Comparative Study on Mining, Eco-tourism and Agriculture

Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Table of Contents 1.0 Conclusions and Recommendations ....................................................................................... 4 1.1 Conclusions ..................................................................................................................... 4 1.2 Recommendations .......................................................................................................... 5 2.0 Background Information ........................................................................................................ 8 3.0 Electric Vehicle Revolution ..................................................................................................... 8 3.0 Selected Projects ................................................................................................................... 9 3.1 Eco-tourism and Agricultural Projects......................................................................... 9 3.3 Annual Revenues ......................................................................................................... 11 3.3.1 Boracay Island ....................................................................................................... 11 3.3.2 Victorias Milling Corporation ............................................................................ 12 3.3.3 Sugarcane Plantation............................................................................................ 13 3.3.4 Palay Plantation .................................................................................................... 14 3.3.5 PASAR Corporation ............................................................................................. 15 3.3.6 Ferro-nickel Smelter ............................................................................................. 16 3.3.7 Bangko Sentral ng Pilipinas Gold Refinery...................................................... 17 3.3.8 Coral Bay Nickel Corporation............................................................................. 18 3.3.9 Taganito HPAL Nickel Corporation................................................................... 20 3.3.10 Calaca Coal-Fired Power Plant ............................................................................. 21 3.3.11 Gold Mines ............................................................................................................ 22 3.3.12 Copper Mines........................................................................................................ 24 3.3.13 Nickel Mines ......................................................................................................... 27 3.3.14 Chromite Mines .................................................................................................... 29 3.3.15 Iron Mines ............................................................................................................. 29 3.3.16 Coal Mines............................................................................................................. 29 4.0 Location of Mines ................................................................................................................ 30 7.0 Ranking of Operating Mines by Revenue Per Hectare ........................................................... 34 8.0 Total Permitted Area, Annual Revenues and Revenue Per Hectare ....................................... 36 9.0 Comparative Ranking by Revenue Per Hectare ..................................................................... 37 TABLES TABLE 1. ECO-TOURISM AND A GRICULTURAL PROJECTS ..............................................................................9 TABLE 2. LIST OF OPERATING MINES, 2016 ................................................................................................. 10 TABLE 3. PRIMARY GOLD PRODUCERS, 2016 ............................................................................................... 22 TABLE 4. COPPER MINES, 2016 ..................................................................................................................... 24 TABLE 5. NICKEL MINES, 2016...................................................................................................................... 27 TABLE 6. RANKING OF GOLD MINES ........................................................................................................... 34 TABLE 7. RANKING OF COPPER MINES ........................................................................................................ 35 Page 2 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 TABLE 8. RANKING OF NICKEL MINES ........................................................................................................ 