Mining in the Philippines Our Accomplishments and Our Challenges Our Properties North Zamboanga Tenement Area = 162,403 hectares (401,307 acres) Dipolog City 0Kilometres 25.0 Tamarok & Tapisa Manila 0 Miles 15.5 Copper / Gold Projects Bonbon Gold Prospect Zamboanga del Norte Gutalac Zamboanga del Sur Municipality Baliguian Municipality Zamboanga Sibugay Balabag Gold / Silver Project Canatuan Siocon Copper / Zinc Municipality Mine 2 TVIRD Timeline 1994 Signs an Exploration Agreement with Option to Purchase 1996-1998 Exploration commences under approved MPSA 2001 Executes MOU with Siocon Subanon Association, Inc. Buys and processes tailings from illegal small-scale miners (the “Environmental 2002 - 2004 Cleanup”) 2004 Gossan Project begins 2005 Recommences definition drilling/development program Completes Gossan Dam, applauded by Canadian Ambassador and DENR 2006 Secretary 2008 Gossan Project ends – Construction begins for Sulphide Project 2009 Commercial operations at Sulphide Project commence 2010 Presidential Mineral Industry Environmental Awards 2010 Platinum Achievement. 2011 Presidential Mineral Industry Environmental Awards 2011 Titanium Award for Excellence in Environmental Management Safest Mine Award 2011 Ordinance Banning New Open Pit Mining Filed 3 Canatuan Before… The area was an ecological disaster with a degraded water supply as a result of small- scale mining 4 Canatuan Before… Crude, leaky small-scale mining tailings ponds pouring mercury and cyanide into the watershed 5 Canatuan Before… Young children, with no access to basic education, often labour along with their families 6 Child Labor A 12-year old child here is shown unloading goods Canatuan Today ‐ Mining, Production & Shipment PIT PLANT PORT PRODUCT PROCESS 8 Canatuan Today 9 Canatuan Today Today, children from Canatuan and surrounding communities go to school to learn and play What we had to contend with… Actions and Attacks Allegations Actors • Blockades of company • Human Rights abuses • Local government officials equipment and personnel • IP Rights violations • DIOPIM Committee on • Protest actions and rallies • Harassment Mining Issues (DCMI) and other Roman Catholic • Complaints lodged in • Encroachment on Church-based groups such Philippine Congress, ancestral domain Senate, Provincial Board, as CAFOD • Lack of social acceptance and Canadian Parliament • Philippine Indigenous • Militarization • Complaint filed with the People’s Links UN Committee on the • Environmental destruction • Mining Watch Canada (e.g. “collapse” of tailings Elimination of all forms of • Christian Aid Racial Discrimination dam) • Rights and Democracy • Report: “Mining or Food” • Cyanide poisoning • Alyansa Tigil Mina • Philippine and • Former illegal small-scale International media miners in Canatuan • Internet • National government executives and legislators Mining in the Philippines Our Accomplishments Strong Indigenous leadership support Canatuan before… Canatuan today… Subanon Chieftain Timuoy Jose Anoy (right) with Subanon Chieftain Timuoy Jose Anoy (far right) Subanon Seven Rivers Overall Chieftain Timuoy with Mansaka Chieftain Datu Cristante Alfons Noval Lambo protesting against mining. and B’laan Chieftain Folong Motom Madule leading the opening ceremonies of Coalition for Responsible Mining in Mindanao launching program in September 2010. Social Development & Management Program Health, Sanitation and Fresh Water Sustainable Livelihood: Demo Farms 14 Corporate Social Commitment Health and Sanitation Sustainable Livelihood Built health clinic that Focused on sustainability, economics provides free 24/7 healthcare and social well-being of community and ambulance service to including micro-finance, technical impact communities skills, training & apprenticeship programs Responsive Education Royalty & Support for Ancestral Domain Built 6 schools, currently 2,500 students, 56 high Extended technical & financial school graduates & 48 assistance for crafting of Ancestral college scholarships Domain Sustainable Development & Protection Plan Infrastructure Development for Impact Communities Built or improved 85 kilometres (52.8 miles) of Initiated projects in areas outside roads, including 4 bridges Canatuan: & a spillway Built Sta. Maria water system Built 11 kilometres (6.8 miles) of farm- to-market road 15 Environmental Commitment Biodiversity Tailings Management 50% of mining area remains in Four tailings storage facilities original habitat condition constructed with three undergoing reclamation Watershed Management Monitoring Programs More than 25 locations subject Monitoring by third party professionals to daily, weekly and quarterly completed on weekly, quarterly and water quality monitoring annual basis Reclamation and Research Programs Rehabilitation