8 0.2 1.55 1.6 0.9 1.0
Potassium (cmol/Kg) 0.16 0.06 0.1 0.045 0.14 0.07
CEC (cmol/Kg) 19.24 20.26 34.75 3.17 18.36 20.17
Heavy Metals
Cadmium (mg/Kg) 4.47 3.74 4.08 8.61 5.11 5.21
Cobalt (mg/Kg) 43.49 35.00 65.12 298.77 343.26 280.15
Copper (mg/Kg) 78.62 34.23 77.57 53.51 23.64 48.22
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Iron (%) 4.08 3.23 4.33 30.47 10.04 11.60
Nickel (mg/Kg) 145.62 113.37 415.26 5297.5 2234.68 4654.79
Lead (mg/Kg) <0.10 <0.10 <0.10 <0.10 <0.10 <0.10
Mercury (mg/Kg) 0.018 0.025 0.026 0.108 0.059 0.037
Available Micronutrients
Copper (ppm) 3.29 0.67 2.34 1.40 1.17 1.86
Zinc (ppm) 0.49 0.71 0.66 1.65 1.3 0.57
Iron (ppm) 81.14 37.39 84.74 19.84 100.25 89.32
Manganese (ppm) 11.18 71.04 57.98 29.99 141.07 29.79
Notes: CEC= Cation Exchange Capacity *Average of weighted averages of two (2) observation sites **Weighted average of top two (2) horizons Taiwan standards for assessment of soil contaminated with heavy metals (mg/Kg): Arsenic=4; Cadmium=5; Copper=200; Nickel=200; Lead=500; Mercury=2; Dutch Standard for Cobalt=240 Range of Iron in Soils=0.3-10%
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Malalag clay loam, 8-18% slopes, in Brgy. Binuangan (Observation 1) is a moderately well drained, shallow (40 cm depth due to gravel) clay loam soil (Table 102). Soil reaction is slightly acidic (pH 6.15). Total nitrogen, organic matter, phosphorus and potassium are all very low with 0.045%, 1.6%. 2.8 mg/kg and 0.16 cmol/kg, respectively. Cation exchange capacity is medium (19.24 cmol/kg). Copper and manganese are low with 3.29 ppm and 11.18 ppm, respectively. Zinc is very low with 0.49 ppm, while iron is medium with 81.14 ppm. The natural fertility of this soil is low. The heavy metals (arsenic, cadmium, cobalt, copper, nickel, lead and mercury) are all below the contamination level as prescribed by the Taiwanese and Dutch standards. Iron content is within the range of iron in soil.
Malalag clay loam, 8-18% slopes, in Brgy. Tagpangahoy (Observation 2) is a moderately well drained, deep clay loam soil. Soil reaction is strongly acidic (pH 5.4). Total nitrogen, phosphorus, and potassium are very low with 0.056%, 0.2 mg/kg and 0.06 cmol/kg, respectively. Organic matter is low with 2.05%, while cation exchange capacity is medium with 20.26 cmol/kg. Copper, zinc and iron are very low with 0.67, 0.71 and 37.39 ppm, respectively. Manganese is low with 71.04 ppm. Natural fertility of this soil is low. The heavy metals (arsenic, cadmium, cobalt, copper, nickel, lead and mercury) are all below the contamination level as prescribed by the Taiwanese and Dutch standards. Iron content is within the range of iron in soil.
Malalag clay loam, 30-50% slopes, in Sitio Payong-payong (Observation 3) is a moderately well-drained, moderately deep clay loam soil. Soil reaction is medium acid (pH 5.8). Total nitrogen, phosphorus and potassium are very low with 0.065%, 1.55 mg/kg and 0.1 cmol/kg, respectively. Organic matter is low with 2.5%, while cation exchange capacity is high (34.75 cmol/kg). Copper and zinc are very low with 2.34 and 0.66 ppm, respectively. Iron is medium (84.74 ppm), while manganese is low with 57.98 ppm. Natural fertility of this soil is low. The heavy metals (arsenic, cobalt, copper, lead and mercury) are below the contamination level as prescribed by the Taiwanese and Dutch standards. Nickel with 415.26 mg/kg is above the Taiwanese contamination level of 200 mg/kg. Iron is within the range of iron in the soil.
Kabatohan sandy clay loam, 8-18% slopes, in the Resource Area (Observation 4 & 5) is a well drained, deep sandy clay loam soil. Soil reaction is medium acid (pH 5.88). Total nitrogen, phosphorus, potassium and cation exchange capacity are very low with 0.016%, 1.6 mg/kg, 0.045 cmol/kg and 3.17 cmol/kg, respectively. Organic matter is low (2.19%). Copper and iron are very low with 1.40 and 19.84 ppm, respectively. Zinc is medium with 1.65 ppm, while manganese is low with 29.99 ppm. Natural fertility of this soil is low. The heavy metals (arsenic, copper, lead and mercury) are below the contamination level as prescribed by the Taiwanese standards. Cadmium with 8.61 mg/kg and nickel with 5297.5 mg/kg are above the contamination level of 5 mg/kg and 200 mg/kg, respectively. Iron with 30.47% is above the range of iron in soil of 0.3 – 10%.
Kabatohan sandy clay loam, 30-50% slopes, in Brgy. E. Morgado (Observation 7) is a well- drained deep sandy clay loam soil. Soil reaction is medium acid (pH 5.88). Total nitrogen, phosphorus and potassium are very low with 0.046%, 0.9 mg/kg and 0.14 cmol/kg, respectively. Organic matter is low (3.58%), while the cation exchange capacity is medium with 18.36 cmol/kg. Iron and manganese are medium with 100.25 and 141.07 ppm, respectively. Zinc is low (1.3 ppm), while copper is very low with 1.17 ppm. Natural fertility of this soil is low. The heavy metals (arsenic, copper, lead and mercury) are below the contamination level of the Taiwanese standards. Cadmium and cobalt with 8.61 mg/kg and 343.26 mg/kg, respectively are above the contamination level of the Taiwanese and Dutch standards of 5 mg/kg and 240 mg/kg, respectively. Iron with 10.04% is on the highest bracket of the Iron in soil, which is 0.3 -10%.
Umingan clay loam, 0-3% slopes, in E. Morgado (Observation 6) is a moderately well drained, deep clay loam soil. Soil reaction is neutral (pH 6.66). Total nitrogen, organic matter,
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phosphorus and potassium are very low with 0.014%, 1.57%, 1.0 mg/kg and 0.07 cmol/kg, respectively. Cation exchange capacity is medium with 20.17 cmol/kg. Copper and zinc are very low with 1.86 and 0.57 ppm, respectively. Iron is medium (89.32 ppm), while manganese is low with 29.79 ppm. Natural fertility of this soil is low. The heavy metals (arsenic, copper, lead and mercury) are below the contamination level as prescribed by the Taiwanese standards. Cadmium, cobalt and nickel with 5.21, 280.15 and 4654.79 mg/kg, respectively are above the contamination level as prescribed by the Taiwanese and Dutch standards of 5, 240 and 200 mg/kg, respectively. Iron with 11.60% is above the range of Iron in soil of 0.3 – 10%.
Heavy Metals in River Sediments
Thirteen river sediment samples were collected from representative stations within the watersheds of the project area. Results showed that most of the heavy metals (arsenic, cadmium, cobalt, copper, lead and mercury) in all the 13 sediment samples are below the contamination level as prescribed by the Taiwanese and Dutch standards (Table 103). The Nickel in sediment samples 1, 6, 8 and 9 are below the contamination level of 200 mg/kg as prescribed by the Taiwanese standards. The Nickel of sediment samples 2, 3, 4, 5, 7, 10, 11, 12 and 13 with 1237.85, 2620.13, 4196.00, 903.77 499.20, 785.66, 1131.64, 347.47 and 598.84 mg/kg, respectively are above the contamination level of 200 mg/kg. The iron of sediment 4 of 10.32% is above the range of Iron in soil of 0.3 – 10%.
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Table 103 - Heavy metal of river sediments
River River River River River River River River River River River River River Heavy Metal Sed.1 Sed.2 Sed.3 Sed.4 Sed.5 Sed.6 Sed.7 Sed.8 Sed.9 Sed.10 Sed.11 Sed.12 Sed.13
Arsenic <0.017 1.60 <0.01 0.71 14.70 16.49 9.79 6.07 3.39 <0.01 4.130 2.50 4.13
Cadmium 2.56 2.20 1.95 2.19 1.83 2.01 1.75 2.01 1.84 1.74 2.29 3.46 2.20
Cobalt 31.64 137.37 116.32 165.43 51.86 63.70 48.94 26.19 22.94 46.03 53.74 36.82 47.68
Copper 156.86 31.61 27.12 16.33 136.91 65.60 113.49 152.54 183.94 94.00 34.71 49.79 71.0
Iron (%) 7.09 7.85 7.82 10.32 4.80 5.98 5.84 5.96 5.85 5.51 5.26 3.77 5.59
Nickel 98.44 1237.85 2621.13 4196.00 903.77 125.05 499.20 36.86 58.71 785.66 1131.64 347.47 598.84
Lead <0.10 <0.10 154.06 <0.10 23.30 <0.10 <0.10 <0.10 28.31 <0.10 <0.10 41.93 <0.10
Mercury 0.021 <0.004 <0.004 <0.004 <0.004 0.055 0.195 <0.004 <0.004 <0.004 <0.004 <0.004 <0.004
Notes:
Taiwan standards for assessment of soils contaminated with heavy metals (mg/Kg): Arsenic=40 Nickel=200 Cadmium=5 Lead= 500 Copper=200 Mercury=2 Dutch Standard/Intervention value for Cobalt= 240 Range of Iron in Soils= 0.3-10%
The locations and descriptions of the sediment sampling stations are presented in Table 104.
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Table 104 - Location and description of river sediment sampling stations
Station ID Location Description
ANP-SEDQ1 Kalinawan River, Brgy.Colorado, Jabonga, Agusan Del Norte Located along the confluence of Kalinawan and Bangonay River
ANP-SEDQ2 Nangka Creek, Brgy. Colorado, Jabonga Located downstream of road culvert along Nangka Creek
ANP-SEDQ3 Paiton Creek, Brgy. Colorado, Jabonga, Agusan Del Norte Located Upstream of road culvert along Paiton Creek
Mantiawas Creek, Brgy. E.Morgado, Santiago, Agusan Del ANP-SEDQ4 Located upstream of Mantiawas Reforestation Area Norte
Located downstream of tailings disposal area of several scale miners, upstream of the ANP-SEDQ5 Duyangan Creek, Brgy. E. Morgado,Santiago, Agusan Del Norte road culvert
ANP-SEDQ6 Agata Creek, Brgy. E. Morgado, Santiago, Agusan Del Norte Located downstream of the road culvert
Dinaringan Creek,Brgy. E. Morgado, Santigao, Agusan Del ANP-SEDQ7 Located downstream of Dinaringan creek prior to confluence of Kalinawan River Norte
ANP-SEDQ8 Kalinawan River, Santigao, Agusan Del Norte Located midstream of Kalinawan River
ANP-SEDQ9 Sua Creek 1, Brgy. Lawigan, Tubay, Agusan Del Norte Located Downstream of Sua Creek 1
ANP-SEDQ10 Sua Creek 2, Brgy. Lawigan, Tubay, Agusan Del Norte Located Downstream of Sua Creek 2
Payong- payong Creek, Brgy. Lawigan, Tubay, Agusan Del ANP-SEDQ11 Located downstream of Payong-payong Norte
ANP-SEDQ12 Tinigbasan Creek,Brgy. Tinigbasan, Tubay, Agusan Del Norte Located along the confluence of two tributaries of Tinigbasan Creek
Tgapangahoy Creek, Brgy. Tgapangahoy, Tubay, Agusan Del ANP-SEDQ13 Located downstream of road culvert along Tagpangahoy Creek Norte
Environmental Baseline Study for the Agata Project, 2011.
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Land use and Vegetation of the Project Area
Five land use/vegetation units were identified and mapped in the project area. These are: the Forest, Coconut and Forest, Coconut, Fern “Agsam”; and Grassland (Land use/Vegetation Map, Figure 75).
Forest exists in patches in all the barangays within the project area. Three forest patches exist in Brgy. Binuangan; two (2) patches in Brgy. Tagpangahoy; one (1) patch in Brgy. Tinigbasan; one (1) patch in Sitio Payong-payong, Brgy. Tinigbasan; and two (2) patches exist in Brgy. E. Morgado, wherein one (1) in the ravine extends up to the ridge top between E. Morgado and Sitio Sua, Brg. Lawigan (Figure 69). The forest which is of secondary type has the following tree species: Mankono, Balete, Lauan, Apitong, Narra, Malapapaya, Silisili, Falcata, Mangium, Gmelina, Dao, Anislag, Antipolo, Molave, Uwayan, Sangisiman, and Tagolingon. The forest in the watershed of Brgy. E. Morgado proper is man-made, planted with Mangium.
Figure 69 - The second growth forest on the upper slopes of Payong-payong watershed, Sitio Payong-payong, Barangay Tinigbasan.
The forest is a mixture of coconut and forest tree species. It exists on the upper slopes of the western Barangays watershed, from Brgy. Binuangan to Brgy. Lawigan. One mapping unit exists on the side slopes in Brgy. E. Morgado on the eastern side (Figure 70).
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Figure 70 - The coconut and forest association at Sitio Payong-payong, Barangay Tinigbasan.
Coconut plantations exist on the relatively gentler slopes adjacent to Barangay/ Sitio Propers in the western watersheds (Figure 71).
Figure 71 - The coconut plantation at Barangay Binuangan
Fern locally known as “Agsam” (Pteridium aquilinium) exists on the relatively gentler slopes of the ridge top of the elongated mountain, particularly on the Resource Area in Brgys. E. Morgado and Lawigan. At E. Morgado side “Agsam” extends down the slopes to the alluvial plain of the Kalinawan River (Figure 72).
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Figure 72 - Fen “ Agsam” in the Resource Area on the plateau-like top ridge at Barangay E. Morgado.
Grassland exists in patches in Brgys. Binuangan, Tagpangahoy, Sitio Payong-payong in the western watershed, and E. Morgado in the eastern watershed. The grassland in the western watershed is dominated by Cogon, Hagonoy and Tugao-tugao with isolated stand of pioneering species such as Anagasi, Malapapaya, and Hagimit. The grassland in the eastern side (E. Morgado) is dominated by Carabao grass with Cogon and Talahib. Isolated stand of pioneering species such as Trema, Anagasi, Mangium and Gmelina also exists. Small patches of cultivation also exist in the grassland planted with Squash (Figure 73).
Figure 73 - The grassland dominated by cogon and hagonoy (lower half) at Barangay Binuangan
An active landslide exists on the upper slopes at Barangay Binuangan watershed (Figure 74).
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Figure 74 - The active landslide on the upper slope of Binuangan watershed, Barangay Binuangan
Soil Suitability Classification
A qualitative suitability classification was made by comparing the plants environmental requirements with the physico-chemical properties of the soil mapping units (Table 105).
Table 105 - Environmental requirements of selected plants
Soil Slope Soil Plant Depth Drainage Soil pH Soil Texture (%) Fertility (cm)
Loamy to Low to Narra 0>50 ≥45 Moderately well 4.5-7.5 structured clay medium
Moderately well to Low to Molave 0>50 ≥45 4.5-7.5 Loamy to clay well drained medium
Moderately well to Loamy to Low to Mahogany 0>50 >75 5.0-7.5 well drained clayey medium
Moderately well to Sandy loam to Low to Mangium 0>50 ≥75 4.0-7.5 well drained clay loam medium
Moderately well to Sandy loam to Low to Auriculiformis 0>50 ≥75 4.0-7.5 well drained clay loam medium
Moderately well to Sandy loam to Low to Falcata 0>50 ≥75 4.5-7.0 well drained clay medium
Moderately well Sandy loam to Coconut 0-50 >75 5.5-7.5 Medium drained clay loam
Moderately well to Loamy to Low to Breadfruit/Rimas 0-50 ≥45 4.5-7.5 well drained clayey medium
Moderately well to Loamy to Low to Jackfruit 0-50 ≥45 4.5-7.5 well drained clayey medium
Moderately well to Loamy to Low to Marang 0-50 ≥45 4.5-7.5 well drained clayey medium
Environmental Baseline Study for the Agata Project, 2011.
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Results showed that the forest tree species (Narra, Molave, Mahogany, Manguim, Auriculiformis and Falcata) and the fruit bearing trees (Breadfruit/Rimas, Jackfruit, Marang, Citrus, Banana, Guyabano/Atis), including Pineapple are all suitable on Kabatohan sandy clay loam, 8-18% and 18-30% slopes, and Umingan clay loam, 0-3% slopes soil mapping units, but with low soil fertility as the limitation.
Narra, Molave, Mahogany, Mangium, Auriculiformis, Falcata, Coconut, Breadfruit, Jackfruit, Marang, Banana, Citrus, Guyabano/Atis and Pineapple are all suitable on Malalag clay loam, 8-18% slopes with low soil fertility as the limitation. Malalag clay loam, 8-18% slopes in Barangay Binuangan have an additional soil depth (shallow soil) limitation for Mahogany, Mangium, Auriculiformis, Falcata, Coconut and Citrus.
Narra, Molave, Mahogany, Mangium, Auriculiformis, Falcata, Coconut, Breadfruit, Jackfruit and Marang are all suitable on Malalag clay loam, 30-50% slopes and Kabatohan sandy clay loam, 30-50% slopes with low soil fertility as the limitation.
The Forest tree species are suitable on Kabatohan sandy clay loam, >50% slopes with low soil fertility as the limitation.
Citrus, Banana, Guyabano/Atis and Pineapple are not suitable on Malalag clay loam and Kabatohan sandy clay loam with >30% slopes.
Soil Erosion Susceptibility of the Project Area
The four (4) contributing factors to erosion include rainfall, soil erodibility, vegetation/ land use and slope. To determine the extent of erosion susceptibility within the project area, three (3) degrees of susceptibility are defined for each of the four contributing factors. These are “slightly susceptible”, “moderately susceptible”, and “highly susceptible”.
Rainfall
For rainfall, the degree rating is shown in Table 106. Based on these rainfall data, the erosion susceptibility rating for the whole project area is “moderate”.
Table 106 - Erosion Susceptibility based on rainfall
Degree of Susceptibility Rainfall Type
Slightly Areas with 5 to 6 dry months and 3 to 4 wet months
Moderately Areas with 5 to 6 dry months and 5 to 6 wet months
Areas with 2 to 4 dry months and 5 to 6 wet months
Highly Areas with 5 to 6 dry months and 3 to 4 wet months with one or more months of 500 mm or more rainfall per month
Areas with 5 to 6 dry months and 5 to 6 wet months with one or more months of 500 mm or more rainfall per month
Environmental Baseline Study for the Agata Project, 2011. Source: Bruce, 1981.
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Soil Properties
For soil types, the susceptibility score is shown in (Table 107). The criteria that were used are the soil depth and clay-silt fraction (Table 102). Soil depth (solum) of Malalag clay loam is 40 cm depth to greater than 100 cm, and the clay-silt fraction is more than 60%. Based on the properties of Malalag clay loam it is with “slight susceptibility to erosion”. Kabatohan sandy clay loam with more than 100 cm soil depth and about 60% clay-silt fraction, it is with “slight susceptibility to erosion”. Soil depth of Umingan clay loam is >100 cm with about 60% clay-silt fractions, it is with “slight susceptibility to erosion”.
Table 107 - Erosion Susceptibility based on soil properties
Degree of Susceptibility Soil Depth and Texture
Areas with 50 to 100 cm solum and 60 to 100% clay-silt fraction
Areas with greater than 100 cm solum and 0 to 60 percent clay-silt Slightly fraction
Unclassified soils of the mountain
Areas with 50 to 100 cm solum and 0 to 60% clay-silt fraction Moderately Areas with greater than 100 cm solum and 60 to 100% clay-silt fraction
Highly Areas with less than 50 cm solum and 0 to 100% clay-silt fraction
Notes: Solum is made up of surface soil and subsoil. Clay-silt fraction is percent total of clay and silt particles determined through mechanical analysis of topsoil. Source: Bruce, 1981.
Land use/Vegetation
For land use/vegetation, the degree rating is shown in Table 108, as shown by land use/vegetation map of the project area (Figure 75), there are five (5) land use/vegetation types identified in the project area. Based on Table 108, the areas with forest, coconut and forest and Coconut are with “slight susceptibility to erosion”. Fern “Agsam” and Grassland are with “moderate susceptibility to erosion”.
Table 108 - Erosion Susceptibility based on Vegetation and Crops Grown
Degree of Susceptibility Type of Crops/Ground Cover
Slightly Areas grown to paddy rice
Areas permanently planted to coconut, mixed orchard, fruit trees, etc.
Areas covered with dense forest/shrubs, tall grasses and pine trees
Moderately Areas grown to sugar cane
Open grassland
Areas with thin growth of deciduous forest with scattered kaingin clearings
Highly Areas, sloping planted to coconut or fruit trees intercropped with upland row crops (corn, cassava, sweet potato, etc.)
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Degree of Susceptibility Type of Crops/Ground Cover
Areas of diversified upland row crops – corn, cassava, upland rice, mungbean, pineapple, etc.
Areas planted to tobacco
Environmental Baseline Study for the Agata Project, 2011. Source: Bruce, 1981.
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Figure 75 - The landuse/vegetation map
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Slope
As shown by the slope in the soil map (Figure 74), and based on Table 109, the slopes of Malalag clay loam and Kabatohan sandy clay loam with 8-18% are with “moderate susceptibility to erosion”. Malalag clay loam and Kabatohan sandy clay loam with 18-30%, 30-50% and >50% slopes are with “high susceptibility to erosion”. Umingan clay loam with 0-3% slopes is with “slight susceptibility to erosion”.
Table 109 - Erosion Susceptibility based on slope
Degree of Susceptibility Slope Range
Slightly Areas with slope between 0 and 8%
Moderately Areas with slope between 8 and 18%
Highly Areas with slope greater than 18%
Environmental Baseline Study for the Agata Project, 2011. Source: Bruce, 1981.
Final Erosion Susceptibility Rating
The four (4) erosion susceptibility ratings of each soil unit are aggregated to form the final rating consistent with Table 110, which shows the decision rule on the composite or final erosion susceptibility index. The Soil Erosion Susceptibility Map (Figure 76) displays the result of erosion susceptibility ratings.
As shown by the Soil Erosion Susceptibility Map, the Forest, Coconut and Forest on Malalag clay loam, 8-18% Slopes; and the Grassland on Umingan clay loam, 0-3% slopes are with “slight susceptibility to erosion”. The Fern “Agsam” and Grassland on Kabatohan sandy clay loam and Malalag clay loam with slopes of 8-18, 18-30 and 30-50% are with “moderate susceptibility to erosion”. The Forest, and Coconut and Forest on Kabatohan sandy clay loam and Malalag clay loam with slopes of 18-30, 30-50 and >50% are also with “moderate susceptibility to erosion”.
Table 110 - Composite Erosion Susceptibility Decision Rule
Individual Susceptibilities Final Degree of Erosion Susceptibility (Rainfall – landuse – slope – soil)
S – S – S – S Slightly susceptible
M – M – M – M Moderately susceptible
H – H – H – H Highly susceptible
H – M – H – H Highly susceptible
H – S – M – M Moderately susceptible
H – M – M – H Moderately susceptible
Environmental Baseline Study for the Agata Project, 2011
Note: S is slightly susceptible, M- moderately susceptible, and H- highly susceptible. Source: Bruce, 1981.
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Figure 76 - The soil erosion susceptibility map
20.2.1.1.3 Flora
Site Description
Table 111 and Table 112 show the location of sampling points for terrestrial flora assessment.
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Table 111 - Location of sampling stations for terrestrial flora assessment
Start Point End Point Transect Area Northing Easting Northing Easting
1 E. Morgado 9.293 125.52666 9.29227 125.52403
2 E. Morgado 9.28841 125.51717 9.28713 125.51497
3 E. Morgado 9.28777 125.52441 9.28668 125.52728
4 Sitio Sua 9.29001 125.50957 9.2901 125.51186
5 Sitio Payong Payong 9.27282 125.50822 9.27715 125.50577
6 Tinigbasan 9.26989 125.51241 9.26894 125.5151
7 Tinigbasan 9.26829 125.51702 9.26755 125.51463
8 Locbon Gamay 9.24979 125.50728 9.25267 125.50678
9 Locbon Dako 9.24475 125.50874 9.24733 125.5078
10 Tagpangahoy 9.23776 125.51593 9.24118 125.51328
11 Tagpangahoy 9.23527 125.51478 9.23653 125.51565
12 Binuangan 9.21791 125.52511 9.21842 125.52722
13 Binuangan 9.22068 125.52918 9.22273 125.53086
14 Binuangan 9.22591 125.53175 9.2289 125.53192
Environmental Baseline Study for the Agata Project, 2011
Table 112 - Location of quadrat sampling stations for terrestrial flora assessment
Quadrats Area Northing Easting
1 E. Morgado 9.28285 125.5128
2 Payong - payong 9.2825 125.57865
3 Payong -payong 9.27963 125.51605
4 Binuangan 9.21851 125.52873
5 Binuangan 9.22129 125.52820
6 Sua 9.2891 125.50988
7 Sua 9.28908 125.50985
8 Sua 9.28981 125.51081
9 Sua 9.28979 125.51078
10 E. Morgado 9.2893 125.52177
11 E. Morgado 9.28928 125.52177
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Quadrats Area Northing Easting
12 E. Morgado 9.28665 125.52729
13 E. Morgado 9.28666 125.52728
14 Tinigbasan 9.26952 125.51736
15 Tinigbasan 9.26935 125.51737
16 Tinigbasan 9.26744 125.51335
17 Tinigbasan 9.26743 125.51333
Environmental Baseline Study for the Agata Project, 2011
The Agata Nickel Project area has three (3) general vegetatiion types namely: forest over ultramafic rocks, tropical lowland evergreen rain forest, and plantations. Since the area is a mine resource, ultramafic forest was observed in almost all ssampling areas. According to Fernando et al. (2008), this is the major natural vegetation type oof Agusan Del Norte. Only few large and tall trees were seen which is a typical characteristiic of this forest ecosystem. A noticeable feature of this forest is the stand of dead mangkono (XXanthostemon verdugonianus) in Sitio Sua (Figure 77). This may be attributed to anthropological activities.
Figure 77 - Stand of dead Xanthostemon verdugonianus seen in Sitio Sua, Brgy. Lawigan, Tubay
Other vegetation in the projecct area is the tropical lowland evergreen rain forest. This vegetation was found only in patches, which seem to be the remnants off vegetation that have existed before. Tropical lowland evergreen rain forests are typically found in the ridges and gullies of the project area where waterr is very abundant.
Plantations of Mangium (Acacia mangium), Yemane (Gmelina arborea) and Falcata (Paraserianthes falcataria) are also present in the project area. This was due to reforestation efforts by the DENR and local government creating these exotic timber-producing plantations (Garcia, 2009).
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Plot Description
Plots 1 to 5 are categorised as forest over ultramafic rocks, Plots 6 to 11 are tropical lowland evergreen forest and Plots 12 to 17 are plantations. Plots 1 and 3 are dominated by Sili-sili (Pavetta indica) whille Plot 2 is dominated by Bagutambis (Symplocos odoratissima). In Plots 4 and 5, only few trees were observed. Mangkono (Xanthostemon verdugonianus) was observed in these plots. Agsam (Gleichenia linearis) is the dominant species in the undergrowth in these plots.
Plots 6 and 7 are tropical lowland evergreen rain forest situated at the creek with rugged terrain and steep slope. Few trees were observed in Plots 8 and 9. This vegetation is just a remnant of the previous vegetation due to intensive logging and land use conversion within the MPSA (Garcia, 2009). Maribuhok (Gymnostoma rumphianum), is the largest and tallest tree in the area. Plots 10 and 11 are dominated by Hindang (Nothaphoebe leytensis) and saplings. Only few undergrowth species were present in these plots. In addition, three ecosystem strata are very distinct in these plots, and woody lianas such Ficus and Dalbergia species are present.
Plots 12 to 15 are plantations of Paraserianthes falcataria while Plots 16 and 17 are generally composed of large Acacia mangium. The undergrowth layers of the plantations are dominated by Gleichenia linearis.
Dominant Plant Form
The dominant plant form found within the Agata Project area is composed mainly of trees with 123 species (Table 113). This is followed by herbs which have 15 species, shrubs with 13 species, vines with 11 species, palms, pandans, cycads and bamboos with nine (9) species, and fern and fern allies with five (5) species. The dominant tree species include Pavetta indica, Paraserianthes falcataria, Melicope triphylla, and Acacia mangium. The most dominant fern in the project area is Gleichenia linearis. Among the shrubs, the dominant species is Leucosyke capitellata. Herb is represented by Alikbangong lalaki (Commelina diffusa), Dilang baka (Pseudoelephantopus spicatus), Kandi-kandilaan (Stachytarpeta jamaicensis), and Hagonoi (Chromolaena odorata).
Table 113 - Plant habits found within Agata Project
Plant Habit Number of Species
Trees 123
Herbs 15
Shrubs 13
Vines 11
Palms, Pandans, Cycad & Bamboo 9
Fern & Fern Allies 5
Total 176
Species Composition and Distribution
A total of 172 species belonging to 69 families and 156 genera were recorded in the project area (Table 114). These species includes trees, herbs, shrubs, vines, palms, ferns, pandans, cycad and bamboo. The most species (having several species) of all genera is Ficus with 15 species followed by Syzygium (6), Artocarpus (4) and Macaranga (3). Most of the species are
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classified under Family Moraceae (19), Fabaceae (14) Myrtaceae (8) Lauraceae (7), Meliaceae (6) and Phyllanthaceae (6). Also, there are agricultural species that are commonly cultivated in the project area, which include coconut (Cocos nucifera), cassava (Manihot esculenta), pineapple (Ananas comosus), santol (Sandoricum koetjape), nangka (Artocarpus heterophyllus), makopa (Syzygium samarangense), tambis (Syzygium aqueum), and banana (Musa acuminata).
Table 114 - Total individuals, average individuals, and number of species of each ecosystem
Total Average Species Ecosystem Individuals Individuals richness
Forest over ultramafic rocks 223 45 57
Tropical lowland evergreen rain forest 119 40 38
Plantation 108 38 36
Total 450 - 172
Environmental Baseline Study for the Agata Project, 2011
Structure, Relative Values and Importance Values of the Forest Ecosystems
Forest Over Ultramafic Rocks
A total of 78 species from 223 individuals belonging to 55 families were recorded and observed in forest over ultramafic rocks (Table 114). Most of these species are classified under family Moraceae, Rubiaceae and Verbenaceae. The dominant tree species in this forest ecosystem include Pavetta indica, Symplocos odoratissima and Syzygium oleinum (Figure 78). Pavetta indica, locally known as Sili-sili or Kiti-kiti, had the highest importance value (IV) of 41.98, which indicates its high abundance and dominance. This species dominates the canopy and intermediate strata, and is well distributed in the project area. Its density per hectare basis is 150 individuals in the canopy stratum and 480 individuals in the intermediate stratum representing 28.85% of the total population. Among the tree species, Pavetta indica had the highest basal area and volume of 4.50 m2/ha and 17.09 m3/ha, respectively.
Symplocos odoratissima and Syzygium oleinum are represented in the canopy, intermediate and undergrowth strata. Symplocos odoratissima ranks second to Pavetta indica while Syzygium oleinum ranks fourth. Other species which have high IV are Da-at (Pandanus sp.1.), Gleichenia linearis and Malamanga (Semecarpus sp.1.) with IVs of 16.31, 15.22 and 10.41, respectively.
The undergrowth layer is dominated by Gleichenia linearis which rank ffth among the 10 species with highest IVs. This species dominates most of the open and lateritic upland areas. The presence of this species in open areas is an indicator of frequent burning activities (Garcia, 2009). It has a density of 120 on a 100 m2 basis which represents 14.28% of the total population. This is followed by Nephrolepis biserrata (80), Pandanus sp.1 (70), Imperata cylindrica (60), Sapindus saponaria forma microcarpa (50), Semecarpus sp.1 (50) and Wikstroemia indica (50). Typical habitat of Wikstroemia indica is in thickets and secondary growth of ultramafics and marginal soils.
Tropical Lowland Evergreen Rainforest
There were 38 species from 119 individuals belonging to 40 various families recorded in the sampled quadrats (Table 112). Based from species composition and habitat characteristics, the sampled quadrats are categorised under the tropical lowland evergreen rain forest.
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Figure 79 shows the 10 species dominating this ecosystem, namely: Pandanus sp.1, Matang- araw (Melicope triphylla), Leucosyke capitellata, Nothaphoebe leytenensis, Pteridium sp.1, Bahai (Ormosia surigaensis), Pavetta indica, Kalantas (Toona calantas), Antipolo (Artocarpus blancoi) and Timonius sp.1. The species with highest IV is Pandanus sp.1, with a value of 35.38. This species is represented only in the canopy and undergrowth strata. The dominance of Pandanus sp.1 is mainly attributed to its abundance in the undergrowth stratum wherein its density is 200 individuals per hectare or about 32.4% of the total population in the undergrowth stratum.
Melicope triphylla ranks second in terms of IV with a value of 28.08, followed by Leucosyke capitellata (21.74), Nothaphoebe leytenensis (21.07) and Pteridium sp.1 (17.59). Melicope triphylla and Leucosyke capitellata are well represented in the canopy, intermediate and undergrowth stratum. Leucosyke capitellata is the most abundant species in the intermediate stratum with a density of 667 individuals per hectare while Melicope triphylla ranks third.
Nothaphoebe leytenensis is only present in the canopy and intermediate strata. It had the highest density in the canopy stratum with 100 individuals per hectare. Toona calantas had the highest basal and volume area due to its large dbh and towering height. The average dbh and height of this species is 95.2 cm and 22.3 m, respectively. Pteridium sp.1, on the other hand, is present only in the undergrowth vegetation. This species is the most dominant fern in this ecosystem.
Plantation forest
A total of 43 species from 108 individuals belonging to 43 families were recorded in the Plantation ecosystem. Paraserianthes falcataria, Acacia mangium and Cocos nucifera have the highest importance value (IV) of 50.87, 33.54, and 26.71, respectively (Figure 80). Generally, there are two (2) types of plantations in the project area, namely: Acacia mangium and Paraserianthes falcataria plantations. Plantation of Acacia mangium is mostly located near in the tributaries of E. Morgado. There are also large trees of Acacia mangium scattered in the ridge tops of E. Morgado. Probably, this species was used as reforestation species of the area where nickel deposits are located. Other ecologically important species found in the Acacia mangium plantations are Cinnamomum mendozai, Garcinia sp.2 and Melicope triphylla. Their respective IVs are the 15.04, 13.98 and 9.79. Narra (Pterocarpus indicus) was also observed in this plantation.
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Figure 78 - The 10 species with the highest importance value found in the forest over ultramafic rocks
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Figure 79 - The 10 species with the highest importance value found in the tropical lowland evergreen rain forest
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Figure 80 - The 10 species with the highest importance value found in the plantation ecosystem
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Paraserianthes falcataria plantation is located in the upslope of Barangay Tinigbasan and Tagpangahoy. Paraserianthes falcataria was intercropped with Cocos nucifera within the project area making these two (2) species ecologically important. The combined IVs of these two (2) species comprised more than 25% of the total IV of the plantation ecosystem. They are represented in the canopy and intermediate strata only. There was no seedling of Paraserianthes falcataria observed in the project area.
Other abundant species in the Paraserianthes falcataria plantations are Arthrophyllum ahernianum and Artocarpus blancoi. These two (2) species are abundant in the intermediate stratum. Several fruit trees such as Sandoricum koetjape, Syzygium samarangense Artocarpus heterophyllus, and Lansones (Lansium domesticum) were also observed.
In the undergrowth layer, Gleichenia linearis is the most dominant in the entire plantation ecosystem. It seems that this species has wide range of ecological adaptation. Gleichenia linearis is also present in forest over ultramafic rocks and tropical lowland evergreen rain forest. Other ecologically important undergrowth species are Commelina benghalensis (8.58 IV), Syzygium samarangense (6.03 IV) and Melicope triphylla (1.58 IV).
Other Vegetation Types
Other vegetations observed in the project area were limestone forest, beach forest and agroforestry ecosystem. The limestone forest is situated in the rocky cliffs and declivitous areas of Brgys. Tinigbasan and Tagpangahoy (Figure 81). The species commonly found in this type of forest are Molave (Vitex parviflora), Tindalo (Afzelia rhomboidea), and Alagau (Premna odorata). Cycas rumphii and Pinanga species were also observed in this vegetation.
Remnants of beach forests were traced in the sampled coastal sitios and barangays. Beach forest (Figure 82) is a forest formation found along sandy and gravelly beaches of the sea coast (Fernando et al., 2008). This forest is composed mainly of Talisai (Terminalia katappa), Botong (Barringtonia asiatica), Malubago (Hibiscus tiliaceus), Bani (Pongamia pinnata), Bitaog (Calophyllum inophyllum) and Pandan dagat (Pandanus tectorius). Hernandia nymphaefolia was also observed in this ecosystem.
There are several areas where beach forests have been replaced with coconut. Plantations of coconut are very visible in most of the lower landscape of every barangay/sitio starting from Brgy. Binuangan up to Brgy. Lawigan. In general, coconut forms the major landscape of the project area. Furthermore, several agroforestry practices were also observed. Adjacent to Plots 8 and 9, a privately owned land covering about five (5) hectares employs five (5) types of intercropping systems. Coconut is the main crop and intercropped with fruit trees (e.g. lansones, makopa and nangka), and other cash crops (e.g. cassava, pineapple and banana).
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Figure 81 - Limestone forest located in Barangay Tinigbasan, Tubay
Figure 82 - Beach forest located in So. Payong-Payong, Barangay Tinigbasaan, Tubay
Diversity Indices
Low diversity indices were recorded from the different forest types of this proposed mining site. However, the result of the comparison of diversity level among the three (3) ecosystems, the forest over ultramafic rocks has highest diversity index with a vallue of H’=2.93 than the tropical lowland evergreen rain forest and plantation ecosystem (Table 115). This is attributed to species richness and number of individuals of each forest ecosystem where forest over ultramafic rocks has the most species and dense compared to otther two (2) forest ecosystems. It is expected that the tropical lowland evergreen rain forest and plantation ecosystem have low diversity because tropical lowland evergreen rain forest is just a remnants of the previous vegetation while the plantation ecosystem is an artificial ecosystemm.
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Table 115 - Diversity index of each forest ecosystem in the project area
Ecosystem Shannon Diversity Index
Forest over ultramafic rocks 2.93
Tropical lowland evergreen rain forest 2.07
Plantation 1.98
Environmental Baseline Study for the Agata Project, 2011.
Conservation Status
Threatened species is a general term to denote species or subspecies considered as critically endangered, endangered, vulnerable or other accepted categories of wildlife whose population is at risk of extinction (DAO 01 s-2007). In the project area, there are nine (9) species recorded that are in the list of threatened plant species (DAO 01 series of 2007) of the Department of Environment and Natural Resources (Table 116). Two of the threatened species are classified as critically endangered, three (3) endangered, and only 1 (one) species is vulnerable.
Table 116 - List of threatened plant species found within the Agata Nickel Project
Status Common/Local Scientific Name Family Name (DAO 2007- 01)
Fabaceae- Tindalo Afzelia rhomboidea (Blanco) Vidal EN Caesalpinioideae
Fabaceae- Narra Pterocarpus indicus Willd CR Papilionoideae
Molave/Tugas Vitex parviflora Juss Lamiaceae EN
Kalantas Toona calantas Merr. & Rolfe Meliaceae CR
Ardisia romanii Elmer Myrsinaceae OTR
Mangkono Xanthostemon verdugonianus Naves Myrtaceae EN
Securinega flexuosa (Muell.-Arg.) Anislag Phyllanthaceae VU Muell.-Arg.
Greeniopsis megalantha Merr. Rubiaceae OWS
Bitongol Flacourtia rukam Zoll. & Mor. Salicaceae OWS
Legends: CR – Critically Endangered; EN – Endangered; VU - Vulnerable; OTS – Other threatened species; OWS - Other Wildlife Species
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Economic Importance
The forest is enormously important as sources of useful products such as timber and wood. Majority of the identified species has economic importance or uses. Many of the trees are utilised for light and heavy construction purposes such as Lunasia amara, Paraserianthes falcataria, Pterospermum diversifolium, Artocarpus fratessii, Cratoxylum formusum, Ficus odorata, Ficus variegate, Gymnostoma rumphianum, and Hibiscus tiliaceus. Some of the trees are used for making ropes and tool handles like Ficus pseudopalma, Macaranga grandifolia, Phyllanthus glochidioides, Artocarpus heterophyllus, Artocarpus odoratissimus, and Neonauclea sp.1. Many species of trees, shrubs and herbs are utilised for medicinal purposes, food, construction materials and ornamental plants. Others can be used as shade tree and landscape purposes.
20.2.1.1.4 Fauna
Site Description
Table 117 shows the characteristics of the sampling stations for terrestrial fauna assessment.
Table 117 - Location of sampling stations for terrestrial fauna assessment
Transect Area Northing Easting
1 E. Morgado to Fly Camp 09° 17' 21.3” 125° 31' 54.9”
Fly camp 09° 17' 33.0” 125° 31' 18
2 Binuangan 09° 13' 10.9” 125° 31' 15.4”
3 Tagpangahoy 09° 14' 12.1” 125° 30' 47.4”
4 Locbong Dako - Locbong Gamay 09° 14' 37.4” 125° 30' 33.0”
5 Lawigan - Sua 09° 18' 22.2” 125° 30' 05.7”
6 Sua - Payongpayong 09° 17' 54.0” 125°30' 14.0”
7 Sitio Payongpayong - Centro 09° 17' 11.1” 125° 30' 24.6”
8 Payongpayong Centro - Tinigbasan 09° 16' 33.2” 125° 30' 24.2”
Environmental Baseline Study for the Agata Project, 2011
Result of the Survey
A total of 58 species of wildlife; 42 birds, seven (7) mammals and nine (9) herps, were observed and recorded in eight (8) survey areas. The highest number of species was noted in E. Morgado, which is the main location of the project and the main impact area of mining activities. It is the only location where frogging was conducted because of the proximity of the area to a river (at the back of the basecamp).
Table 118 presents the species of birds observed during the transect walks. Twenty-four bird families are represented by 42 species of which majority are representative of species which thrive in disturbed or degraded habitats. The most abundant bird family is Columbidae (Doves and Pigeons) with five (5) species, while there are more than 10 families represented by only one (1) species.
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Table 118 - List of bird families with representative species observed in the eight survey areas
Family Scientific Name Common Name
Accipitriadae Butastur indicus Grey-faced Buzzard
Haliastur indus Brahminy Kite
Acrocephalidae Acrocephalus orientalis Oriental reed-warbler
Alcedinidae Todiramphus chloris Collared Kingfisher
Halcyon smyrnensis White-throated Kingfisher
Anatidae Anas luzonica Philippine Duck
Aythya fuligula Tufted Duck
Apodidae Collocalia esculenta Glossy Swiftlet
Collocalia troglodytes Pygmy Swiftlet
Ardeidae Bubulcus ibis Cattle Egret
Ixobrychus cinnamoneus Cinnamon Bittern
Ardea purpurea Purple Heron
Artamidae Artamus leucorynchus White-breasted Wood-swallow
Campephagidae Lalage nigra Pied Triller
Columbidae Geopelia striata Zebra Dove
Chalcophaps indica Emerald Dove
Phapitreron leucotis White-eared Brown Dove
Treron vernans Pink-necked Pigeon
Macropygia phasianella Brown-cuckoo Dove
Corvidae Corvus enca Slender-billed Crow
Corvus macrorhynchos Large-billed Crow
Cuculidae Centropus viridis Philippine Coucal
Cacomantis variolosus Brush Cuckoo
Dicaeida Dicaeum australe Red-keeled Flowerpecker
Estrildidae Lonchura atricapilla Chestnut Munia
Hirundinidae Hirundo tahitica Pacific Swallow
Hirundapus celebensis Purple Needletail
Locustellidae Megalurus palustris Striated Grassbird
Meropidae Merop viridis Blue-throated Bee-eater
Motacillidae Arthus richardi Richard's Pipit
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Family Scientific Name Common Name
Muscicapidae Rhipidura javanica Pied Fantail
Saxicola caprata Pied Bushchat
Gerygone sulphurea Golden-bellied Flycatcher
Cyornis rufigastra Mangrove Blue Flycatcher
Nectariniidae Nectarinia jugularis Olive-backed Sunbird
Oriolidae Oriolus chinensis Black-naped Oriole
Passeridae Passer montanus Eurasian Tree Sparrow
Psittacidae Bolbopsittacus lunulatus Guaiabero
Loriculus philippensis Colasisi
Pycnonotidae Ixos philippinus Philippine Bulbul
Pycnonotus goiavier Yellow-vented Bulbul
Turdidae Copsychus saularis Oriental Magpie-Robin
Environmental Baseline Study for the Agata Project, 2011
Of the 42 species of birds, only four (4) are found in all the survey locations/areas. These are Centropus viridis, Dicaeum australe, Hirundo tahitica and Nectarinia jugularis. These species inhabit varied habitats such as grasslands, secondary growth forests and disturbed vegetation. The waterbirds were only found in E. Morgado because of the presence of the river and rice fields near the survey area.