35 TABLE 9. PERMITTED AREA, ANNUAL REVENUES AND REVENUE PER HECTARE, MINES VERSUS BORACAY .............................................................................................................................................................. 36 TABLE 10. COMPARATIVE RANKING BY REVENUE PER HECTARE ................................................................ 37 FIGURES FIGURE 1. PROJECTED ELECTRIC VEHICLE SALES BY 2025 .............................................................................9 FIGURE 2. BORACAY WHITE SAND ............................................................................................................... 12 FIGURE 3. VICTORIAS SUGAR MILL ............................................................................................................. 13 FIGURE 4. SUGARCANE PLANTATION ........................................................................................................... 14 FIGURE 5. PALAY PLANTATION .................................................................................................................... 15 FIGURE 6. PASAR COPPER SMELTER ........................................................................................................... 16 FIGURE 7. FERRO-NICKEL SMELTER .............................................................................................................. 17 FIGURE 8. GOLD BARS .................................................................................................................................. 18 FIGURE 9. CORAL BAY NICKEL CORPORATION, HPP .................................................................................. 19 FIGURE 10. TAGANITO HPAL NICKEL CORPORATION PLANT .................................................................... 20 FIGURE 11. CALACA POWER PLANT ............................................................................................................. 21 FIGURE 12. GOLD MINING AND MILLING PROCESS .................................................................................... 23 FIGURE 13. DIDIPIO OPEN PIT MINE ............................................................................................................ 25 FIGURE 14. DIDIPIO UNDERGOUND MINE ................................................................................................... 26 FIGURE 15. NICKEL MINE ............................................................................................................................. 28 FIGURE 16. SEMIRARA COAL MINE .............................................................................................................. 29 FIGURE 17. OPERATING MINES, LUZON ....................................................................................................... 30 FIGURE 18. OPERATING MINES, VISAYAS .................................................................................................... 31 FIGURE 19. OPERATING MINES, MINDANAO ............................................................................................... 32 FIGURE 20. SEMIRARA COAL MINE, LOCATION MAP .................................................................................. 33 FIGURE 21. RANKING OF GOLD MINES ........................................................................................................ 34 FIGURE 22. RANKING OF COPPER MINES ..................................................................................................... 35 FIGURE 23. RANKING OF NICKEL MINES ..................................................................................................... 36 FIGURE 24. COMPARATIVE RANKINGS BY REVENUE PER HECTARE ............................................................ 38 FIGURE 25. COMPARATIVE RANKINGS, MINING INDUSTRY VERSUS BORACAY ......................................... 39 FIGURE 26. PERMITTED AREAS LARGER THAN THE CITY OF MANILA ......................................................... 39 Page 3 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 COMPARATIVE ANALYSIS ON MINING, ECO-TOURISM AND AGRICULTURE 1.0 Conclusions and Recommendations 1.1 Conclusions 1.1.1 With the recent rapid developments in electric vehicle technology which uses batteries with eighty percent(80) % nickel, it becomes imperative that the Philippines should stop exporting raw, beneficiated and semi-processed nickel immediately and begin producing nickel metal. 1.1.2 The demand for nickel is expected to double by 2030 and we should not allow the Chinese, Japanese and Koreans to exploit our nickel resources by purchasing from the Philippines raw, beneficiated and semi-processed nickel ore. In the past, the industrialization of China, Japan and Korea had been partly fueled by our country’s exports of copper concentrates and nickel laterite/concentrates. 1.1.3 It is now time for the Philippines to export nickel metal, not just raw, beneficiated or semi-processed nickel ore. This way, our country can evolve from a semi-developed economy into an industrialized economy in ten(10) years or less because of the rapidly expanding demand for electric vehicles. 