Onsite research and studies for More than 200,000 trees have passive wetland acid mine treatment been planted since 2004 using indigenous plants 16 We are Transparent • Mine Tours – “Our Doors Are Open” • Quad-Media Information Campaign • Strategic Industry IEC Alliance 17 “Best of the best” –and No Fatalities Safety & Environmental Awards National Mine Safety and Environment Conference (November 2011) 2011 Presidential Mineral Industry Environmental Awards Priority • Titanium Award for Excellence in 1 Environmental Management • Safest Mining Operation • Safest Surface Mining Operation • Safest Mineral Processing, Number Concentrator Category 18 “Best of the best” –and No Fatalities Safety & Employer Awards Department of Labor and Employment Department of Labor and Employment, (May 2011) the Rotary Club of Zamboanga City- • Outstanding Employer of Zamboanga del East and the Zamboanga Peninsula Norte, Industrial Category Tripartite Industrial Peace Council (June 2011) National Mine Safety and Environment • Most Outstanding Employer in Region 9 Conference (Zamboanga Peninsula) Priority (November 2010) 1 2010 Presidential Mineral Industry Philippine Bureau of Working Environmental Awards Conditions Awards, Department of Labor • Platinum Achievement Award, Surface (Sept 2010) Mining Category • TVI Safety for its 2009 performance of zero • First runner-up in the Safest Mines Awards, lost-time accidents Concentrator Category Number • Top Occupational Safety & Health Manager, • Runner-up in the Mining Forest Award, Mining Category Metallic Category Over 6 million man hours worked Over 4 million man hours worked with only one lost‐time incident with no lost‐time incidents 19 TVI’s Contribution to the Economy TVI has provided all of these to the local and regional communities advancing Siocon from a Class 4 to a Class 1 municipality: Jobs Roads, transportation across the peninsula Power & Communications (cell tower) Multiple levels of Education Hospitals, 24/7 Ambulance Security, peace & order Port facilities Water purification systems Training –agriculture, crafts, apprenticeship programs Environmental cleanup from pre‐illegal small scale miners Taxes and royalties to Subanon and others 20 TVI’s Contribution to the Economy 2004-2008 2009 2010 2011 As of Sept Total Excise Tax Paid (PhP) 77.8 M 62 M 68 M 53.6 M 261.4 M Royalties Paid to IP (PhP) 39.6 M 30.6 M 35 M 41.7M 1%, now 1.5% of gross revenue 146.9 M Actual SDMP (PhP) 23.2 M 7.4 M 11.5 M 25.9M Expenses 68.0 M Business Permit (PhP) 6.7 M 0.35M 4.4 M 11.5M (Siocon) 22.9 M Real Property Tax (PhP) 0.7M 0.3 M 1.5M 4.1M (Siocon / Baliguian) 6.6 M CONTRIBUTION 148 M 100.6 M 120.4 M 136.8 M 505.8 M Operating Costs (PhP) 4.0 B 1.3 B 2.0 B 2.1 B 9.0 B CapEx 1.8 B 0.2 B 0.3 B 0.3 B 2.6 B 21 Mining in the Philippines The Challenges Ordinance Banning New Open Pit Mining The Ordinance The Ordinance was approved by the Sangguniang Panlalawigan (Provincial Board) of Zamboanga del Norte Bans open pit mining – but expressly permits small‐scale mining, and mining by tunneling (i.e. underground) Gives current open pit operations one year to operate, after which they have to cease operations and become completely rehabilitated After 60 days, it requires existing open pit operations to have “totally curtailed” any siltation, erosion and mudflows The Ordinance • GIVES THE GOVERNOR EFFECTIVE CONTROL OVER MINING • IS DRACONIAN Governor is entitled to issue cease and desist orders, and to seize the mining assets, as well as the inventory of product produced, and of course, throw management in jail. Requires that for any new application for mining (non open‐pit) tenements, the Governor must give clearance of consultation –and there must be approval by all LGUs including the Province. Gives any SEC accredited NGO the power of citizen’s arrest against any officer of a mining company if the NGO believes there is a violation of any provision of the Ordinance. Levies 10% Environment Fund on new projects The Ordinance Is Invalid and Unconstitutional Ordinance violates the due process, equal protection and non‐ impairment of contracts clauses of the 1987 Constitution Ordinance is contrary to the applicable provisions of the Local Government Code and the Mining Act, and runs counter to the public policies espoused in these laws. Ordinance would adversely affect the successful environmental protection and enhancement programs and the positive socio‐ economic impact that TVIRD operations has had on the community The Ordinance What It REALLY Means Good Mining versus Bad Mining • Designed to promote irresponsible small‐scale mining Enforcement versus Non‐Enforcement • Removes National Government Responsibility to ensure responsible mining Accountability versus Non‐Accountability • Removes National