Why has Duterte closed the mines?

Photo: Facebook/Rody Duterte

By Claire Heffron

Philippine President Rodrigo Duterte is using a “shock and awe” approach to the country’s mine owners. The world’s biggest nickel ore mines are facing a clampdown with threats of suspension.

The outspoken leader says the country can live without the industry’s input entirely if need be, and has called for mining companies to ‘shape up’ and stop destroying the environment. “We will survive as a nation without you. Either you follow strict government standards, or you close down,” Duterte said.

Enforcing standards

Duterte and newly elected Natural Resources Secretary Gina Lopez want to guarantee that all mines fulfil environmental and safety standards. So far, eight nickel ore mines have been closed down for violations.

These closures have a clear economic impact on the region as the Philippines supplied China 95% of its nickel ore imports in the first six months of this year. Global stocks are high, and a suspension or closure of more mines could drive prices up further. A lot of citizens, both skilled and unskilled, risk of losing the income they receive from the mining sector.

“Pricing will be subject to Chinese demand, especially given their decelerating economy,” said Ronald Recidoro, Vice President at the Chamber of Mines of the Philippines. “It will rest on how purchasers observe the effect of the suspensions and the environment department’s conclusion not to allow any new permits,” he added.

Why was mining suspended?

Following public fury over past environmental disasters and the movement of local communities mining has powerful opponents in the Philippines, including the Catholic Church.

The mining sector is poorly regulated and monitored. Mines and Geosciences Bureau (MGB) Director, Leo Jasareno, says that half of the 44 metal mines frequently violate environmental rules. His testimony suggests ineffective government guidelines and corruption are to blame. The truth is that in spite of abusing environmental rules, companies are allowed to ship the ore they extract and continue to profit.

As an example, the Shenzhou Mining Group Corp have been using the seashore as a waste pool. Despite the companies closure for these types of violations, it was still allowed to ship millions worth of minerals to China. There is evidently no deterrent for violating environmental rules. The state should have seized the ore for itself as punishment.

In another case, people living near mining operations in Santa Cruz, Zambales, experienced massive flooding after tropical cyclone Koppu hit Luzon last year. Philex Mining’s decades-old dam released the biggest mine spill in Philippine history.

Nelia Halcon, executive vice president of the chamber of mines, said, “There is no issue with increasing our industries, but we need enormous capital.”  So long as there is a need for raw minerals, there will be mining; legal or illegal. And with around $800 billion worth of as-yet untapped minerals at stake, “responsible mining” is inadequate as a regulatory framework.

Resources for the future

Another important question is how the extraction of non-renewable resources will benefit generations to come in the Philippines. The nearest thing to a support system currently in place is the Malampaya fund. However, because of lack of clarity and liability it has been abused. Governance reforms must be implemented to ensure that mining benefits the people.

The challenge now for the current administration is to master and regulate the necessary extensive reforms in the mining sector. The future could be bright for the mining companies, and the communities that benefit from the prosperity they bring.  But like so many things in the modern Philipines, that will only happen if they do that Duterte tells them.