1.1.4 The mining industry, on the basis of revenue per hectare of direct impact/permitted area pales in comparison to the eco-tourism project of Boracay Island, the copper smelter/refinery of PASAR, the Gold Refinery of the Bangko Sentral ng Pilipinas and the Calaca Coal-Fired Power Plant. If nothing is done as soon as possible, it will lose the very reason for its existence(raison d’ etre). 1.1.2 Based on the revenue per hectare criteria, the PASAR Copper Smelter and Refinery, BSP Gold Refinery, Boracay Island and the Ferro-nickel Smelter would have the highest returns per unit area of disturbed/permitted land. PASAR Copper and Smelter BSP Gold Refinery Calaca Coal-Fired Power Plant Boracay Island Ferro-nickel Smelter 1.1.2 Revenue per Hectare of Disturbed/Permitted Land(P/hectare) 772,225,000.00 730,695,578.78 98,831,814.87 47,379,311.19 22,030,150.00 A sugar central, the HPAL nickel processing plant and coal mining would comprise the second group while gold, copper and nickel mining ranked a poor third. Victorias Milling HPAL Nickel Processing Coal Mining Revenue per Hectare of Disturbed/Permitted Land(P/hectare) 8,864,596.90 8,536,718.51 6,693,154.02 Page 4 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Gold Mining Copper Mining Nickel Mining 1.1.3 Chromite and iron mining had the poorest revenue per hectare, ranking even lower than the sugarcane and palay plantation. Sugarcane Plantation Palay Plantation Chromite Mining Iron Mining 1.2 Revenue per Hectare of Disturbed/Permitted Land(P/hectare) 2,014,498.14 1,601,557.18 423,950.35 Revenue per Hectare of Disturbed/Permitted Land(P/hectare) 189,489.15 69,100.03 51,936.27 27,739.44 1.1.4 Eco-tourism projects represented by Boracay Island have a higher return per unit area of disturbed/permitted land than coal, gold, copper, nickel, chromite and iron mining. It even has a higher return per hectare than the HPAL nickel processing plants. 1.1.5 A sugar central has almost the same revenue per hectare as a HPAL nickel processing plant and coal mining. Moreover, the HPAL nickel processing plants are within export processing zones and pay only 5% of their gross income/profit as income tax and are exempted from all national and local taxes compared to the other businesses or to self-employed individuals who pay around 15 to 18% of their gross revenue as income tax plus other national and local taxes. 1.1.6 Gold, copper, nickel, chromite and iron mining pale in comparison to Boracay Island. Coal, on the other hand should be viewed within the context of its usage as fuel in our power plants. Coal should not be exported. 1.1.7 Nickel, chromite and iron mining are the worst performers in terms of revenue per hectare when compared to Boracay Island. 1.1.8 Some of the permitted areas in our mines are larger than the 3,855 hectares land area of the City of Manila, our country’s capital. Areas for FTAA and MPSA must reduced substantially to reduce the impact of mining operations to the environment. Recommendations To protect the national interest on our mineral/coal resources: 1.2.1 The Philippines Government should, as matter of policy, should stop exporting immediately raw, beneficiated or semi-processed nickel ore from operating nickel mines and instead require the nickel industry to begin building ferronickel smelting and leaching plants, reverberatory furnaces/converters and nickel refineries. This way, we can take advantage of the boom in electric vehicles whose batteries are 80% nickel. Page 5 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 1.2.2 None of the suspended nickel mines should be allowed to resume operations unless they begin building and have made operational their ferro-nickel smelters, leaching plants reverberatory furnaces/converters and nickel refineries. 1.2.2 Mining and export of direct shipping/beneficiated nickel ore must be phased out immediately because of its very low revenue per hectare(P 423,950.35/hectare) compared to Boracay’s P 47,379,311.19/hectare. At the same time, nickel metal must be produced in the Philippines so that our country can take advantage of the rapidly expanding market in nickel-graphite batteries. 1.2.3 The Philippine Government should also aim to achieve the revenue per hectare generated by the PASAR Copper Smelter and Refinery and BSP Gold Refinery. This can be undertaken by requiring the concerned Government agencies to comply with the following provisions of Executive Order No. 79 dated July 6,2012: “Section 8. Value-Adding Activities and the Development of Downstream Industries for the Mineral Sector—The DENR, in coordination with the Department of Trade and Industry(DTI), Department of Science and Technology(DOST), National Economic Development Authority(NEDA), other Government agencies concerned, the mining industry, and other stakeholders shall submit within a period of six(6) months a national program and road-map, based on the Philippine Development Plan and a National Industrialization Plan for the development of value-adding activities and downstream industries for strategic metallic ores.” To the undersigned’s knowledge, the national program and road-map has not been submitted, despite the lapse of more than five(5) years. 