Because of the distance from the basecamp, it was only in E. Morgado and Binuangan where mist netting and live trapping were done. Eight species of mammals (5 bats and 3 rodents) were observed and recorded in E. Morgado. Four species of fruit bats and one (1) species of vesper bat were caught using the mist nets. In Binuangan, only two (2) species of fruit bats and a species of rodent were caught. The higher number of species caught in E. Morgado indicates that there were more food sources, i.e., fruit trees in E. Morgado while in Binuangan, only coconut trees abound. The trapping area in E. Morgado was adjacent to human habitation and the rice fields where these rodent species are pests; while in Binuangan, the traps were laid along the side of a hill planted with cassava far from human habitation.
The number of individuals of the Short-nosed Fruit Bat and Musky Fruit Bat were higher in Binuangan. This can be attributed to the fact that there were a few mango trees near the site where the nets were set which were fruiting.
Table 119 - List of mammals observed and recorded in E. Mogrado and Binuangan.
No. of Individuals Scientific Name Common Name 1 2
Cynopterus brachyotis Short-nosed Fruit Bat 5 5
Macroglossus minimus Dagger-toothed Flower Bat 1
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No. of Individuals Scientific Name Common Name 1 2
Ptenochirus jagori Musky Fruit Bat 2 7
Rousettus amplexicaudatus Common Rousette 1
Myotis rufopictus Orange-fingered Myotis 1
Rattus tanezumi Asian Black Rat 6 2
Rattus exulans Polynesian Rat 3
Suncus murinus House Shrew 2
The herpetofauna observed and recorded was composed of four (4) species of reptiles and five (5) species of frogs. These were observed and caught in E. Morgado where frogging was done. All of the reptiles were lizards, which inhabit forests and forest floors mostly in low altitudes. The Philippine sailfin lizard was seen crossing the road from the swampy part of the river. This lizard inhabits unpolluted mountain streams and can be an indicator of the health of a habitat.
There are four (4) species of frogs and a toad caught during the frogging activity. The toad is an ubiquitous species which has become a pest in the Philippines. As per information from the locals, most of the frog species caught can be eaten, but because it is not part of their culture to make it a part of their diet, these species abound in the area.
Table 120 - Herpetofauna observed in E. Morgad
No. of Scientific Name Common Name Individuals
Reptiles
Sphenomorphus decipiens Black-sided Sphenomorphus 1
Sphenomorphus cumingi Cuming's Eared Skink 1
Lamprolephis smaragdina philippinica Spotted Green Tree-skink 1
Hydrosaurus pustulatus Philippine Sailfin-lizard 1
Amphibians
Fejervarya vittigera Common Pond Frog 2
Rhinella marina Giant Marine Toad 5
Limnonectes magnus Giant Philippine Frog 2
Fejervarya cancrivora Asian Brackish Water Frog 2
Hylarana everetti Everett's Frog 3
Environmental Baseline Study for the Agata Project, 2011.
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Species Diversity and Richhness
Diversity indices were computed in order to know which area surrvveyed has the highest Species Diversity, Species Richness aand Evenness. Species diversity is measured through the Shannon index, which takes into account the number of species and evenness of the species. It is increased either by having more unique species or by having greater species richness. Species richness is simply a count of the number of different species inn a given area. Equitability J is Shannon diversity divided by the logarithm of number of taxa; itt measures the evenness with which individuals are divided among the taxa present.
Figure 83 shows the comparison of diversity indices for birds observed in each survey site. Species diversity is highest in Transect 1 (E. Morgado) followed bby Transect 6 (Sua to Payong- payong), Transect 7 (Payong-payong Centro), Transect 3 (Tagpangahoy), Transect 5 (Lawigan to Sua), Transect 8 (Payong-payong to Tinigbasan) and Transect 4 (Locbon Dako to Locbon Gamay), respectively.
Species richness is highest in Transect 1 with a value of 7.105, ffoollowed by Transects 2, 6, and 7 with values of more than 4, and the rest except Transect 4 (2.9), had a value of 3.0 or more. Evenness in all of the surveyy sites was almost uniform at values of more or less 0.9.
Figure 83 - Comparison of the speecies diversity, species richness and evennness of bird species observed from different survey sites
According to the Fernando Scale of Diversity, Species Diversity is high in E. Morgado, Moderate in Binuangan, Tagpangahoy, Sua to Payong-payong and low in the rest of the survey sites. Species richness is very high in E. Morgado, Binuangan, Sua to Payong-payong, Payong- payong Centro and Tagpangahoy and high in the rest of the siites except in Locbon Dako to Locbon Gamay which is just moderate. Evenness is very high in all the survey sites.
Species diversity and richness of mammalian species in E. Morgado although higher than in Binuangan, is considered low in the Fernando Biodiversity Scalle. Evenness was very high in both areas (Figure 84).
Figure 85 shows diversity indeces measured in amphibians and reptiles recorded in E. Morgado. Species diversity is moderate; species richness is high with very high evenness.
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The over-all diversity of the survey sites cannot be compared because only E. Morgado and Binuangan were surveyed ffor mammals and only E. Morgado was surveyed for frogs (in addition to birds).
Figure 84 - Comparison of species diversity, richness and evenness of mammalian species in E. Morgado and Binuangan
Figure 85 - Species diversity, richness and evenness of herps in E. Morgado.
Ecological and Conservation Status of Species of Fauna Surrvveyed
Birds
The ecological status of each species of bird observed during the survey is presented in Table 121. Figure 86 shows the percentage of species belonging to eacch category. Results show that most of the species of birds ssurveyed are residents and are common (56%), 20% are endemic- common, 7% are residents which are fairly common, 5% are accidental migrants while 3% are migrants which are fairly common. The rest (9%) are endemic and fairly common, 5% are uncommon residents and 2% are residents, which are locally commmon. As for the conservation status of the birds in the area, only one is in the IUCN Red Listt, Anas luzonica the Philippine Duck, which is Vulnerable. Thhe rest are categorised under Least Concern.
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Table 121 - Ecological status of birds observed during the survey
Scientific Name Common Name Ecological Status
Acrocephalus orientalis Oriental reed-warbler Migrant-Accidental
Anas luzonica Philippine Duck Endemic – common
Anthus novaeseelandiae Richard's Pipit Resident – Common
Ardea purpurea Purple Heron Resident – Fairly Common
Artamus leucorynchus White-breasted Wood-swallow Resident-common
Aythya fuligula Tufted Duck Migrant – uncommon
Bolbopsittacus lunulatus Guaiabero Endemic-common
Bubulcus ibis Cattle Egret Migrant/Resident-locally common
Butastur indicus Grey-faced Buzzard Migrant – Fairly common
Cacomantis variolosus Brush Cuckoo Resident – Common
Centropus viridis Philippine Coucal Endemic-common
Chalcophaps indica Emerald Dove Resident-common
Collocalia esculenta Glossy Swiftlet Resident – Common
Collocalia troglodytes Pygmy Swiftlet Fairly Common-Endemic
Copsychus saularis Oriental Magpie-Robin Resident – uncommon
Corvus enca Slender-billed Crow Resident-common
Corvus macrorhynchos Large-billed Crow Resident-Common
Cyornis rufigastra Mangrove Blue Flycatcher Resident – Common
Dicaeum australe Red-keeled Flowerpecker Endemic-common
Geopelia striata Zebra Dove Resident-common
Gerygone sulphurea Golden-bellied Flycatcher Resident – Locally Common
Todiramphus chloris White-collared Kingfisher Resident-common
Halcyon smyrnensis White-throated Kingfisher Resident-Fairly common
Haliastur indus Brahminy Kite Resident-common
Hirundapus celebensis Purple Needletail Resident - Fairly Common
Hirundo tahitica Pacific Swallow Resident – Common
Ixos philippinus Philippine Bulbul Endemic-common
Ixobrychus cinnamoneus Cinnamon Bittern Resident-common
Lalage nigra Pied Triller Resident - Common
Lonchura atricapilla Chestnut Munia Endemic-common
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Scientific Name Common Name Ecological Status
Loriculus philippensis Colasisi Endemic-common
Macropygia phasianella Reddish Cuckoo Resident – Common
Megalurus palustris Striated Grassbird Resident-common
Merops viridis Blue-throated Bee-eater Resident – Fairly Common
Nectarinia jugularis Olived-backed Sunbird Resident-common
Oriolus chinensis Black-naped Oriole Resident-common
Passer montanus Eurasian Tree Sparrow Resident-common
Phapitreron leucotis White-eared Brown Dove Endemic-common
Pycnonotus goiaver Yellow-vented Bulbul Resident-common
Rhipidura javanica Pied Fantail Resident – Common
Saxicola caprata Pied Bushchat Resident-Common
Treron vernans Pink-necked Pigeon Resident – uncommon
Environmental Baseline Study for the Agata Project, 2011
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Figure 86 - Ecological status of biird species
Mammals
Most of the Volant (flying) mammals observed in the area are common particularly the fruit bats, which are all abundant, widespread and have stable populations. However, the habitats of these species are now threatenedd by forest degradation, application of pesticides to crops, among other detrimental activities. The status of the vesper bat still has to be verified because according to literature, therre is no record of the species in Mindanao but as to its gross morphology, it is Myotis rufopictus. If it is, then this is the first time that it has been found in Mindanao. Considering the nature of these taxa, they may all be threatened because of the destruction of their roosting and feeding areas.
Table 122 - Ecological and Consservation Status of mammalian species oobserved and recorded during the survey
Ecological and Conservation Scientific Name Common Name Stattus
Cynopterus brachyotis Dagger-toothed Flower Bat Abundant and widespread
Macroglossus minimus Musky Fruit Bat Generally stable populations, widespread
Ptenochirus jagori Common Rousette Abundant and generally stable
Rousettus amplexicaudatus Orange-fingered Myotis Unknown, probably uncommon
Myotis rufopictus Asian Black Rat Non--native, abundant
Rattus tanezumi Polynesian Rat Non--native, abundant
Rattus exulans House Shrew Non--native, abundant
Suncus murinus House Shrew Non--native, abundant
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Environmental Baseline Study for the Agata Project, 2011
Herps
Most of the reptile species recorded in the area are common and are categorised by the Global Reptile Assessment as species of Least Concern. This is because these species are common and abundant all over the Philippines. The Philippine Sailfin Lizard is a charismatic species, which is heavily hunted and collected for the pet trade; hence it is categorised as Vulnerable. This species inhabits clean and clear forest streams and is easily affected by pollution and disturbance.
The four (4) species of frogs are common throughout the Philippines but because there are no population studies on these taxa, it is not known whether their numbers are dwindling or increasing. Because these species are edible, it is important that their habitat remain clean and unpolluted so as not to affect their existence. The toad species is introduced and has become a pest to native species, hence eradication is an option.
Table 123 - Ecological and Conservation status of herps observed and recorded during the survey
Ecological and Scientific Name Common Name Conservation Status
Reptiles
Sphenomorphus decipiens Black-sided Sphenomorphus Least Concern
Sphenomorphus cumingi Cuming's Eared Skink Least Concern
Lamprolephis smaragdina Spotted Green Tree-skink Least Concern philippinica
Hydrosaurus pustulatus Philippine Sailfin-lizard Vulnerable
Amphibians
Fejervarya vittigera Common Pond Frog Common
Rhinella marina Giant Marine Toad Introduced/Invasive
Limnonectes magnus Giant Philippine Frog Common
Fejervarya cancrivora Asian Brackish Water Frog Common
Hylarana everetti Everett's Frog Common
Environmental Baseline Study for the Agata Project, 2011
20.2.1.2 Water
20.2.1.2.1 Hydrology
Climate
The entire province of Agusan del Norte experiences a Type II climate based on the Modified Coronas climate classification scheme of the Philippine Atmospheric, Geophysical, Astronomical Services Administration (PAGASA, 1992). This climate type is characterised by the absence of a dry season. Rainfall occurs throughout the year with a period of heavy rainfall occurring generally from December to January. Areas with a Type II climate are situated along
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or very near the eastern coast of the Philippines and are directly exposed to the northeast monsoon.
The northeast monsoon blows from November to April and is responsible for the high amount of rain that falls during this period. The southwest monsoon prevails during the rest of the year but since it approaches the country from the southwest, Agusan del Norte is partly shielded from its full effect.
Tropical cyclones form in the Pacific Ocean and move in a northwesterly direction towards the country. They bring additional rain to the area. The tropical cyclone frequency map of PAGASA indicates that the area endures an average of one (1) tropical cyclone per year.
Rainfall
The PAGASA synoptic station in Butuan City is the nearest weather station to the Agata Project. Its 1981 to 2000 rainfall record implies that the area receives a relatively low average annual rainfall of 2 026 mm. The period of heavy rainfall stretches from October to February where the average monthly rainfall exceeds 190 mm and peaks at 308 mm in the month of January. The relatively dry period occurs from March to September with average rainfall fluctuating near 120 mm and exhibiting 2 dips in rainfall occurring in the months of May and August.
Table 124 enumerates the average monthly and annual rainfall in the area while Figure 87 illustrates the rainfall trend.
Table 124 - Average Monthly and Annual Rainfall
Period Rainfall (mm)
January 308
February 212
March 150
April 107
May 105
June 135
July 158
August 105
September 140
October 195
November 193
December 218
Annual 2,026
Source: 1981-2000 Climatological Normals of PAGASA Butuan City Station
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Figure 87 - Rainfall Trend (Source: 1981-2000 Climatological Normals of PAGASA Butuan City Station)
Temperature
The temperature records of the PAGASA Butuan City Station register a relatively warm annual average temperature of 27.5°C. May and June are the hottest months with temperatures rising to an average of 28.4°C. The coldest month is January, which has an average temperature of 26.1°C. Table 125 lists the average minimum, maximum and mean temperature of the area.
Table 125 - Average Minimum, Maximum and Mean Temperature
Temperatture (°C) Month Minimummm Maximum Temp. Mean (oC)
January 22.0 30.1 26.1
February 22.0 30.8 26.4
March 22.4 31.8 27.1
April 23.1 33.1 28.1
May 23.8 33.8 28.8
June 23.6 33.0 28.3
July 23.3 32.5 27.9
August 23.5 32.8 28.1
September 23.3 32.9 28.1
October 23.2 32.3 27.8
November 23.0 31.6 27.3
December 22.5 30.8 26.7
Annual 23.0 32.1 27.5 Environmental Baseline Study for the Agata Project, 2011. Source: 1981-2000 Climatological Normals of PAGASA Butuan City Stattiion
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Evapotranspiration
Evapotranspiration is the amount of water that is released to the atmosphere by evaporation from soil, surface-water bodies and plant transpiration. Potential evapotranspiration (PET) is evapotranspiration that would occur if sufficient water is always available while actual evapotranspiration (AET) is evapotranspiration that occurs from the actual water available.
The monthly PET in the area was computed according to the FAO Penman-Monteith Method (Allen, et al, 1998) using the climatological normals of the PAGASA Butuan City Station. The FAO Penman-Monteith Method expresses the evaporating power of the atmosphere at a specific location and time of the year, and requires readily available weather data such as temperature, humidity, wind speed and air pressure. The monthly AET values were then estimated from the PET values using the Turc-Pike Equation (Xu, C.Y and Singh, V.P., 2004).
Table 126 shows the derived monthly and annual PET and AET values. The table indicates that the AET fluctuates several times throughout the year but the degree of fluctuation is relatively small. The AET is highest in March where it averages 93 millimeters per month (mm/mo). It then drops to 80 mm/mo in April and May and thereafter recovers to 88 mm/mo in July. The AET attains its lowest average value of 78 mm/mo in August and fluctuates 2 more times from September to February. The annual estimated AET in the area is 999 mm, which constitutes 49% of the average annual rainfall.
Table 126 - Monthly and Annual PET and AET
PET AET Period (mm) (mm)
January 87 84
February 87 80
March 118 93
April 120 80
May 124 80
June 102 81
July 105 88
August 118 78
September 111 87
October 99 88
November 87 79
December 87 81
Annual 1,245 999
Environmental Baseline Study for the Agata Project, 2011.
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Drainage Systems
Within and around the project area, short, generally ephemeral, west-flowing creeks drain the western section of the Northwestern Range and pour directly at Butuan Bay. The eastern section of this mountain range is similarly drained by short, east-flowing creeks that empty at Lake Mainit and Tubay River. Tubay River is the largest river system in the immediate region. It encompasses a drainage area of approximately 99 757 ha that includes a large portion of Agusan del Norte, Surigao del Norte and the whole Lake Mainit. Its farthest headwater originates at the southern slope of Mount Tendido, which rises almost at the northern tip of Mindanao Island. Most of the northern tributaries of this river drain into Lake Mainit first, which serves as a temporary detention pond of the river system. Figure 88 shows the extent of the Tubay River watershed.
The main trunk of Tubay River appears at the southern end of Lake Mainit in the town proper of Jabonga. From there, the river meanders in a south-southeast direction near the western edge of a wide, linear floodplain until it reaches the southern end of the mountain range where it shifts westward and empties at Butuan Bay in the vicinity of Tubay town proper.
Due to its large size, the northern section of the Tubay River watershed is nearer to the PAGASA Surigao City Station than to the PAGASA Butuan City Station. Using the Thiessen Polygon Method, the portion of the watershed that lies within the area of influence of PAGASA Surigao City Station was estimated at approximately 46 208 ha. This area therefore exhibits different climatic averages compared to the southern section, which lies under the area of the influence of PAGASA Butuan City Station. The ANLP is situated in the southern portion of the watershed.
Monthly and Annual Stream Flow
The Department of Public Works and Highways (DPWH) historically operated a gauging station at Kalinawan River (Tubay River), immediately downstream from the bridge at Bgy. Colorado, Jabonga. At this point, the gauging station measured stream flow from the northern section of the river system covering a drainage area of 49 037 ha. The 10-year stream flow record of this station, comprising the years 1968 to 1970 and 1973 to 1979, is classified as fair in quality (NWRC, 1980).
Table 127 shows the average monthly discharge from the northern section of Tubay River based on the former DPWH gauging station. The table reveals that the discharge follows the rainfall pattern in the area. The river yields its highest average flow of 109.0 m3/sec in January, which is also the month of peak rainfall. The discharge drops thereafter and reaches its lowest flow of 40.9 m3/sec in September, which is 1 month after the second period of low rainfall in the area. Table 127 also lists the equivalent monthly discharge in million cubic metres (MCM).
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Figure 88 - The watershed map
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Table 127 - Average Stream Flow of Tubay River
Period Period
Northern section Whole river system
(m3/sec)* (MCM) (m3/sec) (MCM)
January 109.0 291.93 221.7 593.88
February 94.5 228.54 192.2 514.72
March 82.1 219.78 166.9 447.10
April 59.3 153.78 120.7 323.26
May 51.3 137.51 104.4 279.74
June 43.2 112.09 88.0 235.63
July 48.4 129.76 98.6 263.97
August 44.3 118.60 90.1 241.27
September 40.9 106.04 83.2 222.90
October 42.3 113.25 86.0 230.39
November 61.3 158.99 124.8 334.21
December 85.6 229.30 174.2 466.45
Annual 1 999.57 4 153.51
Source - NWRC (1980)
The stream flow record of the former gauging station was used to estimate the discharge from the entire Tubay River watershed using the Analogue Method (Sokolov & Chapman, 1974 and Shaw, 1999). Based on this method, the discharge data of the gauging station, which represented 48% of the drainage area of Tubay River, was used to determine the discharge of the whole river system according to the equation Q2 = Q1 x A2/A1, where Q1 and A1 represent the stream flow and drainage area of the northern section of the river while Q2 and A2 correspond to the stream flow and drainage area of the whole watershed.
Table 127 also enumerates the average monthly and annual discharge from the whole watershed of Tubay River as computed from the Analogue Method. The table reveals that the whole river system yields an average of 4 153.5 MCM of water annually. Stream flow is highest in January when the river discharges an average of 593.9 MCM. The stream flow drops to its lowest monthly average of 222.9 MCM in September.
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Water Balance
Water balance computations were carried out for the Tubay River watershed using the Long- Term Water Balance Method. This method is expressed by the equation P = AET – Q – GR, where P, AET, Q and GR represent rainfall, actual evapotranspiration, stream discharge and groundwater recharge, respectively.
Since the northern and southern sections of the watershed lie within the influence of PAGASA Surigao City Station and PAGASA Butuan City Station respectively, separate computations of rainfall and evapotranspiration were carried out first for these sections using their respective climatological normals. The weighted average of rainfall and actual evapotranspiration over the whole watershed was then computed with area as the weighing parameter. Since the average discharge of Tubay River is already presented in Section 20.2.1.2.1, the unknown variable GR is readily determined from the equation.
Table 128 shows the results of the computation of average rainfall and evapotranspiration for the northern and southern sections of the Tubay River watershed and also the weighted average for the entire watershed.
Table 128 - Average rainfall and evapotranspiration in the Tubay River Watershed
Northern section of Southern section of Entire Tubay River Tubay watershed Tubay watershed watershed Period (DA - 46,208 ha.) (DA - 53,549 ha.) (DA - 99,757 ha.)
Pa AETa Pb AETb P AET (MCM) (MCM) (MCM) (MCM) (MCM) (MCM)
January 277.62 42.47 164.93 44.74 217.13 43.69
February 204.79 34.44 113.42 43.01 155.74 39.04
March 154.61 52.54 80.22 49.59 114.68 50.95
April 109.19 50.41 57.40 42.81 81.39 46.33
May 58.78 42.04 56.12 42.86 57.35 42.48
June 64.83 40.22 72.34 43.59 68.86 42.03
July 76.66 43.60 84.34 46.91 80.78 45.37
August 60.72 40.53 56.28 42.00 58.34 41.32
September 68.85 41.84 75.08 46.60 72.19 44.39
October 118.11 45.03 104.53 47.36 110.82 46.28
November 206.64 40.77 103.24 42.46 151.14 41.68
December 242.55 39.57 116.95 43.19 175.13 41.52
Annual 1 643.34 513.45 1 084.85 535.11 1 343.55 525.08
adata based on PAGASA Surigao City climatological normal bbased on PAGASA Butuan City climatological normals
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The direct use of the monthly rainfall data from the PAGASA Butuan City and Surigao City stations in the water balance computation will yield highly negative monthly groundwater recharge values for all months of the year, resulting in an equally highly negative annual groundwater recharge. This is unrealistic since the area does not experience a dry season and groundwater recharge is expected to occur in at least half of the year.
The most likely reason for this irregularity is that both weather stations are located near coastal areas and therefore measure rainfall that is characteristic of low-lying areas. The rainfall data of these stations do not represent the much higher orographic precipitation that occurs in the mountainous areas, which comprises more than 70% of the Tubay River watershed.
The rainfall input in the water balance was therefore increased by a factor of 3.7. This is considered reasonable since orographic precipitation can be more than twice the amount of rainfall that occurs in the lowlands (Roe, 2005). Table 129 summarises the adjusted water balance.
Table 129 - Water Balance Summary
Tubay River Watershed Period P AET Q GR (MCM) (MCM) (MCM) (MCM)
January 803.37 43.69 593.88 165.81
February 576.25 39.04 514.72 22.49
March 424.30 50.95 447.10 -73.75
April 301.15 46.33 323.26 -68.44
May 212.20 42.48 279.74 -110.03
June 254.80 42.03 235.63 -22.87
July 298.89 45.37 263.97 -10.45
August 215.84 41.32 241.27 -66.75
September 267.11 44.39 222.90 -0.18
October 410.03 46.28 230.39 133.36
November 559.21 41.68 334.21 183.32
December 647.97 41.52 466.45 140.00
Annual 4 971.12 525.08 4 153.51 292.53
% of P 10 84 6
Environmental Baseline Study for the Agata Project, 2011.
Table 129 shows that the annual rainfall, evapotranspiration, stream discharge and groundwater recharge in the Tubay Watershed amount to 4 971.1, 525.1, 4 153.5 and 292.5 MCM, respectively. Eighty-four percent (84%) of the rainfall goes to stream discharge while evapotranspiration takes up 10%. Groundwater recharge constitutes a meagre 6% of the rainfall. This amount of recharge is within the typical range for areas underlain by igneous and metamorphic rocks, and is therefore considered reasonable for the area.
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The negative groundwater recharge values during the months of March to September indicate that during this period groundwater recharge does not take place and instead is released from storage and converted to base flow.
20.2.1.2.2 Hydrogeology
Water Source Inventory
The municipalities of Jabonga, Santiago and Tubay depend mainly on springs and creeks for their domestic water requirements. These water sources are typically located higher than the communities they serve. Concrete spring boxes and dams are used to store the water while galvanised iron (GI), polyethylene (PE) and polyvinyl chloride (PVC) pipes connected to these structures convey the water by gravity to Level 2 and Level 3 water systems (Figure 89 and Figure 90).
Figure 89 SP10, Spring water source Brgy. Binuangan
Figure 90 - CR3 Creek water source, Brgy. Lawigan
Shallow wells fitted with manual pumps were also observed in many places within the Tubay River floodplain. Since these wells are private wells normally used by 1 to 2 houses and are part of any water system, they were cursorily inspected and not included in the inventory.
A total of 10 springs and eight (8) creek water sources were examined during the water source inventory. These water sources serve the communities surrounding the project site. Figure 91 shows their locations while Table 130 summarises the data obtained from these sources. All water sources except springs SP4, SP8 and SP9 are located in the North-western Range. SP4, SP8 and SP9 on the other hand are situated near the base of the mountains that border Tubay River floodplain to the east.
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Table 130 - Summary of Water Source Inventory
Water Source TDS Location pH Remarks ID (mg/L)
SP1 Bgy. Colorado, Jabonga 250 7.6 Serves 100 households
SP2 Bgy. Tinigbasan, Tubay 225 7.9 Serves 200 households
Serves 38 households in SP3 Bgy. La Paz, Santiago 235 8.3 Sitio Ginaringan
Used to serve the whole SP4 Bgy. Curva, Santiago 150 7.5 barangay but recently dried out
SP5 Bgy. La Paz, Santiago 215 7.9 Serves 150 households
Serves 13 households in SP6 Bgy. Tagpangahoy, Tubay 270 7.6 Sitio Locbon Dako
Serves 10 households in Purok SP7 Bgy. Tagpangahoy, Tubay 250 7.5 2
SP8 Bgy. Jagupit, Santiago 210 8.1 Serves the whole barangay
SP9 Bgy. Jagupit, Santiago 250 8.0 Serves the whole barangay
SP10 Bgy. Binuangan, Tubay 220 7.7 Serves the whole barangay
CR1 Bgy. Lawigan, Tubay 150 8.0 Serves households in Purok 1
CR2 Bgy. Colorado, Jabonga 145 7.8 Serves 85 households in Purok 7
CR3 Bgy. Lawigan, Tubay 185 8.0 Serves 100 households
CR4 Bgy. Lawigan, Tubay 145 8.4 Serves 30 households in Sitio Sua
CR5 Bgy. E. Morgado, Santiago 115 8.3 Serves 200 households
CR6 Bgy. Tinigbasan, Tubay 195 7.7 Serves 29 households in Sitio Payong-payong
CR7 Bgy. La Paz, Santiago 190 8.0 Serves 10 households in Sitio Ginaringan
CR8 Bgy. Tagpangahoy, Tubay 120 7.6 Serves 31 households
Environmental Baseline Study for the Agata Project, 2011
The springs used as water sources either issue from fractured zones or are depression springs. Fracture zone springs are fed by groundwater that preferentially flow along the fractured zones from higher areas since these zones are relatively more permeable than the adjacent rocks. On the other hand, the groundwater from depression springs come from the intersection of the water table with an abrupt break in the slope of the land.
While the springs that emanate from fractured zones, as well as the larger creeks, slightly to moderately diminish in flow during the drier months of the year, they still yield sufficient water to the communities that rely on them. The smaller creeks and depression springs however weaken
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substantially during the drier months of the year and even dry out during drought periods. All the creek water sources were also reported by residents to become turbid during heavy rains.
The spring and creek sources in the area yield water that is normally clear, odourless and generally fit for drinking in terms of pH and total dissolved solids (TDS) content. The national standard TDS limit for drinking water is 500 mg/L while the limit for pH is between 6.5 to 7.5. Table 130 also shows the results of onsite measurements of pH and TDS content.
Water sources that supply water to the barangay centres are regularly chlorinated by barangay officials to prevent water-borne diseases.
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Figure 91 - Water source location map
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Based on the regional geology of the area, the characteristics of spring and creek water sources and the distribution of shallow wells in the Tubay River floodplain, the region may be delineated into three (3) hydrogeological units.
The first hydrogeological unit consists of the narrow, northwest trending mountain range to the west of Tubay River floodplain. All the examined water sources except for springs SP4, SP8 and SP9 are situated in this area. Ultramafic and metamorphic rocks that are generally dense, impermeable and contain little or no groundwater mainly underlie this area. Only the weathered zone and fractured zones that contain open fractures are able to hold groundwater in these areas. That is why the flow from many spring and creek water sources in this area diminishes substantially during the drier months of the year.
The mountains that bound Tubay River floodplain to the east constitute the second hydrogeological unit. Sandstone, shale, conglomerate, limestone and lava flows underlie these areas and host local, disconnected aquifers that may yield appreciable amounts of groundwater. The water supply springs SP4, SP8 and SP9 are located near the base of these mountains
The Tubay River floodplain makes up the third hydrogeological unit. Thick Quaternary alluvium consisting of loose to moderately consolidated clay to gravel deposits underlies this area. The aquifers that develop in the sand and gravel layers of this rock unit have a large potential for groundwater development. Although only shallow wells were observed in this area, the aquifers underlying the floodplain are most likely capable of yielding large amounts of groundwater.
Groundwater Levels, Flow Direction and Recharge
The presence of shallow wells in the Tubay River floodplain indicates that the groundwater level in this area is shallower than 6 meters. While there are no wells in the adjacent mountains any occurrence of groundwater in this area will reside mainly in the weathered zone and will be situated shallower than the base of the weathered zone.
Since groundwater moves from high to low elevation head, it will follow the topographic gradient and generally move from the mountains towards the floodplain. The groundwater in the floodplain will follow the direction of Tubay River and move southward to similarly discharge at Butuan Bay near Tubay town proper.
The aquifers in the floodplain are recharged from direct rainfall infiltration, infiltration from the Tubay River and its tributaries and groundwater movement from high to low areas. Based on the water balance, the area takes in approximately 6% of the rainfall as groundwater recharge. Water Quality
Groundwater Quality Assessment
Site Description
The groundwater quality sampling locations are given in Table 131.
Table 131 - Groundwater quality sampling stations
Station ID Coordinates Location
09° 17'06.3'' ANP – DWQ1 Brgy. E. Morgado, Jabonga, Agusan del Norte 125° 31' 58.4''
09° 16'29.3'' SitioPayongpayong, Brgy. Tinigbasan, Tubay, ANP – DWQ2 125° 30' 29.8'' Agusan del Norte
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Station ID Coordinates Location
09°16 '1.57'' Brgy. Tinigbasan, Tubay, ANP – DWQ3 125° 30' 34.66'' Agusan del Norte
09° 14'13.03'' Brgy. Tagpanghoy, Tubay, ANP – DWQ4 125° 30' 56.98'' Agusan del Norte
125° 30' 29.8'' Brgy. Binuangan, Tubay, ANP – DWQ5 125° 31'23.7'' Agusan del Norte
Environmental Baseline Study for the Agata Project, 2011
The groundwater quality data and the appropriate quality criteria are presented in Table 132.
Table 132 - Results of Groundwater quality
Analysis PNS ANP ANP ANP ANP ANP Parameter Method/Instrument DW DW1 DW2 DW3 DW4 DW5
pH Glass Electrode 6.5–8.5 7.66 6.84 7.43 6.67 7.45
BOD, mg/L Aside Modification -- <1 <1 <1 <1 <1
Dichromate – Open COD, mg/L -- <5 <5 20 <5 <5 Reflux
DO, mg/L Iodometric -- 7.2 9.1 9.0 9.4 9.7
Gravimetric TSS, mg/L -- 1 2 <1 <1 <1 (dried at 103-105°C)
Gravimetric (dried at TDS, mg/L 500 115 260 239 174 236 180°C)
Cr+6, mg/L Diphenylcarbazide 0.05 <0.01 <0.01 <0.01 <0.01 <0.01
NO3-N, mg/L Brucine Sulfate -- 0.34 1.04 0.28 0.02 0.16
PO4-P, mg/L Stannous Chloride -- <0.01 0.04 <0.01 <0.01 0.01
Gravimetric Oil & Grease, (Petroleum Ether <1.0 <1.0 <1.0 <1.0 <1.0 mg/L Extraction) nil
Turbidity, NTU Nephelometric 5 1.1 1.0 0.9 12.7 0.8
Hardness (as Flame AAS 300 143.59 233.57 269.74 130.77 253.59 CaCO3)
Total coliforms, Multiple Tube 0 350 33 4.5 49 5 400 MPN/100ml Fermentation
Fecal coliforms, Multiple Tube 0 240 23 2.0 23 3 400 MPN/100ml Fermentation
E. coli Streak Plate 0 positive positive positive positive positive
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Analysis PNS ANP ANP ANP ANP ANP Parameter Method/Instrument DW DW1 DW2 DW3 DW4 DW5
Hydride Generation - As, mg/L 0.01 <0.001 <0.001 <0.001 <0.001 <0.001 AAS
Cd, mg/L Flame AAS 0.003 <0.003 <0.003 <0.003 <0.003 <0.003
Cu, mg/L Flame AAS 1.0 <0.005 <0.005 <0.005 <0.005 <0.005
Co, mg/L Flame AAS -- <0.02 <0.02 <0.02 <0.02 <0.02
Fe, mg/L Flame AAS 1.0 <0.02 <0.02 <0.02 <0.02 0.36
Ni, mg/L Flame AAS -- <0.02 <0.02 <0.02 <0.02 <0.02
Pb, mg/L Flame AAS 0.01 <0.01 <0.01 <0.01 <0.01 <0.01
<0.000 <0.000 <0.000 <0.000 <0.000 Total Hg Cold Vapor AAS 0.001 1 1 1 1 1
Bacteriological Quality
Under the PNSDW, drinking waters should have nil levels of coliforms. All groundwater stations have been tested positive for both total and fecal coliforms. Station ANP DW5 recorded the highest total and fecal coliform count. Station ANP DW1 recorded higher coliform count compared with the other three stations.
Health Significance
In this study, the physical and chemical quality parameters that were measured particularly those with health significance only include heavy metals. Heavy metals occur naturally but are not expected to have concentrations that are dangerous in normal household water systems. Results show all levels are within PNSDW limits or are within typical values of Philippine groundwater resources.
Aesthetic Quality
These parameters refer to the characteristic of drinking water distinguished by odour, taste, colour and clarity. In reference with the PNSDW standard, only turbidity level particularly in station ANP DW4 exceeded the required limit. All levels are within limits.
There were no traces of oil and grease in all groundwater stations. Other parameters that have no standard limits are generally similar to the levels recorded in groundwater samples taken from other areas.
Surface Water Quality
Presented in Table 133 and Table 134 are the surface water quality sampling stations and data, respectively, along with the appropriate quality criteria.
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Table 133 - Freshwater quality sampling stations
Station ID Coordinates Location Description
Kalinawan River, Brgy. 09° 18' 19.6'' Located along the confluence of ANP – FWQ1 Colorado, Jabonga, Kalinawan and Bangonay River 125° 31' 41.8'' Agusan del Norte
09° 18' 09.2'' Nangka Creek, Brgy. Located downstream of road culvert ANP – FWQ2 125° 31' 45.2'' Colorado, Jabonga along Nangka Creek
Paiton Creek, Brgy. 09° 17' 49.9'' Located upstream of road culvert ANP – FWQ3 Colorado, Jabonga, along Paiton Creek 125° 31' 53.2'' Agusan del Norte
Mantiawas Creek, Brgy. 09° 17' 31.1'' Located upstream of Mantiawas ANP – FWQ4 Colorado, Jabonga, Reforestation Area 125° 31' 50.2'' Agusan del Norte
09° 17'06.5'' Duyangan Creek, Brgy. Located downstream of the tailings ANP – FWQ5 E. Morgado, Santiago, disposal area of several scale 125° 31' 58.0'' Agusan del Norte miners, upstream of the road culvert
Agata Creek, Brgy. E. 09° 16'43.2'' Located downstream of the of the ANP – FWQ6 Morgado, Santiago, road culvert 125° 32' 05.1'' Agusan del Norte
09° 16'07.3'' Dinaringan Creek, Brgy. Located downstream of Dinaringan ANP – FWQ7 E. Morgado, Santiago, Creek prior to confluence of 125° 32' 22.1'' Agusan del Norte Kalinawan River
Kalinawan River, 09° 15'47.8'' Located midstream of Kalinawan ANP – FWQ8 Santiago, Agusan del River 125° 32' 31.4'' Norte
09° 17'25.6'' Sua Creek1, Brgy. ANP – FWQ9 Lawigan, Tubay, Located downstream of Sua Creek 1 125° 30' 23'' Agusan del Norte
09° 17'12.2'' Sua Creek2, Brgy. ANP – FWQ10 Lawigan, Tubay, Located downstream of Sua Creek 2 125° 30' 24.7'' Agusan del Norte
Payongpayong Creek, 09° 16'25.5'' Brgy. Tinigbasan, Located downstream of ANP – FWQ11 125° 30' 30.3'' Tubay, Agusan del Payongpayong Norte
Tinigbasan Creek, Brgy. 09° 15'52.8'' Located along the confluence of two ANP – FWQ12 Lawigan, Tubay, tributaries of Lawigan Creek 125° 30' 33.4'' Agusan del Norte
Tagpangahoy Creek, 09° 14'13.5'' Brgy. Tagpangahoy, Located downstream of road culvert ANP – FWQ13 125° 30' 55.6'' Tubay, Agusan del along Tagpangahoy Creek Norte
Binuangan Creek, Brgy. 09° 13'23.3'' Located along the confluence of two ANP – FWQ14 Binuangan, Tubay, Binuangan Creek tributaries 125° 31' 29.3'' Agusan del Norte
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Station ID Coordinates Location Description
Binuangan Creek, Brgy. 09° 13'08.7'' Located downstream of Binuangan ANP – FWQ15 Binuangan, Tubay, Creek adjacent to the intertidal zone 125° 31' 17.1'' Agusan del Norte
09° 14'31.4'' Kalinawan River, Brgy. Located downstream of the ANP – FWQ16 Curva, Santiago, confluence of Kalinawan River and 125° 32' 48.6'' Agusan del Norte Santiago River
Kalinawan River, 09° 9'21.85'' Located downstream of Kalinawan ANP – FWQ17 Tubay, Agusan del River near Tubay Bridge 125° 33' 9.64'' Norte
Environmental Baseline Study for the Agata Project, 2011
Parameters Pertaining to Conventional and other Pollutants
The following discussion presents the parameters contributing to aesthetics and oxygen demand for freshwaters.
Based on laboratory results, all stations were tested positive for E. coli and fecal coliforms. All stations exceeded the total coliform count except for ANP FW1, ANP FW2, ANP FW3, ANP FW4, ANP FW9 and ANP FW14. Fecal coliforms are expected to be high in streams draining populated areas as these receive surface runoff that contain human and domestic animal wastes.
BOD standards were also exceeded in ANP FW5, ANP FW6 and ANP FW13. All other parameters are within the applicable standards.
Parameters for Toxic and Other Deleterious Substances in Fresh Waters
Laboratory analysis indicates that heavy metal concentrations are less than detection in all stream water samples. Other parameters without prescribed values are generally comparable with other areas.
Coastal and Marine Water Quality
Table 134 shows the sampling locations for the coastal and marine water quality. Analytical results for coastal and marine water quality are presented in Table 135 along with the appropriate quality criteria.
Table 134 - Sampling locations for coastal and marine water quality
Station ID Location
ANP – MWQ1 Brgy. Lawigan coastal area, Tubay, Agusan del Norte
ANP – MWQ2 Sitio Payong-payong coastal area, Brgy. Tinigbasan, Tubay, Agusan del Norte
ANP – MWQ3 Brgy. Tinigbasan coastal area, Tubay, Agusan del Norte
ANP – MWQ4 Brgy. Tagpanghoy coastal area, Tubay, Agusan del Norte
ANP – MWQ5 Brgy. Binuangan coastal area, Tubay, Agusan del Norte
ANP – MWQ5 Brgy. La Fraternidad coastal area, Tubay, Agusan del Norte
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Parameters for Conventional and Other Pollutants
The parameters for conventional and other pollutants affecting aesthetics and exerting oxygen demand for coastal and marine water were in compliance with the prescribed criteria for these particular set of parameters.
Parameters for Toxic and Other Deleterious Substances
The parameters for toxic and other deterious substances for coastal and marine waters (for the protection of public health) and other parameters with no criteria were also analysed. In the case of heavy metals, laboratory analyses show that all heavy metals tested were in compliance with their respective prescribed limits set by the DAO 90-34 for marine waters
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Table 135 - Results of laboratory analysis for surface water
Parameter Analysis DENR ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP Method/Instrument Standard FW1 FW2 FW3 FW4 FW5 FW6 FW7 FW8 FW9 FW10 FW11 FW12 FW13 FW14 FW15 FW16 FW17
pH Glass Electrode 6.5 – 8.5 7.5 8.54 8.07 8.13 8.00 8.18 8.44 7.65 7.98
BOD, mg/L Aside Modification 5 1 <1 <1 <1 21 11 6 1 1
COD, mg/L Dichromate – Open -- 10 <5 <5 <5 49 20 5 5 5
Reflux
DO, mg/L Iodometric 5 (min) 8.6 8.4 8.3 9.2 8.5 7.4 8.5 7.1 8.4
TSS, mg/L Gravimetric (dried at 103- Not >30% 94 1 1 1 2,790 21 374 91 2
105°C) increase
TDS, mg/L Gravimetric (dried at -- 82 241 199 105 180 196 119 36 250
180°C)
Cr+6, mg/L Diphenylcarbazide 0.05 <0.01 0.02 <0.01 0.01 0.29 <0.01 <0.01 <0.01 <0.01
NO3-N, mg/L Brucine Sulfate 10 0.14 <0.01 <0.01 0.36 0.07 <0.01 0.08 <0.01 0.04
PO4-P, mg/L Stannous Chloride 0.40 0.04 <0.01 <0.01 <0.01 0.15 <0.01 0.11 2.16 2.16 0.40 <0.01 <0.01 0.01 <0.01 0.02 0.09 0.01
Oil & Grease, mg/L Gravimetric (Petroleum 2 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 2 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 Ether Extraction)
Turbidity, NTU Nephelometric 235 10.5 10.5 10.9 1,248 90.5 363 217.5 11.9 10.8 11.4 12.7 11.3 0.9 13.3 17.5
Hardness (as CaCO3) Flame AAS 75.78 173.9 175.90 131.81 1,750.93 169.18 265.20 57.57 206.98 209.8 225.48 205.87 129.8 126.83 225.48 79.03
Total coliforms, Multiple Tube 5,000 330 17 x 102 22 x 102 490 92 x 103 92 x 102 45 x 104 17 x 103 92 x 103 5,000 92 x 103 92 x 102 16 x 103 24 x 103 24 x 102 16 x 105 23 x MPN/100ml Fermentation 102
Fecal Multiple Tube -- 230 13 x 102 13 x 102 330 54 x 103 92 x 102 20 x 104 13 x 103 54 x 103 -- 54 x 103 35 x 102 54 x 102 24 x 103 24 x 102 54 x 104 23 x coliforms,MPN/100ml Fermentation 102
E. coli Streak Plate -- positive positive positive positive positive positive positive positive positive -- positive Positive positive positive positive positive positive
As, mg/L Hydride Generation - AAS 0.05 <0.001 <0.001 0.02 <0.001 0.144 <0.001 0.011 <0.001 <0.001 0.05 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001
Cd, mg/L Flame AAS 0.01 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 0.01 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003
Co, mg/L Flame AAS -- <0.02 <0.02 <0.02 <0.02 0.27 <0.02 <0.02 <0.02 <0.02 -- 0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Cu, mg/L Flame AAS 0.05 <0.005 <0.005 <0.005 <0.005 1.007 <0.005 <0.005 <0.005 <0.005 0.05 <0.005 <0.005 <0.005 <0.005 <0.005 <0.005 <0.005
Fe, mg/L Flame AAS -- 8.86 0.12 0.09 0.10 382.99 2.74 25.38 7.28 0.25 -- 0.05 0.18 0.17 0.25 <0.02 0.19 3.93
Pb, mg/L Flame AAS 0.05 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 0.05 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.02
Ni, mg/L Flame AAS -- <0.02 <0.02 <0.02 <0.02 3.22 <0.02 0.07 <0.02 <0.02 -- <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Total Hg Cold Vapor AAS 0.002 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 0.002 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001
BOD, mg/L Aside Modification 5 1 <1 <1 16 <1 1 <1 38
COD, mg/L Dichromate – Open -- 5 <5 <5 34 <5 5 10 79 Reflux
DO, mg/L Iodometric 5 (min) 9.3 7.3 7.9 9.3 7.3 7.9 7.3 7.6
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Parameter Analysis DENR ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP ANP Method/Instrument Standard FW1 FW2 FW3 FW4 FW5 FW6 FW7 FW8 FW9 FW10 FW11 FW12 FW13 FW14 FW15 FW16 FW17
TSS, mg/L Gravimetric (dried at 103- Not >30% 1 2 3 1 1 2 54 11 105°C) increase
TDS, mg/L Gravimetric (dried at -- 269 230 234 111 196 377 104 3,446 180°C)
Cr+6, mg/L Diphenylcarbazide 0.05 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01
NO3-N, mg/L Brucine Sulfate 10 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 0.33
Notes: Values that exceeded the standards are presented in red fonts
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Table 136 - Results of marine water quality sampling
Analysis DENR ANP ANP ANP ANP ANP ANP Parameter Method/Instrument Standard MW1 MW2 MW3 MW4 MW5 MW6
pH Glass Electrode 6.5 – 8.5 8.02 8.16 8.26 8.33 8.27 8.19
BOD, mg/L Aside Modification 5 <1 <1 <1 <1 <1 <1
Dichromate – Open COD, mg/L -- 151 101 503 377 503 804 Reflux
DO, mg/L Iodometric 5 (min) 6.5 8.2 8.4 9.0 8.6 8.8
Gravimetric Not >30% TSS, mg/L 4 2 <1 3 8 4 (dried at 103-105°C) increase
Gravimetric TDS, mg/L -- 19,380 18,590 25,914 11,995 10,103 19,363 (dried at 180°C)
Cr+6, mg/L Diphenylcarbazide 0.05 <0.01 <0.01 <0.01 <0.01 <0.01 0.04
NO -N, 3 Brucine Sulfate 10 <1.0 <1.0 <1.0 <1.0 <1.0 0.57 mg/L
PO -P, 4 Stannous Chloride 0.40 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 mg/L
Oil & Gravimetric Grease, (Petroleum Ether <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 mg/L Extraction) 2
Turbidity, Nephelometric 1.5 10.7 0.7 1.3 12.8 11.8 NTU
Hardness Flame AAS 7,797.41 4,743.90 8,336.46 7,072.58 7,204.46 7,658.43 (as CaCO3)
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Analysis DENR ANP ANP ANP ANP ANP ANP Parameter Method/Instrument Standard MW1 MW2 MW3 MW4 MW5 MW6
Hydride Generation - As, mg/L 0.05 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 AAS
Cd, mg/L Flame AAS 0.01 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003
Cu, mg/L Flame AAS 0.05 <0.005 <0.005 <0.005 <0.005 <0.005 <0.005
Co, mg/L Flame AAS -- <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Fe, mg/L Flame AAS -- <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Ni, mg/L Flame AAS -- <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Pb, mg/L Flame AAS 0.05 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01
Total Hg Cold Vapor AAS 0.002 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001
Environmental Baseline Study for the Agata Project, 2011.
