- Go home to Norway, Mindex!

By Harald Eraker
Norwatch

For ten years, the Mindex mining company, which is registered on the Oslo stock exchange, has been searching for minerals on different locations in the Philippines. Previously, their focus has been mainly on gold. However, in later years the company, by way of a fully owned subsidiary - the Mindex Resources Development Inc., has done everything in its power to develop what they call the Mindoro Nickel Project.

The project plans are to produce nickel and cobalt through strip mining within the company's concession area of 9700 hectares, which is located in the central mountains of the Mindoro island, south-west of the Luzon island and the capital Manila.

- At any given point in time, we will be mining on an area of only 5 to 10 hectares. Before taking out the ore, we will scrape off and take care of the topsoil. When the mining activities are finished, this will be returned and replanted, for example with fruit trees chosen by the local population, says Country Manager Arne Isberg at Mindex, Manila. From the mine, the ore, dissolved in water, will be transported 43 kilometres through a pipeline to Pili on the eastern part of the island, close to the town of Pinamalayan. Here, the company is to build a processing plant for nickel and cobalt. According to the plans, the plant is to process 40.000 tons of nickel and 3.000 tons of cobalt per year.

Huge project
The Pili plant will utilise a method called High Pressure Acid Leach (HPAL). Most of the existing nickel processing plants are based on smelters, whereas HPAL, in short, makes use of sulphuric acid to extract nickel and cobalt from the ore. For this purpose, Mindex has secured easy and cheap access to sulphur from the Negros island southeast of Mindoro.

- The HPAL method is much more environmentally friendly than conventional smelting plants. The reason is that the ore from Mindoro is laterite ore, which means that it is already oxidised. Contrary to sulphuric ore, the metals in the laterite ore are therefore 'dead', and do not react with other natural substances. Also, the local population are not affected from bad smell or acid rain from the plant, Isberg explains.

There are plans to build a bigger port at Pili, where not only sulphur will be shipped in and nickel and cobalt will be shipped out. About a quarter of the raw material for the nickel production will be imported from a nickel mine on the Palawan Island, south-west of Mindoro. Ammonium sulphate is a by product from the process in Pili. There are plans ready to build a fertilizer factory to utilise this resource.

- In this way, our project also will supply cheap fertilizer for the local farmers. Presently, there is no fertilizer produced in the Philippines at all. With our plant, we will be able to supply 30 per cent of the country's demand, Isberg says. In addition, the mining company also wants to build a 35 megawatt gas fuelled power plant to supply power to the processing plant. According to Mindex, the company has received an offer to connect to a gas pipeline planned by the oil company Shell in the vicinity of Pili.

No challenges?
So the Mindex' plans here are no little business. The total cost of the project is estimated at around USD 600 million, or more than NOK 5 billion. According to the company, the project will secure work for 2500 people during the construction period, and 1000 on a permanent basis.

- The project will provide annual revenues of around 200 million pesos (about NOK 43 million) to the province, even during the initial years when we enjoy the so-called 'tax holidays'. This means that the province stands to double its income, Isberg says. In August 1998, the prefeasibility study made by Kværner Metals for Mindex was ready. Mindex finished its exploration activities later that year.  The prefeasibility study declares that the project will be among the cheapest in the world, a fact frequently repeated by Mindex. According to Isberg, Kværner is also very keen on winning the contracts for the development of the entire project. Mindex promotes the project as a big economic effort bringing prosperity to Mindoro and its inhabitants. In a press release by Mindex on August 19th, 1998, the company writes that "there are no social, environmental or technical challenges that can stop the project. The local population welcomes this project".

Mindex not wanted
Mindoro is divided into two provinces, Oriental Mindoro to the east, and Occidental Mindoro to the west. During NorWatch's visit to Oriental Mindoro, in which most of the project will be located, there were few signs of a positive attitude towards the project among the local population. A broad alliance of church organisations, environmental activists, human rights groups, farmers' organisations, organisations working with social issues and indigenous peoples' federations has been set up with the aim of stopping the entire project.

ALAMIN, which is the name of the alliance, has amongst other activities, arranged demonstrations, submitted formal protests to the authorities on different levels, and in the run of a few months, collected more than 25.000 signatures protesting against Mindex.

The protest letter from ALAMIN states, amongst other things:

"We refute the categorical statement of Mindex that the local population of Oriental Mindoro welcomes the mining project unconditionally. Thus, we present our policy considerations and moral positions in our unified oppositions against Mindex mining operation."

Land claim
The opposition against the project is based on a range of reasons. Firstly, the actual mining activities are to take place in the mountains which are inhabited by the indigenous people of Mindoro, the Mangyans. Their federation, the KPLN, representing seven Mangyan tribes, has already passed a resolution against the project. The same has been done by the subsidiary organisations of KPLN, SAMANA and CAPT. These represent the Alangan and Tadyawan tribes of the Mangyan, who live in and arround the Mindex concession area.