1.2.4 Permitted/disturbed areas for FTAAs/MPSAs/Coal Operating Contracts must be reduced by the Government to the areas encompassed by the site development plans only(to include mining area, plant site, tailings storage facilities, access roads, stockpile areas, etc.) in the Mine Feasibility Studies as approved by the DENR/MGB and the DOE. Excess areas after the Declaration of Mine Feasibility is approved must be relinquished. 1.2.5 Existing copper mines must be required to build their own copper smelters and refineries or to sell their all their copper concentrates to PASAR under competitive conditions . 1.2.6 Gold mining must be allowed to continue provided all gold bullions are sold to the Bangko Sentral ng Pilipinas for refining and sold under competitive conditions. 1.2.7 Establishment of a jewellery industry based on gold must also be looked into by the Government. Page 6 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 1.2.8 1.2.9 The HPAL plants must also be required, within two(2) years, to build downstream nickel plants and refineries to improve their value-added performance. Chromite and iron mines should be phased-out completely because their revenue per hectare is much lower than sugar and palay production. 1.2.10 Export of coal must also be prohibited to ensure that coal is beneficially used only by local power plants and to reduce the impact of coal mining to the environment as well as to conserve coal resources for the benefit of the Filipino people. As of the end of 2016, fifty seven percent(57%) of Semirara’s coal production is exported to China, Hong Kong, India, Japan, Taiwan and Thailand. 1.2.11 Coal mines must be required to build mine-mouth power plants. 1.2.12 No new export processing zones should be established for the mining industry. 1.2.13 Export of raw or semi-processed minerals should be banned, as what Indonesia did, within the immediate future to ensure that the Filipino people get the maximum benefits from our mineral/coal resources. 1.2.14 If no positive response is secured from the private sector, the Government, in the near future, should impose an export tax equivalent to the difference between the revenue per hectare of the BSP Gold Refinery, PASAR Copper Smelter, etc. and their own respective revenues per hectare. These recommendations are envisioned to achieve the following: a. Leapfrog the Philippines into a developed country in less than ten(10) years. b. Significantly reduce the direct impact area/footprint of mining activities c. Optimize the value of mineral/coal resources d. Increase Government revenues from mining Implementing the above recommendations will, among others, ensure that mineral/coal resources are extracted and processed for the benefit of the Filipino people. Page 7 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 2.0 Background Information Over the past several months, issues have been raised by anti-miming activists concerning eco-tourism and agriculture as better alternatives to mining activities. This short paper will present a comparative analysis of the mining, eco-tourism and agriculture on a purely quantitative basis as an attempt to validate the issues. It will also discuss the impact of the electric vehicle revolution on our nickel industry. The purpose of this paper is solely to stimulate discussion among mining stakeholders on this very sensitive issue and it is not meant to be comprehensive nor complete. It is also meant to be a wake-up call to the Philippine Government and the Mining Industry. This study is the undersigned’s sole initiative and is not funded by any vested interest group, whether pro- or anti-mining. Constructive criticism of the paper is most welcome. 3.0 Electric Vehicle Revolution In 2008, Elon Musk of Tesla, Inc. launched his Tesla Electric Vehicle Roadster with an initial production of 2,500 vehicles. This was followed by his Model S in 2015 and Model X in 2015. Later other prestigious car manufacturers followed such as Mercedes-Benz, Volkswagen, KIA, Renault, Ford, Nissan, Mitsubishi, Toyota, Audi, Jaguar, Honda, General Motors. Today, China is the biggest electric vehicle manufacturer which sold 507,000 vehicles in 2016. The world is in the brink of an “electric vehicle revolution” in which internal combustion engines will be replaced by electric vehicles powered by nickel-graphite batteries whose main raw materials is nickel sulphate(80%) which is produced by dissolving nickel metal in sulfuric acid. While electric vehicles account for only 1% of global sales as of today, this is expected