Notes: Values that exceeded the standards are presented in red fonts
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20.2.1.2.3 Freshwater Biology
Site Description
Sampling sites considered for this study are identified in Table 137. All creeks are less than 500 m in length from source to its mouth, typical of rivers draining high volcanic terrains. Points along the river near its source are typically low in organic matter and does not support much organism, thus sampling were done close to the mouth
Table 137 - Location of sampling stations for freshwater assessment
Name of Station Area Northing Easting Notes Creek/River
E. Morgado, ephemeral FW1 Candiis 09° 18' 24.7' 125° 31' 36.3'' Santiago creek
E. Morgado, FW2 Nangka 09° 18' 13'' 125° 31' 31.6'' Santiago
E. Morgado, FW3 Paiton 09° 18' 130'' 125° 31' 39.6'' Santiago
E. Morgado, FW4 Mantiawas 09° 17' 35.3'' 125° 31' 45.2'' Santiago
water is murky E. Morgado, from gold FW5 Guyangan Santiago panning activities
E. Morgado, FW6 Agata 09° 16' 47.5'' 125° 31' 57.9'' Santiago
E. Morgado, FW7 Bikangbikang 09° 15' 53.4'' 125° 32' 15.7'' Santiago
FW8 Kalinawan Curva, Santiago 09° 14' 35.6'' 125° 32 '43.9''
Tagmamarcay, FW9 Kalinawan 09° 12' 28.4'' 125° 33' 20.7'' Santiago
FW10 Binuangan Binuangan, Tubay 09°13 '15.3'' 125° 31' 16.0''
FW11 Tagpangahoy Tagpangahoy, 09°15 '22.4'' 125° 30' 24.15'' Tubay
FW12 Tinigbasan Tinigbasan, Tubay 09°15 '40.49'' 125° 30' 7.88''
FW13 Payongpayong Payongpayong, 09° 16' 30.1'' 125° 30' 25'' Tubay
FW14 Sua Lawigan, Tubay 09° 17' 30'' 125° 30' 18.9''
Environmental Baseline Study for the Agata Project, 2011
All rivers considered for this study have permanent flows except FW1. On the other hand, no data was collected from FW5 as it was murky from small scale mining activities.
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Benthos
Benthic profiles of the rivers are presented in Table 138.
FW2 is more or less 200 m from the source of Nangka Creek, which may explain the limited biota sampled in the area. The creek, however, features thousands of fish fries in one of the pools along its length indicating its important ecological function as a possible refuge for fish fries. Kalinawan River and the upstream Lake Mainit, are home to about 36 freshwater species (Coffey Report, 2009). The fries are multispecies group, evident upon closer inspection.
Paiton Creek (FW3) may have subterranean flows during summer evidenced by the interrupted river flow during the time of sampling. A limited sample of arthropods was gathered from the river. Mantiawas Creek (FW4) is a cool, gurgling creek with lined with lush vegetation on its banks. Five groups of arthropods were gathered with a total ecological score of 1.35. The benthic community thus indicates that organic pollution is highly unlikely in the creek.
On the other hand, Agata Creek also yielded considerable arthropod groups dominated by mayflies. The total score, however, is 4.35 indicating that some organic pollution is probable. Observations made around the site indicate the presence of domestic households which may be the source of organic matter. In the case of Bikang-bikang Creek (FW7), farm animals tethered on the surrounding fields may have contributed nutrients into the river resulting to an ecological index of 4.15.
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Table 138 - Benthic profile of freshwater sampling stations
FW2 FW3 FW4 FW6 FW7 FW8 FW9 FW10 FW11 FW12 FW13 FW14 Tolerance Taxa values Density (n/.5 sqm)
Arthropods
Insects
O. Diptera (F. Chironomidae; midges) 8 7
O. Diptera (F. Simuliidae; crane flies) 6 2 35
O. Tricoptera (spinning caddishfly) 3 2 2 20 6 19 2
O. Plecoptera (stonflies) 2 9 2
O. Coleoptera 4 1 (water pennies) O. Coleoptera 4 1 10 1 (ripple beetles) O. Ephemeroptera (mayflies) 3 1 23 3 106
O. Odonata (damselfly) 9 1 1 2
Crustacea
decapod shrimp 6 1 17 1 1
decapod crab 6 2 2
Arachnida (water strider) 1
Annnelida
Polychaete 8 1 23
MOLLUSK
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FW2 FW3 FW4 FW6 FW7 FW8 FW9 FW10 FW11 FW12 FW13 FW14 Tolerance Taxa values Density (n/.5 sqm)
Nerita 9 2
Clithon 14 24 18 2
Melanogaster 1 8 5 4 7
Septaria 1 9
Thiara 3
VERTEBRATES
goby fish 1 3 10
fish fry 9
tilapia fry 1
TOTAL NO. SPECIES 3 3 5 6 6 3 3 4 7 3 3 4
TOTAL NO. OF INDIVIDUALS 11 3 23 37 44 164 10 28 50 21 25 20
BIOTIC INDEX 9 5 1.3478 4.3514 4.1591 4.3415 6 6 3 3.15 - 3
Environmental Baseline Study for the Agata Project, 2011.
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FW8 and FW9 were taken from Kalinawan River and are considered downstream points of the creeks previously sampled. FW8 yielded benthos with a total ecological score of 4.31 indicating river water has probably some organic pollution. Downstream, the ecological index of Kalinawan River increased to 6 indicating most probable presence of organic pollution. This may be the case as water travels downstream bearing ecological footprints of the communities along its bank. Kalinawan River runs along a floodplain that supports progressive agricultural communities.
Binuangan River (FW10) on the western side of the proposed mine site also bears the ecological footprint of communities along its banks. The river supports scraper molluscs and omnivorous crabs but does not support arthropod communities. The river is used for domestic purposes such as laundry and as a convenient disposal system of animal waste as pigsties are near the river. An overall ecological index of 6 indicates poor water quality. FW11 is also dominated by molluscs. Molluscs are scrapers consuming algae attached to rocks. Arthropod groups that may serve as indicators of the ecological status of the river are limited probably due to the proximity to salt water.
Tinigbasan Creek (FW12) is dominated by Tricopterans, an insect family that lives in fairly clean waters. Overall ecological index of the water body is excellent with a score of 3. FW13, on the other hand, yielded no indicator species and is dominated by scrapers. Most molluscs are euryhaline, meaning they can resist fluxes of salinity in their environment. The absence of arthropods may be due to the proximity of the sampling sites to the marine environment. FW14 yielded a limited number of indicator species with the benthos dominated by molluscs. Total ecological score is 3 indicating excellent water conditions.
Density of Indicator species indicate that the sampling points on the western side of the proposed mine site have excellent to poor water conditions with water quality deteriorating from the small creeks upstream to Kalinawan River downstream. Creeks and rivers on the western side of the proposed mine site have excellent to fair water qualities mostly dominated by euryhaline mollusc species.
Phytoplankton
Diatoms dominate most of the freshwater sampling sites. These are microalgae with silica tests and are considered “grasses” of the aquatic ecosystem with their high primary productivity. They proliferate in waters with high silica content. Some species of the group are also considered as indicators of clean waters. Density is highest at FW2 with more than 24 000 cells per litre for a single species Fragillaria, a total density of more than 30 000 cells per litre. The high density might have helped support the thousands of fries in the creek.
As opposed to most of the sampling stations, FW7 is dominated by the Blue Green Algae (BGA). The group is known to form greenish blooms in aquatic ecosystems under high nutrient situations. This further supports the contention that the creek is nutritionally enriched by run-off bearing wastes from agricultural animals. This might also be the situation in FW12 where pigsties were observed beside the river.
FW8, on the other hand is dominated by green algae. The group also has high primary productivity but is highly opportunistic under high nutrient situations. No phytoplankton species was observed from FW13 because of high flow during the sampling.
Number of species is highest at FW6 with 33 phytoplankton species identified from the sample. FW11 has the lowest with 14 taxonomic groups. The density is highest at FW2 with over 30 000 cells per litre of sample waters while FW11 has only 191 cells per litre of sample waters.
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General dominance of diatoms shows high primary productivity in the rivers and creeks that may support secondary productivity.
Zooplankton
Productivity in the freshwater environment is supported by phytoplankton. Secondary productivity, however is driven by those that feed on the phytoplankton, the zooplankton.
The larval forms of zooplankton dominate the water column over the adult forms of the plankters. All creeks are mostly dominated by arthropods (insects and copepods), including Kalinawan River. Highest density is at FW3 with more than 600 individuals in a litre of water, equally contributed by insect larvae and copepods. Highest number of species however is at FW9 with 12 identified taxonomic groups. FW12 has the lowest overall density of zooplankton with only over 60 individuals per litre of water.
Among the adult forms of zooplankton, rotifers are highest at FW12. Rotifers are associated with organic matter in the aquatic environment, specifically those from natural sources. FW12 has forested banks and leaf litter may well be the source organic matter favourable for rotifer proliferation.
Heavy metal analysis for freshwater fish
Heavy metal analysis of fish flesh was done on Snakehead (Ophiocephalus sp.; dalag), a carnivorous benthic species taken from Kalinawan River (Table 139). Lead concentrations exceed both Australian and EU standards at 1.97 mg/kg. The concentration is about 150 times higher than the reported concentration in water in 2004 (Coffey Report, 2009) indicating that the species bioaccumulates lead. Bioaccumulation is a process by which non-biodegradable materials add up in concentration with each step of being eaten. The current concentration of lead in Snakehead indicates that consumption of a kilogram of the fish for one week may already result in lead poisoning.
Table 139 - Results of fish flesh analysis for heavy metal on Ophiocephalus sp. from Kalinawan River
Standards
Concentration Chemical Species EU (mg/kg) Australia **(mg/kg/ *(mg/kg) week)
Hexavalent Chromium (Cr6+) <.10
Arsenic (As) <.01 1
Cadmium (Cd) <.03 0.2 0.05
Copper (Cu) 32.25 70
Nickel (Ni) <0.2
Lead (Pb) 1.97 1.5 0.3
Mercury (Hg) 0.034 0.5 0.5
Standards were taken from Rayment, 2009* and Commission Regulation No. 1881/2006**.
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Lead is a neurotoxin that is the most common contaminant of fossil fuels. Given the proximity of Kalinawan from the road, fossil fuel use may be the single most probable source of contamination.
20.2.1.2.4 Marine Biology
Site Description
Table 140 shows the location of sampling stations for marine biological assessment.
Table 140 - Location of sampling stations for marine biological assessment
Station No. Coordinates Location
MW1 09° 18' 12.2'' 125° 30' 04.2'' Brgy. Lawigan, Tubay
MW2 09° 16' 25.8'' 125° 30' 27.6'' Sitio Sua, Brgy. Lawigan, Tubay
MW3 09° 16' 01.8'' 125° 30' 32.4'' Sitio Payong-payong, Brgy. Tinigbasan, Tubay
MW4 09° 14' 08.8'' 125° 30' 51.2'' Brgy. Tinigbasan Proper Coastal Area, Tubay
MW5 09° 13' 05.2'' 125° 31' 19.2'' Sitio Locbon Gamay, Tinigbasan, Tubay
MW6 09° 10' 52.6'' 125° 31' 41.3'' Brgy. Tagpangahoy Proper Coastal Area, Tubay
MW7 09° 13' 3.25'' 125° 31' 19.85'' Brgy. Binuangan, Tubay
MW8 09° 12' 8.46'' 125° 31' 22.43'' Brgy. La Fraternidad Coastal Area, Tubay
Environmental Baseline Study for the Agata Project, 2011.
The coastline north of the Municipality of Tubay is geologically typical of volcanic islands where beaches and shelves are narrow. Reefs on these sites could be classified as either fringing reefs or patch reefs. Fringing reefs support shallow lagoons or an extensive reef flat while patch reefs are marked with deep grooves filled with sand or any other reef-related materials.
Marine Resources
Benthos
The general benthic profile of the marine sampling sites is presented in Table 141.
Table 141 - General benthic profile of the surveyed marine station
MW1 MW2 MW3 MW4 MW5 MW6 MW7 MW8 Life forms/Genera Biotic Factors % Cover
Corals
Acropora (branching) 4.38 1.00 5.30 0.68
Acropora (encrusting) 0.80
Alveopora 6.60
Favia 3.16 1.00 0.96 0.90 3.90 10.97
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MW1 MW2 MW3 MW4 MW5 MW6 MW7 MW8 Life forms/Genera Biotic Factors % Cover
Favites 0.60 1.00
Fungia 0.10 0.40 0.10
Goniastrea 4.78 1.00 0.38
Hydnphora 0.36 0.60 0.14
Meandrina 0.50 0.40 0.28
Poccilopora 7.12 3.08 4.94 2.17 0.40 0.98
Porites (submassive) 13.20 12.66 0.42 0.56 0.92 0.38 0.33
Porites (branching) 2.56 0.67
Porites (encrusting) 1.52 0.30
Scolyma 0.10
Platygyra 8.14 0.17
Montipora 1.10 2.52 0.64 0.34
Echinophora 2.40
Tubastrea 0.26
Pachyseris 0.60 0.36
Montastrea 0.72
Cyphastrea 0.46
Sub-sub total (%)* 11.50 40.06 32.18 2.58 3.94 4.76 12.84 12.43
Others
Mellipora 0.02
Tubipora 2.60 0.80 0.38
Heliopora 13.95 1.16 0.30 0.50
BIOTIC FACTORS 0.96 0.20
soft corals 10.45 2.76 13.50 5.29 19.36
sponge 5.50 4.08 0.72 1.53
Sub-sub total (%) 24.40 12.98 14.60 5.79 19.56 4.10 1.10 1.53
Free-living invertebrates
Diadema 2.34
feather star 0.60
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MW1 MW2 MW3 MW4 MW5 MW6 MW7 MW8 Life forms/Genera Biotic Factors % Cover
Halometra 0.60
Hippopus 0.60
Linkia 0.40
rock clam 0.04
Sub-sub total (%) 0.00 0.04 1.80 0.00 0.40 2.34 0.00 0.00
Sub-total (%) 35.89 53.08 48.58 8.38 23.90 11.20 13.94 13.97
Abiotic factors
silt 17.76
rubble 57.79
sand 1.00 40.08 0.67
dead corals with algae 42.12 42.64 29.25 75.22 38.74 32.26
rock with algae 49.15 40.90
water 14.96 4.80 7.78 4.58 0.88 9.98 36.04 44.47
Sub-total (%) 64.11 46.92 51.42 91.63 76.10 88.80 86.06 86.03
Total Cover (%) 100 100 100 100 100 100 100 100
*Coral cover of 0-24.9% is rated as poor; 30-49.9% is fair; 50-74.9% is good; 75-100% is excellent (from Gomez et al., 1994)
MW1 is the southern-most end of the 10 ha Lawigan Marine Sanctuary. The consolidated material on the site appears to be a chunk of a volcanic rock that serves as the base for benthic recruitment. Large coral colonies were documented from the area with tabulate forms having 1.7 m in diameter. Acropora and Poccillopora are the dominant coral genera (Figure 92). The two (2) genera are usually associated with clear waters and high wave action environments. However, the site is still dominated by rock materials covered with algae (49.1%) and together with other abiotic components of the reef covers more than 64% of the area surveyed. Corals in the area were documented to occupy ledges while open, horizontal areas are occupied by soft corals and other life forms. Horizontal spaces are ideal settlement and recruitment sites but corals are mostly outcompeted by other photosynthetic organisms such as algae.
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Figure 92 - Tabulate Acroporids are found on ledges of the reef material from MW1. Acroporid and Pocilloporid species dominate the area and known to be prevalent in high energy environments.
Figure 93 - MW2 is dominated by Poritids. Coral colonies are relatively smaller indicating recent disturbance on the area.
Razor clams, rock clams and turban shells (Turbo) were also observed from MW1. Turban shells are protected species with populations in the wild suffering from intense harvesting pressure. Individuals observed are matured individuals that may provide possible sources of propagules.
MW2 is an extensive reef flat area with a fair coral cover (40%) dominated by Poritis (Figure 93). Total biotic cover comprises more than 50% of the total area surveyed. While corals are the most dominant feature of the site, individual colony sizes range from 3-60 cm indicating relatively young colonies. Recent bleaching events might have impacted the area as indicated by algae-covered dead corals with outline of corallites still discernable. A notable commercially important invertebrate from the area is the giant clam Hippopus, although it was found outside the laid transect. The individual is about 0.5 m in length and is presumed to be sexually matured. The species is said to be heavily poached in the area and the observed individual may just be a remnant.
MW3 mirrors MW2 in terms of general benthic profile (Figure 94). Corals are the predominant benthic life forms comprising 32% of the surveyed area. Total biotic components are 48% while abiotic components are more than 51%. The giant clam Hippopus was also observed from the site.
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Figure 94 - Benthic profile of MW3 mirrors that of MW2 with the dominance of submassive Poritids
Figure 95 - MW4 is dominated by rock bommies Figure 96 - Coral recruits are small with size ranging covered with algae from 1-3 cm in diameter
The alternative location for the processing plant, MW4, is mostly dominated by non-living benthos components with more than 91% cover of the surveyed area (Figure 95 and Figure 96). Corals with other living organisms only cover less than 10%. Coral colonies are small indicating that they just settled recently.
MW5 is also dominated by non-living components with more than 76% cover in the surveyed area (Figure 97). Living components cover more than 23% with the soft corals dominating at more than 19%. Corals only cover a meagre 3% of the area with most of the colonies having small size.
MW6 is a reef flat behind a shallow lagoon in an embayed coast. Coral cover is poor (>4%) and total biotic cover of the area is only 11.2%. Sponges make up the dominant biotic group with a cover comparable to hard corals (Figure 98). The non-living components of the reef cover more than 88% of the surveyed area and are dominated by sand at 40% cover.
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Figure 97 - MW5 is dominated by soft corals which Figure 98 - Abiotic components are the dominant predominates in areas with high feature of MW6. Small colonies of suspended silts sponges (purple in the middle of the photo) dominates the biotic components.
The primary option for harbour and town (MW7) area is adjacent to an embayed coastline. Reef materials are confined to the mouth of the embayment where the benthic survey was done. Coral cover is poor at 12.8% with the total biotic component of the reef covering 13.94% of the surveyed area (Figure 99). A total of more than 86% is covered by non-living components of the reef partitioned by silt, dead corals with algae and canals deeper than 30 cm in depth.
Figure 99 - MW7 is a silted reef with small coral Figure 100 - Rocks covered with silt and overgrown colonies by algae dominates the benthic profile of MW8. Encrusting coral recruits of Favids fused together form quilt-like pattern (foreground) competing with algae on space.
The last surveyed site (MW8) is an impact area of SR Mining activities. While it is a declared sanctuary, coral cover is poor (12%). Corals are mostly new recruits of Favids fused together forming a quilt-like pattern (Figure 100). Small coral recruits as small as 1 cm were also documented. The dominant features of the reef are reef materials overgrown by algae covering more than 86% of the surveyed area.
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Plankton
Plankton are microscopic plants or animals that are living within the water column. The phytoplankton are microscopic algae and form the base of the maarine pelagic food web. On the other hand, zooplankton are the microscopic juvenile stage of mmarine organisms or adults of microscopic marine organisms within the water column. Study oof the community composition indicates ecological conditions of the waters that may or may not mirror benthic profile as well as data on fisheries.
Phyttoplankton
All marine sampling stations are dominated by diatoms except for MW8. Diatoms are microalgae with siliceous tests and are important part in the diett of almost all herbivorous fish. They also form the base of ocean productivity with calculated biiomass production comparable to grassland areas in the terrestrial environment.
MW8 is dominated by several species of dinoflagellates with a total density of over 4 000 cells per litre of water. Dinoflagellates are also called Harmful Algal Bloom Species (HABS) as they dominate the water column during red tide events. Species may either produce toxin that are bioaccumulated by commercially important species or may deecrease oxygen in the water column during massive die--off events leading to fish kills. Ecology of the group points to opportunistic exploitation of nutrients in the water column resulting in seasonal and cyclical blooms. In the case of MW8, extra nutrient may have been provided by sediment from terrestrial run-off from the mined area innland.
Total density among all sampling sites is comparable except for MW8 with a total phytoplankton density of more than 7 000 ccells per litre (Figure 101). The number of species, however, was also highest at MW8 with 29 species, MW7 is one species less tthan MW8 while the rest of the sampling sites has species richness from 19-24.
Figure 101 - Phytoplankton density profile of the marine stations. Density is comparable among all stations except for MW8.
Zooplankton
Zooplankton are the secondary producers in the marine envvironment as they accumulate biomass mainly from consumption of phytoplankton. Relative to phytoplankton density,
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zooplankton density may fluctuate less as their popullation turn-over is slower. This seems to be the case covered by the current study as zooplankton concentrations, ranging from 9 000 cells per litre to 30 000 cells per litre, are higher relative to phytoplankton densities.
On all sites, larval forms are the dominating members of the zooplankton. MW1 is dominated by gastropod larvae while the rest of the sampling stations are dominated by copepods either in nauplaii or copepodite stagee. The highest number of species was observed from MW4 with 16 species followed by MW1 with 15 species while the rest have 10-113 species counts.
Fisheries
The angelfishes (Pomacentrids) dominate all sampling sites in terms of density and number of species. The group is also the main contributor of species richneess with MW3 and MW4 having 32 species each. The samee sampling sites had the highest density of fish per square metre, mainly because of the contribution of Pomacentriids. Biomasss, however, is dominated by wrasses (Labridae), surgeonfishes (Acanthuridae), and emperorr fishes (Lethrinids). MW1 has the highest calculated harvestable biomass among the sites and among the declared sanctuaries covered for this study (Figure 102).
Figure 102 - Profile of the estimated fish biomass between marine samplingareas surveyed. MW1 has the highest estimated denssity among the sites and among the sanctuaries surveyed for this study.
Heavy metal analysis of fissh
Heavy metals naturally occur in the soil and are released into the environment by erosion. Anthropogenic enhancementts of the ambient concentrations off heavy metals include use of fossil fuels, garbage disposal, and enhanced transport of soil materials into bodies of water, among others. Organisms absorb these metals into their system and biochemically store them in various parts of their systtem. As these chemicals are not excreted out, organisms on the higher trophic level tend to accumulate these metals into theiir body. Standards are set to prevent possible toxicity effects of these metals especially with humans as the final consumer of all organisms. In the Philippines, however, standards are yet to be established.
Results of heavy metal analyses on meat of three (3) trophic groups of fish caught from waters around the surveyed area aare presented in Table 142. Pelagic fishes, represented by the commercially obtained Caessio sp. (Dalagang-bukid; Fusilier) showed that heavy metal content of the flesh is within the accepted standards from both Australia and the European Union. Benthic species, however, showed elevated contents of Lead almost twice the standard set by Australia and almost 10 times the allowed consumption rate pper week set in the EU. The species tested for this study are Priacanthus sp. (Matangbaka,, Big-eye bream), a presumed carnivore, and Upeneus sp. (goatfish), a presumed herbivore.
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Table 142 - Results of the heavy metal analysis on fish flesh from marine stations surveyed
Heavy metal content (mg/kg) Standards
Chemical Species Demersal/Benthic Australia* EU ** (mg/kg/ Pelagic (mg/kg) week) Carnivore Hervibore
Hexavalent Chromium (Cr6+) <.10 <.10 <.10
Arsenic (As) <.01 <.01 <.01 1
Cadmium (Cd) <.03 <.03 <.03 0.2 0.05
Copper (Cu) 33.46 32.58 34.62 70
Nickel (Ni) <.20 0.31 0.2
Lead (Pb) 1.08 2.72 2.12 1.5 0.3
Mercury (Hg) 0.143 0.137 0.116 0.5 0.5
Standards were taken from Rayment, 2009* and Commission Regulation No. 1881/2006
Lead is considered a neurotoxin and is associated with memory loss, tingling sensations, depressions, cognitive deficits, delirium and hallucinations (http:// en.wikipedia.org/wiki/Lead poisoning) among other symptoms that are associated with damages in the central nervous system. Some studies also point to association of high lead concentrations in the air with ADHD in children. The use of fossil fuel is by far the most common source of Lead contamination in the marine environment.
20.2.1.2.5 Physical Oceanography
Site Description
Three oceanographic stations were established to represent the current distribution in the Agata mining coastal area that is within the primary impact area of any possible pollutant discharges. The current meter was moored at about 25 m above the seabed (approximately 5 m below sea surface). Table 143 depicts the sampling points for the physical oceanography study.
Table 143 - Location of sampling stations for physical oceanography
Station Location/Description Coordinate Sampling Period
Ebb Period: OC1 - Near Binuangan Alternate Harbour Option/ 9°13’03.1’’N, 1430H-1630H 19Jun11 or Residue Storage Facility 125°31’07.4’’E Flood Period: 0730H-0940H 20Jun11
Flood Period: 1020H-1210H 20Jun11 9°14’34.2’’N, Ebb Period: OC2 – Near Tagpangahoy Proposed Harbour site 125°30’19.4’’E 1720H-1920H 20Jun11 Flood Period: 1100H-1250H 21Jun11
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Ebb Period : OC3 – Near Payong-payong Alternate Residue 9°16’18.3’’N, 1450H-1700H 20Jun11 Storage Facility 125°30’17.0’’E Flood Period : 0810H-1030H 21Jun11
Environmental Baseline Study for the Agata Project, 2011.
Measurement of Ocean Current by SD-30 Current Meter
The SD30 current meter was used to measure the current speed and direction with built-in temperature sensor at three (3) sampling stations. The SD30 current meter was deployed at approximately 5 m below sea surface and programmed to measure the 10-minute average at each sampling station. Simultaneous with the SD30 current meter measurement, a drogue was released and tracked by GPS at about 10-minute intervals.
The current magnitude at station OC1 (near Binuangan) during ebb tide period ranged from 1.4 to 24.4 cm/s directed towards WSW to NNW (252 to 336 degrees). For flood tide period, the current speed ranged from 3.2 to 12.8 cm/s flows toward WNW to N (287 to 351 degrees).
At station OC2 (near Tagpangahoy), the flood tide observed current ranged from 1.6 to 23.8 cm/s directed toward WNW to NW (293 to 319 degrees) for current measured from 1020H to 1210H on 20 June, 2011. The flood tide current measured on 1100H to 1250H on 21 June, 2011 ranged from 0.6 to 29.0 cm/s directed generally toward NW (283 to 348 degrees) for about 50 minutes then shifted to SE flow (128 to 154 degrees). During ebb tide period, the current measurement at OC2 (Tagpangahoy) ranged from 2.8 to 16.4 cm/s generally moving towards NW (300 to 332 degrees).
At station OC3 (Payong-payong), the ebb current magnitude ranged from 2.0 to 24.0 cm/s that flowed towards the direction of SSE to WSW (153 to 278 degrees). For flood tide current at OC3 (Tagpangahoy), the current magnitude is 4.8 to 16.0 cm/s water mass moving towards SE to S (160 to 190 degrees).
The observed temperature at OC1 station ranged from 28.9 to 29.5°C. For station OC2, the observed seawater temperature ranged from 28.9 to 29.8°C. For the OC3 station, the seawater temperature ranged from 29.25 to 30.25°C. Figure 103 to Figure 105 show the time series of temperature for station OC1 to OC3.
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Figure 103 - Time series of seawater temperature ate OC1 (Binuangan) station
Figure 104 - Time series of seawater temperature ate OC2 (Tagpangahoy) station
Figure 105 - Time series of seawater temperature ate OC3 (Payongpayong) station
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Measurement of Ocean Current by Drogue Tracking
Measurements of ocean currents were conducted simultaneous to current measurement using SD30 current meter. Drogues were initially released near the current meter station and tracked using the Garmin GPSMap 178 Echo Sounder within a 10-minute interval.
For drogue releases near station OC1 (Binuangan), the water mass movement at approximately 10-minute intervals ranged from 16.5 to 28.2 cm/s during ebb tide period and 1.5 to 40.7 cm/s during flood tide period. The resultant drift currents were estimated from initial release until drogue retrieval time. The resultant drift currents for ebb tide and flood tide were 22.6 and 20.4 cm/s, respectively. Currents flow towards southwest (SW) for ebb tide and flow towards northwest (NW) direction for flood tide period. Figure 106 shows the drogue current directional pattern near station OC1 (Binuangan).
At station OC2 (Tagpangahoy), drogue tracking on 20 June, 2011 a flood tide period showed a current magnitude of 0.9 to 24.1 cm/s with a resultant drift current of 10.7 cm/s. Figure 107 shows the drogue current directional pattern near station OC2 (Tagpangahoy). Flood tide current moves in the direction of north-westerly (NW) while flood tide drogue tracking on 21 June, 2011 showed a 0.6 to 19.9 cm/s current speed with resultant drift of 4.5 cm/s. The water mass movement runs generally towards south-easterly (SE) with initial release moving towards northwest (NW) then reverses its flow to southeast (SE) movement. For ebb tide period, current speed ranged from 5.7 to 53.5 cm/s moving initially towards west (W) then changing direction towards northerly (N). The resultant drift current is 27.6 cm/s.
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Figure 106 - Binuangan Drogue
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Figure 107 - Tagpangahoy drogue
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Figure 108 - Sitio Payong-payong drogue
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At station OC3 (Payong-payong), the first drogue release during ebb tide moves very fast reaching the coastline of Brgy. Tinigbasan within a 30-minute period. The current speed is from 19.9 to 36.7 cm/s with resultant drift current of 29.3 cm/s. The water mass movement is generally going to southeast (SE). The second drogue release during ebb showed a 5.8 to 16.7 cm/s current speed moving initially east-southeast (ESE) then changing direction towards south (S). The resultant drift current is 8.3 cm/s. Figure 108 shows the drogue current directional pattern near station OC3 (Payong-payong).
Tides
The primary data used on tidal information for the Agata mining coastal areas is Cebu Port tidal station. Data is taken from Tide and Current Tables for 2011 of the National Mapping and Resource Information Authority (NAMRIA). The nearest tidal station is located at Surigao Port, Surigao City which is within 50 km north of the project area. The Cebu tidal station, with geographical location of 10°18’ N latitude and 123°55' E longitudes, is the reference station for the Butuan Bay. The project area location is located at 9°15‘ N latitude and 125°30' E longitudes about 20 km NNW from Cebu tidal station
Cebu tidal station has two (2) types of tides - diurnal and semidiurnal. The diurnal type of tide is characterised by one high water and one low water in a lunar day. This type prevails when the moon approaches its maximum declination. The maximum tide range occurs during this period. The other type of tide is the semi-diurnal type that exhibits two high waters and two low waters in a lunar day. This type begins to occur when the moon's declination approaches zero.
The various tidal information at Cebu tide station above the mean lower low water (MLLW) is:
Mean Sea Level (MSL) = 0.71 m
Mean Higher High Water (MHHW) = 1.49 m
Mean High Water (MHW) = 1.22 m
Mean Low Water (MLW) = 0.20 m
Bench Mark Elevation = 3.663 m
The benchmark in Cebu (BM 3A) is located in Cebu City on the concrete street sidewalk pavement, just in front of Eastern Shipping Lines building main entrance door along Cuenco Avenue. It is about 16 cm NE of the foot of the first step of the concrete stairs of the building. The mark is a 1.2 cm diameter brass rod, with cross cut on top, cemented flush on the concrete pavement.
The tidal pattern predicted by NAMRIA for Cebu Port on June 19 to 21, 2011 is of semi-diurnal type (Table 144).
The tidal pattern predicted by NAMRIA for Surigao Port on June 19 to 21, 2011 is of diurnal and semi-diurnal type.
Table 144 - Tide observations
Date Time Tidal Ht. (m)
June 19, 2011 0146 0.77
0558 0.42
1239 1.76
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Date Time Tidal Ht. (m)
1956 -0.12
June 20, 2011 0216 0.84
0646 0.44
1318 1.65
2027 -0.03
June 21, 2011 0248 0.92
0734 0.48
1357 1.51
2058 0.05
Predicted tide of NAMRIA Cebu Port
A tidal elevation measurement from 1800H 19 June, 2011 to 1900H 20 June, 2011 is shown in Table 145. Figure 109 shows the location of the tide station where the tidal elevation was measured. The tidal amplitude observed is about 112 cm lowest at 0700H and highest at 1300H on 20 June, 2011. The tide observation at Binuangan showed a semi-diurnal type (see Figure 111) following the Cebu tidal station that is the reference station of Butuan Bay.
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Figure 109 - Tidal elevation (cm) measurement at Binuanagan coastal area Table 145 - Tidal elevation (cm) measurement at Binuangan area
Time 19-June-2011 20-June-2011
0100H - 120
0200H - 124
0300H - 122
0400H - 115
0500H - 110
0600H - 108
0700H - 105
0800H - 120
0900H - 146
1000H - 168
1100H - 188
1200H - 206
1300H - 217
1400H - 209
1500H - 187
1600H - 151
1700H - 130
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Time 19-June-2011 20-June-2011
1800H 85 101
1900H 73 84
2000H 70 -
2100H 75 -
2200H 82 -
2300H 99 -
2400H 112 -
Seawater Temperature Measurement
A seawater temperature profiles were collected at three (3) different locations at the Agata mining coastal area. Corresponding to near surface 2 m below sea surface (about 28 m from seabed) temperature measurement at each sampling location, a near seabed floor (about 5 m from bottom) and mid depth (about 15 m from seabed floor) temperature were recorded to differentiate the temperature at specified depth. A 1-minute average temperature was recorded using a data logging Hobo Pendant thermistors simultaneous to current measurement.
Generally, the temperature is of a typical pattern, higher temperature at near surface compare to deeper level. No unexpected observation was encountered and no known source of energy that can influence change in temperature. There is no discharge from river or from man-made discharge in the area that will affect the temperature at selected sampling points.
The seawater temperature at station OC1 (Binuangan) at near surface about 2 m below sea surface (about 28 m from seabed) ranged from 29.25 to 31.17°C and at mid-depth (15 m from seabed) ranged from 28.95 to 29.35°C and the near seabed (5 m from seabed) ranged from 28.75 to 29.25°C. Temperature gradient between near surface (2 m below sea surface) and near seabed (5 m from seabed) is about 0.10 to 1.9°C. Figure 110 and Figure 111 show the graphical plot of recorded temperature at station OC1.
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Figure 110 - Temperature profile of seawater at OC1 (Binuangan) during Ebb tide period, (19 June 2011)
Figure 111 - Temperature profile of seawater column at OC1 (Binuangan) during Flood Tide Period (20 June 2011)
At station OC2 (Tagpangahooy), the near surface temperature rangged from 29.45 to 31.88°C and at 15 m above seabed the temperature ranges from 28.56 to 30.115°C. The temperature gradient between near surface and near seabed is about 1.80 to 2.43°C. Figure 112 to Figure 113 show the graphical plot of recorded temperature at station OC2.
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Figure 112 - Temperature profile of seawater column at OC2 (Tagpanaghoyy) during Ebb Tide Period (20 June 2011)
Figure 113 - Temperature profile of seawater column at OC2 (Tagpanaghoyy) during Ebb Tide Period (20 June 2011)
For station OC3 (Payongpayong), the near surface temperature ranged from 29.85 to 30.86°C. At 15 m from seabed, the temperature ranged from 29.05 to 29..55°C and at 5 m from seabed the temperature is from 28.56 to 29.85°C. The gradient of temperature between near surface and near bottom is about 1.40 to 1.90°C. Figure 114 to Figure 115 show the graphical of recorded temperature at statiion OC3.
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Figure 114 - Temperature profile of seawater, column at OC3 (Payongoayong) during Ebb Tide Period (20 June 2011)
Figure 115 - Temperature profile of seawater column at OC3 (Payongpayong) During Flood Tide Period (21 June 2011)
Bathymetric Survey Resultts
The coordinate positions and depth profile fronting the three prroposed pier sites are listed in Table 146, Table 147 and Table 148. The adjusted echo sounding records at OC1 (Binuangan area) range from 2.2 to 41.9 m shown in Figure 116 and at OC2 (Tagpangahoy area) range
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from 2.4 to 47.2 m as shown in Figure 117 while at OC3 (Payongpayong area) range from 2.2 to 38.3 m as shown in Figure 118.
The depth profile at OC1 (Binuangan area) shows a slope gradient of about 5.3% within 140 m from shore with maximum water depth of 10 m. A 47.9% slope gradient was observed from 140 to 220 m from shore with depth ranging from 10 to 40 m water depth.
At OC2 (Tagpangahoy area), the bathymetry slope gradient is 13.6% within 70 m from shore with water depth up to 10 m. The slope gradient between 70 to 200 m from shore is 39.1% with water depth range of 10 to 47 m.
For Payong-payong area (station OC3), the slope gradient is 2.4% from shore to about 440 m away from coastline with maximum depth of 10 m water depth. From 440 to 560 m from shore, the slope gradient is 23.8% with water depth range of 10 to 38 m depth.
For a harbour location, the best site for pier location is at Tagpangahoy area where a shorter length of structure can be built to accommodate larger ships that can dock due to steeper water depth in about 70 m distance from coast.
Figure 119 shows the Namria bathymetric map incorporating measured depth using Garmin echo sounder.
Table 146 - Depth profile offshore to coast route at station OC1 (Binuangan)
Date: 19June2011 Adjusted Sounder Position of Depth in Route Time UTM Depth in m Sounding m HH MM SS Easting Northing (+0.5 m)
1 16 46 47 776784 1019710 41.4 41.9
2 16 47 11 776792 1019751 36.0 36.5
3 16 47 47 776789 1019736 27.0 27.5
4 16 48 15 776796 1019780 18.0 18.5
5 16 48 38 776798 1019780 12.6 13.1
6 16 49 2 776800 1019809 7.2 7.7
7 16 49 37 776810 1019847 5.4 5.9
8 16 50 8 776815 1019890 4.5 5.0
9 16 50 24 776829 1019922 3.6 4.1
10 16 51 42 776839 1019948 1.7 2.2
Environmental Baseline Study for the Agata Project, 2011
Table 147 - Depth profile offshore to coast route at station OC2 (Tagpangahoy)
Date: 20June2011 Sounder Position of Adjusted Depth in Route Time UTM Depth in
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Sounding m m HH MM SS Easting Northing (+0.5 m)
1 14 16 23 775219 1022579 46.6 47.1
2 14 16 44 775225 1022588 36.0 36.5
3 14 17 02 775238 1022610 28.8 29.3
4 14 17 35 775254 1022635 19.8 20.3
5 14 17 52 775271 1022660 13.5 14.0
6 14 18 11 775282 1022679 9.0 9.5
7 14 18 47 775295 1022701 5.4 5.9
8 14 19 06 775308 1022721 3.8 4.3
9 14 19 41 775319 1022738 1.9 2.4
Environmental Baseline Study for the Agata Project, 2011
Table 148 - Depth profile offshore to coast route at station OC3 (Payongpayong)
Date: 21June2011 Adjusted Sounder Position of Depth in Route Time UTM Depth in m Sounding m HH MM SS Easting Northing (+0.5 m)
1 8 29 2 774988 1025955 37.8 38.3
2 8 29 30 775016 1025957 28.8 29.3
3 8 29 55 775039 1025955 21.6 22.1
4 8 30 18 775070 1025969 16.2 16.7
5 8 30 59 775135 1025972 10.2 10.7
6 8 31 22 775200 1025967 5.4 5.9
7 8 31 48 775271 1025965 4.6 5.1
8 8 32 07 775350 1025967 3.3 3.8
9 8 32 34 775433 1025968 3.7 4.2
10 8 32 55 775497 1025969 3.5 4.0
11 8 33 17 775577 1025985 1.7 2.2
Environmental Baseline Study for the Agata Project, 2011.
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Figure 116 - Depth profile route at station OC1 (Binuangan)
Figure 117 - Depth profile route at station OC2 (Tagpangahoy)
Figure 118 - Depth profile route at station OC3 (Payong-payong
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Figure 119 - Agata Depth Contour Map
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20.2.1.3 Air
20.2.1.3.1 Site Description
Table 149 shows the sampling stations description for air quality assessment
Table 149 - Location of sampling stations for air quality assessment
Station Coordinates Location
ANP – AQ1 09° 10'47.3'' 125° 31'46'' Brgy. La Fraternidad
ANP – AQ2 09° 18'17.3'' 125° 30'10.2'' Brgy. Lawigan Proper
ANP – AQ3 09° 17'23.2'' 125° 30'22.7'' Sitio Sua
ANP – AQ4 09° 16'29.5'' 125° 30'29.7'' Sitio Payong-payong
ANP – AQ5 09° 16'01.6'' 125° 30'33.9'' Brgy. Tinigbasan Proper
ANP – AQ6 09° 14'08.1'' 125° 30'53.2'' Brgy. Tagpangahoy
ANP – AQ7 09° 13'06.6'' 125° 31'20.4'' Brgy. Binuangan
ANP – AQ8 09° 16'53.9'' 125° 32'03.5'' Brgy. E. Morgado
Environmental Baseline Study for the Agata Project, 2011. The prevailing climate in the project area falls under Type II of the Modified Corona’s Classification of the Philippines. This climate type prevails over Surigao Province. In general, this type of climate is characterised by rainfall that is distributed throughout the year, with lack of distinction between the rainy and dry periods. The maximum rainfall period is from December to January.
This type of climate also prevails over the eastern sectors of Bicol and Visayas regions.
Surface Winds
The average monthly wind speed is a constant 2 m/s year-round with a predominant northeast to east direction in the first five months and a predominant west direction in the rest. The annual wind rose diagrams were taken from Surigao City.
Ambient Air Quality and Noise
Eight sampling stations were established at the project site. The stations were selected based on the areas with the most probable critical receptors. The locations and descriptions of the selected sampling sites are provided in Table 149
20.2.1.3.2 Ambient Air Quality
The analytical results of the 1-hour sampling are shown in Table 150. For the purpose of comparison, the prescribed limits, i.e., the National Ambient Air Quality Standards (NAAQS), under the Philippine Clean Air Act (CAA) or Republic Act 8749 are shown in the last rows of the tables. The NAAQS are the 1-hour concentration limits, which are not to be exceeded as a result of the operation of an industrial facility.
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Table 150 - Results of air quality sampling
SO2 NO2 TSP Sampling Station (ug/Ncm) (ug/Ncm) (ug/Ncm)
ANP – AQ1 6.76 ND 56.29 Brgy. La Fraternidad
ANP – AQ2 10.66 7.4 90.71 Brgy. Lawigan Proper
ANP – AQ3 SitioSua 11.39 ND ND Brgy. Lawigan
ANP – AQ4 SitioPayong paying 9.81 ND ND Brgy. Tinigbasan
ANP – AQ5 9.41 ND ND Brgy. Tinigbasan Proper
ANP – AQ6 10.61 ND ND Brgy. Tagpangahoy
ANP – AQ7 10.21 ND ND Brgy. Binuangan
ANP – AQ8 11.06 1.08 ND Brgy. E. Morgado
Method of Analysis Pararosaniline Griess-Saltzman Gravimetric
Detection Limit <0.20 <0.03 -
DENR Standards 340 260 300 (Ambient level)
Environmental Baseline Study for the Agata Project, 2011
Total Suspended Particulates
Detected 1-hour concentrations of TSP show no detection to 90.71 ug/Ncm. The detected concentrations are lower than the NAAQS limit of 300 ug/Ncm for the 1-hour averaging period.