"In the 9720 hectares of mining concession, there are more than 12 Mangyan communities that will be affected and possibly dislocated when Mindex begins their operation", ALAMIN writes in their letter of protest.

For years, the Alangan- and Tadyawan tribes have been working to make the authorities recognize their claim as an indigenous group for formal rights to thierland. According to ALAMIN, their land claim (registered by the authorities as the Certificate of Ancestral Domain Claim - CADC) implies that the Mangyans already have the ".priority rights in the harvesting, extraction, development or exploitation of any natural resources contained within their ancestral domain. (Section 57, RA 8371)".

Complicated picture
In their press releases, Mindex has dedramatized the mining activities by stating that only 800-900 hectares, i.e. about 10%, of the total concession area will in fact be utilised for mining activities.

- It is estimated that 20 families will have to move, but only temporarily. After completing the replanting, they may move back if they wish to do so, says managing director Anders Hvide of Mindex here in Norway.

However, the indigenous population has to worry not only about Mindex Resources Development operating on their territory. The picture is made more complicated by an application to start exploration activities submitted to the authorities by the Aglubang Mining Corporation. The application covers two thirds of the 9700 hectares mining concession, and at the time when NorWatch visited Mindoro, the local population knew nothing about this second company. During conversation with Arne Isberg in Manila, it turned out that Aglubang is 40 per cent owned by, and under control of Mindex.

- We have discovered enough nickel in the third of the concession area that has been issued to Mindex Resources Development to run the mine for thirty years. But, of course, if we do find substantial nickel and cobalt occurrences in the Aglubang-area, then it might become realistic to start mining operations there as well, Isberg admits.

Deforestation
In addition to the disregard of the indigenous peoples' rights, the local people fear that the project will lead to environmental destruction. The island is already adversely affected by deforestation, partly due to lumbering activities and population pressure. Today, only 6% of Mindoro is covered by forest, most of this in the mountains where the Mangyans live. Thus, the plans for strip-mining are not very welcome.

- How are they going to manage to replant the steep mountain hills? As you can see, there is heavy rain here. When they remove all the forest, this will increase erosion and make rehabilitation of the area very difficult, Evelyn Cacha, leader of ALAMIN, explains to NorWatch.

- We plan to use filter mats made by organic material to cover the soil so that it will not be washed away during rain. Another method is planting grass, which will also help keep the topsoil in place until the trees grow up. Anyway, we are not thinking of mining the steepest hillsides, because this is too costly, Isberg's responses to this issue. The opponents fear not only deforestation and destruction inside the concession area. The same area is as well an important watershed for several of the region's large rivers.

Floods
In the lowland of the Oriental Mindoro province, some of the richest rice cropping areas in the country are found. Because of deforestation, the farmers and others have already experienced destructive floods in later years.

- Several times, the rivers have flooded and destroyed our harvests, says rice farmer Honorato P. Sanque, and shows NorWatch destruction and marks from the water on the housewalls.

The Philippine provinces are divided into municipalities, which are subdivided into districts (Barangays). Honorato Sanque is elected leader of Barangay Publasjon 4 of the Victoria municipality, in which the Mindex mine will be located.

- We are afraid. If they remove the forest and topsoil in the mountains, the floods will become even worse. After all, water runs downwards, not upwards, Sanque says, and refers to a resolution against Mindex adopted by his Barangay.

The opponents are also concerned with another aspect of the water resources. According to the plans, the company needs 1150 cubic metres of water per hour to flush the ore from the mine through the pipeline to the processing plant at Pili. The effects of this on the ground water level and mountain ecology is an open question of concern to the project opponents.

The Mindoro crocodile
The exact route for the 43 kilometres long pipeline has not yet been decided. However, according to Mindex, it has been decided that it will be put underground, except from at the river crossings.

ALAMIN calls attention to the fact the pipeline will be going through areas prone to earthquakes, and thus they fear leaks. For example, the project opponents are concerned about the Naujan Lake downstream from the mining area. The lake, located in the crater of an extinct volcano, has the status of a national park (the Naujan Lake National Park). This national park is home, amongst others, to the Mindoro crocodile, which is very rare and is listed on the IUCN red list of threatened species. Mindex repudiates that leaks may lead to problems of any kind to the Naujan Lake, and says that the ore to be transported through the pipeline is of the same composition as the sediments that are naturally transported into the lake through erosion in the mountains. The company informs that the pipeline will be earthquake-proof, with safety valves and alarm systems in case of an accident. In addition, there are plans to pump water from Pili and recycle it in order to keep consumption to a minimum. As for the Pili plant, one of the issues of concern is the discharge of waste material, the so-called red mud, into the ocean. This will be done through a pipeline at 4 kilometers from the shoreline at 200 metres below sea level. This method is called Submarine Tailings Discharge, or Offshore Deep Sea Tailings Placement, which is the preferred term by Mindex.

