16/05/2008 - The Philippines has assured Australian miner OceanaGold that operations at its gold-copper project will face no hindrance after having been barricaded by local officials trying to stop construction work, an official said on Thursday.
Environment and Mines Secretary Jose Atienza said he had told OceanaGold it could continue its activities and ignore a cease and desist order by a local governor after the firm declined to pay 30 million pesos ($700,000) for a quarrying permit.
"I have also notified the local police to lift barricades at the project site because the governor's order was based on an illegal assumption," Atienza told reporters in a phone interview.
"OceanaGold is not in the quarrying business. I cannot allow illegal orders to disrupt legitimate mining operations because it would send a wrong signal to our investors."
Only around $1 billion has flowed into the Philippine mining industry in overseas investment since 2004 but the government is hoping that this will surge to around $10 billion within the next three years due to record commodity prices and the country's proximity to resource-hungry China.
Land ownership disputes, communist and Muslim insurgencies and bureaucratic red tape can hold up projects in the Philippines for decades, despite the government's public support for the sector, miners and fund managers have said.
OceanaGold has so far raised about $200 million to develop its Didipio site in the Philippines, around 270 km (168 miles) north of Manila.
The mine is expected to produce around 120,000 ounces of gold and around 15,000 tonnes of copper concentrate a year in the first 10 years of production.
In 2009, while it is still ramping up output, Didipio is expected to produce around 60,000 ounces of gold. The mine is expected to have a minimum life of 15 years.
Atienza said OceanaGold was still at the stage of building processing plants and other related facilities after securing permits and financial and environmental clearances, but it was on track for commissioning next year.
On April 9, Nueva Vizcaya Governor Luisa Lloren Cuaresma issued an order stopping "earth-moving" operations at the OceanaGold mining site for failing to pay the permit.
When the Australian miner ignored the order, Cuaresma led a protest near the project site, erecting barricades to disrupt operations at the Didipio area.
Atienza has appealed to the governor to lift the barricades, describing her cease and desist order as illegal.
"She should not push us to implement the full force of the law," he added.
The Philippines has struggled to develop its mining sector despite deposits of copper, gold, nickel and other metals worth billions of dollars.
A Supreme Court ruling in 2004 cleared the way for 100 percent foreign ownership in Philippine mining projects, but the country's efforts to lure foreign investments have been hampered by opposition from the influential Roman Catholic church, local distrust, political instability and security issues.
Since the start of the year, three mines in the southern Philippines have been attacked by communist New People's Army (NPA) rebels demanding revolutionary taxes.
Source: AAP NewsWire