to reach 40% in less than twenty(20) years. This is because technology have driven battery cost to less than 20% of its cost in 2013. Furthermore, battery capacity has been increasing and charging infrastructure are beginning to be built in China, United States and Europe. In terms of operating cost, electric vehicles cost less than internal combustion engines even at today’s petroleum prices. Even the price of electric vehicles is expected to be lower than that of internal combustion engines. By 2040, electric vehicles are foreseen to displace about 8 million barrels of fuel consumption per day. It does becomes imperative for the Philippines to take advantage of the forthcoming electric vehicle revolution by requiring the production of nickel metal in the Philippines instead of exporting raw, beneficiated or semi-processed nickel to China, Japan Page 8 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 or Korea. This electric vehicle revolution has the capability of industrializing the Philippines in ten(10) years or less. Projected electric vehicle sales by 2025 would be 14,231,000 broken down as follows: Figure 1. Projected Electric Vehicle Sales by 2025 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 Vehicle Sales, Number of Units Europe China Rest of the World 3.0 Selected Projects 3.1 Eco-tourism and Agricultural Projects United States Japan The following were selected to serve as a benchmark vis-à-vis the performance of the thirty two(32) operating copper, gold, nickel. chromite and iron mines and one(1) coal mine. They were selected because data/information on their operations are readily available to the public and can be easily verified. Table 1. Eco-tourism and Agricultural Projects 1 2 3 4 5 Project Boracay Island Industry Eco-tourism Victorias Milling Corporation Sugarcane Plantation Palay Plantation Sugar Milling PASAR Corporation Copper Smelter Sugar Plantation Rice Source of Information Philippine Information Agency, August 13.2017 Annual Report 2016 Sugar Regulatory Administration, 2016 Department of Agriculture, 2016 PASAR, Top 1,000 Corporations Businessworld, 2016 Page 9 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 6 7 6 7 8 3.2 Coral Bay Nickel Corp Taganito HPAL Nickel Corp. Ferro-nickel Smelters Calaca Coal-Fired Power Planr Bangko Sentral ng Pilipinas Hydrometallurgical Processing PlantNickel and Cobalt Sulfides Hydrometallurgical Processing PlantNickel and Cobalt Sulfides Ferro-nickel Power Gold Refining DENR, MGB, PEZA DENR, MGB, PEZA Unpublished study of the undersigned Semirara Mining and Power Corp Annual Report, 2016 BSP Annual Report, 2016 Operating Mines The list of operating mines below were secured from the report of the Mines and Geosciences Bureau(MGB) on Philippine Metallic Production, 2016 versus 2015 and the annual report of Semirara Mining and Power Corporation Table 2. List of Operating Mines, 2016 1 2 3 4 5 Mine Philippine Gold Refining and Processing Corp./ Filminera Resources Corp. Benguet Corporation Philsaga Mining Corp 6 Lepanto Consolidated Apex Mining Company, Inc. Greenstone Resources Corp 7 8 FCF Minerals Corp Carmen Copper Corp 9 10 Philex Mining Corp Oceana Gold Philippines, Inc. Techiron Resources, Inc. 11 12 Location Aroroy, Masbate Product Gold and Other Associated Mineral Deposits Acupan, Benguet Bunawan and Rosario, Agusan del Sur Mankayan, Benguet Maco, Compostela Valley Gold and Silver Gold and Other Mineral Deposits Gold and Copper Gold and Silver Alegria, Mainit, Tubod and Bacuag, Surigao del Norte Quezon, Nueva Vizcaya Toledo and Naga Cities, Cebu Tuba and Itogon, Benguet Nueva Vizcaya and Quirino Gold, Copper and Silver Guian, Eastern Samar Chromite and Other Associated Mineral Deposits Iron Ore Asia Mining and Dev. Corp Hinatuan Mining Corp Dona Remedios Trinidad, Bulacan Taga-naan Surigao del Norte Bataraza, Palawan 15 16 17 18 19 Rio Tuba Nickel Mining Corp Cagdianao Mining Corp SR Metals, Inc. Berong Nickel Corp Benguet Corp Taganito Mining Corp 20 CTP Construction Carrascal, Surigao del Sur 13 14 Cagdianao, Dinagat Island Tubay. Agusan del Norte Quezon, Palawan Sta. Cruz, Zambales Claver, Surigao del Norte Associated Gold Copper, gold and other associated mineral deposits Copper and Gold Gold and Copper Nickel and Other Associated Mineral Deposits Nickel Nickel Nickel Nickel Nickel Nickel and Other Associated Mineral Deposits Nickel Page 10 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 21 22 Platinum Group Corp AAM Philippines 23 Carrascal Nickel Corp 24 Cantilan, Surigao del Sur 25 Marcventures Mining and Dev. Corp. Adnama Mining Resources 26 Agata Mining Ventures 27 28 FCF Minerals Libjo Mining Corp Jabonga, Tubay and Santiago, Agusan del Norte Quezon, Nueva Vizcaya Libjo, Dinagat Island 29 Citinickel Mines and Dev. Corp. Techiron Resources, Inc. Narra and Sofronio Espanola, Palawan Guian, Eastern Samar Ore Asia Mining and Dev Corp Century Peak