Millions of tons per year
The content of nickel and cobalt in the ore is 1% and 0.07% respectively. With a projected production of 40.000 tons of nickel and 3.000 tons of cobalt at the Pili plant, more than 4 million tons of waste will be discharged directly into the ocean annually.

- The waste is discharged at a depth of about 200 metres, where the sea floor sharply declines to about 600 metres. At such a depth, the waste material, which does not contain any heavy metals, pose no threat to the environment. I'm sure this is a much better way of handling this problem than storing all the waste material on land, says the Mindex-boss.

- Mankind has little knowledge about the ocean, but we know that there is life at all depths. It would be better to store the waste at a site where the environmental impacts can be detected. From the analysis of the Mindoro ore, made by Mindex, it shows that it is untrue that it contains no heavy metals except from nickel and cobalt. In particular, high contents of chrome are to be found, in addition to smaller amounts of copper and zinc. In spite of these metals being already oxidised, it is not correct to label them as dead. Small particles such as those in question here, have a relatively larger surface, which leaves the environment more open to being affected by the metals, says Bård Bergfall at the environmental advisory company Haaland, Bergfall & Co AS.

Important fisheries
ALAMIN is very concerned with how the discharge is to affect the sea ecology. According to the authorities, the Mindoro Strait east of Mindoro, is one of the country's most important fishing grounds. For example, the commercially most important species of tuna fish regularly migrates through this strait.

- I was born and raised here, and I've made a living from fishing since I was a young boy. Here we also fish deep-water fish which is valuable for us. If they discharge millions of tons of waste every year, we are bound to lose our way of income, says 75 year-old Juanito Palermo from Barangay Pili. The plant will occupy about 100 hectares along the coast, but no one with whom NorWatch spoke knew the exact location of the plant, nor how many would have to move because of it. According to Mindex, the plans are to build two housing complexes in Pili - one for the employees and one for those who have to move because of the project.

Controversial method
Submarine Tailings Discharge (STD) has increasingly been promoted as an alternative to land-based storage of waste. It is promoted by Mindex and the rest of the mining industry as an environmentally sound method.

- But STD is a most controversial method. In the USA and Canada, it has been prohibited. True enough, the Island Copper mine in Canada was granted exemption from this regulation for many years, and in the USA there is one offshore-mine which is, quite naturally, using this method of waste disposal. Apart from this, there is little research done on what effects the method may have on fish populations and the marine ecology, says Geoff Nettleton of Minewatch and Survival International, England.

Nettleton has lived 7 years in the Philippines, studying conflicts between mining companies and indigenous peoples. He visited Mindoro to investigate the Mindex case together with NorWatch. His opinion is that employment of the STD method should be viewed with the ecology and ocean currents of tropical areas in mind. According to mining experts referred to by Nettleton, one of the major problems concerning waste from nickel mines is that it contains a lot of small particles that will not be stable on the ocean floor.

Eternal sandstorm
- A cloud of small particles that will not settle on the bottom is bound to hover over the ocean floor like an eternal sandstorm. In the areas affected by such a cloud, the particles will clog the gills of fish, and especially shellfish, which are incapable of escaping fast enough, explains Bård Bergfall.

The Australian Mineral Policy Institute is one of few agencies to have looked more closely into this. The institute has studied the plans made by the company Highlands Pacific to start a nickel and cobalt project in the Madang province in Papua New Guinea. The Australian company also plans to dispose their waste into the ocean. The Mineral Policy Institute, however, advises against the company using the STD method. In their report, published in February 1999, it is referred to the fact that the ocean currents in the area would most probably whirl up the disposed waste, transporting it to shallower waters and thereby creating environmental destruction and decline in fisheries. In their presentation of the project, Mindex writes that the STD method is recognised worldwide, and that proof has been presented that the method is environmentally sound. A list of mining projects has been appendixed to support this claim. One of the examples is the company Titania in the Jøssing Fjord, Norway.

- It is very interesting that Mindex would use the Titania case in their presentation of the STD method, as the discharge from this company was stopped in the early nineties because of the environmental destruction it caused, says Bergfall. He goes on to say that  nowadays, the discharge from Titania is deposited in a land based waste disposal.

The planned waste discharge from the Mindex operation is about the double of that of Titania.