TSP is primarily a measure of the concentration of airborne particulate matter in air. Based on the study team’s observations, the probable sources of TSP at the study area include fugitive dust from unpaved grounds (i.e., roads, farms and cleared areas), emissions from haul trucks and smoke from burning of fuel wood from the nearby households.
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Sulphur Dioxide
Sulphur dioxide concentration ranged from 6.71 to 11.31 µg/Ncm. Station ANP AQ3 has the highest observed value while the lowest concentration was recorded at ANP AQ1. The SO2 levels at the project area are very low compared with the NAAQS of 340 ug/Ncm.
The very low detected SO2 concentrations indicate natural background levels, in the absence of a major emission source at the study area.
Nitrogen Dioxide
1-hour readings of NO2 concentrations ranging from ‘not detected’ to 7.4 µg/Ncm. Similar with the SO2, NO2 levels are very low. The detected levels are significantly lower than the prescribed concentrations in the NAAQS of 260 ug/Ncm.
Similar with SO2, the very low detected NO2 levels most probably indicate natural background levels. Anthropogenic NO2 are primarily formed from fuel combustion. These are derived from emissions from vehicles/fuel burning equipment and use of firewood for cooking. Anthropogenic sources of NO2 at the project locale are almost insignificant.
Ambient Noise
The daytime noise levels are presented in Table 151 with the applicable DENR Class shown in the last row. The Philippine Ambient Noise Standards for the different classes or categories are shown in Table 152. As shown in Table 151 measured noise levels are less than the prescribed noise limits. The detected noise levels are typical of remote rural areas.
Table 151 - Results of noise level observation in the area
Station ID Morning Daytime Evening Night-time 5:00am-9:00am 9:00am-6:00pm 6:00pm-10:00pm 10:00pm-5:00pm
AQ1 - 38.0 – 56.5 - -
AQ2 - 39.8 - 56.8 - -
DENR Standard (Class A) 50 55 50 45
Environmental Baseline Study for the Agata Project, 2011
Table 152 - Philippine Ambient Noise Standard
Maximum Allowable Noise (dBA) by Time Periods[2] Category[1] Daytime Morning/Evening Night-time
AA 50 45 40
A 55 50 45
B 65 60 55
C 70 65 60
D 75 70 65
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Using the NPCC classification, Stations AQ-1, AQ-2 and AQ-3 are classified as Class D, as they are primary components of the on-going mining project. Stations AQ-7 and AQ-8 can be classified as Class AA, as these stations are within the compound of Hayanggabon Elementary School and an Iglesia Ni Kristo chapel, respectively. The rest of the stations are within/near residential areas, therefore categorizing them under Class A.
The following discussion deals with the identification of “potential” impacts that may be caused by the project to the environment and people. The determination of impacts considered the possible effects of the mining activity during the construction and operational period of the proposed project. These impacts are in two (2) forms – positive and negative. For the negative impacts, appropriate measures are presented to alleviate any of the project’s downbeat effect while acceptable schemes to enhance the positive impacts are also discussed based on the findings of the experts who conducted this study.
20.2.2 Environmental impacts and mitigation
20.2.2.1 The Land
Discussed below are the perceived environmental impacts of the Mining Project and appropriate management measures:
Mineral resources
The mineral resources in the project area shall be converted from being idle materials underground to ore and materials of high economic value. This will create a large value that is added to these resources, which will contribute to local economic activity and the general economy of the country.
Terrain
The land will be modified as a result of the mining activity. Excavation and earth moving will create pits and result in changes to the landform. Likewise, the displaced materials will create mounds and elevations in stockpile areas. Roads will also be constructed creating some areas with flattened terrain, while at the same time some areas with steep terrain. The tailings dam and the resulting tailings pond will also create a significant change in the topography, since a valley will be dammed and filled with residues from ore processing. In some areas, the resulting landform change will create changes in the drainage pattern, displacing streams and creating ponds.
Geological information
The mineral exploration and the whole mining activity will reveal new information about the geology and the mineral resources in the area. This will enhance our understanding of the subsurface and will add to our appreciation of the natural resources and their value.
Loss of vegetation cover – grassland & secondary low volume forest
The primary impact zone is within the MRL Agata MPSA area itself located within the Brgys. of Lawigan, Tinigbasan, Tagpangahoy and Binuangan in Tubay, E. Morgado in Santiago and Colorado in Jabonga. The major impact on the vegetation and flora within the mentioned barangays will be the removal of vegetation due to the establishment of mine pit, roads, buildings, water pumping station, residue storage facility, plant site, accommodation village and harbour. The mine pit will be established along the mineralised area within the boundaries of Lawigan, Tinigbasan, and E. Morgado. The access road connecting the mine pit, process plant and accommodation village will traverse either from the mountain ridge or from the coastal road that will be established by MRL. The proposed residue storage facility will be located in Brgy.
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Binuangan, while the plant site, accommodation village and harbour will be established in Brgy. Tagpangahoy. The water pumping station will be located adjacent to the Kalinawan River. The construction of all of these will have considerable effects on the overall diversity of the forest considering its direct and indirect impacts.
Loss of habitats for terrestrial fauna
All species of terrestrial fauna will be affected by mining activities because they depend on the few remaining patches of secondary forests which they utilize as roosts and food sources. Mining activities in the mountain (to-be-mined) in E. Morgado, Colorado will surely affect the waterways (streams and rivers) in Lawigan to Tagpangahoy which are the sources of water for households present in the area. The heaviest impact will be felt in the area where roads will be constructed going up the mountain and going down to the alternative harbor. If the roads are constructed before the start of mining activities, many microhabitats, or pocket habitats, as the case may be will be destroyed.
Mitigating Measures
The following are recommended mitigation measures to reduce the adverse environmental impacts of the project on the terrestrial component. Measures to enhance the positive effects of the project, primarily on rehabilitation activities of the upland forest, riparian and mangrove ecosystems, are discussed as well.
On displacement of wildlife species
It is therefore recommended that a forested portion (50-100 ha) of the mineable area be retained to serve as habitat or a reserve for wild terrestrial fauna. Minimal activities should be carried out near rivers, creeks and streams in order to preserve the water sources of the community near or in the vicinity of the mines. Mitigating measures to lessen the effect of mining in the area should be implemented e.g., habitat restoration or reforestation where endemic and indigenous species should be planted (not exotics: mahogany, gmelina and the like) as soon as an area has been abandoned after mining activities. The cooperation of the community in the restoration of the degraded ecosystem should be requested.
Monitoring of wild fauna should be done quarterly by the Environmental Management Section of the company and semi-annually by an independent wildlife biologist (fauna specialist). The IEC on wildlife conservation should be continued and practiced by both the mining company and the communities which will be affected by mining operations.
Minimize Soil Erosion
During the excavation of areas with rich nickel deposits, a belt of trees with a width of 25 m or more must be established along its perimeter to minimise soil erosion. Spacing to be used must be close enough (e.g. 1x1 m2) so that the vegetation will immediately hold the soil.
Other slope stabilisation measures should be planned and implemented to reduce and avert erosion. Drainages should be designed and maintained particularly to manage the flow of rainwater on the land surface. Stockpiles and excavated areas should be properly designed to prevent sheet wash that carries the fine grained earth materials downstream. Check dams and other suitable erosion control structures should be planned around excavation and active mining areas.
Progressive rehabilitation effort
For rehabilitation activities of the company, appropriate reforestation species should be used to ensure the better growth and high survival rates. Avoid using exotic plants as reforestation
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species. Instead, endemic and indigenous species (e.g. Pavetta indica, Symplocos odoratissima, Wikstroemia indica, Xanthostemon verdugonianus) found within the area should be used in the rehabilitation activities to promote biodiversity conservation.
Minimisation of forest removal
During the construction phase, establishment of temporary access roads will require clearing of vegetation to facilitate movement of workers and mobilisation of equipment. If feasible cutting of potential mother trees should be minimised because these may serve as the genetic resource for the important species.
For the permanent access road that will connect the mine site, processing facilty, RSF and harbour to the nearest public road, delineation of vegetation to be cleared should be determined beforehand in order to avoid unnecessary clearing. As much as possible, avoid the removal of the remaining forest with good vegetation cover in the project area. The remaining forests with good vegetation cover are usually located in the gullies where water is abundant.
Biodiversity establishment
The residue storage facility requires large area occupying natural habitat of an endangered species, Xanthostemon verdugonianus. The density of this species is very limited in the project area (e.g. 20 individuals per hectare for the canopy stratum and 40 individuals per hectare for the intermediate stratum). The company should establish biodiversity corridors such as buffer zone, conservation, regeneration or offset areas near the site where the facility is to be built. This will protect and preserve not only those threatened species but also indigenous flora.
Proper delineation of mining areas
A portion of mineable area (e.g. 50-100 ha) with low grade ore may be set aside as habitat for the all vascular plants present in the project area. A permanent plot may be established within this area to monitor the ecosystem dynamics and ecology of the endemic and indigenous reforestation species. This may also be habitat for wild fauna.
Biological monitoring for terrestrial flora
Quarterly monitoring should be done by the Environmental Management Section of MRL and annually by an independent terrestrial flora specialist.
Biological monitoring for terrestrial fauna
Monitoring of wild fauna should be done quarterly by the Environmental Management Section of MRL and semi-annually by an independent wildlife biologist (fauna specialist). The IEC on wildlife conservation should be continued and practiced by both the mining company and the communities which will be affected by mining operations.
Post-mining rehabilitation
The mining plan should incorporate a rehabilitation program to manage the terrain, erosion and land stability changes that will result from the mining operation. A suitable land use plan that can be established, be sustained over the long term and provide the most benefit to the environment and the people should be formulated as part of the mine decommissioning and abandonment plan.
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20.2.2.2 The Water
On Surface Water
The ANLP will involve stripping of vegetation and excavation of land for the construction of mine and processing plant facilities, access roads and for the open cut mining itself. Increased erosion will ensue and a corresponding rise in the sediment load of the creeks draining the MPSA area is expected unless proper mitigating measures to prevent erosion of disturbed areas and siltation are put in place. If erosion is left unchecked, siltation will occur in Tubay River and the portion of Butuan Bay adjacent to the project site. Siltation of the CR5 to CR8 water sources will also take place.
The creeks draining the nickel laterite resource area and the proposed mining and processing plant facilities in Brgy. Tagpangahoy may also be contaminated with petrochemical spills from the operation of earth moving equipment and other chemicals used in the processing of the nickel laterite.
The project will involve the use of a residue storage facility (RSF) to contain the processing plant wastes. The RSF is intended to be built at Brgy. Binuangan at the western slope of the North-western Range, which faces Butuan Bay. The foreshore area fronting the RSF will be affected by siltation and contamination should the proposed RSF suffer a breach.
The stream flow of Tubay River will be also reduced if the proponent pursues its plan of drawing water from this river for the ANLP. Table 153 however shows that the annual water requirement is just a mere 0.10% of the discharge of Tubay River at its junction with Asiga River. The effect of the project on the river’s discharge is therefore negligible.
On Groundwater
The project will have negligible effect on the amount of groundwater since the rocks that underlie the nickel laterite resource area and the proposed mining and plant facilities contain little or no groundwater. However, the spring water sources SP2, SP7 and SP6 may be silted and/or contaminated with petrochemicals during mine development and operation. This is because these water sources are located below the haul road to and from the proposed process plant and resource area/mine pit. SP5 might also be affected because of it’s proximity to the proposed new service road leading to the proposed water intake pump.
On Water Quality
Water quality impacts in the study area emanate from the different phases of the project – exploration, ore extraction (open-pit or underground mining), storage, milling, processing and disposal of spent chemicals used in the milling and/or processing.
This section excludes the impacts of the exploration stage and covers only during construction, operation and closure of mine.
The characteristics of mine wastes are among the most important determinant of water quality at a mining activity. Mine wastes or mine materials include the extraction area (open-pit or underground), waste rock, unprocessed lean ore, ore piles (heap/dump leach piles), tailings and metallurgical processing wastes. All of these wastes may not be present at a specific operation.
The discussion hereunder describes the impacts of water quality within the study area and the brief description of the management that needs to be employed to minimize such identified impacts:
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Water Runoff
Runoff from a mine or quarry can potentially increase TSS levels causing turbid waters. An increase in the alkalinity of water may also occur with increased carbonate ions in the water. A water management system to control the runoff and sedimentation will be established to minimize water quality impacts. Regular water quality monitoring will be conducted in the streams immediate to the mine or quarry site vicinity.
Chemical Spillage
Chemical spills (acids, oils and other chemicals) from storage facilities may occur in case of accidental leaks or breach of containers. Storage facilities will be bunded to contain accidental breaches or leaks. Containment will be sufficient to contain 110% the volume of stored chemicals.
Generation of Solid and sewage waste
Generation of solid waste and sewage will potentially contaminate the land and water resources. A water management system will be established at the site to collect and treat wastewater. A solid waste management plan will also be established which will include a materials recovery facility and an engineered solid waste disposal site.
Hazardous wastes from operations and company clinic will be collected by appropriate contractors or otherwise disposed-of in an ecologically sound manner.
Discharge from the decant pond
Discharge from the decant pond to the coastal waters in the vicinity can potentially cause deterioration of the quality of immediate coastal water. Regular effluent monitoring will be conducted and appropriate treatment of the effluent will be done as necessary prior to discharge.
On Freshwater Ecology
Construction would involve earth movement activities that would produce loose sediments that may be carried by run-off. Rivers and creeks convey the materials into larger bodies of water. As most of the sampled creeks are small, production of large volumes of sediment may result in total cover-up of portions of the creeks. This would result in annihilation of all benthic fauna in these creeks. This impact would seem irreversible given limited connectivity of the small creeks with other water bodies.
Larger rivers such as Kalinawan, owing to the large volume of water, have the capability to flush out deposited sediments. Meanders or river bends, however, are expected to change with the addition of sediment supply which would result to changes in biotic patterns of the water body.
A larger volume of sediment is expected to be produced during the operation of the project. As during the construction phase, the risk of losing the small creeks to sediment deposits is high. Biotic factors would be adversely affected and most likely are irreversible. Ecological function of the creeks as refuge for fish fries may be lost which may compromise succession of aquatic fauna upstream of Kalinawan River.
Kalinawan River is an ecologically important conduit for biodiversity maintenance of Lake Mainit. Migratory species have been documented to inhabit the Lake (COFFEY, 2009) by traversing Kalinawan. These include anandromous species like Anguilla (kasili), Chanos (bangus), and Macrobrachium (ulang) which migrate into salt water bodies to breed. Euryhaline species like Therapon (bugaong), Caranx (langub,bugok), Siganus (danggit), Mugil (banak),
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and Upeneus (goatfish) have wide tolerance to changes in salinity level which enable them to migrate upstream of Kalinawan. Changes in the quality of water within Kalinawan with an increased sedimentation would compromise this important ecological process.
Increased concentration of heavy metal contaminants in fish flesh is expected with increased sediment deposition on the waterways, especially for demersal species. This is expected especially for FW10 which may be affected by tailings leachates. While the impact could be considered reversible, it will affect the whole food chain and is expected to happen long after the closure of the project.
Heavy metal contamination of aquatic fauna is one of the expected lingering effects of the mine operation, especially significant to the water bodies near the RSF.
Sediment deposition into existing creeks may be minimised by limiting activities within their drainage area. In the events that earth movements cannot be confined outside the drainage area of the creek, stockpiles should be stabilised to prevent landslides which would fill in the creek drainage. As much as possible, works around creek drainage areas should be confined during low flow season to minimize sediment transport downstream.
A system of drainage canals should be built where stockpiles would be located. Canals should have silt trap structures to minimize sediment transport. Where possible, run-off from activity sites should be confined first into silt ponds to decrease sediment load before water is released into the environment. Recycling of collected waters from the ponds is highly recommended.
On Marine Ecology
The sediment carried by run-off from earth-moving activity sites throughout the different phases of the project is the most significant probable factor that may impact the marine environment. This is important to consider on all sampling points with the construction of a proposed road and specifically significant on MW3 to MW7 where proposed project components are to be established. Sediments smother coral colonies that may lead to death. Fish, with their swimming ability, may avoid sedimented sites and will result in lower fish biomass and lower fish diversity.
Different wastes that would be generated by different components of the project would impact the marine environment. Both solid and liquid wastes from the proposed town site would impact water quality. Anthropogenically produced wastes are usually high in limiting nutrients such as Nitrates and Phosphates which may cause algal bloom in the area. This may be more significant on embayed sites such as MW5, MW6 and MW7 where flushing is relatively poor.
Accidental spillage of tailings from the tailings dam would result to complete decimation of marine organisms on site and contamination by heavy metals of other organisms. Tailings are known to contain all other metals that were not chemically separated from the ore and are therefore potentially toxic in their raw form. Increased ambient heavy metal concentration in fish may be observed on events of accidental spills or leaching of tailings from the storage facility.
The sediment that would be carried by run-off from the mine site potentially remains as the most significant impact of the proposed project to the marine environment. The ecological profile of MW8 serves as the basis for the possible impact scenario that may happen: corals would be decimated, fish assemblage would be reduced, and plankton community may be dominated by HABs and other opportunistic species.
Leachates from the TSF and other waste holding facilities may remain to have significant impact to the marine environment during the decommissioning phase. Leachates may include heavy metal residues, organic matter residues, and non-biodegradable materials.
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Butuan Bay is known for a circulating hydrodynamic feature known as Butuan Jet (Bernardo, 2011, unpublished). The water motion connects reefs throughout the area by transporting larvae across. Coastal features modify the circulation. For example, embayed areas retain more sediments than other areas. The Butuan jet was observed during the sample period impinging near the coast. Water circulation as fast as 1 m/s was observed carrying flotsam and debris, and this prevented further examination of some sites.
The hydrodynamic feature is ecologically important for larval transport. Sedimented sites like MW8 and MW7 had yielded coral recruits despite the unfavourable conditions, and this might indicate availability of larvae carried by the jet. The fast moving water may also even out distribution of sediment in the area such that sites receiving high sediment input maybe periodically cleansed. Recovery of sites from recent natural or even anthropogenic disturbances may be mediated by this hydrodynamic feature and may be able to mediate impacts of the project and possible recovery of impacted sites. However, it may also carry contamination of heavy metal to other sides and spread sediments over large areas. Sources of propagules may be affected which would affect recovery of downstream sites. This necessitates control of impact variables on site and confinement of impacts to the smallest area possible.
Mitigation of sediment deposition by run-off into the marine environment may include: (1) Construction of sediment traps that would allow settlement of particles before water is released; (2) Deployment of sediment traps in construction activities near or within the shore that would confine silt into limited areas; (3) Embankment stabilisation programs such as coco-netting. If possible, earth-moving activities should be confined only during seasons of low run-off to minimise erosion.
A waste management program should be established on all project components, especially on the proposed town site. If possible, waste water should be treated to the approximate standard of the water body where it will be released. Solid wastes should be properly handled, segregated, treated and disposed accordingly.
The potential impact of increase in siltation rates in coastal areas especially near the mouth of the river can be avoided by preventing erosion of sediments from nickel ore from the drying and stockpile areas to the river system. In addition, drainage systems consisting of canals or dikes around open areas directing sediment-laden storm runoff to natural and man-made sedimentation basins should be provided. The catch basins should have adequate sizes such that the retention time is long enough for the sediment loads to settle.
A good engineering design is to be adopted to minimize the impact on the current flow and natural coastal configuration.
Access roads to the mine and quarry should be provided with proper drainage systems to prevent erosion of road materials during strong rainfall events. To ensure that storm water falling on roadways will be collected by the roadside drainage. Mined areas should be re-vegetated to prevent sediment transport leading to coastal waters.
20.2.2.3 The Air
The climate and weather in the study areas will not be altered by the activities relative to the project. Total Suspended Particulates, SOx, NOx concentrations and noise level conditions in the area are expected to increase slightly during the operation of the Project but predicted to be within the DENR standard.
Increased Noise Level
Noise will be generated from the operation of various equipment including vehicular movement, quarrying and hauling. Heavy equipment will be appropriately muffled. Speed limits for vehicular
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movements will be set and monitored. Workers operating heavy equipment will be provided with appropriate personal protective equipment (PPE), as necessary. Noise will be reduced with the pipeline construction as stated previously.
Increase in Gaseous Emissions
The operation of motorised heavy equipment, vehicles and diesel power sources (i.e. gensets) during the construction phase will generate SO2 and NO2 emissions. All diesel-powered equipment and vehicles will be maintained in accordance with the manufacturer’s specification. The company will also comply with LTO registration requirements for emissions testing of vehicles and with the DENR on the RA 8749 (Clean Air Act) requirements for level of emissions.
Dust Generation
Site preparation, rehabilitation/construction of the haul roads and clearing activities for the stockpile area for ore preparation, equipment service area, pier and HPP area, as well as the limestone quarry will generate fugitive dusts. Earthworks and transport of the mined ore will also generate dust emissions.
Road dust emissions will be suppressed with water, as necessary on a regular basis, especially in areas where there are nearby settlements. In addition, drivers’ awareness of the effect of vehicular speed on dust generation will be instigated by the company in order to minimize it. Buffer zones will also be established to reduce windblown losses of dusts. Other measures, as necessary, shall be implemented to reduce generation of dust and re-suspension into the atmosphere.
Exposure to Gaseous Pollutants
Exposure of the workers to dust emissions, acid fumes and gaseous pollutants may pose health hazards for workers. All employees will be provided with appropriate PPE. Employee/contractor compliance with company safety procedures will be strictly monitored
Stack Emissions
Stack emissions, i.e. TSP, SO2 and NO2, from the proposed coal-fired power plant, sulphuric acid plant, slake lime plant, HPAL scrubber and vent systems may exceed emission standards and adversely affect the ambient air quality.
To control the power plant emissions, dust collectors will be in place and low sulphur-content heavy fuel oil and high efficiency combustion will be utilised for the operation. For sulphuric acid production, emissions of SO2 shall be controlled by the absorption of SO3 into H2O. Regular maintenance of the facilities of the HPP will be conducted to maintain efficiencies of the different equipment (i.e. scrubber).
To aid in the Potential Impact Preventive Measures or Mitigations assessment of the cumulative impacts on air quality, air dispersion modelling was carried out.
20.2.3 Environmentally significant sites
It is significant to note the existence of identified “critical areas” near the proposed project site. The presence of these areas should be given focus because these may directly or indirectly be affected by the proposed project. Its sensitivity should be considered for this may pose alarm to the local non-government organisations and even the surrounding communities.
The Lake Mainit Development Alliance was organised in year 1999 as a group responsible for the supervision and protection of Lake Mainit, being the fourth largest lake in the Philippine
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archipelago. Its watershed covers approximately 87 072 ha with an aggregate land area of 72 372 ha. The lake is comprised of 28 tributaries from which Kalinawan River serves as the primary outlet. Within the watershed area reside approximately 115 177 people having 23 530 households in a total of 99 barangays. It is important to note that the major commercial fishes in the area include Tilapia, Pidianga (Goby), Bugwan, Hayuan (Mudfish), Isik (Shrimp), Bangkok (Catfish), Kasili (Eel), Luyab and Carp. These describe a rich resource within and around the lake that mainly supports the livelihood of local dwellers. Aside from the agricultural, forestry, and fishing activities, mining has been part of the common resource in the area. Gold, limestone, and copper are the major mineral products being utilised by various companies having mineral claims in the area.
Historic flooding in Lake Mainit recently happened due to continuous rain in the first quarter of year 2011. As noted, flash floods occurred in the lakeshore municipalities including Mainit and Alegria of Surigao del Norte and Kitcharao and Jabonga of Agusan del Norte. Claims that mining was one of the causes of this event led to the idea that mining threatens Lake Mainit. In an article posted by Surigaonon Ako2, seven (7) exploration permits (EP) approved by the Mines and Geosciences Bureau (MGB) on June 30, 2010 are within the jurisdiction of the town of Mainit, Surigao del Norte, and one (1) in Kitcharao, Agusan del Norte while the rest are in the Agusan del Sur towns of Bunawan, Prosperidad and Bayugan; Agusan del Norte towns of Tubay, Cabadbaran and Santiago, among others. The identified tenement holders include Minimax Mineral Exploration Corp., Silangan Minadanao Mining Co., Inc; Manila Mining Corp.; Coolabah Mining Corp.; Occidental Mining Corp.; MRL Gold Phils. Inc.; and Kalayaan Copper- Gold Resources, Inc.
In particular, a blog site called Pidjanga directly named “MRL Resources Ltd.” (sic) as the company causing the degradation of the Lake Mainit environment following a statement that the company did not inform the residents about the mining activity and that MRL has formed small- scale miners into a cooperative without conducting local dialogue. Any such claims are baseless and MRL has not conducted any mining up to the present time. The group also claimed that the mouth of the lake outlet is already heavily silted caused by the denudation of mountainside which is a product of vegetation clearing by the mining companies.
Although less impact to the lake is foreseen upon project development, these issues should be addressed with full sensitivity. A proper and comprehensive information drive should be carried out by the proponent to the local communities to make them truly aware of the operation. It is also important to consider the participation of affected communities in the future environmental and social monitoring in order to create an open interaction between the local dwellers and the company. Reducing the anxiety of people on the impacts of mining is crucial for it needs ong- term contact with the community and assurances to them that the most appropriate environmental measures are implemented.
20.2.4 Significant Biological, Physical Environment Findings
20.2.4.1 Project water requirement and proposed water source
The water requirement of the ANLP is presently estimated to be at least 390 m3/hour. MRL plans to draw this water from the Tubay River at its junction with Asiga River, a major tributary of Tubay River. At this junction, the watershed has a catchment area of 86 315 ha.
2 http://www.surigaotoday.com/2011/01/mining-threatens-4th-largest-freshwater.html
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Figure 120 - Proposed water source for ANLP
Table 153 shows the estimated monthly and yearly discharge from this catchment using the Analogue Method. The table reveals that on a monthly basis, the water requirement of the ANLP varies from 0.06 to 0.15% of the water flowing through the Tubay-Asiga river junction while the average annual water requirement is merely 0.10% of the river’s flow at this junction. This indicates that Tubay River can easily sustain the project’s water requirement.
Table 153 - Available and required water for the ANLP
% of Tubay River at Junction with Water Requirement of Tubay River Asiga River ANLP Period Discharge
(MCM)
Jan 513.85 0.29 0.06
Feb 402.26 0.26 0.07
Mar 386.85 0.29 0.08
Apr 270.68 0.28 0.10
May 242.05 0.29 0.12
Jun 197.30 0.28 0.14
Jul 228.40 0.29 0.13
Aug 208.76 0.29 0.14
Sep 186.64 0.28 0.15
Oct 199.34 0.29 0.15
Nov 279.85 0.28 0.10
Dec 403.60 0.29 0.07
Annual 3 519.58 3.42 0.10
It must be stressed however that the stream flow values obtained for Tubay River are based on stream gauge data that are over 40 years old. The Tubay River watershed has undergone
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changes since that time and actual, long-term discharge measurements should therefore be carried out to substantiate the initial findings on water availability.
20.2.4.2 Proposed alternative project water source
While the proposed water source site at the junction of Tubay and Asiga rivers discharges much more water than the project requirements, the steep slope of the site does not offer a good area to locate pumping facilities. Furthermore, direct pumping of water from the river will necessitate much filtering since the amount of suspended solids in the river is relatively high.
An alternative would be to locate the water source site 2 to 3 km downstream where a narrow floodplain appears to the west of Tubay River Several infiltration galleries or large shallow wells may be constructed in this area and fitted with appropriate pumps to satisfy the water requirement of the Agata Project. While the source of this intake scheme is still river water, allowing the water to pass through the shallow alluvial deposits will filter out much of the suspended solids. Furthermore, the floodplain at this area is large enough to house the pumping facilities needed to bring the water to the proposed plant site.
Figure 121 - Proposed alternative water source
The floodplain should however be examined first to determine the occurrence and thickness of permeable alluvial deposits in the shallow subsurface.
20.3 Community and Social
20.3.1 Introduction and Methodology
This section has been prepared principally by Gaia South, with the exception of the following sub-sections that were prepared by MRL: 20.3.3.3 (Village Relocation), 20.3.3.4 (Heritage Sites), 20.3.4.1 (Additional Important Legal Requirements), 20.3.4.2 (Land Ownership), and 20.3.6 (MRL Community and Social Engagement).
The Municipalities of Jabonga, Santiago and Tubay were identified as the directly affected communities of the proposed mining project. Direct impact areas are defined as the immediate vicinity where various mining facilities will be established and where serious impacts will extend upon project construction, operation, and abandonment.
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Table 154 - Experts And Researchers Conducted The Community And Social Study
Name Expertise Date of Sampling
Daphne Bate, M.D. Public Health June 13-16, 2011
Cesar B. Cuyugan, Jr. Socio-economics August 18-26, 2011
Cherish June Galamay Research Associate June 13-16, 2011
Emerson Darroles Research Associate June 7-16/ August 18-26, 2011
20.3.1.1 Socio-economics
The study made use of secondary data collected from various agencies and local government offices including the Municipal Planning and Development Office (MPDO) and Rural Health Unit/s (RHUs) of the Municipalities of Jabonga, Santiago, and Tubay. The socio-economic and health data from the potential impact barangays were used as references. Focus Group Discussions (FGDs) and Key Informant Interviews (KIIs) were also conducted. In doing so, the following guide questions were used during the interview:
20.3.1.1.1 The Key Informant Interview Guide Questions 1. As the Municipal (position in the government), what, in your opinion, are the desirable development directions for your municipality? 2. Are these consistent with the development direction in the Municipal Comprehensive Development Plan, Executive Agenda, and other plans?) (Note: The assumption here is that the KI knows or is familiar with the comprehensive development plan, executive agenda, other plans.) 3. What do you think about mining as an economic activity? 4. Do you think Mining is one of the socially acceptable modes of development for the municipality? What are the reason/s for your answer? 5. Which do you think is more preferable, small-scale mining or large-scale mining? Why? What are the advantages of large-scale mining? Disadvantages? What are the advantages of small-scale mining? Disadvantages? 6. What will happen to your municipality 10 years from now? What will lead or cause your municipality to experience what you think will happen to it 10 years from now? 7. How would the vision be different if your municipality allows only the implementation of small-scale mining instead of large-scale mining? How would the vision be different if only large-scale mining is implemented and not allowing small-scale mining?
The Focus Group Discussion Guide Questions
1. What type of development do you think is possible for your municipality? 2. What do you think about mining as an economic activity? 3. Do you think mining is one of the socially acceptable modes of development for the municipality? What are the reason/s for your answer? 4. Are there certain conditions that can make mining easier/more favorable? 5. Is there any concern related to socio-economics that will make the mining activity difficult? 6. In your opinion, would people support responsible large-scale mining in your area? Why?
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20.3.1.2 Public Health
Health data were obtained from the Municipal Health Offices of Jabonga, Santiago, and Tubay. Interviews on the health status and health care system of the community were conducted with the key barangay leaders, doctor, nurses, barangay midwives and residents. Important information regarding public health was gathered from municipal health unit and barangay health stations facilities, health personnel, health programs and services, medicines and drug procurement data, referral systems, health missions’ data, financial support and environmental sanitation programs. Data gathering for the Public Health sector was guided by the following objectives and used the corresponding types and sources of information:
1. In order to establish the baseline health profile of the impact communities, the following were sourced from related offices: a) Vital health statistics; b) Morbidity and mortality rates and the 5-year trend; c) Identification of the notifiable diseases in the areas including endemic diseases; d) Local health resources (Government and Private); and e) Environmental Health and Sanitation Profile: water supply, human excretement management, waste management and disposal systems and food hygiene. 2. The discussion of the potential problems and impacts related to the nickel mining project include: a) The nature of the project activities and identified associated hazards, particularly in the air, water, soil and other involved hazardous materials or processes; and b) The potential consequences to workers and communities.
20.3.2 Baseline Community and Stakeholders
The majority of the inhabitants of the Agata project areas are of Visayan heritage. It is also home to indigenous peoples composed of Mamanwa-Manobo.
Written historical accounts indicate that during the early years of the Caraga Region, its inhabitants came from mainland Asia, followed by Malayans, Arabs, Chinese, Japanese, Spanish and Americans. Migrants from the Visayan and Luzon provinces later settled in the area. Most of its inhabitants speak the Cebuano dialect and reside in the rural areas.
20.3.2.1 Socio-economics
20.3.2.1.1 Profile of the Municipality of Jabonga
Jabonga is one of the oldest towns located in the northern part of Agusan del Norte. It is approximately 62 km from Butuan City, the regional center of Caraga Region. Jabonga could be easily distinguished and identified if associated with Lake Mainit since it lies within its influence area.
It has a total land area of 29 300 ha representing 14% of the total land area of Agusan del Norte. Of this total land area, 23 850 ha are forested areas, 5 155 ha are agricultural land and some 295 ha are for built-up uses. The municipality has a type II climate where there are no pronounced dry and wet seasons.
The municipality has 15 barangays, five (5) of which are along the national highway, five (5) are along the lakeshore of Lake Mainit, four (4) are coastal barangays, and one (1) upland barangay.
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Based on the 2007 official census on population and housing, Jabonga’s population was 23 052. The total population of 23 037 comprise the 4 211 households for an average household size of 5.47. The remaining 15 in the population are transients or institutional population.
The economy of the municipality is highly dependent on agriculture.
Fire Protection Services
Based on local records, the Municipality of Jabonga has a fire protection service available, one (1) fire truck.
Table 155 - Fire Protection Service
Personnel Facilities/Equipment Condition Type of No. of Location Area to Pop’n Services Personnel Ratio Vehicle Others
168 One [1] fire Headquarters Jabonga 8 1:3,000 - Operational sq m truck
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Infrastructure (inc. buildings, roads, etc.)
Table 156 - Inventory of roads by system classification and type of pavement, year 2009
Road Surface Type Roads by ROW Total Length System Concrete Asphalt Gravel Earth Classification [m] (km) km % C km % C Km % C km % C
National 300 11.0 11.0 100.00 Good - 100.00 - None - - None - -
Provincial 8.0 16.39 5.0 30.50 Good 0.10 0.61 Good 11.29 68.89 Good None - -
Municipal 8.0 5.17 1.40 12.14 Good none - - 3.77 87.86 Good None - -
Barangay Road 6.0 67.40 0.65 0.96 Good none - - 29.95 44.44 Poor 36.80 54.60 Poor
Total - 99.96 18.05 18.06 - 0.10 0.10 - 45.01 38.02 - 36.80 34.81
Environmental Baseline Study for the Agata Project, 2011.
Notes: C – Physical Condition: Good – acceptable/serviceable Poor – needs Improvement Critical – For Priority Action
The table (Table 156) shows that of the total road length, the barangay, municipal and provincial roads are all-weather type. Of these, almost 50% are in poor condition.
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Table 157 - Inventory of bridges by location, type, capacity and condition, Year 2009
Bridge Name Location Type Road Capacity Physical Condition
Bangonay Bridge Bangonay RCDG 15 tons Good Puyo Bridge Bangonay RCDG 15 tons Good Sayajon Bridge Cuyago RCDG 15 tons Good Baleguian Bridge Baleguian RCDG 15 tons Good Camalig Bridge A.Beltran RCDG 15 tons Good Calinawan Bridge Colorado RCDG 15 tons Good
Environmental Baseline Study for the Agata Project, 2011.
Notes: Type: Concrete, steel, wood, other C – Physical Condition: Good – acceptable/serviceable Poor – needs improvement Critical – for priority action
Table 158 - Land transportation terminals by location and condition, year 2009
Type of Public Name Barangay Utility Using the Physical Condition Terminal
Terminal/Parking Bangonay, Baleguian, PUJ, Tricycle, “habal- Poor Facilities Poblacion habal”
Power/Electric Supply
Table 159 shows that there are about 3 757 power connections in the municipality for domestic, industrial, and commercial establishments, among others. The area consumes about 190 kilowatt hours of power per month. The projected power requirements however are assumed in Table 160.
Table 159 - Number of connections by type of users and coverage consumption (KWh/Mo.)
Type of Connection Number of Connections Average Consumption (KWH/mo.)
Domestic 3 368 households 20 Industrial 14 establishment 80 Commercial 300 30 Public Building 60 50 Streetlights (Public) 15 10 Others
Total 3757 190
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Table 160 - Projected power requirements by type of connections (KWH)
Projected Power Requirements Connection/User Year 1 Year 2 Year 3 Year 4 Year 5
Domestic 808 320 889 152 978 067.5 1 075 874.25 1 183 461.68 Industrial 13 440 14 784 16 262.4 17 888.64 19 677.50 Commercial 108 000 118 800 130 680 143 748 158 122.8 Institutional 3 012 3 312.2 3 643.42 4 007.76 4 408.59 Agricultural 9 000 9 900 10 890 11 979 13 176.9 Streetlights (Public) 1 800 1 980 2 178 2 395.8 2 635.38
Total 943 573 1 037 930.20 1 141 724.32 1 255 897.45 1 381 487.85
Water Supply
As shown in Table 161, there are about 15 level 2 water sources in the municipality that serve approximately 3 780 households. Level 3 water sources on the other hand have 791 local connections serving 15 barangays.
Table 161 - Level 2 Water Supply by Type and Number of Population Served, Year 2009
Number of No. of HH Location of Number of Barangay Communal Population Water Sources Pumps Served Faucets Served
A.Beltran - 16 1 - Maraiging - 3 1 - Baleguian 2 24 1 72 Cuyago 4 27 1 440 Bangonay 12 44 1 386 Libas 12 40 1 488 Magsaysay 21 0 1 300 Colorado 20 13 1 209 Bunga 1 12 1 265 San Pablo - 4 1 140 San Vicente - 10 1 171 Sto. Nino - 11 1 373 San Jose - 22 1 169 Magdagooc - 27 1 179 Poblacion - 10 1 588
Environmental Baseline Study for the Agata Project, 2011.
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Table 162 - Existing Surface Water Resources by Type and Classification, Year 2009
Surface Water (e.g. lakes, rivers, water Classification (e.g. Location impounding structures, etc.) Class AA, A, B, C, D)
Lake Mainit Jabonga Lake KalinawanRiver Colorado, Jabonga River Puyo River Bangonay, Jabonga River Baleguian River Baleguian, Jabonga River Cuyago Water Impounding System Cuyago, Jabonga Irrigation Mayugda Falls Poblacion, Jabonga Creek Lambingan Falls San Jose, Jabonga River Magsaysay Water Impounding System Magsaysay, Jabonga Irrigation Tomaliwis River Bunga-Tapian, River San Pablo River Jabonga-Mainit River Silopan Creek San Pablo, Jabonga Creek Cabugao Creek Poblacion, Jabonga Creek Dao Creek San Pablo, Jabonga Creek Naga Creek San Pablo, Jabonga Creek Kayatoog Creek San Pablo, Jabonga Creek Camalig River Bunga, Jabonga River Santo Nino Creek A.Beltran, Jabonga Creek Magdagooc River Santo Nino, Jabonga River San Vicente Creek Magdagooc, Jabonga Creek San Vicente, Jabonga
Environmental Baseline Study for the Agata Project, 2011.
Communication
Table 163 shows the telecommunication facilities in the municipality. It can be observed that cellular phone is the most common gadget used by the community, as there are reported 2 000 units in the area. There are also postal services in the area as shown in Table 164.
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Table 163 - Inventory of telecommunications facilities and services by type and classification, year 2009
# of Subscribers/users Franchise Location Service Facilities and Type Potential Holder of Firm Area Capacity subscriber Existing pending applications
DOTC Landline Landline Butuan City Poblacion 16 units 50 [TelOf] Telephone telephone
Internet and Landline PhilCom Butuan City Poblacion Landline 2 40 telephone Phone
Communication Globe Manila Municipality Wireless - - antenna
Communication Smart Manila Municipality Wireless - - antenna
Globe/Smart Manila Municipality Wireless Cellular phones 2,000.00 - /TM
Others: 3 [PNP, Jabonga Municipality SSB - HF radio BFP, LGU
Environmental Baseline Study for the Agata Project, 2011.
Table 164 - Postal Service Facilities
Postal Facility Number
Postal Office – Poblacion, Jabonga 1 Money Order Machine 1 Postal Station/Circuits 1
Environmental Baseline Study for the Agata Project, 2011.
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Burial Facilities
Table 165 shows the burial facilities in the municipality. There is only one (1) private cemetery and the rest are public cemeteries.
Table 165 - Burial Facilities
Name of Cemetery/Mem Barangay Ownership(Private/Public) Area Parks
Poblacion Cemetery Brgy Poblacion Public 18 000 sq m Magdagooc Cemetery Brgy Magdagooc Public 10 000 sq m Santo Nino Cemetery Brgy Santo Public 10 000 sq m San Vicente Cemetery Brgy San Vicente Public 10 000 sq m Colorado Cemetery Brgy Colorado Public 5 000 sq m Private 5 000 sq m Libas Cemetery Brgy Libas Public 5 000 sq m Baleguian BrgyBaleguian Public 10 000 sq m
Environmental Baseline Study for the Agata Project, 2011.
Economic Activity
Tourism and Recreation
The municipality has different destinations available for tourists. Some of these are easily accessible by land. Local festivals are also being held in the area as a form of thanksgiving.
Table 166 - Various tourism areas in the region
Access Road Name of Tourism Accessibility Establishment Pavement Condition Means of Means of Transportatio n Available from Distance Nearest (km) Airport from Distance the Nearest (km) Seaport from Distance National (km) Highway
Mayor Pio A. Monton Great Land 75 km 95 km 9 km √ Good √ Lake Resort
Libas Cave Land 65 km 85 km 2.5 km -
Lambingan Falls Land 85 km 105 km 19 km - Good 6
Vito Wall [scuba Land 91 k 111 k 25 km - Good 6 diving]
Environmental Baseline Study for the Agata Project, 2011.
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Table 167 - Local Activities
Frequency of Duration of Activity Activity Activity
Sumayajaw Festival Yearly 1 day Baoto Festival Yearly 3 days
Environmental Baseline Study for the Agata Project, 2011
Agriculture and Livestock
Among the most common agricultural crops being cultivated in the area include coconut, rice, banana, cassava, sweet potato, fruit trees, vegetable and corn. Coconut gives the highest production of 8 112 metric tons a year as it composes about 61% of the total agricultural land area. Please refer to Table 168.
Table 168 - Common agricultural products
Area Production/year Major Crops Barangay Hectares % to Total Volume (mt) Value(Php)
Coconut All Barangays 6 760 61.38 8 112.0 121 680 000.00
Rice A. Beltran, 682 6.19 4 992.8 67 402 800.00 Maraiging, Irrigated (310) (2.81) (2 452) (34 317 000.00) Baleguian, Cuyago, Colorado, Non-irrigated Magsaysay, (372) (3.38) (2 827.2) (38 167 200.00) Poblacion
Banana All Barangays 516.79 4.69 1 550.37 5 426 295.00
Cassava - 80.25 0.73 1 777.00 1 777 000.00
Sweet Potato - 83.35 0.77 2 099.99 2 099 990.00
Fruit Trees - 296.39 2.69
Vegetables - 39.25 0.36 238.0 1 428 000.00
Corn - 232 2.11 835.2 7 934 400.00
Forest Trees - 2 322.75 21.08 - -
Total - 11 014.60 100 19 605.36 207 748 485.00
Environmental Baseline Study for the Agata Project, 2011
Table 169 shows that all barangays have livestock and poultry industries with an annual production volume of 274 327 kgs for livestock and 4 947 kg for poultry. Fishing activities production is shown in Table 170. About 113 079 kg of fish per year is being caught from marine water resources while approximately 213 070 kg of fishes come from inland resources.
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Table 169 - Poultry and livestock data
Area Production/yr Type Barangay (hectare Classification s) Volume (kg) Value (Php)
Livestock All Barangays 326.46 Backyard 274 327 13 716 350
Poultry All Barangays 0.28 Backyard 4 947 494 700
Environmental Baseline Study for the Agata Project, 2011
Table 170 - Fishing activities
Production/yr Fishing Ground Barangay Volume (kg) Value (Php)
San Vicente, San Jose, Magdagooc, Marine (sea, bay, gulf) 113 079.0 9 046 360 Santo Nino
Inland (river, lake, marsh All Lakeside Brgys 213 070.1 10 653 505 /swamp, fishpond/cage)
Environmental Baseline Study for the Agata Project, 2011
20.3.2.1.2 Profile of the Municipality of Santiago
The Municipality of Santiago is located in the northern portion of the Province of Agusan del Norte within the grid coordinates of 9°2’21” to 9°14’4” north latitude, 9°13’37” to 9°13’29” south latitude, 125°33’30” west longitude to 9°13’42” to 9°19’18” north latitude, 125°32’11” to 125°46’11” to 9°16’23” and to 9°15’4” south latitude. It is bounded on the south by the Municipality of Tubay and Cabadbaran, and on the east by the Municipality of Madrid, Surigao del Sur.