Corp Dona Remedios Trinidad, Bulacan Loreto and Libjo, Dinagat Islands Sta. Cruz and Candelaria, Zambales 30 31 32 33 Zambales Metals Corp 34 Semirara Mining Power Corp Metals Diversified 3.3 Annual Revenues 3.3.1 Boracay Island and Claver, Surigao del Norte Nickel Panamaon and Esperanza, Loreto, Dinagat Island Carrasacal, Surigao del Sur Nickel Claver, Surigao del Norte Caluya, Semirara Antique Island, Nickel and Other Associated Mineral Deposits Nickel Nickel and Other Assocaited Mineral Deposits Nickel Gold Chromite, Nickel and Other Associated Mineral Deposits Nickel, Chromite and Other Associated Mineral Deposits Chromite and Other Associated Mineral Deposits Iron Nickel and Other Associated Mineral Deposits Chromite, Nickel, Platinum and Other Associated Mineral Deposits Coal Boracay is approximately 315 km south of Manila and 2 km off the northwest tip of Panay Island in Western Visayas. Boracay Island and its beaches have received awards from numerous travel publications and agencies. The island is composed of Barangays Manoc-Manoc, Balabag, and Yapak in the municipality of Malay, Aklan Province. The island is administered by the Philippine Tourism Authority and the provincial government of Aklan. Apart from its white sand beaches, Boracay is also famous for being one of the world's top destinations for relaxation The island of Boracay generated a total of P34,518,669,078.30 in tourism receipts from January to July 2017. This is roughly equivalent to P 27,735 per tourist. Aklan Provincial Tourism Office records showed that of the total tourism receipts, P22,819,281,388.80 came from foreign and overseas Filipinos; while P11,699,387,689.50 were from domestic tourists. Based on the report, such earnings were generated from the 1,260,958 tourist arrivals of Boracay for the first seven months this year; which triggered the growth of tourism receipts of the island. Foreign tourists listed were 574,405; while domestic or local tourists were 655,505; and 31,048 overseas Filipinos. Page 11 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 The Department of Tourism – Boracay has expressed optimism that the two million tourist arrivals target for this year will be met or may even be exceeded. If the 2,000,000 tourist target is met, Boracay will generate tourism receipts of P 55 Billion for 2017. With such trend, according to DOT-Boracay, it is not far that target set will be met or may even be surpassed in terms of tourist arrivals and tourism receipts. In 2016, according to the Philippine Information Agency(PIA), tourism receipts of Boracay were recorded at P48,895,469,783.40. AOR Figure 2. Boracay White Sand 3.3.2 Victorias Milling Corporation Victorias Milling Company, Inc. (VMC) was incorporated on May 7, 1919 to engage in integrated raw and refined sugar manufacturing as well as to operate engineering services. VMC's sugar plant facilities are located in Victorias City, Negros Occidental. On July 3, 2013, the Securities and Exchange Commission (SEC) approved the inclusion of ethanol and/or potable alcohol production, infrastructure, transportation, telecommunication, mining, water, power generation, recreation, and financial or credit consultancy in the Company's business purposes. Victorias Milling Company, Inc. was founded by Miguel J. Ossorio with his wife Paz, his brother Francisco, Shiras M. Jones, and Claudio R. De Luzuriaga. Victorias Milling Company, Inc. (VMC) is one of the biggest producers of raw and refined sugar in the Philippines. It currently holds the biggest share of refined sugar production in the province of Negros, and in the rest of the country as well. These amount to a 23.73% and 12.63% market share, respectively. Page 12 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 VMC’s sugar operations consist of two-mill tandems with a combined rated grinding capacity of 15,000 tonnes of cane daily. One is the VMC Walkers Mill or the “A” Mill, designed by Walkers Limited of Australia. It has a grinding capacity of 10,000 tonnes of sugarcane per day. The other one is called the “C” Mill, designed by Farell Company of Hawaii. This one has a daily grinding capacity 5,000 tonnes of sugarcane. Along with all these, VMC also has a Raw House capable of processing 15,000 TCM daily and a Refinery capable of producing 25,000 to 27,000 50-kg bags of refined sugar daily. The Core Sampling System, a technology that reflects the true quality of each cane sample and eliminates the inadequacies of old systems, complements the factory. According to its Annual Report, Victorias generated P 5,314,018 from its sugar milling business in 2016 Figure 3. Victorias Sugar Mill 3.3.3 Sugarcane Plantation There are twenty four(24) sugar centrals/mills in the country with a total milling capacity of 201,900 MT sugarcane per day or an average of 8,413 MT sugarcane per day per mill. There are eleven(11) operating refineries with an average annual