Bought and paid for
Presently, Mindex is working to get approval from the environmental authorities (the Environmental Compliance Certificate) for their nickel project. The first step to be taken in this process, is the Environmental Impact Assessment (EIA) which is presently under preparation by Dames & More, the world's leading consulting company to the mining industry. But hardly anyone with whom NorWatch spoke to in Mindoro had any faith in Dames & More. Among the local politicians and the project opponents, it was a shared view that the consulting firm was not independent, as long as Mindex elected the company themselves and payed for their job. The dissatisfaction with Dames & More was strong enough to lead the project opponents to occupy and altogether stop a scoping meeting held by the consulting firm and Mindex in the city of Victoria, where the objective was to solicit the people's views of what issues to be studied in the EIA.

- Dames & More is approved by the country's authorities. We find it sad and annoying that these people create trouble in this way. They were not interested in anything other than stopping the scoping, Isberg says.

The leader of ALAMIN, and participant at the demonstration, Evelyn Cocha, explains the action thus:

- Firstly, only a few chosen ones were invited to the scoping. Secondly, they refused to discuss the project's impact on people and nature with us.

- On June 25th, we held another meeting in Victoria, this time trouble-free, says Anders Hvide at the Mindex main office in Norway.

According to Hvide, this time only 100 demonstrators from ALAMIN showed up, whereas an organisation called LIHAM mobilised several thousand people in support of the project.

- LIHAM is an organisation working to have the natural resources of the Philippines exploited, says Hvide, and adds that the organisation has collected 35.000 signatures in favour of Mindex.

Resistance at high levels
Even at the highest political level, one is very sceptical to the role of Dames & More:

- No independent agency has evaluated the social and environmental impacts of the project. Therefore, we have asked the University of Philippines in Manila to prepare an independent study for us, so that we can make the correct decisions. My clear impression is that the majority of the population in the province is against the project, and the provincial parliament of our neighbours in Occidental Mindoro has already passed a resolution against the project plans, says vice-governor of Oriental Mindoro, Bartolome L. Marasigan.

On his side, Arne Isberg emphasises that the local population will have ample opportunity to voice their opinion on the project when Dames & More have finished their work with the EIA, probably some time around the middle of next year.

- A special committee is then to be appointed, in which representatives of all interested parties of the province may evaluate the social and environmental aspects of the project, says Isberg. However, he sees no problems with the local authorities producing their own study of the project.

Vice-governor Marasigan says straight foreward to NorWatch that he is opposing the nickel project. He, and also other centrally positioned people in the provincial administration are not very happy for the exploration activities done by Mindex for many years without any formal contact with the local political authorities.

- In 1995, the Mangyans came and told us that something was happening inside their territories. Only in October last year did Mindex officially make contact with us, presenting their project plans, says the vice-governor.

Go-ahead to mining operations
The possibility for foreign companies to come and start operations more or less at their own will, without informing local authorities, is due to the Mining Act of 1995 (see box). This law has liberalised the country's mining industry, paving the way for foreign companies.

"The PhilippineMining Act contains all the necessary ingredients in making the country's mining industry truly a haven for transnational mining corporations", concludes the organization IBON in their report "The Continuing Struggle Against TNC Mining", published in January this year.

The National Council of Churches in the Philippines is one of many agencies that have joined the struggle against the Mining Act of 1995. In a resolution passed in 1996, they demanded that the authorities abolish the act, prohibit strip mining altogether and work out a new and just legal framework to benefit the people and the environment.

Destructive nature
Opposition against the Mindex project is also found deep inside the political corridors in Mindoro. Orlando A. Maliwanag, working at the staff of the province's vice-governor, has produced a document on the project, which was handed over to all members of parliament in Oriental Mindoro when NorWatch visited the area. In this document, Maliwanag has collected data and information on the social and environmental impacts of the project, which contrasts sharply with the pretty picture Mindex has painted. Amongst other findings, the document establishes the following:

"Since the economic thrusts of the Provincial Government of Oriental Mindoro are anchored on food sustainability, eco-tourism and the development of agri-industry, the entry of big mining operations is detrimental of the sustainable development agenda of the province. Mining and sustainable agricultural development cannot go hand in hand because of the destructive nature of the former."

- It depends fully on what type of mining operations that are in question. What we have plans for, must be one of the least harmful ways of running this kind of operations on, maintains the head of Mindex in Norway, Anders Hvide.
 
Mindex on the Philippines
Mindex ASA is registered on the Oslo Stock Exchange Market, and has a 100% ownership over the subsidiary Mindex Resources Development Inc. in the Philippines. Mindex Resources Development is behind the plans for the nickel/cobalt project on Mindoro, which as yet is the only project the company is involved in in the Philippines.

Mindex ASA also has the following subsidiaries on the Philippines: Aglubang Mining Corporation, Alagag Mining Inc., Wisetech Servises Inc. and Pili Point Prosessing Inc. 

The Mindex mining concession area in Mindoro is divided into two: Around a third is controlled by Mindex Resources Development Inc, whereas the rest is controlled by Aglubang Mining Corp.

Norwatch Newsletter 11/99