The hierarchy of settlements classifies Santiago as a satellite municipality. It is a self-contained community with respect to basic daily needs of its populace and for other services and facilities, like hospital services and tertiary education. It is dependent on a major urban center, which in this case is Butuan City, the region’s sub-regional center.
Based on its vision for a progressive agro and eco-tourism area sustainably managed by an empowered citizenry, the Municipality of Santiago describes the development scenario as an opportunity to augment its income and generate its local revenues and other financial resources by increasing its productive rice areas of 125 ha to 152 ha and developing fully its potential eco- tourism sites from 50 ha to 55 ha. Moreover, as the degree of development soars high, poverty among its residents will be alleviated gradually. Eventually, the locality will also generate employment while its marginal farmers will enjoy sustainable increased farm production.
This municipality has been identified mainly as an agricultural area, where majority of its people are dependent on farming. Coconut is its major crop and the number one source of income of most farmers. Banana, corn and abaca are also identified as its potential crops. One of the existing potential resources in this municipality is the CBRMP-Santiago Upland Development Project (with an area of 598 ha), which is presently being planted with fruit trees, particularly jackfruit, lanzones, durian and marang. This special project, which covers seven (7) barangays and two (2) tribal communities, aims to alleviate poverty and reduce forest degradation. Sloping Agricultural Land Technology (SALT) farming has been identified as one of its priority projects.
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Santiago is blessed with wonderful and scenic spots like Mapaso Hot and Cold Spring,. Bikangkang Falls, the winding crystal-clear Aciga River, the Kalinawan River and the towering Mabaho Mountain, which are potential ecotourism sources of income for the local government.
In order to utilise its potential resources the local government has identified the following infrastructure support facilities and utilities needed, namely; farm-to-market roads, bridges, school buildings, irrigation and drainage system, flood control projects, pre and post-harvest facilities and resort facilities.
The beneficiaries of this planned development are the farmers, fishermen, businessmen and the indigenous people. The identified influential personalities in the community and in the LGU, who are supportive and have the political will to carry out development in this municipality, are the skilled workers, civilized IPs, technical men, NGOs and PO’s and the local officials.
There are undeveloped agricultural areas of barangays along Kalinawan River, due to perennial flooding caused by the backflow of Aciga River. This occurs because of siltation at the mouth of the Kalinawan River, which impedes the flow of water from the Aciga River.
Demography
Age-sex Distribution
There are slightly more males than females with males comprising about 51.58% of the population. Also noteworthy is the sharp decline in population of the age group 5–9 years old compared to the 10-14 and 15-19 age groups.
Table 171 - Age-sex distribution
Age in Years Both Sexes Male Female
Under 1 721 358 363
2-4 1 451 801 650
5-9 1 263 1 169 1 094
10-14 2 222 1 124 1 098
15-19 2 342 1 219 1 218
20-24 1 801 939 862
25-29 1 402 721 681
30-34 1 083 535 548
35-39 1 092 564 528
40-44 1 054 537 517
45-49 879 448 431
50-54 644 348 296
55-59 523 274 252
60-64 334 172 162
65-69 292 134 158
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Age in Years Both Sexes Male Female
70-74 191 100 91
75-79 122 57 65
80 & Over 92 48 44
All Ages 18 511 9 548 9 058
Percentage 100% 51.58% 48.42%
Environmental Baseline Study for the Agata Project, 2011
Education
Santiago School District has nine (9) complete elementary schools, one (1) primary school and a central school with a total population of 2 577 pupils. It has two (2) secondary schools and eight (8) pre-school classes.
The seven (7) elementary schools and two (2) secondary schools are managed by full–fledged principals and one (1) school head teacher. A teacher in charge manages the three (3) schools in the upland areas.
The Department of Education of Santiago District has undertaken several steps to improve the performance of the different schools at both the elementary and secondary levels by using co– curricular activities initiated by the school, district and division, and special programs like Scouting and Red Cross activities that are helpful in the overall development of children.
Housing and Tenure
Santiago has a total number of 3 157 households. Of the total households there are 160 households, which are classified as informal settlers and these can be found in different barangays. Poblacion I has a total of four (4) households, Poblacion II has nine (9) households, Curva has the most with 97 households, San Isidro eight (8) households, Jagupit with 23 households, E. Morgado with seven (7) households, Lapaz with nine (9) households and Tagbuyacan with three (3) households.
There are a total of 319 households living in makeshift housing.
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Table 172 - Informal household settlers, 2007
Households who are Informal Barangays Total Number of Households Settlers
Magnitude Proportion
Poblacion 1 294 4 14.74
Poblacion 2 320 9 0.98
Curva 658 97 2.81
San Isidro 817 8 2.39
Jagupit 192 23 2.07
E. Morgado 338 7 1.86
Lapaz 377 9 11.98
Tagbuyacan 161 3 1.36
TOTAL 3 157 160 38.19
Environmental Baseline Study for the Agata Project, 2011
Table 173 - Households living in makeshift housing
Households Indicator Magnitude Proportion
Households living in makeshift housing 319 10.1
Environmental Baseline Study for the Agata Project, 2011
Social Welfare Facilities
Investing in human capital is vital for development. The people are the greatest resource in attaining community development goals. A well-developed community speaks of the kind of people who live in it. People’s potential, discovered and mobilised is often described as the agent of change towards development.
The Municipality of Santiago has endeavoured to provide social service facilities in each barangay. These, however, are not adequate to serve the total needs of the population, especially in the remote areas where facilities and services need improvement.
Services Offered:
Family life education and counselling Family planning assistance Day Care services, supplemental feeding Medical care
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Relief/rehabilitation Others.
Type of Clientele:
Disadvantaged families; Depressed areas; Disadvantaged women (18-59 years old); Children (0-12 years old); Youth (13-34 years old); Persons with disabilities (PDWs); and Older persons (60 years old and above).
Facilities:
Day Care centre; Senior citizen centre; Rehabilitation centre; Women centre; and Others.
Physical Condition:
Good – well maintained/serviceable; Poor – needs improvement; and Critical – needs priority action.
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Table 174 - Social welfare facilities, services and clientele
Physical No. of Staff Barangay Facilities Services Type of Clientele Organization Condition Clientele Compliment
Curva Day Care Centre Good Day Care Services, Potentially neglected 22 Day Care parents DCW Supplemental Feeding children
Elderly Day Good Support services for Needy elderly sectors 50 Curva Senior Citizens Prog. Implementer Centre elderly Organization on Elderly designated worker
Jagupit Day Care Centre Good Day Care Services, Disadvantage families 46 Day Care Parents Org. DCW Family life Dev. & Counselling
Supplemental feeding Underweight children 46 Day Care Parents Org DCW
San Isidro Day Care Centre Good Supplemental Feeding Underweight children 57 Day Care Parents Org. DCW
Tagbuyacan Day Care Centre Needs improvement -do- -do- 32 Day Care Parents Org. DCW
Lapaz Day Care Centre Needs improvement -do- -do- 28 Day Care Parents Org. DCW
E. Morgado Day Care Centre Needs improvement -do- -do- 54 Day Care Parents Org. DCW
Poblacion 1
Purok 2 Day Care Centre Needs improvement -do- -do- 40 Day Care Parents Org. DCW
Women Centre Unfinished bldg. Community based Disadvantage women 120 Women’s Org Women Leader needs priority action services for needy women
Day Care Centre No facility yet needs Day Care Services Day Care Parents DCW priority
Matingue Day Care Centre No Facility yet needs Day Care Services Preschoolers 25 Day Care Parents DCW priority action
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Physical No. of Staff Barangay Facilities Services Type of Clientele Organization Condition Clientele Compliment
Pangaylan Preschoolers 28
Poblacion 2 Day Care Centre Needs Improvement Day Care Services Preschoolers 81 Day Care Parents DCW
TOTAL 629
Environmental Baseline Study for the Agata Project, 2011
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Protective Services
The Municipality has addressed the crime prone areas at Barangay Poblacion 1 along the national highway near Paypay bridge. The LGU, in coordination with Local Police, established a Municipal Police Substation manned on a 24-hour basis as a counter measure to address the said problem.
Safety and security at the national highway has also been taken into consideration. The LGU also collaborated with the Philippine National Police (PNP) in setting-up a Municipal Police Substation along the highway purposely to check on the safety and security of public motorists travelling along the highway of Santiago. Traffic enforcers are posted at strategic areas in the municipality at all times.
Some personnel of the local police force were sent for schooling to make them more effective and efficient with regards to public safety and security.
The Municipal Police Station has a floor area of 30 sq.m. and a personnel complement of 21 staff, giving a ratio of 1 policeman:878 population. It has one (1) patrol car, one (1) computer and one (1) SSB radio, all of which are serviceable. Santiago hosts the regional headquarters of the Regional Mobile Group. The headquarters has an estimated land area of 5 000 sq.m. with two (2) patrol cars, one (1) 6x6 truck, one (1) computer, and one (1) SSB radio all of which are well-functioning.
Table 175 - Protective Services by Facilities and Equipment, Year 2008
Area Facilities/Equipment Type of Location Condition Services (sq.m. Ratio Ratio No. of
) to Pop’n Vehicle Others Personnel Personnel Personnel
Police
2 units 1 unit RMG Patrol Car, computer, Poblacion 2 5,000 - - serviceable Headquarter 1 unit 6X6 1 unit SSB truck radio
I unit 1 unit computer, PNP Station Poblacion 2 300 21 1:878 serviceable Patrol Car 1 unit SSB radio
Environmental Baseline Study for the Agata Project, 2011
The PNP personnel are supplemented by local volunteers who function as a support group for peace and order and disaster response teams in their respective barangays. While the number is inadequate to cover all barangays and address the needs of the population, this volunteer force is important in enhancing the protective services of the municipality.
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Table 176 - Barangay Services, Year 2008
Number of Condition of Type of Services Facilities/Equipment Volunteer/staff Facilities/Equipment
Traffic 0 none none
Peace and Order 8 handcuffs & batuta serviceable
Disaster 24 megaphone serviceable
Auxiliary Services 0 none none
Others 0 none none
Environmental Baseline Study for the Agata Project, 2011
The current number of available police personnel is 21, and this meets a minimum requirement based on population. However, this is grossly inadequate to meet the ideal number of police personnel which is 1 police officer per 500 population. Using this standard, the actual requirement would be 36 police personnel.
Fire Protection Services
The Municipality of Santiago has no Fire Protection Services and relies solely on the facilities of the Municipality of Jabonga and the City of Cabadbaran to serve its emergency needs. Despite having few fire incidents, inter-agency coordination with nearby LGUs needs to be instigated and more fire prevention measures should be carried out to prevent any fire incident.
Infrastructure (inc. buildings, roads, etc.)
Municipal roads that need improvement are the following: Poblacion 1 going to Pangaylan with a total length of 1.50 km, Jagupit to Daha with 1.50 km, San Isidro to Sarog with 9 km, San Isidro to Kalasunahan with 5 km, all of which are earth fill, and Tagbuyacan going to Cadahon- dahonan with 0.5 km, Poblacion 2 to Cadahondahonan with 5 km length, which are gravel fill.
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Table 177 - Inventory of Roads by System Classification and Type of Pavement, Year 2008
Roads by Concrete Gravel Earth Total System ROW Length Classification km % C km % C Km % C
National 15.00 8.00 8.00 100% Good ------
Provincial 10.00 2.50 1.30 52% Good 1.20 48% Poor - - -
Needs Municipal 8.00 11.0467 6.3926 57.87% Good 3.8541 34.89% Good .80 7.24 Improvement
Barangay Road 6.00 37.762 1.405 3.72% Good 14.4129 38.18% - 21.938 59.10 -
Footpath 0.50 29.0 - - - 5.0 - - 24 - -
Environmental Baseline Study for the Agata Project, 2011
Notes: C – Physical Condition: Good – acceptable/serviceable Poor – needs Improvement Critical – For Priority Action
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On the inventory of bridges, the Mapaso stay cable footbridge, is completely damaged and needs priority action since it provides access to one of the tourist destinations.
Table 178 - Road Bridges
Road Physical Bridge Name Location Type Capacity Condition
1.Paypay Twin Barangay Poblacion 1 Concrete 20 tons Good Bridge Barangay Jagupit, Concrete 20 tons Good 2.Jagupit Bridge Barangay San Isidro Concrete 20 tons Good 3.Guinoyoran Bridge Lapaz, San Isidro, Stay Cable Foot 5 tons Critical 4.Mapaso Hanging Agusan del Norte bridge Bridge
Environmental Baseline Study for the Agata Project, 2011
Notes: Type: Concrete, steel, wood, other C – Physical Condition: Good – acceptable/serviceable Poor – needs improvement
Table 179 - Critical – for priority action
Observe Explanations (Causes) Implications when Policy Options Condition unresolved
1. Bridge is Cable wire has come to its limit and Visitors/Tourist may Construct a new completely when it was broken, cable wire was not be interested in bridge, probably a damaged completely damaged together with its going to Mapaso. reinforced concrete angle bars and other accessories. one dick bridge (RCDB)
Environmental Baseline Study for the Agata Project, 2011
Power/Electric Supply
Maria Cristina Falls hydroelectric Plant supplies power to the municipality, and is generally distributed by Agusan del Norte Electric Cooperative (ANECO). Consequently, all barangays within the municipality get electricity through ANECO. Four tribal barangays, namely: Pangaylan, Casagayan, Matingue, and Cadahondahonan are supplied by Solar Power Technology System (SPOTS) through the Department of Agrarian Reform (DAR).
Table 180 - Households Served and Unserved by Electricity, Year 2008
Number of Percentage Households
Rural Urban Rural Urban
Served 1 177 1 084 37.28% 34.34%
Un served 504 392 15.96% 11.42%
Total 1 681 1 476 53.24% 45.76%
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Environmental Baseline Study for the Agata Project, 2011
Electricity plays a large role in development. However, not all households in the municipality have access to electricity. Only 1 177 households (37.28%) in rural areas and 1 084 households (34.34%) in urban areas have been served. 504 households (15.96%) in rural areas and 392 households (11.42%) in urban areas have no electricity.
Table 181 - Power/Electricity
Observe Explanations Implications when Policy Options Condition (Causes) unresolved
27.38% of the Cannot be reached by Still those individual Board of Director/ANECO community the electric power line. cannot attest the luxury provides assistance to those without electricity. of having electricity. areas with have no power line. Difficult to access by the electric power company vehicle.
Environmental Baseline Study for the Agata Project, 2011
Water Supply
Generally, the municipality has sufficient water supply. Sources of water come from developed and undeveloped springs, deep well, shallow well, river and bottled water.
Urban barangays such as Poblacion 1 and Poblacion 2 have level 2 and level 3 water systems which come from Sinawsawan Spring and Talapga Spring. Other barangays also have their own source of water distributed through level 2 and level 3 systems. Increasing water utilisation and demand has resulted in inadequate supply of water in some areas. There is a need to develop more water sources to supply the needs of the increasing population.
Table 182 - Level 2 Water Supply by Type and Number of Population Served, Year 2008
Location of Water Number of Pumps Barangay Served Sources
E. Morgado 1 (Foothill) E. Morgado Tagbuyacan 2 (Mabaho, Kanislagan) Tagbuyacan Poblacion 2 3 (P-1, P-6, Talapga) Poblacion 2 Poblacion 1 1 (Sinawsawan) Poblacion 1 Lapaz 2 (Palu 4, Guinaringan) Lapaz Curva 2 (Mountain) Curva Jagupit 3 (Kamandagon) Jagupit San Isidro 3 (Foothill) San Isidro
Environmental Baseline Study for the Agata Project, 2011
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Table 183 - Observed water supply condition
Implications Observe Explanations when Policy Options Condition (Causes) unresolved
In-adequate Not enough supply There will be LGU must provide budget for the supply of at source scarcity of water construction of additional intake box, water reservoir with complete plumbing accessories for potable water
Environmental Baseline Study for the Agata Project, 2011
Table 184 - Other water sources, year 2008
Number of Household Population Served Barangay Undeveloped Spring Open Dug Wells Rainwater Water Peddlers
1. Poblacion- 1 1. Pangaylan n/a n/a n/a 2. Matinggue n/a n/a n/a 3. Casagayan n/a n/a n/a 2. Poblacion- 2 1. Cadahon-dahonan n/a n/a n/a 3. San Isidro 1. Mambato n/a n/a n/a
Environmental Baseline Study for the Agata Project, 2011
The Municipality is known to have a forestland reserve. Ironically, it is experiencing scarcity of water supply due to increasing demand. However, there remain some undeveloped spring sources in the locality, which need to be developed, such as Pangaylan, Matinggue, Casagayan, Cadahon-dahonan and Mamboto.
Table 185 - Existing surfacewater resources by type and classification, year 2008
Surface Water (e.g. lakes, rivers, Location water impounding structures, etc.)
Kalinawan River From E. Morgado down to Jagupit Aciga River Poblacion-1, Santiago, Agusan del Norte Kamandagon Jagupit, Santiago, Agusan del Norte Guinoyoran River San Isidro, Santiago, Agusan del Norte
Environmental Baseline Study for the Agata Project, 2011
Out of 3 157 households there are 794 who have their own community water system. 2 188 households are served by a shared community water system, eight (8) households have their own deep well, four (4) households share a deep well, one (1) household is served by an artesian well, two (2) households are served by their own dug/shallow well, 106 households are served by dug shallow well (shared), and 40 households are served by river, stream, lake, spring. 7 households use Bottled water.
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Table 186 - Source of Drinking Water
Number of Total Source of drinking water Municipality households Magnitude Proportion
SANTIAGO
Community water system-own 794 25.15
Community water system-shared 2 188 69.31
Deep well-own 8 0.25
Deep well-shared 4 0.13
Artesian well-own 0 0
Artesian well-shared 3157 1 0.03
Dug/shallow well-own 2 0.06
Dug/shallow well-shared 106 3.36
River, stream, lake, spring 40 1.27
Bottled water 7 0.22
Tanker truck/Peddler 3 0.1
Other 0 0
Environmental Baseline Study for the Agata Project, 2011
Communication
One of the communication facilities serving the municipality is the postal office, manned by three (3) personnel; one (1) postmaster, one (1) messenger, and one (1) clerk. It also serves the Municipality of Jabonga, which is an adjacent community.
The presence of two (2) cell sites and Single Side Band (SSB) repeaters are the main wireless communication means in the municipality. There are no local TV stations and radio stations in the area, but the signal from Butuan City and other parts of the country can be accessed.
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Waste Management
Table 187 - Methods of Solid Waste Disposal
Quantity (total No. of Responsible Methods municipal solid Households Agency waste generated) served
Collected and disposed to: 15 cu.m./week Public Market MLGU Open dump Controlled dump Sanitary landfill Composting 40 cu.m./day 2,841 Individual Residence Recycling Not collected Burned Dumped in individual open pit
Environmental Baseline Study for the Agata Project, 2011
On waste management, the municipal government acquired a 2 ha lot at Barangay San Isidro, to be utilised as the municipal dumpsite. However, after two (2) years, this dumpsite was closed by the Environmental Management Bureau (EMB) due to non-compliance with the standard requirements.
Generally, garbage disposal is not a problem to the municipality at present. Garbage and other refuse in the public market is minimal and manageable with only 2.14 cu.m./day or 15 cu.m./week. In the residential areas, compost pits are utilised as the garbage disposal system in every household.
Burial Facilities
The municipality has two (2) public cemeteries of 1 ha each. While these cemeteries have already reached their maximum capacity, the local government plans to put up a public cemetery in each barangay.
Table 188 - Existing Cemeteries And Memorial Parks, Year 2008
Barangay Ownership(Private/Public) Area Capacity Remarks
Jagupit Public 1 ha Full Establishing and Opening of new public cemetery in
every barangay is Poblacion-2, Public 1 ha Full recommended. Santiago
Environmental Baseline Study for the Agata Project, 2011
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Economic Activity
Tourism and Recreation
The municipality is endowed with scenic and wonderful tourist spots, such as Mapaso Hot and Cold Spring, Guinaringan Falls, Aciga River, Mount Mabaho, and Kalinawan River. The local government in coordination with the provincial government designed a tour package for domestic and foreign tourists. Initial development of these spots has been implemented utilising local funds. Tourists have been visiting the area for wading in volcanic hot springs with various degrees of heat, bird watching, photography, canoeing, and mountain climbing.
Table 189 - Inventory of Tourism Establishments, Year 2008
Name of Area Locatio Ownershi Tourism (has. Type of Attraction Facilities n p Establishment )
Lapaz Mapaso Hot Spring 50 (Natural) Cottages MLGU Area Hot Spring and Wildlife sanctuary
Environmental Baseline Study for the Agata Project, 2011
Notes: Type of Attraction: Natural; man-made; cultural; festival; religious, historical and others Ownership: LGU; NGA-DOT; PTA; Protected Area; A & D lands; private sector
Table 190 - Accessibility of Existing Tourism Establishment And Tourist Attraction
Access Road Means of Name of Tourism Transportation Accessibility Establishment Available Pavement Condition Distance from Nearest Airport (km) Distance from the Nearest Seaport (km) Distance from National Highway (km)
Mapaso Hot Concrete, All year Land, Water 48.50 63.50 2 fair Spring gravel, earth round
Environmental Baseline Study for the Agata Project, 2011
Agriculture and Livestock
Rice production in this municipality ranks fourth among the major crops produced mainly due to a very limited source of water. Ricefields are rainfed. Based on records, only 20 ha have drainage irrigation canals. With the CIDP project funded by the Department of Agriculture, some of the corn areas were converted to rice, including areas not yet previously cultivated. This resulted in an increase in rice production in Tagbuyacan covering approximately 60 ha.
Corn production ranks third among the major crops of the municipality. Some corn areas were converted into squash and rice paddies. Decreased corn areas in Tagbuyacan were documented.
Livestock poultry production in the municipality is increasing in all barangays through rural- based organisations, which help farm families to generate higher income.
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Banana production ranks second among the major crops produced in the municipality. It has an area of approximately 1,558.6 ha. It faces some problems regarding low market price, and pests and diseases due to lack of maintenance in some areas.
Vegetable production area is increasing due to conversion of land area from corn to vegetables through the gross commodity program. Root crop production however is minimal.
Coconut production still ranks highest in terms of area and production in the municipality.
Table 191 - Existing Major Agricultural Crops By Area, Production And Market, Year 2008
Product Area Production Major Market Barangay Crops Local Hectares % to Total Volume (m.t.) Value(Php) (Php/kls.)
1. Rice
Irrigated ------
Non- E. Morgado 5 7.10 25.0 300 000.00 12.00 irrigated Tagbuyacan 60 85.70 300.0 1 080 000.00 12.00 Lapaz 5 7.10 25.00 300 00.00 12.00
2. Corn Tagbuyacan 61 34.60 140.30 1 262 700.00 9.0 E. Morgado 15 8.50 34.50 310 500.00 9.0 Poblacion 1 15 8.50 34.50 310 500.00 9.0 Poblacion 2 15 8.50 34.50 310 500.00 9.0 Lapaz 15 8.50 34.50 310 500.00 9.0 Curva 15 8.50 34.50 310 500.00 9.0 Jagupit 20 11.36 26.12 234 108.00 9.0 San Isidro 20 11.36 26.36 234 108.00 9.0
3. Others Tagbuyacan 150.10 9.62 750.50 3 752 500.00 5.00 Banana E. Morgado 58.0 3.72 290 1 450 000.00 5.00 Poblacion 1 328.8 21.0 1 644 8 220 000.00 5.00 Poblacion 2 258.7 16.59 1 293.50 6 467 500.00 5.00 Lapaz 173 11 865 4 325 000.00 5.00 Curva 63.90 4 319.50 1 597 500.00 5.00 Jagupit 337 21.60 168 840 000.00 5.00 San Isidro 190 12.20 950 4 750 000.00 5.00
Vegetables Tagbuyacan 35 57.30 350 2 275 000.00 6.00 E. Morgado 6 9.80 60 360 000.00 Poblacion 1 5 8.10 50 1 250 000.00 25.00 Poblacion 2 1.50 2.40 15 225 000.00 15.00 Lapaz 10 16.30 100 650 000.00 6.50 Curva 15 .81 2.50 25 000.00 10.00 Jagupit 1 1.60 5 125 000.00 15.00
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Major Product Barangay Area Production Crops Market San Isidro 2 3.20 10 150 000.00 15.00
Coconut Tagbuyacan 229.50 11.29 458 2 061 000.00 4.50 E. Morgado 7.72 .37 15.44 694 800.00 4.50 Poblacion 1 347.29 17 694.58 31 256 100.00 4.50 Poblacion 2 350.12 17.23 700.24 31 510 800.00 4.50 Lapaz 197.55 9.72 395.10 1 777 950.00 4.50 Curva 352.33 17.33 704.66 31 709 700.00 4.50 Jagupit 442.18 21.76 884.36 39 796 200.00 4.50 San Isidro 105.55 5.19 211.10 9 499 500.00 4.50
Root crops Tagbuyacan 10 11.90 75 750 000.00 10.00 E. Morgado 9 10.70 67.50 675 000.00 10.00 Poblacion 1 15 17.80 112.50 1 125 000.00 10.00 Poblacion 2 15 17.80 112.50 1 125 000.00 10.00 Lapaz 9 10.70 67.50 675 000.00 10.00 Curva 10 11.90 75 750 000.00 10.00 Jagupit 10 11.90 75 750 000.00 10.00 San Isidro 6 7.14 45 450 000.00 10.00
TOTAL 3 997.24 598.69 12 281.76 195 731 966.00 356.5
Environmental Baseline Study for the Agata Project, 2011
Table 192 - Major Crop
Major Area Volume of Production Crops 2007 2008 Increase/Decrease 2007 2008 Increase/Decrease
Rice 30 70 40 Has. 150 350 200
Corn 176 176 -0- 404.80 404.80 maintain
Environmental Baseline Study for the Agata Project, 2011
Livestock and Poultry
Livestock production in the municipality is generally backyard level for all types of livestock. Poultry is the most common and has the highest production in terms of weight (kilograms per year). This is followed by swine production and a far third is goat production. Cattle, carabao, and duck production for food are low.
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Table 193 - Existing Livestock And Poultry Farms, Year 2008
Production Type Barangay Classification (kg)
Livestock (Swine) San Isidro Backyard 500 Jagupit Backyard 64 Curva Backyard 583 Poblacion 1 Backyard 660 Tagbuyacan Backyard 300 Poblacion 2 Backyard 200 Lapaz Backyard 200 E. Morgado Backyard 150
Cattle San Isidro Backyard 85 Jagupit Backyard 40 Curva Backyard 50 Poblacion 1 Backyard 35 Tagbuyacan Backyard 50 Poblacion 2 Backyard 25 Lapaz Backyard 50 E. Morgado Backyard 30
Carabao San Isidro Backyard 60 Jagupit Backyard 51 Curva Backyard 38 Poblacion 1 Backyard 25 Tagbuyacan Backyard 65 Poblacion 2 Backyard 30 Lapaz Backyard 60 E. Morgado Backyard 40
Goat San Isidro Backyard 780 Jagupit Backyard 49 Curva Backyard 42 Poblacion 1 Backyard 20 Tagbuyacan Backyard 300 Poblacion 2 Backyard 50 Lapaz Backyard 100 E. Morgado Backyard 100
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Production Type Barangay Classification (kg)
Poultry (Chicken) San Isidro Backyard 2 480 Jagupit Backyard 270 Curva Backyard 1 110 Poblacion 1 Backyard 900 Tagbuyacan Backyard 4 000 Poblacion 2 Backyard 1 500 Lapaz Backyard 3 500 E. Morgado Backyard 2 500
Duck San Isidro Backyard 50 Jagupit Backyard 15 Curva Backyard 40 Poblacion 1 Backyard 15 Tagbuyacan Backyard 50 Poblacion 2 Backyard 10 Lapaz Backyard 50 E. Morgado Backyard 15
Environmental Baseline Study for the Agata Project, 2011
Notes Livestock – piggery, cattle, carabao, horse, etc. Poultry – chicken, duck, ostrich, etc. Classification: commercial or backyard Product Market: local (within city/mun), export (outside LGU, prov, region)
Fisheries
The fisheries sector in the municipality covers almost 7 km of lakeshore where most of the populace are engaged in fishing. The fish are abundant during the months of June and July, and decrease during the months of November to December. Two of the major reasons for the decrease of fish catch are electric and dynamite fishing.
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Table 194 - Existing Fishing Ground And Aquaculture Production, Year 2008
Production Product Market Fishing Ground Barangay Volume (m.t.) Value (Php) Local (Php/Kl.)
Tagbuyacan 3 608 216 480 60 E. Morgado 4 705 282 300 60 Lapaz 1 645 98 700 60 River Curva 114 6 840 60 Jagupit 188 11 280 60 San Isidro 80 4 800 60
Fishponds/cages E. Morgado 2.50 25 000.00 Within the Municipality
Environmental Baseline Study for the Agata Project, 2011
Industry, Commerce, and Trade
The number of establishments covered by issued business permits showed a predominantly increasing trend from year 2004 to 2008 with retailing and services sectors being the most active.
Table 195 - List of Business Permits Issued By Type
Type of Business 2004 2005 2006 2007 2008 Permits Issued
1.Retailer 53 52 58 73 64 2.Manufacturer 18 14 16 19 15 3.Processing 1 2 5 5 3 4.Services 47 68 69 70 71 5.Dealer 11 22 21 21 22 6.Wholesaler 6 6 9 10 9 7.Contractor 1 2 2 1 2 8.Producer 5 5
Totals 137 166 186 185 204
Environmental Baseline Study for the Agata Project, 2011
Government Revenues and Expenditures
In terms of Government revenues, the municipality is highly dependent on the Internal Revenue Allotment (IRA), which comprises more than 90% of its annual revenue. The total annual budget is more or less PhP 50 Million, mostly sourced from the IRA. Local revenues are composed of Real Property Tax (RPT), which is a provincial imposition from where the municipality gets a share of the collection. Prompt payment of business taxes is also being implemented. However, looking at the number of businesses covered with business permits, it can be seen that the local revenues from business taxes are not substantial. The municipality also has identified local economic enterprises, but these are heavily subsidized from the general fund instead of pulling in a profit to augment the local income.
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20.3.2.1.3 Profile of the Municipality of Tubay
The town of Tubay is named after its legendary founder Datu Tabay. It lays claim to being the second Spanish Settlement in Agusan, as early as 1751. Formerly, the people settled in the wilderness of Ilihan, then transferred to Sitio Malabog and later to Tubay-Tubay and Sabang near the mouth of the Jabonga River. However, the danger of frequent floods and Moro attacks convinced the succeeding leaders of the place to move the pueblo to Daang Lungsod, where the massive magkuno post of the once spacious and strongly-built church now stands. It was here that the settlement firmly took root.
In 1898, Tubay was a prosperous town. When the Americans visited Tubay and Cabadbaran, they were convinced that the latter was the better place for the seat of government. Therefore in 1903, Tubay was reduced to a barrio to give way to its equally thriving neighbour, Cabadbaran. Although it became a barrio, it still remained the centre of commercial activity due to the presence of Chinese merchants. Booming business in Tubay was still noticeable in the 1920’s when the navigable Jabonga River was the chief artery of its copra and hemp traffic. However, when the road connecting Tubay-Santiago and Cabadbaran was finished, business in Tubay began to decline and trade through the Jabonga River disappeared.
On October 20, 1947, Tubay regained its township status by virtue of Presidential Proclamation No. 44 signed by then President Manuel A. Roxas and by Republic Act No. 44 of the same year.
Demography
Age-sex Distribution
The proportion of young dependents in Tubay (0-14 years old) was 30.87%, while the proportion of old dependents (65 years old and over) accounted for 8.55% of the municipal population. The proportion of economically active population (15-64 years old) made up 60.58%. Males constituted the majority of the population in the municipality. The recorded sex ratio was 107 males for every 100 females.
The proportion of household population for both sexes who were able to read and write in the municipality of Tubay was registered to be 2.55%, while the proportion of illiterate was 97.45%. There were more literate males in Tubay compared to females, recorded to be 2.77% and 2.31%, respectively.
About 19.03% of the household population 5 years old and over in the municipality attended or finished Elementary Education; 9.50% High School; Post-Secondary registered 1.22%; College undergraduate recorded 37.55%; and Academic Degree holder accounted 4.13%. On the other hand, about 1 857 (9.76%) children aged 5 to 6 years old had completed pre-school and were likely to become Grade 1 students in the next school year. Males dominated the Elementary level with 9.91% as compared to 9.13% for females. On the other hand, females dominated in the higher levels of education in Tubay.
The school going population in the municipality is projected to increase in year 2020 by 9 438; this figure is 1 517 points higher than the 2007 population of 7 921.
Education
Only Tubay Central Elementary School and Sta. Ana Elementary School have a shop building, library and clinic rooms but these require priority action and need major repairs. All schools have no computer room, computer laboratory, or multi-purpose halls. Only a few schools have a well maintained playground.
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Table 196 - Student -teacher and Student - Classroom Ratio By Level, 2008-2009
No. of Enrollees Type/Level Male Female Total Total No. of Total No. of Teachers Total No. of Classrooms – Student Teacher Ratio Student Classroom Ratio
Private
Elementary No information Secondary
Public
Elementary (District 1) 831 763 1 594 51 50 1:31 1:32
(District 2) 928 902 1 830 65 57 1:35 1:35
Secondary
Tinigbasan NHS 91 65 156 5 4 1:31 1:39
Tubay NHS Annex 207 153 360 6 7 1:72 1:72
Tubay NHS Main 207 167 374 10 10 1:38 1:38
Environmental Baseline Study for the Agata Project, 2011
The student-teacher ratio and student-classroom ratio are below the planning standard 1:40. In secondary level the student classroom ratio is above the planning standard of 1:35. Although there is no problem in the student-classroom ratio except for Doña Rosario National High School, it isimportant to note that most of the classrooms need major repair.
Housing and Tenure
Most families with housing units in different barangays are located on land owned by the Municipality of Tubay. There are few families with housing units located on privately owned lots. It implies that there was absence of donation and delayed processing of ownership of these lots on the part of the donee and donors. There was also no expedient processing of transfer of land ownership from private landowner to buyer due to a backlog of pending pertinent papers.
The 2 642 housing units, which are 79.20% of the total household have sufficient water supply but there are still 20.80% or 694 households unserved with potable water supply. The household with modern water sealed toilets is already 84.74% with only 15.26% still using the antipolo or old type.
The 3 667 housing units owned by individuals were constructed in 2 618 different lots. There are several housing units found in one lot demonstrating that not all constituents made their houses on their own lot but on other lots. There were no housing units amortized but there are housing units and lots being rented. About 2 848 housing units are occupied and constructed in lots with the consent of the owners. None of the units are occupied without consent of lot owners.
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Social Welfare Facilities
Table 197 - Social welfare facilities, services and clientele
Physical Type of No. of Staff Barangay Facilities Services Organization Condition Clientele clientele Compliment
Binowangan All brgys has Good > Day Care Services > 0-5 yo children > Day Care Parents 1-MSWDO Org SKAs > Supplemental Feeding > Disadvantage 1-SWO-1 Cabayawa Day Care Centers Good Families > Mun Fed/Brgy Senior > SEA-K/Tindahan Natin 1-SWA Citizen Orgs. Doña Rosario Good > Senior citizens > RPM 1-BHA > Tubay Association of > PWDs Doña Telesfora Good > Social/Self Enhancement Differently Abled 1-Skilled worker program for older person > Out of school Persons La Fraternidad Good and PWDs youths > Community > Educational Assitance for > Disadvantage Lawigan Critical Volunteers Youth and PWDs women Association Poblacion 1 Good > ECCD > Children in > Women's conflict w/ the > Medical and Burial Organization Poblacion 2 Good law (CICL) assistance for older > Pag-asa Youth Assn. Sta. Ana Good person and PWD. > Children in need of special > Philhealth Insurance for protection Tagmamarkay Good Indigent families. (CNSP). > Relief and rehab Tagpangahoy Good > Solo parents > AICs Tinigbasan Good > Depressed com > Capacity building for com. Victory Good volunteers > Issuance of ID card to solo parents, SCV, PWDs > SSS for CICLL/CNSP > Marriage counseling service/Pre-marriage
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Physical Type of No. of Staff Barangay Facilities Services Organization Condition Clientele clientele Compliment counselingservice.
Environmental Baseline Study for the Agata Project, 2011
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Protective Services
The Municipality of Tubay has no Bureau of Jail and Management Protection (BJMP) personnel, only PNP personnel are available. The Tubay Municipal Police Station is not a permanent structure. Temporarily, the Police Station is located as an extension of Tubay Municipal Gym. It occupies an area of 150 sq.m. The PNP organic personnel have a roster of 21 staff, which is a ratio of 1 000 population to one (1) policeman. There is also a PNP outpost located at Barangay 2. There are two (2) PNP members assigned to the said outpost. At the national highway of Brgy. Doña Rosario, another two (2) PNP members are assigned as traffic officers and traffic investigators. There is a motorcycle issued from the PNP for the use of the policemen assigned in traffic implementation. The municipal jail, a temporary structure attached to the police station, has an area of 100 sq.m.
The record of statistics on crime incidence for the year 2004 to 2006 was damaged by the flood that hit the police station in December 2006. In 2007 compared to 2008 the statistics on crime incidence neither declined nor increased. The leadership of the Tubay Municipal Police Station implemented several barangay consultations (pulong-pulong) and seminars, and police visibility in the barangays and at the town centre was raised to prevent crimes, and to address peace and order education needs of residents in the Municipality of Tubay.
From the year 2003 to present, there has been no fire incident reported to the Municipal Police Station of Tubay.
The Municipality of Tubay has appointed 20 members of Police Auxiliary services. These are trained and paid by the municipality. Two (2) volunteers manage the peace and order situation in each barangay, two (2) disaster staff and two (2) barangay intelligence network members.
Fire Protection Services
The municipality of Tubay has no Bureau of Fire Protection (BFP) personnel and equipment.
Infrastructure
Transportation Network
The Municipality of Tubay is a ten-minute ride to Cabadbaran, the capital town of the province; a 35-minute ride to Butuan City, the regional capital of Caraga Region XIII; 45-minute ride to Bancasi Airport; an hour ride to Buenavista-Nasipit-Carmen (BueNasCar) Industrial Corridor where the International Port is located, and a 45-minute ride to Lake Mainit, the tourism centre of Agusan del Norte on the eastern side.
Tubay has a total road length of 82.91 km classified as: National roads (farm to market roads included) 56.11% or 46.522 km , 13.79% or 11.432 km are provincial roads, 7.02% or 5.825 km are classified as municipal roads and 19.14 km or 23.08% as barangay road . Out of the total road length, 19.62% or 16.27 km are paved with concrete surface while 25.04 km or 30.20% are filled with gravel but not properly maintained and 41.61 km or 50.18% need priority action due to their location in remote areas. This has happened because most of the roads did not pass the standard requirement based on the traffic count conducted.
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Table 198 - Inventory Of Roads By System Classification And Type Of Pavement
Road Surface Type Roads By System Concrete Gravel Earth Right Of Way Classification Total Length (Km.) (ROW) Km. % C Km. % C Km. % C
National 30.000 46.522 7.480 16.08% Good 5.100 10.96% Good 33.940 72.95% Critical
Provincial 15.000 11.432 4.302 37.63% Good 7.130 62.37% Poor - - -
City / Municipal 12.000 5.825 2.693 46.23% Good 3.132 53.77% Poor - - -
Barangay Road 10.000 19.135 1.796 9.39% Good 9.674 50.56% Poor 7.665 40.06% Critical
Environmental Baseline Study for the Agata Project, 2011
Most of the bridges that connect the major thoroughfares of this municipality are in good condition but the Ambahan Bridge, classified as bailey (wood supported with steel truss) bridge, needs constant monitoring of its aesthetics and structural aspects. All funds intended for the construction and maintenance of bridges come from the national government except for the hanging footbridge located in Poblacion Barangay 1, for which the LGU has set aside a maintenance budget.
Table 199 - Inventory Of Bridges By Location, Type, Capacity And Condition
*Road Capacity Bridge Name Location Type Physical Condition (tons)
Ambahan Bridge Cabayawa Wood 8-tons Poor
Tubay–Hanging Foot Br. Poblacion 1 Steel/Calbe - Critical
Dumlao Bridge Dona Rosario Concrete 20-tons Good
Abucay Bridge Poblacion 2 Concrete 20-tons Good
Maraput Bridge Victory Concrete 20-tons Good
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Bridge Name Location Type *Road Capacity Physical Condition Minuswang Bridge Victory Concrete 20-tons Good
Calooy Bridge Dona Rosario Concrete 20-tons Good
Sta Ana Bridge Sta Ana Concrete 20-tons Good
Tagmamarkay Bridge Tagmamarkay Concrete 20-tons Good
Environmental Baseline Study for the Agata Project, 2011
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The road network of Tubay extending to the junction of the national highway is classified as good. Tubay was a recipient of infrastructure funds from the USAID Program of Road Construction on Asphalting. Presently, the National Secondary Coastal Access Road has yet to be constructed. This will principally link Surigao del Norte and Agusan del Norte along the coastal area and the Lake Mainit Eco-tourism Zone (LAMETE), which covers the municipalities of Jabonga, Kitcharao, Santiago and Tubay.
Sea Transport Service
Sea faring travelers from Tubay have to go to the existing international port situated in the Municipality of Nasipit or the alternate sub-ports of entry situated in Butuan City and Barangay Masao. Nasipit port serves both foreign and inter-island vessel routes. This port caters to both service handling of bulk cargoes and passengers bound regularly for Manila, Cebu, Bohol, Leyte, Iloilo and to other domestic ports of call. It is also a transshipment point of cargoes from abroad.
Power/Electric Supply
The power supply of Tubay comes from the Maria Cristina Hydroelectric Plant and the Power Barge in Nasipit. It is distributed by the Agusan del Norte Electric Cooperative (ANECO). As of to date, all barangays, including in coastal areas are now reached by ANECO.
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Number of Connections by Type of Users
3% 1% 4% 0%
1%
91%
Domestic Industrial Commercial Public Bldg. Streetlights (Public) Others
Figure 122 - Number of connections by type of users
Number of Connections by Average Consumptions
1% 6% 6% 0%
19%
68%
Domestic Industrial Commercial Public Bldg. Streetlights (Public) Others
Figure 123 - Number Of Connections By Average Consumptions Water Supply
Tubay has abundant sources of water and natural springs. However, the water system is up to Level 2 only. Water system service therefore needs to be expanded and improved in order to cater to the water demands of the projected number and type of consumers, from residential to industrial and commercial.
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Table 200 - Level I Water Supply System By Type And Number Of Population Served, 2008
Shallow Well Deep Well Improved Spring
HH. Pop. HH. Pop. Brgy. HH. Pop. Served Served Served No. No. No. No. % No. % No. %
1. Cabayawa 8 27 7 22 240 89 1 10 4
2. Victory 5 19 12 20 145 88 condemned
3. Dona Rosario - - - 23 381 100 - - -
4. Santa Ana 18 108 25 7 42 9 - - -
5. Barangay 1 1 10 4 14 87 32 - - -
6. Barangay 2 - - - 10 153 44 1 30 8
7. La Fraternidad 15 108 35 ------
Total 47 272 96 1048 2 40
Environmental Baseline Study for the Agata Project, 2011
Table 201 - Level II and III Systems
Level II Level III
Location of Water Barangay Sources Served HH HH % % Served Served Location and No. and Location Pumps of Water (liters Capacity per day) No. of Communal Faucets
Lawigan and Sowa 3 units 1 L/sec. 10 Lawigan 94 99 1 1
Tinigbasan & 2 units 1 L/sec. 20 Tinigbasan 64 39 99 61 Payong-payong
Tagpangahoy & 2 units 1 L/sec. 10 Tagpangahoy 70 89 9 11 Lucbon
Binowangan 2 units 1 L/sec. 20 Binowangan 167 100 - -
La Fraternidad 3 units 1 L/sec. 20 La Fraternidad 182 59 20 6
Dona Dona Telesfora 2 units 1 L/sec. 40 401 99 1 1 Telesfora
Barangay 1 1 unit 1 L/sec. 20 Barangay 1 110 40 65 24
Barangay 2 1 unit 1 L/sec. 10 Barangay 2 103 28 70 20
Dona Telesfora 1 unit 1 L/sec. 80 Santa Ana 283 66 - -
Tagmamarkay 3 units 1 L/sec. 60 Tagmamarkay 230 70 100 30
Environmental Baseline Study for the Agata Project, 2011
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Communication
A landline telephone serviced by Philcom is used at the municipal hall. Other available means of communication are cellular phones (SMART & Globe Cell). Butuan City and the City of Cabadbaran (35 and 10 minute-ride from Tubay) also provide other means of telecommunication services like PT&T, PHILCOM, BAYANTEL & CRUZTELCO for IDD (International and National Direct Dial) long distance calls.
Table 202 - Communication Services Facilities
Ownership Type Barangay Public Private
Postal Services Doña Rosario √
Internet Providers Poblacion 2 √
Telephone Service Providers Poblacion 2 √
Cell Sites Network Poblacion 1 √
Poblacion 2 √
Doña Rosario √
Environmental Baseline Study for the Agata Project, 2011
Sanitation and Waste Management
Sewage and Solid Waste Disposal
Tubay does not have a Comprehensive Wastewater and Solid Waste Disposal System. All households depend on septic tanks and pit privy system in disposing human wastes. The Code of Public Safety (M.O. #1-96), especially on waste and sanitation, is enforced as part of the requirements of applicants for new buildings/houses.
