Two years after its Financial or Technical Assistance Agreement (FTAA) with the Philippine government expired, Australian-Canadian miner OceanaGold Corporation (OceanaGold) is now allowed to resume the operations of its gold-copper mining project in the country until 2044.
This is on condition that, among others, the company will sell a portion of its Philippine operating subsidiary, OceanaGold Philippines Inc. (OGPI), to the public within the next three years.
In a statement, OceanaGold advised its stakeholders that the Philippine government has already renewed its FTAA for the Didipio gold-copper mining project in Nueva Vizcaya for an additional 25-year period, beginning June 19, 2019.
The FTAA was renewed on substantially the same terms and conditions but it includes some modifications.
As part of the modifications of the FTAA, the company has agreed to sell at least 10 percent of the common shares in OGPI, the holder of the FTAA, at the Philippine Stock Exchange (PSE) within the next three years.
It also agreed to allocate the equivalent of an additional 1.5 percent of its gross revenue for community development, as well as reclassify Net Smelter Return into allowable deduction and shared 60/40 percent rather than wholly included in government share. NSR is the net revenue from the sale of mineral products sans the cost of transportation and refining.
OGPI shall also offer for purchase by the Philippine Central Bank not less than 25 percent of its annual gold oré production at fair market price and mutually agreed upon terms, based on the renewed FTAA.
Lastly, OGPI’s principal office should be transferred to its host province within the next two years. The company hold’s a main office in Makati, away from its host provinces are Nueva Vizcaya and Quirino.
Meanwhile, OceanaGold said that with the issuance of its renewed FTAA, its first operational priority is the rehiring and training of its Filipino workforce, which will include a focus on safeguarding workers from the current risks associated with COVID-19.
“The Company plans a staged restart of operations with milling to recommence as soon as possible utilizing stockpiled ore of which the operation has approximately 19 million tonnes available,” OceanaGold said.
“The Company aims to achieve full underground production capacity within 12 months. Once fully ramped-up, the Company expects Didipio to produce approximately 10,000 gold ounces and 1,000 tonnes of copper per month at first quartile All-in Sustaining Costs,” it added.
The FTAA renewal came weeks after an environmental group renewed its call for the government to permanently close the mining operations of the company, citing the latter’s “documented” violations of Philippine environmental laws.
In an earlier statement, Alyansa Tigil Mina (ATM) asked President Rodrigo Duterte to reject the application for contract renewal on the Didipio mine, pointing out that OGPI has committed serious violations of Philippine environmental laws, including the destruction of a watershed, pollution of water sources, and reduced access to water by residents.
The group also claimed that OGPI failed to secure the free, prior, and informed consent (FPIC) of indigenous peoples; failed to deliver reforestation promises; disregarded the provincial land use plan, including illegal closure of a municipal road; and threatened biodiversity in the Caraballo-Palali Mountain range, a Priority Conservation Area.
Right now, there is ongoing opposition against the Didipio mine project coming from the local government unit (LGU) of Nueva Vizcaya, one of its host provinces.
In 2019, Nueva Vizcaya Governor Carlos Padilla released an order to stop the company’s operation as soon as its FTAA expired, and ordered the establishment of a barricade surrounding the Didipio mine site.
The Court of Appeals (CA) likewise decided to junk in July last year OceanaGold’s petition to resume operations.