Mining: A New Challenge for the Philippines
CP David

In the last few years, global prices of important minerals have skyrocketed. Gold, for example, has more than doubled in value. Copper prices are at record highs, quadruple what they were just a couple of years ago. And the price of nickel has gone from $6 per pound to more than $10. This is certainly good news for developing countries like the Philippines that have huge reserves of such minerals. Currently, sales of these three major minerals earn the Philippines a respectable $1 billion annually, though the country still lags behind major producers in the region like Indonesia ($3.6 billion annually). Experts estimate that about two dozen Philippine sites just waiting to be developed hold about $90 billion worth of minerals. Exactly how to develop these prospects, however, is a sticky problem.

Despite the country’s world-class ore deposits, the local mining industry made no significant contribution to the Philippine economy during the latter part of the 20th century. Promising areas were left unexplored, as mining was virtually at a standstill until around seven years ago, when a steady but significant increase in world metal prices resurrected the industry. In fact, prior to the development of new prospects and rehabilitation of old mine sites that started in 2003, there were only three remaining large-scale gold/copper mines in the entire country.

Today, armed with a new mining law, the Philippine government is vigorously promoting mining to take advantage of the increasing metal demand in the region. Twenty-four priority projects are lined up, at least six of which have opened or will open in the next couple of years. Most are gold/copper operations but several medium-scale nickel laterite projects are also in the pipeline.

Developing mineral resources in developing countries like the Philippines is controversial due to issues inherent to the nature of the industry. Economic viability for the host country is often questionable as foreign mining firms dominate this capital-intensive business. Social inequity is cited when minority groups’ rights are compromised in favor of a national agenda. Last and most often raised is the matter of environmental sustainability of mining operations. In 1996, the largest mine spill in Philippine history occurred on the island of Marinduque where about 2 million to 3 million metric tons of tailings sludge were released from copper, gold and silver mining activities. More recently, the flagship project of the government on Rapu-Rapu Island experienced consecutive cyanide-laced spills in 2005 that affected the island’s coastal zone. Significant fishkills occurred after these events. With stringent “first-world” environmental laws and a growing pro-conservation consciousness in the local population, every potential problem is magnified and scrutinized.

Arguably, these challenges can be managed with better governance and vigilance in the assessment of all mining operations. This, I imagine, is true everywhere in the world. However, a quick survey of past mine-related environmental problems reveals a complicating issue that tropical countries contend with — managing water within the mine site. This may seem a trivial matter requiring only a few engineering interventions, but it isn’t: It involves the mismanagement of water and its costly consequences.

Water management in tropical mine sites is compounded by high rainfall (more than 300 centimeters per year) often brought about by events such as typhoons or monsoon rains, spanning from several hours to several days at a time. Some of the problems that result or are aggravated by this include: water/wastewater impoundment instability, inadequate water supply during the dry season, high volumes of mine wastewater for treatment, heavily silted runoffs, landslides, acid rock drainage generation and insufficient water for downstream users. Managing a mine site thus involves running an effective drainage system. This is an important characteristic in a growing checklist for responsible mining.

Short but extreme rain events sound very much like the hallmark of climate change. It may be that water management is a growing problem induced by extreme weather conditions, or that it’s an old one largely ignored during the “environmentally lenient” past. Whichever is the case, this is something that needs to be addressed by those who wish to mine in the 21st century.

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