Rudimentary methods of disposing solid waste in Tubay are still practiced. Communal compost pits are strategically installed in puroks and households.
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Economic Activity
Tourism and Recreation
Table 203 - Accessibility Of Existing Tourism Establishment And Tourist Attractions
Access Road
Name of Means of Tourism Transportatio Establishme n Available nt Pavement Condition Distance from Nearest Airport (Km) Distance from Nearest Seaport (Km) Distance from National (Km) Highway Accessibility
Sta. Maria Land 47 66 5 C Good 1 Beach
Mountain C & Unpaved Land & Water 48 67 6 Good 1 Beach Resort gravel
Lawigan Point Concrete and Land & Water 66 85 14 Fair 4 Diving Site earth
Lucbon Gamay Water 57 76 10 C Good 1 and 7 white beach
Camp Telesfora Land 49 68 2 Gravel & earth Poor condition 1
Environmental Baseline Study for the Agata Project, 2011
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Agriculture and Livestock
The role of Agusan del Norte in regional development is to promote crop production for domestic and commercial consumption as well as to promote agro-industrial development.
Figure 124 - Agricultural Activity In The Area Figure 125 - Livestock Activity In The Area
Tubay, as a predominantly agricultural town, supports this role due to its abundant supply of root crops, coconuts, banannas, and fish, which are traded to the neighbouring municipalities. The production of these crops is in the backyard scale, serving as cash crops to augment the livelihood of the farmers. The on-going reforestation activities of the denuded areas are expected to produce trees off commercial value.
The total volume of production of all crops in Tubay is estimated at 7 415.38 metric tones (MT). Of this total yield, coconut accounts for more than half (5 275.38 MT), followed by banana (1 875 MT), corn (240 MT), and rice (25 MT). The total productionn of coconut benefits the entire population in general. Directly benefitted by coconut productiion are about 1 890 farming families.
The carabao population generally declined in some barangays due to limited pasture areas. Cattle population in the municipality generally increased compareed to last year’s population. The horse population is only 31 head. Only Brgy. Doña Telesfora maintains horses to transport upland crops from hilly partts of the barangay to the barangay proper. Hog/swine population sustained its population due to availability of feeds, mostly root crops planted by farmers. Goat population generally declined due to limited pasture area annd the increase of goat meat consumers. Poultry population sustained its population for thee last 5 years because of the presence of a private company that enters into contracts for growing of chickens. The duck population continued to decline until 2009.
Selective logging is implemented to support the logging industrry of the province. Aside from hard timber, Tubay supports the production of locally available construction materials with its supply of old coconut trees for coco lumber, pebbles, adobe, sand and gravel. The municipality also relies on the mining industry of the region with its metallic and non-metallic deposits, which are partially explored.
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The municipal waters of Tubay, particularly the Kalinawan River and Butuan Bay are important food providers for the Tubaynons and nearby municipalities. These are also good sources of income for the fisherfolk in the municipality. The high volume of fish production (209.72 MT) also indicates good economic and living conditions of the fishing communities, especially during the peak season of fish catch. It is observed that the way of living of the fishing communities is also improved, while business establishments and other leisure activities are active and busy. However, this high productivity is subject to the law of supply and demand, where the problems of low prices of commodities are a prime issue. Market access and linkage should be extended with the help of concerned national agencies, as the LGU is facing local financial constraints.
Industry, Commerce, and Trade
Tubay Agri-Industrial Processing Center
Identified as one of the growth centres in the Caraga region by the Provincial Development Council, the Philippine Economic Zone Authority (PEZA) has approved the conversion of the 210 ha area owned by JC Agri Development Corporation into the Tubay Agri-Industrial Processing Center (TAPCEN) with the owners, JC Agri Development Corporation, as its site developer.
TAPCEN, located at Poblacion Brgy. Doña Rosario, is approximately 86 km from Surigao City and 33 km from Butuan City, 63 km from the Nasipit International Port and 5 km away from the beaches of the municipality. If fully operational, TAPCEN will generate employment opportunities for 15 000 to 20 000 workers and will generate substantial export earnings, encouraging and stimulating local industries.
The purpose of establishing TAPCEN is to absorb the abundant supply of agricultural production in the lake-zone and neighbouring areas of the municipality. The area is expected to be equipped with cold storage and processing facilities, an area for cattle fattening and a slaughter facility as well as forest product processing. Post-harvest facilities, fish processing and canning facilities, which are presently operating with the abundant “tamban” species as raw material, are also located in the area.
Industries encouraged in the TAPCEN area are agri-based manufacturing operations, technology-based companies, and allied manufacturing activities.
Some of the key priority projects for Mindanao, affirmed by the recent Mindanao Business Conference, are the establishment of major food manufacturing and setting-up of a coco-coir processing facility in the Tubay Agri-Industrial Processing Center (TAPCEN).
The coco-coir facility will be capable of transforming various coconut waste materials into marketable products like coco fiber and dust for horticultural applications with countries like Australia, Germany and Japan as principal markets. First stage processing will be at the village level, increasing downstream economic activities at the barangay level and contiguous areas.
Presently, there is only one processing industry operating within TAPCEN area, the nata de coco processing and coco virgin oil industry, which was owned by JC Agricultural Development Incorporated. This industry previously processed fresh fish but due to the limited supply of fish catch, the owner decided to shift their business from fish cannery to the nata de coco/coco virgin oil processing industry. The municipality has also other small cottage industries operating in Tubay such as soap-making and Nutri-Curls. A soap-making facility, located at Brgy. La Fraternidad is owned by a private individual. The major products are carrot soap, papaya soap and cucumber soap. On the other hand, Nutri Curls production was initiated by the Local Government Unit of Tubay to help the unemployed women earn extra income. It is also located at Barangay Doña Rosario.
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Figure 126 - Coconut Oil Processing
Mining Operations in Tubay
The Tubay Nickel-Cobalt project is run by SR Metals, Inc., a mining company operating in Tubay, Agusan del Norte, located in Sitio Bugnam, Brgy. La Frraternidad. The mining project also covers Binuangan, Sta. Ana, Tagmamarkay and Pobllacion 2 as secondary host barangays. La Fraternidad, Binuangan, and Poblacion 2 are sittuated along the western coast facing Butuan Bay, while Brgy. Tagmamarkay and Sta. Ana are at the northeastern and eastern side of the ridge, respectively.
The nickel-cobalt mining operations comprise the 572.64 ha of the MPSA of SR Metals, Inc., approved on March 10, 2008, MPSA (XIII)-00014 in Brgy. La Fraternidad, Binuangan, and Sta. Ana. A with a maximum production rate of 800 000-1 500 000 MT of nickel-cobalt ore per year. Specifically, it covers mining development, operation, maintenance and rehabilitation works; and construction and operation of mine structures and support facilities such as: stockyards; dumpsites; haul roads; settliing ponds; Office building including Assay Laboratory; Motorpool/ Mechanical shop with fuel and water depot; bunkhouses, nurrssery, recreational facility; port facility; and drainage system.
Government Revenues and Expenditures
Tax and Revenues
Although it was one of the busiest business havens of the northern part of the province in the 1920’s until the later part of the 1950’s, the economic growth opportunities of the town were reduced dramatically to a minimum when most of its busineess operators relocated their operations to the new and more accessible town of Cabadbaran.
Today, the bulk of Tubay’s economic activities are mainly the typical sari-sari stores, family-run small handicraft-making businesses, food processing, soap-making and the new mining operations.
In last year’s count, the folllowing lines of businesses were acccounted for during the annual business mapping survey:
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Table 204 - Business Survey
Business 2009 2008 2007
Tricycle Operator 97 85 42
Retailer 79 89 86
Copra Buyer 4 5 2
Bakery 2 2 -
Cockpit 1 1 1
Wholesaler (JMR) 1 1 1
Manufacturer 2 1 -
Bathhouse/Resort 1 1 -
Poultry 1 2 2
Copra Buy and Sell 1 - -
Banana Buyer 1 1 1
Environmental Baseline Study for the Agata Project, 2011
While most of these activities have augmented the local revenues of the municipality, a bigger portion of the economic growth opportunities of Tubay in the area of tourism, mining and other industrially viable undertakings are still waiting for the right prospects and utilization. When its natural environment is soundly exploited with a sustained integrity, then the town of Tubay will become a progressive town.
Table 205 - Local Receipts And Expenditures
Transaction 2006 2007 2008
Total Receipts 31 563 599.88 43 858 525.17 44 246 329.19
Total Expenditures 29 388 105.34 34 262 289.32 42 330 376.00
Balance 2 175 494.54 9 596 289.32 1 915 953.19
Environmental Baseline Study for the Agata Project, 2011
2007 - an increase of balance ending was notice. 2008 - lowest balance ending.
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Table 206 - Municipal Revenues by Source
Major Revenue sources 2006 2007 2008
Operating and Miscellaneous 30 022 959.65 29 978 387.92 35 122 412.64 Revenues
Tax Revenues 1 540 640.23 13 880 137.25 3 910 958.87
Borrowings 0 0 3 500 000.00
Total 31 563 599.88 43 858 525.17 42 533 371.51
Environmental Baseline Study for the Agata Project, 2011
2007 - highest revenue collections 2006 - lowest collections Table 207 - Extent of Fiscal Autonomy
2006 2007 2008
Locally Generated Revenues (all sources) 3 597 143.91 15 040 702.17 5 298 984.80
Internal Revenue Allotment 27 966 455.97 28 817 823.00 33 734 386.71
Total 31 563 599.88 43 858 525.17 39 033 371.51
Environmental Baseline Study for the Agata Project, 2011
2007 - peak collection activities 2008 - lowest local collection activities
Results of the Key Informant Interviews/ Focused Group Discussion
Focused Group Discussions (FGDs) and Key Informant Interviews (KIIs) focused on investigating the acceptance by the relevant stakeholders of the issues, opinions, and perceptions related to local development with large-scale mining as one of the economic drivers. The concerns focused on the social acceptability of the proposed mining project in the midst of various and oftentimes conflicting issues and concerns relating to economic development, social development and environmental sustainability.
The results of the discussions showed that, in general, the stakeholders in the three (3) subject municipalities are amenable to mining as a mode of development for their communities. Even amidst issues relating to environmental degradation, social displacement of families and communities, possible loss of livelihood, and peace and order, they feel that the entry of large- scale mining will greatly facilitate and enhance the economic conditions of the people and communities. While the existing development trend is mostly agricultural with tourism as a hopeful possibility, many respondents feel that the pace of development will be slow if they continue to rely on these modes. Even for the barangays which engage in small-scale mining, people look forward to an improved economic situation that would allow them to engage in other modes of livelihood and employment aside from the small-scale mining practiced for a long time.
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Political acceptance is also high. Despite some negative experience with another mining company presently operating in their area, the Tubay Mayor remains hopeful that MRL would practice responsible mining and will comply with the ECC conditionalities as well as the payment of taxes to boost the local economy. The Jabonga Mayor is very interested on when the operation will commence as he feels the need for more economic activity to boost the income of his constituents. Only the Santiago Mayor refused to meet with the team, but put a side note in the invitation that he will talk with MRL if they are already commencing operations. This shows that the good Mayor is interested and supportive, but probably perceptive with the long process that MRL is taking to comply with all the legal conditionalities, permits and licenses for the commencement of the mining operations.
Overall, the perception is that, while there are valid issues on the environment and social aspects, the perceived economic benefit from the entry of large-scale mining will outweigh these and even possibly be the answer to the recurring problem of the delivery of social services due to inadequacy of resources, both from national and local revenues. The general perception is that since MRL is taking the effort to comply with the legal requirements for the permits and licenses to operate, it will probably exercise responsible mining and will engage in partnership with the local authorities for economic and social development of the communities. In fact, they cite the existing programs and projects of MRL, even if it has not yet started actual mining operations, as a proof of goodwill and intent.
Information, Education, and Communication strategies (and possible engagement programs for public consultation meetings)
For the social study, several IEC activities were done as preparatory work to ensure that the respondents were aware of the purpose and methodology so as to ensure their cooperation. Among the activities conducted were:
Personal meetings with key stakeholders and respondents – the Research Assistant conducted these short meetings prior to the conduct of the FGDs and KII. In the meetings, he discussed with the key stakeholders and respondents the purpose and methodology to be used in the upcoming activities. Letters of Invitation to the FGD participants – the FGD participants received hand- delivered invitation letters that indicated the purpose and methodology of the activity to be done. The letters also contained the date, time and venue for the activity as well as other relevant details. The Research Assistant made sure that each participant received a copy of the letter.
To further enhance the social acceptability of the project, the following IEC activities are either underway or could be proposed to the Community Relations Team:
Community Accountability Board – this is simply a billboard containing a checklist of the agreements between the company, the LGU and the community. This includes the projects that have been committed by the company and the counterparts of the LGU and the community. The purpose of this board is to ensure that the community is aware of the agreements and the counterparting schemes. The listed items may be classified into “planned”, “on-going”, and “delivered or completed” to highlight the movement of the projects. Alternatively, it can be structured as a checklist where each project or activity is ticked off the list as it is completed or delivered.
Community Relations Periodical or Newsletter – this is a regularly printed information sheet, usually in the local dialect, containing the updates of the Community Relations activities as well as updates on the project to inform the community and stakeholders on the status of project implementation. It may also contain some technical issues, which need to be clarified to the public, discussed in layman’s terms. Activities which highlight
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the cooperation between the company and the local government unit or community are also included to project the company’s partnership for local developmental activities.
Radio Program – this is particularly effective for the section of the population residing in remote areas where printed material cannot easily be made accessible and for the residents who are not functionally literate or have difficulty reading. The medium provides access to most houseeholds and has the advantage of being responsive to the most current issues. Further it can be structured to provide immediate feedback and to promote dialogue with local leaders and officials by invitiing them to be a guest in the program to discuss the issues of the day. It can also be a venue for making announcements of coming activities and projects, apppreciating people, and getting support for activities and events. Conduct of Community/ Barangay Consultatiions – this can be done for a variety of purposes which include information campaign on projectts and activities, discussion of relevant and timely issues, generation of feedback of project activities, identification of development projects, explaining project related technical isssues affecting the community, and other topics. Methodology to be used can also be variied such as group discussions, lectures, audio-visual presentations, open-space approach, structured debates, or even creative presentations. This IEC approach humanizes the company and the project by putting the company representatives face to face with the local community. Sponsorship Assistance to Community Activities – Sports competitions, Fiesta activities, Clean-up drives, beautty contests, and other community inittiated activities provide a fertile ground for developing good community relations and forwarding advocacies. By giving sponsorship assistance, the company can show that it is interested in the social relationships and treatts itself as part of the community wheere it conducts its business.
There are numerous other IEC approaches and methodoologies that can be utilized in order to promote social acceptability and relatiionship. Thee challenge is to find and utilise the approaches and methods that are most appropriate to the culture and nature of the local community.
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Figure 127 - Focus Group Discusssion at Municipality Figure 128 - Key Informant Interview with the Mayor of Jabonga of Jabonga Hon. Glicerio Monton, Jr.
Figure 129 - Key Informant Interview with the Figure 130 - Key Informant Interview with the Barangay Captain of E. Morgado, MSWDO Officer of Municipality of Santiago Lucita Estrada Santiago, Zenaida S. Chavez
Figure 131 - Focus Group Discusssion at Municipality Figure 132 - Focuus Group Discussion at Municipality of Santiago of Tubay
Figure 133- Key Informant Interview with the Mayor of Tubay Hon. Sadeka S. Tomaneng
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20.3.2.2 Public Health
20.3.2.2.1 Health Profile of the Impact Municipalities
Vital Health Statistics
Tubay Municipality has the highest population among all three (3) impact areas. The birth rates of Santiago and Tubay are higher than that of the average birtth rate of the Philippines. Both municipalities showed increasing rates in the last four (4) years, however, the rate decreased in Santiago in 2010 (Table 208 and Figure 134). The residents should be informed on birth control methods and the role of this on population control.
Table 208 - Vital Health Statistics of the Philippines and Impact Municipalitiees, Agusan del Norte
Philippines Santiago Jabonga Tubay Parameter 2008 2008 2009 2009
Total Population 90,4457,200 16,140 19,844 20,458
Birth Rate 21.2 31.28 20.56 25.91
Mortality Rate 4.3 3.04 3.48 2.15
Infant Mortality Rate 9.3 0 0 1.88
Maternal Death Rate 63.3 0 0 1.88
Environmental Baseline Study for the Agata Project, 2011
Figure 134 - Health Statistics of the Philippines and Impact Municipalities, Aggusan del Norte
The crude mortality rates (CMR) of the three (3) impact areaas are lower than the national statistics. The infant and maternal mortality rates of the Philippinees are significantly higher than those of the impact communiities as shown in Figure 134.
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Leading Causes of Morbidity
The leading causes of diseases of the Philippines are compared to that of the impact municipalities in Table 209 and Figure 135. The rate of diseases of the heart is highest in Jabonga compared to the national statistics and to the other impact communities. The program on the control of cardio-vascular diseases should be enhanced and updated to include education of residents on how to prevent and control this life-style disease.
Table Table 209 and Figure 135 also illustrate the significantly higher rates of acute respiratory infection in Santiago and Jabonga Municipality compared to other diseases and to that of the national statistics. The rate of bronchitis and bronchiolitis is also highest in Tubay. However, the rate of pneumonia in the Philippines as a whole is higher than the impact communities. The rates of diarrhea and influenza are also higher in Santiago compared to the rest of impact communities and that of the Philippines. There is a need to improve on the implementation of controls for acute respiratory diseases, upper and lower tracts in Santiago and Jabonga. Since diarrhea is part of the leading causes of diseases, the execution of the program on the control of diarrhea and on environmental sanitation should also be given priority.
The increase in the cases of chicken pox and mumps indicates the need to improve on the performance of the health programs on control of infectious diseases. PTB, pneumonia, schistosomiasis, rabies, leprosy, filariasis and amoebiasis were reported in these communities that will require prevention and control of spread through adequate treatment, prevention and monitoring.
Table 209 - Morbidity: Leading Causes: Philippines versus Impact Municipalities (Rate/1000 Population)
Philippines Santiago Jabonga Tubay Causes 2008 2009 2009-10 2007
Acute Respiratory 18.40 74.69 40.62 Infection
ALTRI AND Pneumonia 8.71 1.25
Bronchitis/Bronchiolitis 5.8 2.3 21.7
Hypertension 5.57 5.34 6.05 4.54
Acute Watery Diarrhea 4.85 10.80 3.02 3.32
Environmental Baseline Study for the Agata Project, 2011
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Figure 135 - Morbidity: Leading Caauses: Philippines versus Impact Municipalities (Rate/1000 Population)
Leading Causes of Mortality
The causes of deaths in the impact communities are similar too that of the Philippines. Table Table 210 and Figure 136 shhow the latest available data of the leading cause of deaths in the Philippines compared to Sanntiago, Jabonga and Tubay Municipalities. The leading causes of deaths in the impact communities are mostly due to life-style diseases like CVD/hypertension, heart disease, liver cirrhosis (alcoholic), lung cancer, PUD, COPD, diabetes mellitus, vehicular accident and gunshot wound. Pneumonia and tuberculosis are also common infectious diseases causing death among residents.
The rate of heart disease in the Philippines is higher than that in the impact areas. Pneumonia is highest in Jabonga while vascular system disease is predomiinant in Tubay compared to all other communities, including Philippines overall. Cases of cancer, accident, tuberculosis and chronic lower respiratory disease are highest in the national statistics than the impact areas. Santiago Municipality approoximates the rate of malignant neoplasm in the Philippines as a whole.
Table 210 - Mortality: Leading Causes: Philippines versus Impact Municipalitties (Rate/1000 Population)
Causes Philippines Santiago Jabonga Tubay
Heart Diseases 0.85 0.23 0.56
Vascular System Diseases 0.62 0.34 0.65 0.97
Malignant Neoplasm 0.48 0.45 0.08 0.1
Accidents** 0.41 0.06 0.08 0.25
Pneumonia 0.38 0.06 1.13 0.05
Tuberculosis, all forms 0.31 0.06
Chronic lower respiratory diseases 0.23 0.17
Diabetes Mellitus 0.2 0.23 0.08
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Figure 136 - Mortality: Leading Causes: Philippines versus Impact Municipallities (Rate/1000 Population)
Health Services and Facilities
The impact communities surrounding the Nickel Mines of Agusan del Norte include the Municipalities of Santiago, Tubay and Jabonga. These communitties have one Rural Health Unit (RHU) each. These RHUs are presently improving and upgrading their services by adapting the standard policies of the Sentrrong Sigla, Out-patient Package, TB--DOTS and Maternity package.
The municipalities of Santiago and Tubay have adequate numbeers of doctors, dentist, nurses, midwives, laboratory technicians and active barangay health workers as shown in Table 211. However, a doctor, dentist, midwives and sanitary inspector are lacking in the rural health unit (RHU) to implement the health programs of the DOH in Jabongaa. The LGU, instead, provided the area with a district hospitaal where doctors and other health personnel are available.
Table 211 - Standard Number of Health Personnel per populatiion
Standard Ratio Santiago Jabonga Tubay
Doctor 1:20 000 1:17 592 0 1:19 582
Dentist 1:50 000 1: 17 592 0 1:19 582
Nurse 1:20 000 1: 17 592 0 1:19 582
Midwives 1:5 000 1:3 518 1:97 1:2 797
Laboratory technician 1:20 000 1: 17 592
Sanitary inspectors 1:20 000 1: 17 592 1:19 582
Active Barangay Health Workers 1:123 1:270 1:120 1:170
Environmental Baseline Study for the Agata Project, 2011
Perinatal deliveries are conducted by doctors and assisted by tthe nurse and midwives in the lying-in clinics of Santiago and Tubay Municipalities and the districct hospital of Jabonga.
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The health personnel of the RHU implement the health programs of the DOH that address the leading causes of diseases and deaths in the area. The RHU is provided with laboratory equipment to confirm diagnosis of these diseases. The RHU’s offer free services and medicines to the residents.
The LGU also takes care of the waste management (collection and disposal) in these municipalities. The Sanitary Inspector records and monitors the methods of waste disposal of these communities and the sources of safe water. The residents are trained and practice voluntary segregation of garbage in their homes. The other means of disposing garbage is by throwing in compost pits and/or by burning in the backyard.
The LGU also prepare for any form of emergency, calamity and disaster. The Emergency and Disaster Program is organized and conducted by the LGU of the municipalities.
The established DOH Referral system in the impact communities facilitates the management of health problems of residents. Residents have access to the LGU Hospital (Jabonga) or the district hospital in Cabadbaran or the provincial or regional hospital in Butuan City.
The residents are given the opportunity to become members of the Philippine Health Insurance Incorporated (PhilHealth) through the Indigent Program of the LGU. Through this membership, the indigents get free medicines from the RHU and are partly financially supported when patients are confined in the hospital.
Sources of drugs are available in the impact areas including Botica ng Bayan and pharmacies.
20.3.2.2.2 Health Profile of the Municipality of Santiago, Agusan del Norte
Vital Health Statistics
Table 212 and Figure 137 show the decreasing trend of population from 2007 to 2009. However, the population again increased in 2010.
Table 212 - Vital Health Statistics Of Santiago Municipality By Year, Agusan Del Norte Rate Per 1,000 Populations
Parameter 2006 2007 2008 2009 2010
Total Population 21,958 22,716 18,931 16,140 17,592
Number of Barangays 8 8 8 8 8
Number of BHS 6 8 8 8 8
No. of Households 3,659 3,786 3,157 2,690 2,932
Total Number of live birth 326 391 370 505 227 Male 160 198 189 240 109 Female 166 193 181 265 118
Birth Rate 14.84 17.21 19.54 31.28 12.90
Total Number of Deaths 38 33 51 49 49 Male 22 23 33 33 33 Female 16 10 17 16 16
Mortality Rate 1.73 1.45 2.69 3.04 2.78
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Parameter 2006 2007 2008 2009 2010
Number of Infant Mortality 0 1 0 0 0
Infant Mortality Rate 0 0 0 0 0
Number of Maternal Deaths 0 0 0 0 0
Maternal Death Rate 0 0 0 0 0
Environmental Baseline Study for the Agata Project, 2011
Figure 137 - Population of Santiago, Agusan del Norte by Year
In Santiago Municipality, the number of live births increased from 2006 to 2009, but it decreased in 2010. The number of deaths remained stable in the last five (5)) years.
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Figure 138 - Total Live births and Deaths in Santiago, Agusan del Norte by Year
Leading Causes of Morbidiity
The leading causes of diseases in 2010 include upper respiratory tract infection (URTI), urinary tract infection (UTI), gastroenteritis, skin diseases, wounds, hypertensive cardio-vascular disease (HCVD), influenza, parasitism, accidents, bronchitis/bbronchiolitis and peptic ulcer diseases (PUD)/gastritis (Table 213 and Figure 139).
Table 213 - Leading Causes Of Disease, Santiago, Agusan Del Norte, 2010
Rate Causes Number (per 1000 popullation)
URTI 1314 74.69
UTI 205 11.65
Gastroenteritis 190 10.80
Skin diseases 187 10.63
Wounds 138 7.84
HCVD 94 5.34
Influenza 78 4.43
Parasitism 71 4.03
Accidents 48 2.73
Bronchitis/bronchiolitis 41 2.3
PUD/Gastritis 41 2.3
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Figure 139 - Leading Causes of Diisease, Santiago, Agusan del Norte, 2010
There was an increase in the number of UTI, gastroenteritis, skin diseases, influenza, and parasitism. The cases of CVD, hypertension, bronchitis and bronchiolitis decreased in the same period of time (Figure 139 and Figure 140 and 10.2.10).
Wounds and accidents showed decrease in cases in 2007 and 2008.
Table 214 - Leading Causes Of Diseases By Year Santiago, Agusan Del Nortte
2006 2007 2008 2009 2010
URTI 1,307 1087 919 896 1314
UTI 57 172 170 124 205
Gastroenteritis 96 133 128 85 190
Skin diseases 152 99 101 90 187
Wounds 93 8 158 14 138
CVD/Hypertension 133 89 113 77 94
Influenza 36 54 35 37 78
Parasitism 26 36 51 28 71
Accidents 5 1 52 3 48
Bronchitis/bronchiolitis 66 84 77 53 41
Environmental Baseline Study for the Agata Project, 2011
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Figure 140 - Leading Cause of Diseases: URTI by Year Santiago, Agusan dell Norte
Figure 141 - Leading Causes Of Diseases By Year ,Santiago, Agusan Del Norrte
The other causes of morbidity that increased in the last five (5) years include peptic ulcer disease and gastritis, chicken pox, mumps and malnutrition. The cases of PTB, pneumonia, schistosomiasis, dog bites and amoebiasis showed decreasing trends.
Other reported cases in Santiago in the last five years include cancer, heart diseases, musculo- skeletal disorders (osteoarthritis, gout, muscle fatigue, sprainn), malaria, bronchial asthma, hepatitis, renal diseases, leprosy, filariasis and conjunctivitis. There were reported 43 cases of rabies in 2006.
Skin diseases include skin infections and dermatitis. Tonsillo-pharyngitis and acute respiratory infections are clumped together with upper respiratory tract infectiions (URTI).
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Leading Causes of Mortality
The causes of deaths in Santiago Municipality include cancer, hypertension, injury/wounds, cerebro-vascular accident (CVA) or stroke, heart disease, diabetes mellitus, COPD, renal disease, bronchial asthma, PTB, pneumonia, vehicular accident, PUD, meningitis, and schistosomiasis (Table 215 and Figure 142).
Table 215 - Causes Of Mortality, Santiago, Agusan Del Norte, 2009 - Rate Per 1,000 Populations
Rate Causes Number (per 1000 population)
Cancer 8 0.45
Hypertension 6 0.34
Injury/wounds 5 0.28
CVA 4 0.23
Heart disease 4 0.23
Diabetes mellitus 4 0.23
COPD 3 0.17
Renal disease 3 0.17
Bronchial asthma 1 0.06
PTB 1 0.06
Pneumonia 1 0.06
Vehicular accident 1 0.06
PUD 1 0.06
Meningitis 1 0.06
Schistosomiasis 1 0.06
Environmental Baseline Study for the Agata Project, 2011
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Figure 142 - Causes of Mortality, Santiago, Agusan del Norte, 2009
Table 216 and Figure 143 show the decrease in the number off HCVD, renal disease, COPD, pneumonia, accidents and injury/wounds in the last five years. Caancer cases initially decreased in 2008, however, they increased again in 2009. The cases of diabetes mellitus, heart diseases, pneumonia and COPD increased in 2008 but the trends decreased in the following years.
Table 216 - Causes Of Mortality By Year, Santiago, Agusan Del Norte
Causes 2006 2007 2008 2009 2010
Cancer 8 5 1 9 8
HCVD 12 13 7 12 6
Injury/wounds 2 5
CVA 4
Heart disease 6 4
Diabetes mellitus 6 1 7 4
COPD 1 3 6 4 3
Renal disease 5 4 2 4 3
Bronchial asthma 1
PTB 1 1 1
Pneumonia 5 2 6 1 1
Accident 6 3 1
PUD 2 3 1
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Causes 2006 2007 2008 2009 2010
Meningitis 1
Schistosomiasis 1 1 2 1 1
Liver disease 1 2 3 1
Dengue 1
Pancreatitis 5
Environmental Baseline Study for the Agata Project, 2011
Figure 143 - Causes of Mortality by Year, Santiago, Agusan del Norte
The causes of deaths among infants were due to pneumonia (1) and vomiting induced severe dehydration (1) in 2006, acute respiratory distress syndrome (1) in 2008, and bacterial meningitis (1) in 2010.
Health Services and Facilities
Table 217 enumerates the health workers in the municipal heealth and their corresponding number and ratio to population. There is one municipal health officer, public health nurse, laboratory technician, sanitary inspector and dentist. There are five midwives, 65 barangay health worker and 10 utility workers in Santiago Municipality.
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Table 217 - Health Workers in Santiago Municipality, Agusan del Norte, 2010
Number Ratio of No. to Population
Doctor 1 1:17,592
Nurse 1 1: 17,592
Laboratory technician 1 1: 17,592
Dentist 1 1: 17,592
Midwives 5 1:3,518
Sanitary inspectors 1 1: 17,592
Active Barangay Health Workers 65 1:270
Utility Workers 10 1:1,759
Environmental Baseline Study for the Agata Project, 2011
Health and Environment
Table 218 and Figure 144 illustrate the sources of safe water in Santiago Municipality. The majority of the households get their water from ground water through pipes shared with the community. Twenty-four percent of the households are supplied with safe water in their own houses, while 9% get water directly from streams and springs.
Table 218 - Environmental Sanitation Program by year, Santiago, Agusan del Norte, 2010
Activities Number Percentage No. of Households (HH) 2,932
No. of HH with access to safe water 2,932 100%
HH with access to Level I water supply 247 9%
HH with access to Level 2 water supply 1,970 67%
HH with access to Level 3 water supply 715 24%
HH with Sanitary Toilet Facilities 2,311 79%
HH with satisfactory disposal of solid waste 2,137 73%
HH with complete basic sanitation facilities 2,137 73%
No. of Food Establishments 137
No. of Food Establishments with Sanitary Permit 128 93%
No. of food Handlers 149
No. of food Handlers with Health Certificate 135 91%
Environmental Baseline Study for the Agata Project, 2011
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Seventy-nine percent (79%) of the households keep sanitary toilet facilities. Seventy-three percent (73%) of the households have a satisfactory way of disposing their solid wastes, and keep complete basic sanitation facilities. Ninety-three percent (93%) of food establishments keep a sanitary permit while 991% of food handlers are certified to do the job.
Figure 144 - Sources of Safe Water, Santiago, Agusan del Norte, 2010
20.3.2.2.3 Health Profile of the Muniiccipality of Jabonga, Agusan del Norte
Vital Health Statistics
The population of Jabonga Municipality increased from 2005 to 2008. However, it decreased in 2009 (Table 219 and Figure 145). Figure 145 shows the significcant decrease in the number of infants born from 2005 to 2009.
Table 219 - Vital Health Statisttics Of Jabonga Municipality By Year, Agusan Del Norte (Rate Per 1,000 Populations)
Parameter 2005 2006 2007 2009
Total Population 21,515 21,723 21,934 19,844
Total Number of Live birth 559 537 4221 408
Birth Rate 25.98 24.72 19.119 20.56
Total Number of Deaths 58 62 70 60
Mortality Rate 2.69 2.85 3.119 3.48
Number of Infant Mortality 1 1 1 0
Infant Mortality Rate 1.79 1.86 2.37 0
Number of Maternal Deaths 0 0 0 0
Maternal Death Rate 0 0 0
Environmental Baseline Study for the Agata Project, 2011
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Figure 145 - Population of Jabonga, Agusan del Norte by Year
Figure 146 - Number of Live births and deaths of Jabonga, Agusan del Norte by Year
Leading Causes of Morbidiity
The leading causes of diseases in Jabonga Municipality are URTI, CVD/hypertension, injuries and wounds, parasites, gastroenteritis, skin diseases, schistosomiasis, tuberculosis, pneumonia and conjunctivitis (Table 220aand Figure 147).
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Table 220 - Leading Causes Of Disease By Municipality, 2010 - Jabonga, Agusan Del Norte
Ratte Causes Numbere (per 1000 population)
URTI 806 40.662
CVD/hypertension 120 6.05
Injuries/wounds 84 4.23
Parasitism 60 3.02
Gastroenteritis 60 3.02
Schistomiasis 58 2.92
Skin Disease 48 2.44
Tuberculosis 30 1.51
Pneumonia 25 1.25
Conjunctivitis 13 0.66
Environmental Baseline Study for the Agata Project, 2011
Figure 147 - Leading Causes of Diisease by Municipality, 2010Jabonga, Agusan del Norte
Table 221 and Figure 148 show the causes of diseases from 2007 to 2010. The cases of URTI and the other causes of diseases decreased in the same periods except for heart diseases, which increased in 2010. There were no recorded cases of bronchitis, filariasis and chicken pox in 2009 to 2010.
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Table 221 - Leading Causes Of Diseases By Year, Jabonga, Agusan Del Nortte
2007 2009 2010
URTI 64.51 59.95 40.62
CVD 17.1 9.46 5.1
Gastroenteritis 12.77 5.19 3.02
Bronchitis 11.44 - -
Disease Parasitism 9.39 5.71 3.02
Skin Disease 8.25 5.01 2.4
Pneumonia 7.84 2.09 1.25
Conjunctivitis 2.96 1.17 0.66
Filariasis 1.55 - -
Schistomiasis 1.55 4.62 2.92
Injuries/wounds - 7.24 4.23
Chicken pox - 1.44
Tuberculosis - - 1.51
Figure 148 - Leading Causes of Diiseases by Year, Jabonga, Aggusan del Nortte
Many of the children in Jabonga are well nourished while 20% are malnourished. Eighteen percent of the malnourished are slightly affected. One percentt of the children is overweight (Table 222 and Figure 149) in Jabonga.
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Table 222 - Nutritional Status, Jabonga, Agusan Del Norte, 2009 (Rate Per 1,000 Populations)
2005 2006 2007 2008
BNVL 96 112 76 40
BNL 622 591 631 556
Normal 1983 2,085 2,464 2,482
Above Normal 37 25 41 28
Total 2,743 2,813 3,212 3,106
Figure 149 - Nutritional Status, Jaabonga, Agusan del Norte, 2009Rate per 1,000 Populations
Leading Causes of Mortality
The causes of deaths in Jabonga Municipality include pneumonia, CVD/hypertension, heart disease, liver cirrhosis, lung cancer, PUD, diabetes mellitus, vehicular accident, gunshot wound, bronchial asthma (Table 223 and Figure 150).
Table 223 - Causes of Mortality, Jabonga, Agusan del Norte, 2009 (rate per 1,000 populations)
Rate Causes Number (per 1000 population)
Pneumonia 26 1.13
CVD/Hypertension 15 0.65
Heart Disease 13 0.56
Liver Cirrhosis 5 0.21
Lung Cancer 2 0.08
Peptic Ulcer Disease 2 0.08
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Diabetes Mellitus 2 0.08
Vehicular accident 2 0.08
Gunshot wound 1 0.04
Bronchial Asthma 1 0.04
Environmental Baseline Study for the Agata Project, 2011
Figure 150 - Causes of Mortality, Jabonga Agusan del Norte, 2009
Health Services and Facilities
The health records of Jabonga show the absence of a physician, nurse and dentist in 2007. However, there are 228 midwives who implement the health programs of the DOH and they are assisted by 183 trained “hilots”.
Table 224 - Health Workers in the Municipality of Jabonga, Agusan del Norte, 2007
Personnel Jabonga
Municipal Health Officer 0
Dentist 0
Nurse 0
Midwives 228
Trained Hilot 183
Environmental Baseline Study for the Agata Project, 2011
20.3.2.2.4 Health Profile of the Muniiccipality of Tubay, Agusan del Norte
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Vital Health Statistics
Table 225 and Figure 151 to Figure 152 show the increasing trend of population and live births from 2005 to 2009. The number of deaths remained stable in the same period of time. There was one infant and one maternal mortality in 2009.
Table 225 - Vital Health Statistics of Tubay Municipality by year, Agusan del Norte (rate per 1,000 populations)
Parameter 2005 2007 2009
Total Population 19,015 19,582 20,458
Number of Barangays 13 13 13
Number of BHS 5 5 5
No. of Households 3,703 3,780 4,091
Total Number of live birth 410 443 530 Male 212 242 265 Female 198 201 265
Birth Rate 21.56 22.62 25.91
Total Number of Deaths 39 31 44 Male 29 19 26 Female 10 12 18
Mortality Rate 2.05 1.58 2.15
Number of Infant Mortality 0 0 1
Infant Mortality Rate 0 0 1.88
Number of Maternal Deaths 0 0 1
Maternal Death Rate 0 0 1.88
Environmental Baseline Study for the Agata Project, 2011
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Figure 151 - Population of Tubay, Agusan del Norte by Year
Figure 152 - Total Live Births and Deaths in Tubay, Agusan del Norte by Yeaar
Leading Causes of Morbidiity
In Tubay, the leading causes of diseases include bronchitis/bronchiolitis, wounds, hypertension, skin disease, diarrhea, urinary tract infection, pulmonary tuberculosis, tonsillitis and carbuncle (boil) (Table 226 and Figure 153).
Cases of hepatitis B (3), rabiies (1), syphilis (2), schistosomiasis ((2) and trichomoniasis (8) have also been reported.
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Table 226 - Leading Causes Of Disease, Tubay, Agusan del Norte, 2007
Rate Causes Number (per 1000 population)
Bronchitis/bronchiolitis 425 21.70
Wounds 112 5.72
Hypertension 89 4.54
Skin disease 88 4.49
Diarrhea 65 3.32
Urinary tract infection 55 2.81
Pulmonary tuberculosis 37 1.88
Tonsillitis 111 0.56
Boil 110 0.51
Influenza 110 0.51
otitis media 9 0.46
Environmental Baseline Study for the Agata Project, 2011
Figure 153 - Leading Causes of Diisease, Tubay, Agusan del Norte, 2010
There was a significant increase in the number of bronchitis/bronnchilitis, UTI, wounds, and skin diseases from 2006 to 2007. Hypertension increased from 2005 to 2006 but decreased significantly in 2007. There was a decrease in the number of influuenza, tonsillitis and PTB cases in those recent three (3) years (Table 227 and Figure 154 and Figure 155).
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Table 227 - Leading Causes Of Diseases By Year Tubay, Agusan Del Norte
2005 2006 2007
Bronchitis 95 38 425
Hypertension 91 169 89
Wounds 63 112
Influenza 53 58 10
PTB 52 46 37
UTI 37 55
Skin disease 37 88
Tonsillitis 19 11
Measles 15 0
Chicken pox 8 0
Malaria 3 3 0
Typhoid fever 2 2 0
Environmental Baseline Study for the Agata Project, 2011
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Figure 154 - Leading Causes of Diisease, Tubay, Agusan del Norte, 2010
Figure 155 - Leading Causes of Diiseases by Year Tubay, Agusan del Norte
Leading Causes of Mortality
The causes of deaths in Tubay Municipality include cardio-vascuular disease, accident, cancer, renal disease, rabies, pneumonia and septicemia (Table 228 and Figure 156).
Table 228 - Causes of Mortality, Tubay, Agusan del Norte, 2007 (rate per 10,000 populations)
Rate Causes Number (per 1000 population))
Cardio-vascular disease 19 0.97
Accident 5 0.25
Cancer 2 0.10
Renal Disease 2 0.10
Rabies 1 0.05
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Pneumonia 1 0.05
Septicemia 1 0.05
Environmental Baseline Study for the Agata Project, 2011
Figure 156 - Causes of Mortality, Tubay, Agusan del Norte, 2009
The leading causes of deaths in Tubay from 2005 to 2007 are shown in Table 229 and Figure 157. Both Table and Figure show the increase in the number off coronary artery disease from 2005 to 2007. There was a decrease in the number of pulmonary disease, cancer and peptic ulcer disease. The other causes of deaths reported include cerebro-vascular accident and schistosomiasis in 2005, andd dehydration and typhoid fever in 2006.
Table 229 - Causes Of Mortality by year, Tubay, Agusan del Norte
Causes 2005 2006 2007
Coronary artery disease 14 18 19
Accident 5 11 5
Pulmonary disease 7 9 1
Renal failure 1 6 2
Cancer 5 3 2
Acute pancreatitis 1 3 -
Dehydration - 1 -
Typhoid fever - 1 -
Peptic ulcer disease 3 1 -
Cerebro-vascular accident 9 - -
Schistosomiasis 1 - -
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Environmental Baseline Study for the Agata Project, 2011
Figure 157 - Causes of Mortality by Year, Tubay, Agusan del Norte
Health Services and Facilities
There is one (1) personnel in each of the followiing positions in the MHU: doctor, nurse, laboratory technician, dentist and sanitary inspector. The number of midwives decreased to seven (7) in 2007, but the number of active barangay health workers increased in the same year (Table 230).
Table 230 - Health Workers in Tubay Municipality, Agusan del Norte, 2010
Personnel 2005 2007 2009
Doctor 1 1 1
Nurse 1 1 1
Laboratory technician 1 1 1
Dentist 0 1 1
Midwives 9 8 7
Sanitary inspectors 1 1 1
Active Barangay Health Workers 110 109 115
Environmental Baseline Study for the Agata Project, 2011
Health and Environment
Table 231 and Figure 158 illustrate the sources of safe water in Tubay Municipality. The majority of the households get their water from springs or streams (40%). Thirty-two percent (32%) of household water comes from ground water through pipees shared with the community. Twenty-eight percent (28%) of the households are supplied with safe water in their own houses.
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Table 231 - Environmental Sanitation Program by Year, Tubay, Agusan del Norte, 2009
Activities 2009 Percentage
No. of Households (HH) 4,125
No. of HH with access to safe water 4,125 100%
HH with access to Level I water supply 1664 40%
HH with access to Level 2 water supply 1299 32%
HH with access to Level 3 water supply 1162 28%
HH with Sanitary Toilet Facilities 3857 93.50%
HH with satisfactory disposal of solid waste 2228 54.01%
HH with complete basic sanitation facilities 2228 54.01%
No. of Food Establishments 251
No. of Food Establishments with Sanitary Permit 134 53.38
No. of food Handlers 283
No. of food Handlers with Health Certificate 184 65.01
Environmental Baseline Study for the Agata Project, 2011
Ninety-three percent (93%) of households keep a sanitary toilet. Fifty-four percent (54%) of households have a satisfactory way of disposing solid waste and keep a complete basic sanitation facility. Only 53% of food establishments and 65% of food handlers are certified.
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Figure 158 - Sources Of Safe Water In Tubay Municipality, Agusan Del Nortee, 2009
20.3.3 Potential Impacts and Mitigations
20.3.3.1 Socio-economics
Matrix Relating Project Stage to Social Impact Asseessment Variables
Social Impact Assessment Variable Planning/Policy Development Development Implementation/ Construction Operation/ Maintenance Decommissioning/ Abandonment
Population Characteristics
Dispersal of Increase of Increase of population to Population Change None households in households in the mined over relocation sites vicinity areas
Perceptions of Entry of Entry of people Entry of people Ethnic and racial intrusion into people in in ancestral in ancestral distribution ancestral ancestral domains domains domains domains
Relocation of New Issues and Relocated populations households in households of - speculation impact areas workers
Speculation on Influx of Influx of mine Outflow of laid- Influx or outflows of job construction workers and off mine temporary workers opportunities workers businessmen workers
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Community and Institutional Structures
Formation of Voluntary associations None - labor unions
Increased anti- Increased Perceptions of mining/ environmental/ Interest group activity health, risk and - environmental armed group safety group activity activity
Creation of Expansion of Increased Size and structure of local new offices some offices resources for - government and monitoring and task social projects groups forces
Support Construction Employment/income services as Unskilled and Unskilled and work, unskilled characteristics transport, food, technical work technical work and skilled etc.
Employment in Employment as Employment as 1% equity Employment equity of sustaining guides, unskilled share of mine Indigenous people economic interpreters workers produce activities
Entry of Increase of Industrial/commercial industrial and industrial and - - diversity commercial commercial activities activities
Zoning Rezoning for reclassification Rezoning for protected Presence of planning and of impact areas commercial areas, - zoning activity and and industrial residential and resettlement areas commercial area areas.
Political and Social Resources
Emergence of Emergence of Polarization of Distribution of power and new leaders clear leaders issues and - authority with conflicting for different leaders interests interests
Listing of Relocation and Identifications of directly affected organization of - - stakeholders stakeholders stakeholders
Issues and Involvement in Involvement in Involvement in Interested and affected speculations of monitoring and monitoring restoration publics effects of evaluation and evaluation activities mining
Leadership capability and
characteristics
Individual and Family Changes
Perceptions of risk, Issues and - - - health, and safety speculations
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Replacement Negotiation, Continuing Displacement/relocation Issues and of livelihood compensation, socio-economic concerns speculations and economic and relocation well-being activity
Trust in political and - - - - social institutions
Concerns about Some families More families Residential stability safety of may move out - will settle in residence or settle in
Conflicting Polarization of Attitudes toward Issues and issues and issues and - policy/project speculations attitudes attitudes
Increased Concerns about social Issues and expression of - - well-being speculations concerns
Community Resources
Improved Installation of Construction of access, Change in community monitoring resettlement common - infrastructure devices and areas with service road repair facilities facilities
Employment Technical Leadership and assistance in development Sustainability Indigenous people empowerment ADSDPP and education planning of Tribal revision of children Council
Changes in Modification of Revision of Restoration of land use due to land use in the Land use patterns Comprehensive land, revision construction pit area and Land Use Plan of CLUP activities facilities
Identification of Some of the Some of the Effects on cultural, cultural, resources may resources may historical, and historical, and require - be lost or Archaeological resources archeological movement or destroyed resources preservation
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The following table presents the impact analysis on the social environment.
Matrix on Impact Analysis of Projected Social Impact Assessment Variables
Social Impact Assessment Variable - sible - sible r r Long -term -term Long Short -term orary Temp- Perma-nent Reve Irreve Signi- ficant ficant Insigni- Population Characteristics
Population Change √ √ √ √
Ethnic and racial √ √ √ √ distribution
Relocated populations √ √ √ √
Influx or outflows of √ √ √ √ temporary workers
Community and Institutional Structures
Voluntary associations √ √ √ √
Interest group activity √ √ √ √
Size and structure of √ √ √ √ local government
Employment/income √ √ √ √ characteristics
Employment equity of √ √ √ √ minority groups
Industrial/commercial √ √ √ √ diversity
Political and Social Resources
Distribution of power √ √ √ √ and authority
Identifications of √ √ √ √ stakeholders
Interested and √ √ √ √ affected publics
Leadership capability
and characteristics
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Individual and Family Changes
Perceptions of risk, √ √ √ √ health, and safety
Displacement/relocatio √ √ √ √ n concerns
Trust in political and √ √ √ √ social institutions
Residential stability √ √ √ √
Attitudes toward √ √ √ √ policy/project
Concerns about social √ √ √ √ well-being
Community Resources
Change in community √ √ √ √ infrastructure
Indigenous people √ √ √ √
Land use patterns √ √ √ √
Effects on cultural, historical, and √ √ √ √ archaeological resources
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The following is the summary of impact/ mitigation measures/ and monitoring programs during the construction, operation and abandonment phases:
Matrix Summary of Mitigation Measures to Social Impact Assessment Variables
Social Impact Planning/Policy Implementation/ Operation/ Decommissioning/ Assessment Variable Development Construction Maintenance Abandonment
Population Characteristics
Establishment Policy on Population Policy on priority of Baseline priority of monitoring and Population Change of local hiring to information on local hiring to management reduce influx population reduce influx program
Monitoring of Establishment Monitoring of Ethnic Monitoring of Ethnic of Baseline Ethnic Ethnic and racial distribution distribution through information on distribution distribution through updating of ethnic through updating updating of statistics distribution of statistics statistics
Ensuring proper IEC, compensation Maintain level Relocated consultation, and comparable of facilities populations and consensus or better and services building relocation
Policy on Employment Baseline of Policy on priority Influx or outflows of priority of monitoring and skills inventory of local hiring to temporary workers local hiring to management of population reduce influx reduce influx program
Community and Institutional Structures
Voluntary
associations
Engagement IEC, Engagement of Engagement of of interest Interest group consultation, interest groups in interest groups in groups in activity and consensus community community community building development development development
Technical and Payment of financial Payment of local Payment of local local taxes to Size and structure assistance in taxes to support taxes to support support of local government the profiling of operation of new operation of new operation of affected offices offices new offices communities
College Livelihood and Scholarship for Employment Employment of Employment/incom employable deserving youth of scholarship scholarship e characteristics skills training for in relevant graduates graduates affected families courses
College Livelihood and Employment Employment equity Scholarship for Employment of IP employable of IP of Indigenous deserving IP scholarship skills training for scholarship people youth in relevant graduates IP communities graduates courses
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Utilization of Utilization of Utilization of local local service Utilization of local local service service and Industrial/commerci and trading service and trading and trading trading business al diversity business for business for project business for for project project activities project activities activities activities
Technical Technical and Technical and Presence of and financial Technical and financial financial planning and zoning assistance for financial assistance assistance for assistance for activity CLUP for CLUP Updating CLUP Updating CLUP Updating Updating
Political and Social Resources
Leadership Leadership Leadership training and Leadership training Distribution of training and training and conduct of and conduct of For power and authority conduct of For a conduct of For a For a on a on issues on issues on issues issues
Technical and Stakeholder financial Stakeholder Stakeholder Identifications of engagement assistance for engagement in engagement in stakeholders in Project Stakeholder Project Activities Project Activities Activities Identification
Engagement IEC, Engagement of Engagement of of interest Interested and consultation, interest groups in interest groups in groups in affected publics and consensus community community community building development development development
Leadership capability and characteristics
Individual and Family Changes
IEC on Community Responsible Community Community Perceptions of risk, engagement Mining, Health Training on Risk engagement on risk health, and safety on risk and safety reduction reduction reduction issues
IEC on relevant Support to issues and Transparent Support to social Displacement/reloc social and consensus negotiation and and economic ation concerns economic building compensation activities activities activities
Trust in political and
social institutions
IEC on IEC on relevant IEC on relevant relevant IEC on relevant issues and issues and issues and issues and Residential stability consensus consensus consensus consensus building building building activities building activities activities activities
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IEC on relevant Community Community Community issues and engagement Attitudes toward engagement in engagement in consensus in project/ policy/project project/ policy project/ policy building policy development development activities development
IEC on relevant Community Community issues and Community Concerns about engagement in engagement consensus engagement in social well-being social in social building social development development development activities
Community Resources
Provision of Provision of Change in Provision of Social Social Provision of Social Social community Development Development Development Development Assistance Fund Assistance Assistance Fund infrastructure Assistance Fund Fund
Provision of Provision of the Provision of the Provision of the 1% Indigenous people the 1% royalty 1% royalty for IP 1% royalty for IP royalty for IP for IP
Technical and Technical and Technical and Technical and financial financial financial Land use patterns financial assistance assistance in assistance in assistance in in CLUP revision CLUP revision CLUP revision CLUP revision
Technical and Effects on cultural, Identification of financial cultural, assistance in the historical, and historical, and movement or Archaeological archeological preservation of resources resources identified resources
20.3.3.2 Public Health
During the pre-operation phase, dust will be generated from rock erosion and soil. Sources of dust, installation of barriers and planting trees to protect areas are some of the measures to minimize the problem.
Air pollution emitted from moving vehicles and running heavy equipment may trigger exacerbation of allergic rhinitis, post-nasal syndrome and exacerbation of COPD and asthma. Inhalation of dust and air pollution can be minimized with the use of masks, while skin rash due to contact allergy and injuries/wounds can be avoided with the use of body covering and boots. Vehicles and heavy equipment should be properly maintained to avoid generation of air pollutants in the atmosphere.
Concentrations of chemicals in the air in confined sites should be monitored regularly to determine limit levels within standard concentrations. These areas should be provided with adequate ventilation to avoid inhalation poisoning and heat stress.
To minimize road accidents, streets should be placed in safer grounds and away from residential areas. There should be warning signs posted in every accident-prone site.
Noise may reach levels beyond physiologic requirements resulting in reduction of hearing. To prevent this health consequence, noise barriers should be constructed to minimize sound in
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work areas. Construction workers should wear ear mufflers and should be allowed to limit work to 8 hours each time to rest the ears from loud noises.
Workers should be informed and trained on the proper handling of tools and equipment to avoid injury. Employees should be trained to assume proper posture when executing work to avoid muscle fatigue, strain and even injuries.
To avoid heat stress and strokes, workers should be provided with adequate water supply for drinking and washing. Regular work shifts should also be adapted to rest the worker from continuous exposure to high temperatures. They also should have immediate access to shaded areas with good ventilation.
The company should start an occupational health and safety program during the construction phase of the project. Construction workers should be trained on the program including first aid training and safety practices while on duty. The workers should have access to a medical clinic where they can be attended to by a nurse and doctor at all times.
The company should inform residents living close to the mining project of the nature of the Project and its operations through meetings and seminars. The project operators should also inform the public on safety measures that they are implementing in order to avoid adverse effects to health.
Chemical Hazards
The sources of air pollution during the operation phase are generated from running vehicles and heavy equipment. Motor vehicle used for transporting materials SO2, NO2, CO and SPM. Vehicles and heavy equipment should be well maintained to minimize emission of air pollutants. Adequate ventilated area is required to avoid accumulation of pollutants and suffocation of workers in enclosed areas.
More dust will be generated from the digging and crushing of rocks during the operation phase. Identifying sources of dust, installation of barriers, and planting trees to protect surrounding areas, are some of the measures to minimise the problem. Use of body covering and masks should be imposed on workers to avoid contact dermatitis and inhalation of chemical, dust and SPM, respectively.
Exposures to elevated levels of nickel during mining have been recorded to cause acute and chronic non-cancer effects later. Acute health effects include irritation and allergic sensitisation. Chronic non-cancer effects from exposure to nickel include asthma and other respiratory effects.
Skin and respiratory protection should be used where there is potential exposure to nickel dust (note that no metallic nickel or nickel dust will be used or produced at the proposed plant). Medical surveillance should concentrate on the skin and respiratory system, with prompt removal of those who develop dermal or respiratory allergy. A biological threshold level of 10 µg/L in plasma is recommended for workers exposed to nickel compounds. A maximum level of 10 µg/L in the urine is recommended for workers exposed to nickel carbonyl (note that no nickel carbonyl will be used or produced at the proposed plant).
A study by George Ekosse regarding respondents living in sites closest to a mine and smelter / concentrator plant, Selebi Phikwe Ni-Cu mine area, Botswana, reported a higher incidence of chest pains and frequent coughing, compared to those living in other parts of the study area. Residents associate fumes and dust from mining activities to the frequent coughing and persistent chest pains, which could be symptoms of respiratory tract diseases (Afr J Health Sci. 2005 Jan-Jun; 12 (1-2):37-48).
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On regulations and recommendations for "not-to-exceed" toxic levels of nickel in the air, water, soil, or food, OSHA has set an enforceable limit of 1.0 mg nickel/m³ for metallic nickel and nickel compounds in workroom air to protect workers during an 8-hour shift over a 40-hour work week. EPA recommends that drinking water levels for nickel should not be more than 0.1 mg/L (Níquel, Public Health Statement for Nickel. August 2005).
Measurements of the amount of nickel in blood, feces, and urine can be used to estimate exposure to nickel.
Physical Hazards
Physical hazards include noise, heat, ergonomic stress, occupational accidents and injuries. Heat stroke is a result of exposure to extreme heat and may follow strenuous exercise under high temperatures. Workers should be provided with adequate ventilation in work areas. They should be allowed to adapt regular work shifts and rest time. Water and juices should be made available for drinking to avoid dehydration. The work environment should be well shaded with good ventilation to prevent rise in temperatures.
The Occupational Safety and Health Administration (OHSA) recommends avoiding exposure to noise at or above 8-hour time-weight average (TWA) of 85 dBA. The hearing conservation program (HCP) suggests that all industrial projects protect workers from noise by noise monitoring, engineering and administrative controls, use of ear plugs, earmuffs and /or helmets and periodic audiometric examination.
Ergonomics is the study of the physical and cognitive demands of work to ensure a safe and productive worksite. The company should provide a good workplace, workstations, tools, equipment, and to train workers on the right procedures of workers to avoid fatigue, discomfort, and injuries. The demands of the job should be within the physical and cognitive capabilities of the workers. Health professionals should monitor the work areas and assess job procedures, equipment, and working condition.
Protection of workers from Biological Hazards
Biological hazards include exposures to bacteria, viruses, fungi, and parasites. These organisms can spread easily among workers. Spread of infectious diarrhea could be prevented if workers are supplied with drinking water from safe sources and sanitary toilets. Patients with the infection should be treated immediately to avoid spread to other workers. Vaccinations for viruses are also highly recommended. Microorganisms (virus, bacteria and PTB) inhalation can be voided by providing spacious working and living areas with adequate ventilation.
Safety of Workers
To prevent and control work-related accidents, injuries and diseases, an occupational health and safety program has to be created in the project site. A safety and health committee should be organised that will include safety professionals who will develop and implement an effective safety and health management system. The committee will formulate the policies, goals, plans, programs, procedures, and standards of the program. It will create the safety procedures, rules and regulations, training, inspection and monitoring in the workplace. It will also conduct regular investigations, analysis, reporting and recording of all occupational injuries and accidents in the workplace. These records will be submitted annually to the DOLE.
Workers will be informed of the policies and guides to safety formulated by the occupational health and safety program. The workers will have to practice all policies and guides to minimise occupational accidents and injuries, and to prevent disabilities and fatalities in the work site.
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Health of the Workers
All workers should have access to a medical clinic, with adequate equipment, in the work place. There should be a physician to attend to first aid medical treatment, general medical problems and injuries of the workers. A nurse, a medical technician and a sanitary inspector should serve and assist the physician.
The company should provide an ambulance to safely conduct patients to the surrounding hospitals for additional evaluation and management. Telephones and radios, and even referral forms, as means of communication with other health personnel and facilities, will facilitate medical attendance.
All applicants who want to work with the company should undergo pre-employment physical examination by the company physician to ensure medical fitness prior to hiring. Annual physical fitness examination in the company should include all employees and be extended to contractual workers of other companies to ensure healthy workers in the jobsite. All medical consultations and annual medical examinations of employees should be recorded. All medical illnesses, occupational injuries and accidents will have to be reported to DOLE every year.
20.3.3.3 Village Relocation
It is highly likely village relocation will be undertaken in areas where infrastructure will be built. MRL is committed to pursue land acquisition and resettlement consistent with the IFC Standard No. 5 (Land Acquisition and Involuntary Resettlement). MRL will commission Land Acquisition consultants and will seek the assistance of the LGUs in implementing its Land Acquisition and Relocation Plan.
20.3.3.4 Heritage Sites
There are no declared heritage sites within the project area. The established sites for heritage and culture are found in Butuan City and these include the Magellan Marker, an 1872 edifice located at the mouth of Agusan River in Magallanes, the Centennial Bitaug Tree, also in Magallanes, and the well-preserved ancestral homes of Spanish architecture in Cabadbaran City.
20.3.4 The Project in Relation to Philippine Laws and Regulations
Mining operations in the Philippines require the fulfillment of various local regulations and compliance to different environmental standards that will ensure the protection of not only the existing environment but the people who will directly and indirectly be affected by the mining activity. The following national rules and regulations should highly be considered at all project phases:
PD 1151 (Nov. 23, 1979) - the Philippine Environmental Policy; PD 1586 (June 11, 1978) - establishes the environmental impact assessment system as provided by PD 1151; Proc. No. 2146 (Dec. 14, 1981) - proclaiming certain areas and types of projects as environmentally critical and within the scope of the environmental impact statement system established under PD 1586; DENR Administrative Order (DAO) No. 21 (June 5, 1992) - amending the Revised Rules and Regulations Implementing PD 1586; further amended by DAO 37 series of 1996; DENR DAO No. 11 (March 28, 1994) - supplementing DENR AO No. 21 and providing for programmatic compliance procedures within the environmental impact statement system;
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DAO No. 34 (March 20, 1990) - revised water usage and classification/water quality criteria amending Sections 68 and 69, Chapter III of the 1978 NPCC Rules and Regulations; DAO No. 35 (March 20, 1990) - revised effluent regulations of 1990, revising and amending the effluent regulations of 1982; DAO No. 14 (March 18, 1993) - revised air quality standards of 1992, revising and amending the air quality standards of 1978; DENR Administrative Order (DAO) No. 96-37 (December 2, 1996) - Revising the DENR Administrative Order No. 21, Series of 1992 to further strengthen the implementation of the environmental impact statement system; and Executive Order No. 410 (July 03, 1999) – Providing for new guidelines for the processing of applications for port zone delineation.
The process of Environmental Impact Assessment (EIA) was established under Presidential Decree 1151 as one of the major requirements of the Philippine government for various projects including mining, power plants, residential communities, and other industries. Through the Philippine EIS System, the proponents are required to submit an Environmental Impact Statement to the Department of Environment and Natural Resources - Environmental Management Bureau (DENR-EMB), which includes the description of the present condition of the physical environment and people prior to the operation of the proposed project. This document considers further the possible effects of the proposed project on the local environment and people.
Upon finalization of the EIS, a series of reviews by the Technical Committee of DENR-EMB will be done. These ensure that the content of the EIS is well organised and presents the most appropriate measures needed to mitigate and/or enhance the effects of the project being proposed. Once approved, an Environmental Compliance Certificate (ECC) will be released. The ECC identifies all other applicable environmental laws, regulations, or guidelines that the proponent must comply with to ensure the regulatory compliance of the project. If an ECC is denied, it does not rule out the proponent from submitting a new EIS for a new site or for modifications in the facilities' design and operation.
Hereunder are the relevant regulations, which the EIA is required to conform with:
DAO 2003-30 - Implementing Rules and Regulations (IRR) for the Philippine Environmental Impact Statement System (PEISS). This order supersedes DAO Nos. 96-37, 2000-37, 2000-05 and other related orders. All projects or undertaking are evaluated according to the Procedural Manual for DAO 2003-30;
RA 6969 - Toxic and Hazardous Waste Act (1990); RA 8749 - The Philippine Clean Air Act (1999); RA 9003 - The Ecological Solid Waste Management (2000); RA 9275 - Philippine Clean Water Act (2004); Philippine Mining Act of 1995 (RA 7942) and its IRR (DAO 96-40); Mine Safety and Health Standards (DAO 2000-98); and DOH Framework and Guidelines on EHIA (1997).
An overview of the EIA process is presented as Figure 10.4.1.
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Geology Environmental Baseline Study (current) Soils and Land-use Terrestrial Flora
14 weeks Terrestrial Fauna Water Quality Hydrology Hydrogeology Freshwater Biology Marine Biology Air and Noise Quality Socio-economics Public Health Finalization of Project Description In-depth Environmental Formulation of Environmental Management Plan Impact Study (EIA) Environmental Risk Assessment
~8-10 weeks Socio Development Plan (SDP) Comprehensive Integration of Reports Internal Review by the client and EIS Preparer Finalization of the EIS foe DENR-EMB Screening
EIS Report Screening EIS Review Process Technical Meeting with the EMB Review by the EMB Committee Members and Evaluation Technically Public Consultation (if required) 40 working days
Decision/ Approval by the EMB Approval of ECC
Figure 159 - The ECC Application Process
20.3.4.1 Additional Important Legal Requirements
During mining operations, companies are required to submit a Social Development Management Plan (SDMP) after consultation with the host communities. The purpose of this plan is to promote the general welfare of the inhabitants in these communities. Funding for the SDMP is based on 1.5% of the Operating Cost, 75% of which is apportioned to implement the SDMP, 15% for Information and Education Campaigns, and 10% for the development of mining technology and geosciences. The SDMP is subject to the approval of the Mines and Geosciences Bureau (MGB).
At exploration stage, companies are required to submit Community Development Programs (CDP) in consultation with the host communities. This program ensures that even at exploration stage, community projects agreed upon by the community and the company are undertaken. Funding for the CDP is equivalent to a minimum of 10% of the approved two-year Exploration Work Program. The CDP is also approved by the MGB. Historically, MRL has exceeded the mandated budget for community projects.
Apart from these requirements, the Company is required to present its Exploration and Environmental Work Programs to the concerned local government units (LGUs). It is mandated
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that a Company should conduct project presentations and have their support through a proof of consultations from at least 2 out of the 3 respective legislative bodies of the LGU (provincial, municipal and barangay levels). However, MRL takes the initiative and strives to advance its exploration activities with due recognition of all of the social licenses relevant to the LGUs.
If an Indigenous Cultural Community (ICC) or Indigenous Peoples (IPs) area will be affected by the future activities of the Company, consultation with the National Commission of Indigenous Peoples (NCIP) is also a prerequisite. These areas will then be evaluated to establish whether it is considered to be a Certificate of Ancestral Domain Claim/Title (CADC/T) area under Philippine law. If so, the Company is required to pay a 1% of revenue royalty to IPs. The consultation process includes on-going engagement with communities and individuals, signing of formal agreements with communities as appropriate, provision of timely information and time for decision-making according to local cultural practices through Free and Prior, Informed Consent (FPIC) from the identified ICCs/IPs. Notwithstanding, MRL has already volunteered to contribute the 1% revenue royalty to the IPs in the area while still in the exploration stage.
20.3.4.2 Land Ownership
The nickel laterite deposits are in areas classified as Alienable and Disposable. There are no dwellings in the said areas and private land properties. Portions, however, are covered by Community-Based Forestry Management Agreements (CBFMA) issued by the Department of Environment and Natural Resources (DENR) to People’s Organizations in Barangays Lawigan, Tinigbasan, Tagpangahoy and Binuanagan. Community Based Forest Management is a participatory development program of the Forest Management Bureau-DENR for forest protection and sustainable use involving local communities through POs. The MRL/Minimax MPSA Contract superseded these CBFMAs. However, one of the ECC requirements is for MRL to coordinate with the CBFMA holders and establish an agreement on the utilization and management of the CBFM areas within the MPSA Contract Area. The Community Environmental and Natural Resource Office (CENRO) in Cabadbaran is facilitating the finalisation of the agreements.
The proposed infrastructure sites are in private land properties covered by Tax Declaration and Land Titles. Land acquisition terms will have to be negotiated and the prices will depend on such factors as the rights the land owners have (tax declaration-covered or titled), the improvements on the said land properties, vegetation, land valuation, etc. MRL has undertaken demographic profiling and understands the consequences of possible future land acquisition on each individual, and plans to present this assessment and their management plan for land acquisition in a Land Acquisition and Compensation Plan.
20.3.5 Social acceptability
Social acceptability is an important factor in the decision whether to proceed with a project or not. Talking about social acceptability, the management needs to know not only how natural systems function and are sustained, but also how social systems function and are sustained in their relationships with natural systems. The support of the host community of a business or project is critical for continuous and undisrupted operations. Social acceptability is not limited to the tolerance of the community of the presence of the project operations, but deals more with the participation and involvement of the community in the project and the support or auxiliary services needed to operate the project, such as labour supply, food supply, and other necessary services.
Key social acceptability factors include:
The stand of LGUs on future developments (especially to mining)
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The three (3) municipalities have a common development potential for agriculture and fisheries (both inland and municipal waters) however, they feel that anchoring on agro- industrialisation or eco-tourism would bring about slow development which would not be able to drastically improve the lives of the constituents.
As for mining, all the LGUs have accepted that mining is an alternative development mode that is possible in their locality, especially with the presence of small-scale mining for several decades already. They look forward to having a large-scale mining operation in their locality with the expectation of experiencing more vibrant economic activity, increased local revenues, enhanced employment opportunities, and better quality of life for the constituents.
Is there any concern related to socio-economics that will make the mining activity difficult?
Several concerns that would possibly make mining difficult were mentioned in the discussions. Most of the worries and concerns mentioned by the FGD participants are within the control or decision of the management of the mining company to remedy, such as:
o Employment of local residents especially with the concern that only a few jobs may be available because of the use of machinery. o Information and education of the local community on the mining operations. o Negotiation with the directly affected stakeholders such as the landowners, small- scale miners, IP groups, among others. o Readiness of relocation sites for families who will be displaced by the mining operations. o Ensuring livelihood opportunities for the affected residents whose main livelihood will be displaced. o Delivery of social services and institutional support for community organizations and service providers.
Some of the issues, however, are beyond the control of the management of the mining company to address and will need the participation of local authorities and national government agencies. Some of these are:
o Peace and order problems brought about by the presence of armed groups in the surrounding areas. o Determination and settling of municipal and barangay boundaries in order to determine exactly the location of the company installations and operation areas. o Recent influx of small scale mining investors who are buying ore and hauling it to processing plants elsewhere. Clear policies on the handling of such cases should be in place. o Political intervention (protection) of other mining companies presently operating but not relating properly with the LGU, especially in terms of providing employment and paying the right taxes and fees. Are there certain situations that can make mining easier/more favourable?
Generally, the responses to this question focus on the implementation of responsible mining as well as community information and participation as the situation that will make mining easier and more favourable. The prevailing mindset is the need to know what to expect (e.g. benefits) from the mining operations.
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Any social issue in the area that needs to be resolved?
One possible social issue that needs to be resolved is the emergence of self-declared tribal leaders. There are reports of an instance where a group gathered IP members and then held a meeting to declare somebody not even an IP as a tribal leader. This may give rise to conflicting claims for the IP share later on considering that the area is not yet covered under a CADC or CADT.
Another social issue that needs to be resolved is the matter of small-scale mining being done be the residents themselves and those financed by outsiders. Some of these activities are within the mining claim of MRL and unless clear policies and agreements are made, this may lead to unwarranted claims for compensation later on, despite the fact that all this small-scale mining activity is considered illegal.
Data that should have been gathered to improve the report
With the findings on the inadequacy of the available secondary demographic and socio- economic data in the Municipal Ecological Profiles and Comprehensive Development Plans of the three target municipalities, it is recommended that these data should be gathered in more detail through primary data gathering using a stratified sampling household survey or a socio-economic census, in preparation for the conduct of future studies relating to the acquisition of permits and licenses for large scale mining operations.
Other social issues that should be addressed in relation to the proposed project (e.g. social risk associated with Residue Storage Facility).
None were surfaced during the FGD and KII conducted.
Social restrictions and site regulations where applicable.
There was no information or data on social restrictions and site regulations gathered during the field research. The three (3) LGUs are open to the entry of large-scale mining. In fact, the question most repeated was on when the operations will begin.
20.3.6 MRL community and social engagement
MRL has been actively engaged with local communities since early exploration work was conducted in 1997, in association with minor activities such as reconnaissance work or implementation of drilling activities carried out many years ago. In the early years, technical personnel served as community relations officers in parallel with their technical work. Through several years of immersion in the community, MRL has recognised that it can only be successful if it has the support of the locals, thus a Community Relations Division was formally created. Several activities were undertaken to gather information on the communities and to determine their main concerns. These include the identification of host communities, community immersion, networking, and extensive and effective Information, Communication and Education (ICE) campaigns. MRL also implements social development programs and exercises transparency to the people and other community groups and organisations. MRL’s community engagement is a progressive process with a well-defined strategy and approach along with the project development stages.
In consultation with the communities, MRL has launched and assisted in social development programs that focus on improving the economics, education, health and social well-being of its community partners within budget constraints and dictates. MRL has implemented the Community Technical Working Group (CTWG) system in collaboration with government agencies, local government units and non-government organisations, including representatives
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from business, religious institutions and People’s Organizations (POs). Nineteen CTWGs were established which comprise representatives at a barangay (village) level including: existing village organisations, religious groups, village council, youth groups, women’s groups, local NGOs, farmers, fisher folk, local government agencies and vulnerable people. Recently, these barangay level CTWGs were integrated into municipal level CTWGs. It is structured to represent all aspects of a village and usually has members ranging from 30 to 60 people. This multi-sector group, formed in the spirit of transparency and volunteerism, is primarily tasked to monitor the exploration activities of the Company in terms of their social and environmental impacts. Moreover, with its wide representation of the various sectors within a community, it has become an avenue by which issues and concerns of the community are raised, discussed and resolved. The CTWG provides valuable input into the communities and has acted as MRL’s partner in planning and implementing the company’s extensive community development programs.
Among the milestones accomplished in the area of social development is MRL’s partnership with the Department of Education (DepEd) in the implementation of the “Adopt-a-School” Program, which benefits five elementary schools on the Agata Project. Under this partnership, two school buildings were constructed, numerous schools repaired, and many education-related programs were launched. In areas where there are a number of students and where the DepEd cannot provide for the honorarium for volunteer teachers, MRL provides a minimal honorarium to volunteer teachers.
MRL also implements the Computer Literacy Program to accommodate Mindoro scholars, out- of-school youth, teachers and other locals. This is a program of which MRL is especially proud. Utilising the Company’s computer equipment and the educational skills of its staff, MRL is able, at low-cost, to introduce these skills to remote communities with a paucity of such high technical skills and assets. At present MRL has four mobile computer groups spread across four villages, catering to 80 students at a time at 2 to 3 month cycles. MRL has also supported its host communities and local government units with small infrastructure programs such as construction of roads, buildings, barangay and municipal centres, day care and health centres, water reticulation projects and school rooms. MRL has also provided assistance with many socio- cultural projects.
In addition to these community development programs, the project is envisioned to employ over 1000 people and create opportunities for suppliers and service providers which will have a significant socioeconomic impact on the communities in and around Agata.
20.3.7 Summary of possible issues and potential deal breakers
Table 232 depicts the conditions that may affect the project operation. Community concerns, physical and natural occurrences are summarized to show considerations on the possible deal breakers.
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Table 232 - Summary Of Possible Issues And Potential Deal Breakers
Socio-economic trends and Remarks issues
Non-Government Organizations The existence of local NGOs delivering various accusations and (NGOs) go up against mining anguish over mining operations are relatively the organizations pushing through either mine closure or enhancement/ development of the environmental measures of the company. Issues on the effect of mining to the diversity of Lake Mainit and its environs have captured the ears of the NGOs while mining activities are continuously done in the area. The perception of local residents can easily be formed if they personally feel the downbeat effects of mining and that their perception on other negative events in the area are caused by these operations. Pidjanga in particular has been very active in watching the actions of the mining companies. Their approach to local communities should be regarded as an opportunity to strengthen the capability of the company in implementing the best mechanism in protecting the environment putting into consideration the objective of responsible mining.
Market trends The dynamic market trend has a significant effect on the mining business as it dictates the on-going prices for products. The activities of mining are dictated by the market and financial trends. The operation will generally be based on the performance of the economy.
Existing Land Classification Although the area is not yet finally declared as an ancestral domain by the National Council for Indigenous People (NCIP), the application is in process and this should be considered by the company. Once declared within an ancestral claim, various permitting and dialogues will be required with the said government sector. Thus the sensivity of the indigenous people will be prioritized and shall be given appropriate benefits as mandated by the Philippine Law.
Geological risks The proposed project lies in a fault zone area, which is prone to geological hazards such as earthquake. In the process of planning and designing, the structures should be able to meet the applicable/standard structural capacity of a certain facility to avoid accidents in the future operations.
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Socio-economic trends and Remarks issues
Environmental conflicts/problems Incidence of flooding mainly affects some areas adjacent to the mining claim especially during heavy rains from November to February. This creates a high possibility of silt deposition, which will particularly spread along the stretch of Kalinawan River in Curva. The location of the proposed pumping station is seen to be very prone to inundation. If high and continuous silt deposition will occur in the smaller tributaries and farmlands, this will further affect the quality of water as well as the agricultural outputs. The presence of small-scale mining activities in the areas of Santiago and Bangonay may pose environmental concerns since their wastes from processing and ball milling are directly routed to Kalinawan River creating turbid water. This occurrence can always be attributed to larger mining concessions in the area. Kaingin activity is also evident in some areas within the MPSA. These slash and burn activity causes deforestation that eventually leads to serious soil erosion and compaction. Therefore, an immediate and comprehensive reforestation is needed associating the most suitable plant species.
Environmental Baseline Study for the Agata Project, 2011.
20.4 Permitting
20.4.1 Mining Acts and Regulations Philippine Mining Act of 1995 (RA 7942) o An Act instituting a new system of mineral resources exploration, development, utilization, and conservation. o DAO 1996-40 outlines the Implementing Rules and Regulations (IRR) for RA 7942. Numerous DAOs were promulgated afterwards by the DENR, which basically streamlined the processing of Exploration Permits and Mineral Production Sharing Agreements, revised applicable fees since enactment of the IRR, such as occupation fees, revised the issuance of the Ore Transport Permits, revised the issuance of the Small-Scale Mining Permits and enhanced the social and environmental components of the Mining Act, among others.
20.4.2 Environmental Acts and Regulations Environmental Compliance Certificate o A certificate issued by the DENR/Environmental Management Bureau (EMB) after a positive review of the ECC application. This certifies that based on the application of the proponent, the proposed project or undertaking will not cause a significant negative impact on the Philippine environment. The ECC contains specific measures and conditions that must be met by the project proponent before and during the operation of the project. In some cases, conditions are listed to be performed during the project’s abandonment phase to lessen identified potential environmental impacts. An ECC was granted for the proposed direct-shipping ore (DSO) mining operations for ANLP and ASLP on May 20, 2008, denominated as ECC 0710 0252140. The planned DSO mining operations must happen within five (5) years from the issuance of the ECC or else the same will expire and may be cancelled by the DENR/EMB.
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Pollution Control Law (1976) (Republic Act (RA) 3931) o Prohibits disposal into any of the water, air and/or land resources of the Philippines any organic or inorganic matter or any substance in gaseous or liquid form that shall cause pollution. This has been amended by the Clean Water and Clean Air acts. The Environment Management Bureau has authority to issue permits required to discharge any industrial wastes and other wastes. Water Code (1976) (PD 1067) o Control and management of use of water, including change in point or nature of diversion, amount of appropriation, period of use; lowering or raising the level of the water of a lake, river or marsh, or draining the same; transbasin diversion; and dumping of mine tailings or wastes into a river or a waterway. Clean Water Act (2003) (9275) o Control and management of water quality in all water bodies, primarily relating to the abatement and control of pollution from land based sources. Permits to discharge are regulated under DENR Administrative Order (DAO) 2004-25 and DAO 2003-39. Clean Air Act (1998) (RA 8749) o Control and management of mobile and stationary sources of air pollution. DAO 2004-26 requires companies to obtain a Permit to Operate for sources that emit various air pollutants. Ecological Solid Waste Management Act (2000) (RA 9003) o Control, transfer, transport, processing and disposal of solid waste in the country. Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990 (RA 6969) o Control and management of import, manufacture, process, distribution, use, transport, treatment, and disposal of toxic substances and hazardous and nuclear wastes in the country. Sanitation Code of the Philippines Solid Waste Management System
In addition, there are environmental and social responsibilities that must be met as provided for under the Mining Act 1995 (RA 7942) and DAO 1996-40. These are:
Environmental Work Program (EnWP) – socio-environmental programs are at least 10% of the estimated exploration cost Initial expenditures for environment-related infrastructures – at least 10% of the estimated project development cost Mine Rehabilitation Fund (MRF) Rehabilitation Cash Fund (RCF) – 10% of Environmental Protection and Enhancement Program (EPEP) cost or USD 120 000 (PhP 5 million), whichever is lower; to be used for the progressive rehabilitation measures Monitoring Trust Fund (MTF) - Replenishable amount of USD 3 600 (PhP 150 000); to be used by the Multi-partite Monitoring Team (MMT) Environmental Trust Fund (ETF) - Replenishable amount of at least USD 3 600 (PhP 150 000) to be used for compensation for damages outside of those caused by mine waste and tailings.
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Mine Waste and Tailings Reserve Fund (MWTRF) – USD 0.0012 (PhP 0.05) for every tonne of mine waste and USD 0.0024 (PhP 0.10) for every tonne of tailings; for compensation for damages as a result of mine waste and mill tailings. Polluter Pays Principle – USD 1.2/t (PhP 50/t) of materials disposed in unauthorised areas. Final Mine Rehabilitation/ Decommissioning Plan (FMRDP) - Cost variable but must include an environmental plan and a social plan plus the cost of a ten year maintenance and monitoring period.
Social Development Provisions include:
Just Compensation to Landowners - Variable; depending on status of land. With IFC as an important investor in MRL, IFC’s Performance Standard No. 5 (Land Acquisition and Involuntary Resettlement) will have to be applied involving resettlement issues. Social Development and Management Program (SDMP) - 1.5% of the Operating Cost; for the implementation of sustainable community development projects/programs for the host and neighbouring communities. Social Plan as part of FMR/DP - Variable; meant to minimise the mine’s negative impact and promote economic progress to the host and neighbouring communities and to mine employees and their dependents
20.4.3 Other Philippine Legislation
Apart from the MPSA, additional permits/clearances, and compliances are required under other legislation and regulations prior to the commencement of development and mining operations. These include (but are not limited to):
Indigenous People’s Rights Act (IPRA) of 1997 (RA 8371) o An Act recognizing, protecting and promoting the rights of Indigenous Cultural Communities (ICC)/Indigenous Peoples (IP) establishing mechanisms, appropriating funds therefor, and for other purposes. One main feature of this Law is the issuance of the Free, Prior and Informed Consent (FPIC) by the IPs for any project where there are ICCs. The National Commission on Indigenous Peoples (NCIP) is the government agency administering the IPRA. As far as the MPSA of MRL/Minimax is concerned, the FPIC process involving MRL and the Mamanwa tribes people of Coro, E. Morgado, and La Paz was supervised and handled directly by NCIP-Regional Office No. 13 resulting in the finalization of a Memorandum of Agreement (MOA) between MRL on behalf of Minimax and the said IPs on February 6, 2008. The MOA itself was a unilateral decision of MRL giving the Mamanwa tribes people 1% royalty from gross revenues upon commencement of mining operations, despite the fact that the said IPs have no documented ancestral domains claim or title over any area within the MRL/Minimax MPSA Contract Area. Special Land Use Permit o For temporary use of state-owned lands Foreshore Lease Agreement o It may also cover marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers for commercial, industrial or other productive purposes other than agriculture. Permit to Develop/Operate Private Port
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o This permit must be secured by port owners / port developers which intend to develop/expand/improve a foreshore or reclaimed area for the purpose of port. RA 8974 – An Act to facilitate the acquisition of right-of-way or site for National Government Infrastructure Projects – for resettlement of displaced families. Local Business Permits
21 Capital and Operating Costs
21.1 Scope of Estimate
The capital and operating cost estimates contains a number of elements with the responsibility for each element designated to different parties, as summarised in Table 233.
Table 233 – Estimate Contributors
PFS Element Responsible Party Company
Mining Mining consultant Crystal Sun Consulting
General Infrastructure General Infrastructure Consultant Ausenco Vector - Resindo
Process Plant, services, utilities Engineering Contractor Ausenco and site infrastructure
Ausenco Vector - Gaia Environmental Environmental Consultant South
The scope of the estimate covers mining, process plant, general infrastructure, EPCM services, equipment and materials supply, construction, installation, pre-commissioning and commissioning of the process plant facilities.
21.2 Accuracy of Estimate
The capital and operating cost estimates have been developed to an intended level of accuracy of ± 20 to 25%.
21.3 Summary of Capital Cost Estimate
The capital cost estimate summarised in Table 234 was estimated by ausenco and is expressed in US dollar (USD) values. The base date of the estimate is September 2011. Mining costs were estimated by Crystal Sun Consulting.
Table 234 - Capital Cost Estimate Summary
Area Capital Cost USD M
Mine 6.3
Process Plant 540
General Infrastructure 120
Indirect Costs 150
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Area Capital Cost USD M
Provisions 110
Owners Costs See Section 22 economic analysis
Total Project Costs excluding owner’s costs 920
Sustaining capital costs, not included in the above capital cost estimate, for mining and the residue storage facility are summarised in Table 235 and Table 236.
Table 235 – Summary of Sustaining Capital - Mining
Mining Unit Yr 1-5 Yr 6-10 Yr 11-15 Yr 16-20 TOTAL
Mining USD M 6.6 7.3 7.8 6.2 28
Bolobo startup USD M 8 8
Exclusions - contingency
Table 236– Summary of Sustaining Capital – Residue Storage Facility
RSF Unit Yr 3 Yr 12 Closure Total
Residue USD M 72 45 6 120 Storage Facility
Capital costs are presented by each major facility for the Project according to the Work Breakdown Structure (WBS) in Table 237.
Table 237– Capital Cost by Major Facility (level 2 WBS)
WBS Code Description Cost USD M
1000 MINING 6.3 1100 Mine Site Development 0.1 1200 Mine Equipment & Plant 4.7 1300 Mine Infrastructure 1.0 1400 Limestone Quarry 0.5 3000 PROCESS 540 3100 Process Plant 283.0 3300 Process Plant Major Services 151.0 3400 Process Plant Services & Utilities 7.8 3500 Power 69.2 3600 Process Plant Infrastructure 25.9 4000 GENERAL INFRASTRUCTURE 120 4100 Port 22.8 4200 Residue Storage Facility 48.0
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WBS Code Description Cost USD M
4300 Decant Return 0.9 4400 Other General Infrastructure 46.4 7000 INDIRECT COSTS 150 7200 Construction Camp 25.7 7500 First Fill / Spares 9.3 7600 Commissioning 1.8 7700 EPCM Costs 112.6 8000 OWNERS COSTS See Section 22 economic analysis 8100 Project Development See economic analysis 8200 Admin / Hr See economic analysis 8300 Third Party Consultants See economic analysis 8400 Road & Buildings Maintenance See economic analysis 9000 PROVISIONS 110 9100 Estimate Contingency 110 9200 Escalation See economic analysis 9300 Forex See economic analysis
TOTAL 920
21.3.1 Mining capital cost estimate
Refer to section 24.2 for the mining capital cost estimate detail.
21.3.2 Exclusions
The following items were excluded from the capital cost estimate but are included in the economic analysis:
Resettlement / relocation costs Refurbishing of temporary facilities upon completion of construction (if required) Demurrage Working Capital Ongoing exploration costs Taxes & Duties Corporate costs Plant production operating costs Operation and maintenance manuals other than those supplied by equipment vendors CCTV for process plant
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No allowance for any other management, other than the EPCM contractor Community relations and services Force majeure issues Future scope changes Special incentives (schedule, safety or others) No allowance has been made for loss of productivity and/or disruption due to religious, social and/or cultural activities. Third party consultants other than those listed in Section 8 Foreign currency fluctuations and escalation All owner-payable taxes except as noted Any operational insurance such as business interruption insurance and machinery breakdown etc. License and royalty fees Project interest Sustaining or deferred capital costs Training of operations people Plant closure and rehabilitation costs Mine closure and rehabilitation cost Project contingency (risk) Owners costs Operating cost year 0 within the capital cost estimate
21.3.3 Operating cost estimate
A year-by-year operating cost estimate has been developed for the mining, limestone quarrying and crushing, process plant, and port and infrastructure facilities of the Agata Nickel Laterite Project. The operating cost estimates for each major project division were developed at a prefeasibility study level.
The annualised operating costs for the project presented in Table 238 were estimated by Ausenco and are expressed in US dollar (USD) values. The base date of the estimate is September 2011. Mining costs were estimated by Crystal Sun Consulting.
Table 238 - Operating Cost Summary
Year 1 Year 2 Year 3+ Area USD M USD/lb Ni USD M USD/lb Ni USD M USD/lb Ni
Mining 9.7 0.41 11.4 0.32 12.1 0.31
Limestone 0.4 0.02 0.6 0.02 0.65 0.02
Process Plant 79 3.3 97 2.8 100 2.6
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Area Year 1 Year 2 Year 3+
Port and 2.1 0.09 2.1 0.06 2.1 0.05 Infrastructure
Project Operating 91 3.9 110 3.2 120 3.0 Cost
Mining Contingency, 1.5 0.06 1.7 0.05 1.8 0.05 15%
Limestone 0.06 0.00 0.09 0.00 0.10 0.00 Contingency, 15%
Process and Port 8.1 0.34 10.0 0.28 10.6 0.27 Contingency, 10%
Community Support 1.4 0.06 1.7 0.05 1.8 0.05 (SDMP/IEC)
Total Project 100 4.3 125 3.6 130 3.4 Operating Cost
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The average of the annual operating costs from Year 3 onwards for mining and limestone were used for the Year 3+ estimate.
Figure 160 shows the cost distribution for the resulting Project Operating Cost (excluding Community Support and Contingency).
2% 7% 10% 2% MINING 0%
11% LIMESTONE 12% PROCESS PLANT LABOUR
PROCESS REAGENTS, CONSUMABLES & FUEL PROCESS PLANT MAINTENANCE GENERAL & ADMIN
CONTRACTS
PORT & INFRASTRUCTURE
56%
Figure 160 - Project Operating Cost Distribution
Note that the cost for process reagents, consumables and fuel is the major contributor to the project operating cost, comprising 56%. The cost for sulphur accounts for 43% of this cost.
21.3.4 Mining operating cost estimate
Refer to section 24.2 for the mining operatingl cost estimate detail.
21.3.5 Exclusions
The following costs have been excluded from these estimates but included in the economic analysis:
All corporate-related overheads Depreciation Corporate taxes Inflation Import duty and value-added tax Royalties
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Interest and finance charges
22 Economic Analysis
22.1 Introduction
A financial model of the preferred development option has been prepared and the results are presented on an after tax and before finance basis in constant January 2012 US dollars. The model has been prepared on a stand-alone basis and contains no head-office or external sources of revenue or costs. Revenues and costs are estimated in US dollars converted from local currency where applicable at the rate of 42 Philippine Peso to 1 USD. The final cashflow, NPV discounted at 8% and IRR are presented in Section 22.5.
22.2 Economic Model Input Parameters
The financial model is based on the preferred development case put forward by Mindoro as follows:
An HPAL, AL and Saprolite Neutralisation hydrometallurgical plant, processing 1.8 Mtpa of limonite and saprolite mineralisation to produce a nominal 17 000 t of nickel in mixed hydroxide product (MHP).
A pre-production and construction period of 36 months to allow sufficient time for permitting, detailed engineering and finance/due diligence.
A mining schedule, estimated on a quarterly basis which optimises the use of current resource. Plant feed not processed is stockpiled.
Limonite and saprolite are blended to meet the nickel and magnesium specifications required by the process plant.
An on-site sulphuric acid plant will produce all the acid required. Surplus heat will be used to drive steam turbines. Surplus power generated will be sold into the local grid.
No DSO or thermally upgraded limonite product is produced or sold.
The economic parameters applied to the model are based on the following:
US dollar to Philippine Peso exchange rate of 42 PhP based on the prevailing rate. The long-term foreign exchange rate forecasts are highly variable as a consequence of uncertainties in the impact of the European Union Debt crisis, the shifting of economic strength towards China and other Emerging Countries.
A long-term nickel price of US$10 per pound, being the consensus mid price published in the Metal Bulletin. A cobalt price of 1.66 times the Ni price which reflects the historic price relationship between the two commodities.
Sulphur price of $95/t landed, exported from Vancouver, Canada, based on the upper end of long term (2015+) price forecasts provided by Fertecon Research Centre Ltd.
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Payability of 77% LME for nickel in mixed hydroxide product (MHP), and 50% for cobalt, based on the history of negotiated contracts.
A discount rate of 8% has been applied to the after-tax cashflows on the basis of the 3.8% Philippines Central Bank discount rate plus a 4.2% risk premium to reflect the pre- feasibility study level of confidence in cashflows and the positive outlook for long term mineral development in the Surigao region and the Philippines generally.
The taxation and royalty assumptions incorporated into the financial model are as follows:
The Agata project is assumed to be a regional project of significance in the Philippines and the 6 year tax-holiday for projects of this type has been applied.
Carried forward tax losses of $15M have been applied.
The Philippines corporate tax rate of 30%.
No accelerated depreciation applied – all capital depreciated over the life of the project.
A 2% Local Government royalty on gross sales
A 1% Indigenous persons royalty on gross sales
Other local government and environmental and rehabilitation levies applied in accordance with the Philippines Mining regulations
22.3 Capital Costs
Installed capital cost estimates are based on the pre-feasibility study figures provided by Ausenco and Ausenco Vector and documented in this report. The life-of-mine capital costs used in the economic analysis are summarised in Table 239 below.
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Table 239 - Capital Cost Estimates
Capital Costs Description USD M
Mining 6.3
Ore Preparation & Leaching 120
Products Section & Neutralisation 100
Plant Development 57
Acid Plant 140
Services and Utilities 24
Power Station, Auxiliary & Distr 70
Process Plant Infrastructure 26
General Infrastructure 120
Total Direct Cost 660
EPCM 120
Other Construction Services 26
Owners Cost 22
Total Indirect Cost 170
Direct + Indirect Cost 830
Contingency 110
Total Install Capital Cost 940
Sustaining Capital Tailings Dam uplifts 120 Mine Sustaining Capital 28 BoloBolo start-up 8.0
Total Life-of-Mine Capital 1,100
Direct development costs include all mining fleet, process plant packages, acid plant, power station, residue storage and general site infrastructure. Indirect development costs include EPCM and construction services, temporary construction facilities and commissioning costs. A further 20% contingency is applied to all the installed capital costs. The total installed capital cost is USD940 M.
Sustaining capital cost of USD120 M has been included for additional tailings dam lifts following 4 and 10 years of production, as estimated by Ausenco Vector.
Value Added Tax (VAT) is assumed to be refunded in the period in which it is incurred.
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The sensitivity of the project to Capital Costs is discussed in Section 22.6.
22.4 Operating Costs
Key assumptions which drive the operating costs are summarised in Table 240.
Table 240 - Operating Cost Assumptions
Item Unit Value
Process Throughput DMT per annum 1.8 M
Nickel Recovery % 88.4
No. of Staff No. 618
Average Salary USD pa 21 340
Acid Consumption kg/t ore 510
Sulphur Price USD/t delivered 95
Fuel Oil USD/l 0.70
Electricity Price USD/MWh 143
Maintenance Materials USD pa 14.0 M
General & Admin Cost (excl. USD pa 8.9 M Labour)
Owner mining costs have been estimated from similar nickel laterite mining operations in the Philippines. The mining cost is inclusive of labour cost, waste mining, stockpile rehandle, and haulage costs.
Plant consumables costs have been determined by Ausenco on the basis of unit consumption rates as determined in the process mass and energy balance and reagent/consumable prices obtained from suppliers as at September 2011.
Fixed, general and administration costs have been estimated on the basis of comparable Philippines operations and other nickel laterite operations.
The changing operating cost over the life of mine expressed in USD per tonne of nickel in MHP produced is shown in Figure 161. The gradual rise in operating cost per tonne of nickel produced is a function of the falling grade and in the final phase when atmospheric leaching of remaining stocks of high magnesium saprolite takes place.
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USD / t Ni Operating Cost 14,000
12,000
10,000
8,000 G&A 6,000 Indirects Acid Labour 4,000 Mining Processing 2,000 Acid ‐ 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
Figure 161- Operating Cost by Cost Centre
22.5 Life of Mine Project Financials
The summary cashflows after tax and before financing for the Agata Project are summarised in Table 241.
Table 241- Summary Cash Flow
LOM Average Annual
USD M USD M
Revenue 5 535 310 Capital Expenditure ( 1 101 ) N/A Operating Expenditure ( 2 225 ) ( 116 ) Tax Paid ( 456 ) ( 27 ) Free Cashflow 1 752 154
NPV (10%) 380 IRR 14% Payback 5.5 years
A chart illustrating the cumulative cashflow of the project is shown in Figure 162.
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2000 Cumulative Cashflow 1500 Millions
1000
500
0
‐500
‐1000
‐1500 Total CapEx ‐ Excl VAT
Figure 162- Cumulative Cashflow
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Table 242- Project Production & Cash Flow
Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 LOM
PHYSICALS
Laterite Mined (000) - - 152 1,289 1,642 1,750 1,886 1,789 1,737 2,014 2,018 1,897 2,187 1,850 1,842 1,905 1,946 1,780 34,374 DMT
Limonite - - - 402 603 670 670 670 670 670 670 670 670 670 670 670 670 670 11,968 Feed
Saprolite - - - 670 1,004 1,116 1,116 1,116 1,116 1,116 1,116 1,116 1,116 1,116 1,116 1,116 1,116 1,116 21,756 Feed
MHP - - - 29,592 41,739 44,891 45,071 47,015 47,400 47,560 46,447 45,605 45,865 44,212 42,552 43,013 41,614 38,199 807,421 Production
Contained Ni - - - 11,289 15,924 17,126 17,195 17,936 18,083 18,144 17,720 17,398 7,497 16,867 16,234 16,409 5,876 14,573 308,031
CASHFLOW
Cash - - - 202 285 308 308 322 325 326 317 312 315 303 292 297 288 264 5 535 Receipts
Capital - 424 518 2 1 26 25 28 2 2 0 1 2 3 26 25 8 2 1 101 Expenditure
Operating 0 0 0 88 109 116 116 116 116 116 117 116 117 116 115 116 115 110 2 225 Expenditure
Tax Paid ------48 46 44 44 41 31 33 35 31 456
Total Free - - - 0 112 175 167 167 178 207 160 155 151 151 144 120 124 129 120 1 752 Cash Flow 424 518
NPV 383
IRR 14%
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22.6 Sensitivity Analysis
Sensitivity analysis on the financial model shows that the project is robust to changes in modelling assumptions and requires adverse changes in excess of 20% to make the project marginal on an NPV basis. The sensitivity study has identified that the project is most sensitive to factors which impact revenue (nickel price, feed grade and recovery) followed by capital costs and operating cost. The relative sensitivity of the project to revenue, capital and operating cost estimates is illustrated in Figure 163 and Table 243 below.
900
800 Project Sensitivity
700
600
500
400
300
200
100
0 80% 90% 100% 110% 120%
Capex Revenue Operating Cost Acid Cost
Figure 163– Project Sensitivity
Table 243 - Project Sensitivity To Key Operating Costs
USD Cash Flow (USD Million)
Nickel Price per lb 8 9 10 11 12
35 59 250 442 633 825
65 1 192 384 575 767 Sulphur Price 95 (57) 134 326 517 708
195 (251) (60) 132 323 515
4 (24) 168 359 550 742 Power Price 6 1 192 384 575 767 PhP/kw 8 25 217 408 600 791
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23 Adjacent Properties (MRL)
The Surigao peninsula in northeastern Mindanao, where the Agata project is located, is a significant mining district of the Philippines. There are four commercially significant nickel laterite resources, including Taganito, Cagdianao, Hinatuan and Nonoc Island. There are also other known but undeveloped nickel laterite resources in the area. Nickel laterite has been mapped beyond the immediate boundaries of the MRL Tenements. These occurrences may be of future interest to MRL but are not contemplated or provided for in the current PEA. In addition both MRL and other companies have interests in epithermal gold and porphyry copper- gold projects in the area.
24 Other Relevant Data and Information
24.1 Mine Operating Costs
Mine operating costs are expressed in US dollars.
24.1.1 Introduction
A Mine Operating cost model was developed using information from equipment suppliers and similar sized operating mines in South East Asia.
24.1.2 Operating hours
The mine operation has been scheduled to operate for 365 days per annum, with allowance for stoppages during moderate-high rainfall conditions. Mine production has been scheduled for 320 days per annum.
A three panel roster system has been assumed with mine personnel working three 8 hour shifts per day.
24.1.3 Equipment productivity
Equipment productivity has been based on load/haul simulations, assuming equipment performance parameters from equipment suppliers and material properties of the deposit.
The weighted average dry bulk density and weight average moisture content from resource calculations are 1.37 tonnes/m3 and 26% respectively. A material swell factor of 30% has been assumed.
The primary load/haul fleet consists of a Volvo EC460 excavator loading Volvo A35 articulated trucks which will be predominantly used in the pit. The secondary load/haul fleet consists of a Volvo L150 Front End Loader loading Volvo FMX on-highway trucks and will be predominantly used for Stockpile rehandle.
A second (multi function) Volvo EC460 excavator unit has been included in the fleet to be used in the limestone quarry, and to cover a 10% shortfall in excavator loading capacity from Years 7-13. This unit will also be used for ancillary tasks and function as backup unit for both primary and secondary loading units.
Loading Unit productivity assumptions are shown in Table 244.
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Haul profiles were developed for the 63 mining panels. The profiles were based on the temporary in-pit road network (shown in Figure 46) and the distance to the centroid of each mining panel. The average gradient for the temporary road network was 5% and the rolling resistance was assumed at 3%. Load/haul simulations were carried out on 20 panels to estimate average haul and return speeds, and interpolated for the remaining mining panels.
Hauler productivity assumptions are shown in Table 245.
Table 244 - Loading Unit Productivity
Load Unit Excavator Loader
Make/Model Volvo EC460 Volvo L150
Bucket Capacity lcm 2.58 4.00
Bucket Fill Factor # 1.00 0.95
Bucket Load per Pass lcm 2.58 3.80
Swell Factor % 30% 30%
Bucket Load per Pass bcm 1.98 2.92
Density (In Situ) wmt/m3 1.85 1.85
Bucket Load per Pass wmt 3.7 5.4
Hauler Unit Articulated 6x4
Hauler Make/Model Volvo A35E Volvo FMX
Rated Hauler Capacity (by weight) wmt 33.5 24.0
Rated Hauler Capacity (by volume) lcm 20.5 14.9
Number of Passes # 8.00 4.00
Hauler Payload wmt 29.4 21.6
Hauler Payload bcm 15.9 11.7
Spot Time sec 42.0 42.0
Load Unit First Pass sec 6.0 10.0
Load Unit Cycle sec 21.0 33.0
Total Loading Time min 3.25 2.52
Production per 60 min hour wmt/hr 543 516
Effectiveness min/hr 55 55
Loader Productivity dmt/op hr 307 303
Hauler productivity options are shown in Table 245.
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Table 245 - Hauler Productivity
Pit to Stockpile/Dump A35E (ADT) Unit Minimum Maximum Average
Haul distance m 1,100 3,100 1,800
Wtd Avg Speed Waste (Loaded) kph 27 34 30
Wtd Avg Speed Waste (Empty) kph 36 43 39
Total Cycle Time min 10.0 15.8 12.5
Production per 60 min hr dmt/hr 83 131 106
Effectiveness min/hr 55 55 55
Hauler Productivity dmt/op hr 63 100 81
Pit to Stockpile/Dump FMX (OHT) Unit Minimum Maximum Average
Haul distance m 7,700 7,700 7,700
Wtd Avg Speed Waste (Loaded) kph 35 35 35
Wtd Avg Speed Waste (Empty) kph 45 45 45
Total Cycle Time min 28.8 28.8 28.8
Production per 60 min hr dmt/hr 33 33 33
Effectiveness min/hr 55 55 55
Hauler Productivity dmt/op hr 24 24 24
24.1.4 Site Preparation
Allowance has been made for ancillary equipment to establish drainage controls, strip topsoil, establish temporary access roads and bench face development. Initially, topsoil will be stockpiled adjacent to the In-Pit Ore Stockpile.
Costs associated with these activities have been allocated to the Environmental and Rehabilitation item in the Mining Costs summary in
Table 246.
24.1.5 Grade Control
Grade Control drilling, as outlined in Section 4.6.3, will be carried by a drilling contractor. Limonite drilling metreage estimates have been based on a 12.5 m x 12.5 m pattern. Where limonite thickness exceeds 3 m, the area will be mined to a nominal bench elevation. Saprolite will be grade controlled selectively on a 6.25 m x 6.25 m pattern for definition of the final cut to the base of the designed pit. Limonite & saprolite drilling metreage estimates include 10% over- drill.
Grade control drilling costs have been estimated based on USD 17.50/m, and assay costs are based on USD 8.00/sample, with allowance to duplicates every 10 samples. These costs include consumables and a 15% contingency.
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Figure 164 - Grade Control Drilling
24.1.6 Mining Operations
Equipment operating costs have been developed using informmation from several sources, including equipment suppliers and contractor estimates from similar sized operations in South East Asia.
A hybrid Full Maintenance Service Contract agreement for the maintenance of plant and equipment has been assumed, with the costs exclusive of Supervision and Labour.
Equipment hourly operating costs (exclusive of Supervision & Labour costs) for major equipment are shown in
Table 246.
Diesel fuel cost has been estimated at USD 1.00/litre. Diesel consumption is shown in Figure 165.
Figure 165 - Diesel Consumption
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Table 246 - Equipment Costs
Make/Model Equipment USD/hr
Volvo EC460 Excavator 73
Volvo L150F Front End Loader 65
Volvo A35E Articulated Truck 51
Volvo FMX 6X4R 6X4 Truck 35
Volvo EC460 (#2) Excavator 76
Volvo FMX 6X4R Water Truck 35
Cat D7 equiv Dozer 60
Volvo G960 Grader 46
Volvo SD105DX Roller 15
Te Handler 27
Workshop Crane 27
Service Truck 33
24.1.7 Mine administration and technical services overheads
Mine Administration and overhead cost assumptions (exclusive of salaries and on-costs) are shown in Table 247. These are inclusive of Communication, Travel and Accommodation, Safety Equipment and Supplies, Consumables, Contractors, Equipment Rental, and Repair and Maintenance expenses.
Table 247 - Mine Administration and Technical Services Costs
Mine Admin & Technical Services USD pa
Mine Administration 131 500
Mining Engineering 54 300
Geology 68 900
Survey 31 300
Mine Services 44 900
Maintenance Technical Services 284 900
TOTAL 615 700
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24.1.8 Environment and rehabilitation
Allowance has been made for ancillary equipment to maintain drainage controls and carry out work as described in Section 4.6.11.
The total area disturbed by mining operation excavations at Agata North is estimated at 195 hectares, which will be progressively rehabilitated with transitional sub-grade saprolite material and topsoil prior to seeding and revegetation. Approximately 588,000 m3 of this material has been allocated for rehabilitation purposes at Agata North. The same methodology will be employed at Agata South and Bolobolo, where the area disturbed by mining operations has been estimated at 58 hectares and 62 hectares, respectively.
Costs associated with these activities have been allocated to the Environmental and Rehabilitation item in the Mining Costs summary in Table 249.
24.1.9 Manning
Staff and labour costs are based on operations that are currently in operation or planned in the Philippines in 2011. Staff and Labour cost estimates are inclusive of on-costs.
The mine department will be manned by 100% Philippine National personnel. All labour will be sourced from the local region. Most staff will work a rotational roster system, whilst labour personnel will work an 8 hour day for 6 days per week.
Manning levels in peak production periods are shown in Table 248. Manning levels are inclusive of labour requirements for operating the limestone quarry.
Table 248 - Manning Levels in Peak Production Periods
Day Aft Night Total
Admin & Mine Tech Services
Mine Manager M 1 1
Senior Mine Foreman SS 1 1
Mine Foreman L 1 1 1 3
Roads Foreman L 1 1
Draftsman JS 1 1
Clerk L 1 1 2
Senior Mine Geologist SS 1 1
Mine Geologist JS 1 1 1 3
Grade Control Technician L 1 1 1 3
Senior Mining Engineer SS 1 1
Mining Engineer JS 1 1 2
Senior Surveyor SS 1 1
Surveyor JS 1 1 2
Survey Assistant L 1 1 2
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HSE Officer SS 1 1
First Aid Attendant / Janitor L 1/1 1/1 1/1 3/3
Maintenance Technical Services
Mine Maintenance Superintendent M 1 1
Senior Mine Maintenance Foreman SS 1 1 2
Maintenance Foreman JS 1 1 1 3
Supply Officer SS 1 1
Clerk / Storeman L 1/1 1/1 0/1 2/3
Total 23 13 7 43
Mine Operations
Mining
Excavator Operator L 2 2 1 5
Loader Operator L 1 1 1 3
Dozer Operator L 2 2 1 5
Grader Operator L 2 2 1 5
Haul Truck Driver L 23 23 23 69
Water Truck Driver L 1 1 2
Roads & Services Crew L 2 2
Maintenance
Fitter L 12 12 11 35
Welder L 6 6 5 17
Trades Assistant L 6 6 5 17
Serviceman L 2 2 2 6
Crane Operator L 1 1 2
Service Bay L 1 1 1 3
Labourer L 2 2 2 6
Total 63 61 53 177
GRAND TOTAL 86 74 60 220
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24.1.10 Operating cost summary
A summary of mine operating costs is shown in Table 249. The average unit cost of mining is USD 6.93/dmt ore mined.
Table 249 - Mine Operating Costs
Mine Admin Maint Grade Mine Ops Stockpile Enviro Tech Service Tech Control Operations Rehandle Rehab Fuel Lube Labour TOTAL Year M USD M USD M USD M USD M USD M USD M USD M USD M USD
0 0.23 0.28 0.06 0.27 0.28 0.08 0.80 0.18 2.19
1 1.09 1.49 0.52 0.84 0.93 0.26 2.60 1.98 9.71
2 1.19 1.57 0.73 0.96 1.17 0.32 3.20 2.24 11.39
3 1.23 1.60 0.63 0.88 1.28 0.32 3.26 2.32 11.52
4 1.23 1.60 0.68 0.93 1.29 0.33 3.34 2.41 11.81
5 1.23 1.60 0.63 0.94 1.29 0.33 3.37 2.40 11.79
6 1.23 1.60 0.60 0.93 1.28 0.33 3.33 2.40 11.71
7 1.23 1.60 0.70 0.99 1.27 0.34 3.41 2.48 12.00
8 1.23 1.60 0.69 1.01 1.27 0.34 3.45 2.47 12.07
9 1.23 1.60 0.61 0.98 1.28 0.34 3.42 2.47 11.93
10 1.23 1.60 0.77 1.13 1.25 0.36 3.61 2.73 12.68
11 1.23 1.60 0.65 1.04 1.26 0.35 3.49 2.47 12.09
12 1.23 1.60 0.61 1.06 1.26 0.35 3.52 2.47 12.09
13 1.23 1.60 0.65 1.02 1.26 0.34 3.45 2.47 12.03
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Mine Admin Maint Grade Mine Ops Stockpile Enviro Tech Service Tech Control Operations Rehandle Rehab Fuel Lube Labour TOTAL Year M USD M USD M USD M USD M USD M USD M USD M USD M USD
14 1.23 1.60 0.68 1.22 1.34 0.38 3.86 2.57 12.89
15 0.78 0.94 0.61 1.10 0.88 0.30 2.90 1.95 9.45
16 0.42 0.42 0.67 1.15 0.87 0.30 2.98 1.96 8.77
17 0.33 0.29 0.69 1.18 0.87 0.31 3.03 1.96 8.65
18 0.33 0.29 0.69 1.19 0.62 0.27 2.61 1.67 7.67
19 0.17 0.14 0.23 0.62 0.52 0.17 1.59 0.54 3.99
20 0.11 0.09 - - 0.17 0.03 0.25 - 0.65
TOTAL 19.36 24.73 12.11 19.43 21.64 6.16 61.48 42.14 207.07
Mine Admin Maint Grade Mine Ops Stockpile Enviro Fuel Lube Labour TOTAL Unit Rates Tech Service Tech Control Operations Rehandle Rehab
USD/dmt 0.56 0.72 0.35 0.57 0.63 0.18 1.79 1.23 6.02
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Table 250- Mine Unit Costs
24.2 Mine Capital Costs
Mine capital costs are expressed in 2011 USD.
24.2.1 Infrastructure Capital
Mine Infrastructure capital costs are shown in Table 251.
The Mine Maintenance Workshop is the most significant item. This facility contains three equipment maintenance service bays, and additionall bays for bulk lube storage, tyre changing, welding and light vehicles. Additional facilities include a parts warehouse and store, an 80kL fuel tank, a 20kL water tank, a hydrocarbon unit, wash pad and a sedimentation trap.
Concrete cost for constructioon has been assumed at USD 250/m3.
Mine Infrastructure capital costs are incurred from the 4th quarterr of Year 0.
Table 251 - Mine Infrastructure Capital
Mine Infrastructure Capital 0 1-5 6-10 11-15 16-20 TOTAL Yeaar
Starter Pit Roads Stockpile Dev 0.10 - - 0.10 0.17 0.37
Sediment Ponds 0.07 - - 0.07 - 0.14
First Fill 0.07 - - - - 0.07
Administration Building 0.17 0.04 0.04 0.04 0.04 0.35
Administration Services 0.06 0.03 0.04 0.04 0.03 0.20
Mine Technical Services 0.05 0.03 0.05 0.06 0.04 0.24
Mine Maint Workshop Fuel Fac 0.57 0.19 0.22 0.22 0.19 1.40
Maintenance Tech Services 0.04 0.03 0.04 0.04 0.03 0.20
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Mine Infrastructure Capital 0 1-5 6-10 11-15 16-20 TOTAL Year
TOTAL M USD 1.14 0.33 0.41 0.59 0.51 2.98
24.2.2 Mining Fleet and Equipment Capital
Mining equipment capital costs are shown in Table 252. Most of the equipment costs have been provided by local equipment dealers and available information from within the Philippines.
Volvo equipment has a proven track record in South East Asia and is robust enough given that the operating ground conditions at the project are soft-medium.
Discussions have been held with local businesses that are capable of supplying Full Maintenance Contract capability to provide servicing and support for the fleet.
Mobilisation costs are based on estimated sea freight costs from Manila which is approximately 3.4% of fleet and equipment capital costs.
Major fleet items will be replaced every 5-6 years based on anticipated operating life.
Table 252 - Mining Fleet, Equipment Capital and Mobilisation
Unit Total Yr Yr Yr Yr Yr Total Mining Fleet & M M 0 1-5 6-10 11-15 16-20 # Equipment USD USD
Volvo EC460 EXC 0.25 1 1 1 1 1 5 1.25
Volvo L150F FEL 0.20 - 1 1 1 1 4 0.81
Volvo A35E ADT Tr 0.39 4 5 3 6 6 24 9.36
Volvo FMX 6X4R O/H Tr 0.11 5 15 16 16 8 60 6.60
Volvo EC460 EXC 0.25 1 1 1 1 - 4 1.00
Volvo FMX 6X4R O/H Tr 0.11 1 1 1 1 - 4 0.44
Cat D7 equiv Dozer 0.29 1 1 2 2 2 8 2.30
Volvo G960 Grader 0.25 1 1 2 2 2 8 1.96
Volvo SD105DX Roller 0.08 1 - 1 - - 2 0.16
Lighting Plant 0.02 2 4 4 4 2 16 0.25
Land Cruiser 0.07 1 1 2 2 1 7 0.47
Tyre Handler 0.20 1 - - - - 1 0.20
Workshop Crane 0.19 1 - - - - 1 0.19
Service Truck 0.26 1 1 2 1 1 6 1.57
Toyota Hilux 0.03 6 20 26 13 13 78 2.26
Bus 0.07 1 2 2 2 1 8 0.56
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Iveco Manhaul 0.13 1 - 1 - - 2 0.26
30
Total Equipment Year 0 1-5 6-10 11-15 16-20 M Mobilisation USD
Mobilisation cost 0.15 0.21 0.23 0.24 0.19 1.01
24.2.3 Capital Cost Summary
A summary of mine capital costs are shown in Table 253.
Table 253 - Mine Capital Cost Summary
Mining Capital Year 0 1-5 6-9 10-15 16-20 TOTAL
Mine Infrastructure Capital 1.14 0.33 0.41 0.59 0.51 3.0
Fleet, Equipment and Vehicles 4.46 6.05 6.63 6.95 5.54 30
Mobilisation 0.15 0.21 0.23 0.24 0.19 1.0
GRAND TOTAL M USD 5.8 6.6 7.3 7.8 6.2 34
25 Interpretations and Conclusions
25.1 Geological Setting and Mineralisation
The weathering of significant outcropping Ultramafic units within the Western Range of the Surigao Mineral District has led to the formation of a widespread and significant lateritic Ni/Co resources. Mineralisation occurs within both the ferruginous upper zone, which is predominantly limonite, and the underlying less altered saprolite zone, which contains predominantly serpentinites and primary clays of the smectite series (stevensite / saponite). Ni enrichment has occurred due to the loss of Si and Mg from the profile, concentrating minor elements from the primary ultramafic (Ni, Co, Fe), to economic levels for exploitation.
This lateritic Ni geological setting is common throughout the world, with the only difference being the rate of weathering, the climate during the weathering period, and the depth of weathering. The Agata North and satellite deposits have formed recently and have many similarities to deposits located within Surigao, Mindanao, Philippines, and globally (Cuba, New Caledonia etc) – and the mining and exploitation of these deposits is well documented and well known.
It can be concluded that the Agata North and satellite lateritic Ni deposits are reliably mineralised based on the global understanding of these deposits in both their formation and their residual nature. However, the rate of erosion and the fickle nature of the mineralisation in parts ensures that a systematic approach is required in defining the mineralisation and this has been carried out by MRL at every step of the exploration process.
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25.2 Drilling
MRL has completed a series of significant drill programs in the definition of the Agata North lateritic Ni deposit. All drilling to date has been completed by the use of small mobile open hole NQ coring rigs, which are highly mobile in difficult to access terrain. Recovery from these drill rigs is high, with losses generally occurring where there are changes in the hardness of the drilled material, causing material to be disrupted at the bit face. The major ore zone is generally a softer material and losses within the ore zones have been minimal at all stages of the drilling programs. A variety of contractors have been used over time, with the drilling rate being the only variation with regards to their performance and sampling rate.
As the drilling technique has provided MRL with core from which to sample and log, the level of detail has been extremely high and this has provided the resource with very accurate boundary definitions and sampling runs specific to geology and lithology. Issues such as boulders within the saprolite, extensive nature of transition zones, and the relative hardness of various ferruginous layers have been able to documented and reviewed giving MRL a significant advantage for modelling and grade resource estimation.
The drill spacings have been tested geostatistically and shown to meet the standards of both indicated and measured for most of the Agata North deposit. A geostatistical drilled grid of 25m centres within the Agata North deposit has provided a significant amount of detail within the short range data and provided confidence in the drill spacings being applied.
25.3 Sample Preparation, Analyses and Security
A complete and fully developed series of tests have confirmed the validity and the reliability of the sample preparation, chemical analyses, and security of the process. The checking is comprehensive and includes confirmation of the sample prep via analyses of coarse sizing fractions, and repeats of primary pulps; and confirmation of the analyses through the use of standards, internal repeats and the use of an independent laboratory.
The security of process is provided through independent sample collation by the author and the previous report author, with these results matching the primary result. Also physical checks of the core on site has taken place with logging checked against core as well as referencing grades to the core to see if any inconsistencies have occurred. There has been no indication of any core manipulation or grade inconsistencies at any point of the resource reviews.
25.4 Data Verification
All the data has been verified by the author through physical checks and reviews, geological checks and reviews, geochemical checks and reviews, and survey checks and reviews. All data used in the process of resource estimation is appropriate for the estimate and provides adequate support for all subsequent resource estimations.
Bulk density data verification has been difficult due to ground conditions and the variable hardness of the material making many of the simple techniques effectively useless. The primary data collected from pits and test sites, as well as the knowledge gained from lateritic Ni mines in the region indicates that the values being applied are applicable and provide a close estimate to actual tonnages.
25.5 Metallurgy
The metallurgical testwork performed to date has demonstrated exceptional leaching response for the main ore types, superior to that of most nickel laterites, as well as typical downstream recoveries and mixed hydroxide product quality.
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26 Recommendations
26.1 Geological Setting and Mineralisation
There are no further recommendations to be made with regards to the geological setting and mineralisation. The resource region, geology, and type of mineralisation is well understood and requires no further work within the resource area.
26.2 Drilling
The drilling technique and drill spacing is entirely appropriate for the collation of geological data and geochemical data. The use of open hole NQ coring rigs has issues associated with core preservation and recovery, but MRL has achieved extremely high recoveries (>97%) and a high level of competency when preserving and logging the core.
There is no recommendation to change or alter the drilling technique currently used by MRL within their lateritic deposits at Agata North and satellite deposits. Also there is also no recommendation to change the drill spacing until such time that resources may require upgrading to a higher status, or that mining is to commence and grade control data would be required.
26.3 Sample Preparation, Analyses and Security
The sample preparation, analyses and security are all extremely competent and there is no recommendation to alter the processes that have been put in place by MRL. Minor changes to the range of standards have been discussed with MRL staff and this change has been made and implemented.
26.4 Data Verification
The complete series of repeats and independent analyses of the lateritic Ni samples of MRL highlight the quality of the data provided by MRL staff. Independent verification has only ever found minor transcription errors and these were quickly sorted – there is no systematic errors encountered at any stage of the data verification process.
Bulk density test work will need to be ongoing so as to more accurately define the values for both limonite and saprolite ore zones. The difficulty of defining densities in friable and high moisture content ores is well documented, and as such every effort should be made to provide solid quantitative data as access and weather conditions permit.
26.5 Mining
Investigate the results of the closely spaced infill drilling program at Agata North to get better understanding of the base of ore profile. Results from such an investigation can be applied to ore loss and dilution parameters as well as determine an optimal grade control drill spacing in the saprolite ore profile
Investigate the possibility of increasing plant throughput in the HPAL/AL/SN circuits (or alternative processes) to fully utilise the additional saprolite ore available; albeit at lower metallurgical recoveries.
Modify the mining panel size from 250m x 250m to 100m x 100m for the first 5 years of production and reschedule. This might identify medium term issues in regard to stockpile capacity requirements and ore blending for plant feed requirements
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Investigate a conveyor system for ore carriage from the Agata North In-Pit stockpile to the plant as an alternative to truck haulage to the ROM stockpile
26.6 Metallurgy
More detailed programs of work are required as part of the Feasibility Study planned for the project:
All metallurgical testwork undertaken to date has been conducted at bench scale. Continuous testwork and piloting of the total proposed circuit with recycling of intermediate streams is required to support the next level of study. It is important that blending of composite samples for piloting reflects the amount of each mineralisation type in the deposit, including the three classifications of saprolite. Leach variability testwork using samples from a range of spatial pit locations, mineralisation types and grades throughout the deposit. This should include both HPAL and AL testing for the relevant mineralisation types, as well as slurry characterisation. Leach testwork using samples from the deposits to be mined in the later years of operation (e.g. Bolobolo, Karihatag and Agata South). Further evaluation for upgrading of limonite by large scale scrubbing tests and continuous scrubbing piloting, including limonite ore from other nearby deposits. More detailed investigation of hydrometallurgical flowsheets that may complement a thermal upgrading operation, e.g. saprolite only processing via atmospheric leaching technologies.
26.7 Process Plant Site Location
Progress plant site location studies prior to the feasibility study in an endeavour to reduce geotechnical risk and earthworks costs for the project.
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27 References
Ausenco Vector, Agata Nickel Project Scoping Study, Sep 2010.
Boyd Willis Hydromet Consulting, Technical Report on the Agata Nickel Project Scoping Study, 19 Nov 2010.
Copur, H., N. Bilgin, H. Tuncdemir, C. Balci (2003) A set of indices based on indentation tests for assessment of rock cutting performance and rock properties. The Journal of the South African Institute of Mining and Metallurgy, 103, (9), 589-599.
Department of Health. Department of Health District Health System in a Devolved Setting 2002.
Dorotan E. and Mogyorosy. Making your local health system work. German Agency for Technical Cooperation (GTZ) 2004.
Environmental Health Service, DOH. Philippine National Framework and Guidelines for Environ Health Impact Assessment (EHIA) 1997.
Gaia South, Inc. Social Profiling and Environmental Impact Assessment. 2006.
Gifford, M. G. Independent Report on the Nickel Laterite Resource – Agata South, Philippines, Agata Nickel laterite Project, 4 November 2011 (SEDAR).
Gifford, M. G. Independent Report on the Nickel Laterite Resource – Bolobolo & Karihatag, Philippines, Agata Nickel laterite Project, 4 November 2011 (SEDAR).
Geotech investigations – JCP Geo-Ex Services.
Golder Report No. 107641354-004-R-Rev1, “Preliminary Economic Assessment - Agata Nickel Project Mindanao Philippines”, May 2011.
Glawe, U. and J. Linard (2003) High concrete dam on serpentinite. Quarterly Journal of Engineering Geology and Hydrogeology, 36, 273-285, doi: 10.1144/1470-9236/03-225.
Goodman, R. E. (1993) Engineering Geology: Rock in engineering construction. John Wiley & Sons, Inc. New York, New York.
Kodolanyi, J. and T. Pettke (2011) Loss of trace elements from serpentinites during fluid- assisted transformation of chrysotile to antigorite – An example from Guatemala. Chemical Geology, 284, 351-362, doi: 10.1016/j.chemgeo.2011.03.016.
Kohli, A. H., D. L. Goldsby, G. Hirth, T. Tullis (2011) Flash weakening of serpentinite at near- seismic slip rates. Journal of Geophysical Research, 116, B03202, doi: 10.1029/2010JB007833.
LaDou J. Current Occupational and Environmental Medicine. McGraw Hill 2004.
Moore, D. E. and D. A. Lockner (2011) Frictional strengths of talc-serpentine and talc-quartz mixtures. Journal of Geophysical Research, 116, B01403, doi: 10.1029/2010/JB007881.
O’Hanley, D. S. (1996) Serpentinites: Records of tectonic and petrological history. Oxford Monographs on Geology and Geophysics No. 34. Oxford University Press, New York, New York.
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Schramel P, et al. Nutritional copper intoxication in three German infants with severe liver damage, J Trace Elem Electrolytes Health Dis 2:85-88, 1988.
Stark, T. D., E. J. Newman, G. de la Pena, D. H. Hillebrandt (2011). Fill placement on slopes underlain by Franciscan Melange. Journal of Geotechnical and Geoenvironmental Engineering, 137, (3), 263-271, doi: 10.1061/(ASCE)GT.1943-5606.0000394.
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Appendix 1 – Certificates of Qualified Persons
2143-RPT-014 Appendices
CERTIFICATE OF QUALIFIED PERSON
Mark Gifford Geological Consultant 636 Bramley River Rd Margaret River WA 6285, Australia
I, Mark Gifford am a qualified geologist working from a private consultancy.
The technical report to which this certificate applies is entitled “Technical Report for Agata Nickel Laterite Project, Mindanao, Philippines” and dated 20 December 2011.
I graduated with a Master’s degree with honours in Earth Sciences at the University of Waikato in 1988.
I am a fellow of The Australasian Institute of Mining and Metallurgy.
My relevant experience with respect to the Agata Nickel Project includes managing the exploration and mine geology of the Murrin Murrin lateritic Ni mine in the goldfields West Australia for 5 years, as well as consulting to numerous small Ni laterite explorers in both Australia and abroad
I have visited the Agata Nickel site on numerous occasions since February 2010, with my last visit to site in July 2011/
I am responsible for the preparation of report Sections 1.2, 1.3, 7, 8, 9, 10, 11, 12, 14, 24, 25.1 to 25.4 and 26.1 to 26.4
I am independent (as defined by Section 1.5 of NI 43-101) of Mindoro Resources Limited.
I have been involved in the project since February 2010. The nature of this involvement is the development of resources based upon exploration completed by MindoroResources Limited.
I have read the National Instrument 43-101 and the Technical Report, to the best of my qualified person’s knowledge, information, and belief, the technical report, or part that the qualified person is responsible for, has been prepared in compliance with this Instrument.
As of the date of this Certificate, to the best of my knowledge, information and belief, the Technical Report, or part that the qualified person is responsible for, contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
2143-RPT-014 Appendices
CERTIFICATE OF QUALIFIED PERSON
Dallas Cox Principal Consultant Crystal Sun Consulting Limited 3713 The Center 99 Queen’s Road Central Hong Kong
I, Dallas Cox am Principal Consultant of Crystal Sun Consulting Limited.
The technical report to which this certificate applies is entitled “Technical Report for Agata Nickel Laterite Project, Mindanao, Philippines” and dated 20 December 2011.
I graduated with a degree in Mining Engineering at the University of New South Wales, Kensington in 1986.
I am a member of The Australasian Institute of Mining and Metallurgy and Chartered Professional (CP) with membership number 201098.
My relevant experience with respect to the Agata Nickel Project includes operational and technical services functions for Queensland Nickel Greenvale operations from 1987 to 1990, and mining and resource studies for Acoje Nickel Project (Zambales, Philippines), Adlay Nickel Project (Surigao del Norte, Philippines), Verdant Vale Nickel Project (Bukidnon, Philippines) and Chaldag Nickel Project (Turkey) between 2007 and 2011. In addition, I have worked as a mining engineer for 25 years.
I have visited the Agata Nickel Project site and MRL’s regional nickel deposits in Agusan del Norte, Philippines in the 2007 (July), 2008 (January and November), 2010 (July, August and December) and 2011 (January, April and May).
I am responsible for the preparation of Sections 1.4, 1.5, 15, 16, 26.5 of the report.
I am independent (as defined by Section 1.5 of NI 43-101) of Mindoro Resources Limited.
I have been involved with the project since August 2007. The nature of this involvement has been site visits, meetings with technical staff, preliminary resource estimation, preliminary economic evaluations and mining and mineral reserve studies.
I have read the National Instrument 43-101 and the Technical Report, to the best of my qualified person’s knowledge, information, and belief, the technical report, or part that the qualified person is responsible for, has been prepared in compliance with this Instrument.
As of the date of this Certificate, to the best of my knowledge, information and belief, the Technical Report, or part that the qualified person is responsible for, contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
2143-RPT-014 Appendices
CERTIFICATE OF QUALIFIED PERSON
Monte Christie Senior Geotechnical Engineer Ausenco Vector 143E Spring Hill Drive Grass Valley, CA 95945 USA
I, Monte Christie, was a Senior Geotechnical Engineer of Ausenco at the time this report was prepared.
The technical report to which this certificate applies is entitled “Technical Report for Agata Nickel Laterite Project, Mindanao, Philippines” and dated 20 December 2011.
I graduated with a degree in geotechnical engineering from UC Berkeley in 1997.
I am a Registered Professional Engineer and Geotechnical Engineer of California.
My relevant experience with respect to the Agata Nickel Project includes the geotechnical study of the residue storage facility and associated dam. In addition, I have worked as a geotechnical for 18 years.
I have visited the Agata Nickel site for two days in May 2011.
I am responsible for the preparation of Sections 18.9 of this report.
I am independent (as defined by Section 1.5 of NI 43-101) of Mindoro Resources Limited.
I have been involved in the project since May 2011. The nature of this involvement is the co- ordination of the prefeasibility study and includes supervision and preparation of the Technical Report.
I have read the National Instrument 43-101 and the Technical Report, to the best of my qualified person’s knowledge, information, and belief, the technical report, or part that the qualified person is responsible for, has been prepared in compliance with this Instrument.
As of the date of this Certificate, to the best of my knowledge, information and belief, the Technical Report, or part that the qualified person is responsible for, contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
2143-RPT-014 Appendices
CERTIFICATE OF QUALIFIED PERSON
Ruth Sherrit Principal Process Engineer Ausenco 144 Montague Rd South Brisbane QLD, 4101, Australia
I, Ruth Sherrit am a Principal Process Engineer of Ausenco.
The technical report to which this certificate applies is entitled “Technical Report for Agata Nickel Laterite Project, Mindanao, Philippines” and dated 20 December 2011.
I graduated with a degree in Minerals Engineering and Extractive Metallurgy at the Western Australian School of Mines, Kalgoorlie in 1992.
I am a member of The Australasian Institute of Mining and Metallurgy, Chartered Professional (CP) and a Registered Professional Engineer of Queensland (RPEQ).
My relevant experience with respect to the Agata Nickel Project includes commissioning and operation of the Cawse Nickel Project in Western Australia, feasibility study for the Ravensthorpe Nickel Project in Western Australia and detail design of the HPAL package for the Rio Tuba Project in the Philippines. In addition, I have worked as a metallurgist for 20 years.
I have visited the Agata Nickel site for two days in May 2011.
I am responsible for the supervision of this report and preparations of of Sections 1.1, 1.6, 1.7, 1.8, 1.9, 2, 3, 4, 5, 6, 13, 17, 18.1 to 18.8, 19, 20, 21, 22, 23, 25.5, 26.6 and 26.7 of this report.
I am independent (as defined by Section 1.5 of NI 43-101) of Mindoro Resources Limited.
I have been involved in the project since May 2011. The nature of this involvement is the co- ordination of the prefeasibility study and includes supervision and preparation of the Technical Report.
I have read the National Instrument 43-101 and the Technical Report, to the best of my qualified person’s knowledge, information, and belief, the technical report, or part that the qualified person is responsible for, has been prepared in compliance with this Instrument.
As of the date of this Certificate, to the best of my knowledge, information and belief, the Technical Report, or part that the qualified person is responsible for, contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
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Appendix 2 – Consents of Qualified Persons
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Consent of Author
Mark Gifford Geological Consultant 636 Bramley River Rd Margaret River WA 6285, Australia
I, Mark Gifford, consent to the public filing of the technical report titled “Technical Report for Agata Nickel Laterite Project, Mindanao, Philippines” and dated 20 December 2011 by Mindoro Resources Limited.
I also consent to any extracts from a summary of the Technical Report in the news release issued on 2 November 2011 of Mindoro Resources Limited.
I certify that I have read the news release that the report supports being filed by Mindoro Resources Limited and that it fairly and accurately represents the information in the sections of the technical report for which I am responsible.
20 December 2011
______
Mark Gifford
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Consent of Author
Dallas Cox Principal Consultant Crystal Sun Consulting Limited 3713 The Center 99 Queen’s Road Central Hong Kong
I, Dallas Cox, consent to the public filing of the technical report titled “Technical Report for Agata Nickel Laterite Project, Mindanao, Philippines” and dated 20 December 2011 by Mindoro Resources Limited.
I also consent to any extracts from a summary of the Technical Report in the news release issued on 2 November 2011 of Mindoro Resources Limited.
I certify that I have read the news release that the report supports being filed by Mindoro Resources Limited and that it fairly and accurately represents the information in the sections of the technical report for which I am responsible.
20 December 2011
______
Dallas Cox
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Consent of Author
Ruth Sherrit Principal Process Engineer Ausenco 144 Montague Rd South Brisbane QLD, 4101, Australia
I, Ruth Sherrit, consent to the public filing of the technical report titled “Technical Report for Agata Nickel Laterite Project, Mindanao, Philippines” and dated 20 December 2011 by Mindoro Resources Limited.
I also consent to any extracts from a summary of the Technical Report in the news release issued on 2 November 2011 of Mindoro Resources Limited.
I certify that I have read the news release that the report supports being filed by Mindoro Resources Limited and that it fairly and accurately represents the information in the sections of the technical report for which I am responsible.
20 December 2011
______
Ruth Sherrit
Principal Process Engineer
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