production of 20,000,000 50 kg bags or 1,000,000 MT refined sugar, eight bio-ethanol distilleries with a capacity of 222 million liters and five(5) power generating plants with a capacity of 84 MW. Average farm size is about five(5) hectares with 65,000 farm owners, 700,000 farm workers and five million(5,000,000) dependents. Area planted to sugar as of end of 2016 was 419,207 hectares with an estimated annual revenue of P 79,435,178,560 at an average price of P 35.48 per kg. Page 13 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 4. Sugarcane Plantation 3.3.4 Palay Plantation In 2016, the Philippines harvested palay from a total of 4,556,040 hectares with a total farm production of 17, 627,240 MT and milled rice production of 11,500,000 MT. Average farmgate palay prices for 2016 was P 17.86 per kg while average wholesale price of well-milled rice was P 38.22 per kg.. Total rice importation was 1,400,000 MT, making the Philippines as the world’s largest importer of rice According to the data of the Philippine Statistics Authority(PSA), palay revenues for 2016 was P 314,822,506,400. Page 14 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 5. Palay Plantation 3.3.5 PASAR Corporation The PASAR plant complex occupies 80 hectares in the 424-hectare Leyte Industrial Development Estate (LIDE). Completed in 1983 with the capacity to produce 138,000 metric tonnes per year (mtpy) of Grade A electrolytic copper cathodes, it was expanded in 1993 to 172,500 mtpy, and in 2007 to 215,000 mtpy. According to the Businessworld’s Top 1,000 Corporations list, PASAR had a gross revenue of P 61,778,000,000. Page 15 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 6. PASAR Copper Smelter 3.3.6 Ferro-nickel Smelter The company will establish a ferronickel smelter project which have been designed to treat nickel laterite ore through kiln drying and calcining processes to produce calcined nickel ore. The calcined ore is smelted in an electric furnace to produce molten crude ferronickel. The molten crude ferronickel is then refined in a ladle and subsequently cast and solidified into the final ferronickel ingot product containing at least 20% nickel metal with the rest being substantially iron. The ferronickel is then sold for further use in the production of stainless steel. Operation of the smelter complex envision an annual production capacity to be around 3,135 metric tons of ferronickel ingots with about 6,911,421 pounds of contained nickel metal. Estimated annual revenues per year is P 1,762,412,000. Page 16 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 7. Ferro-nickel Smelter 3.3.7 Bangko Sentral ng Pilipinas Gold Refinery Gold producers, small-scale miners and other individuals may sell their gold at prevailing global market rates at various gold buying stations such as the Mint and Refinery Operations Department (MROD) in Quezon City and the BSP offices in the cities of Baguio, Naga, Davao and Zamboanga. Purchased gold in the form of bars or discs are then refined at the MROD and converted into London good delivery bars. Alternatively, some of the gold may also be manufactured into semi-finished material in the form of grains and sheets for re-sale to local jewellers and industrial users. The BSP may enter into a location swap transaction so that bars held in the bullion vault may be mobilized and made readily available for gold-related transactions in the international market. Page 17 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 8. Gold Bars 3.3.8 Coral Bay Nickel Corporation The company operates a Hydrometallurgical Processing Plant(HPP) in Rio Tuba, Bataraza, Palawan producing nickel and cobalt sulfides from existing stockpiles of low grade nickel ore from the Rio Tuba nickel mine. In the initial stage, HPP1 produced 10,000 tons nickel and 750 tons cobalt per year. Main product is mixed sulfide(MS) of nickel and cobalt analyzing 57.2% Ni and 4.2% Co. MS is in powder form and are contained in flexible plastic bags for export. With its HPP2 project, total plant capacity is now 24,000 tons nickel and 1,500 tons cobalt per year. Page 18 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 9. Coral Bay Nickel Corporation, HPP Page 19 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 3.3.9 Taganito HPAL Nickel Corporation Taganito HPAL Nickel Corporation manufactures nickel using high-pressure acid leach (HPAL) technology, which uses low-grade laterite ores. The company was founded in 2008 and is based in Manila, Philippines. Taganito HPAL Nickel Corporation operates as a subsidiary of Sumitomo Metal Mining Co. Ltd. The company produces nickel-cobalt mixed sulfides containing 30,000 MT of nickel and 2,600 MT of cobalt. Figure 10. Taganito HPAL Nickel Corporation Plant Page 20 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 3.3.10 Calaca Coal-Fired Power Plant The Calaca coal-fired thermal power plant is a 600 megawatt (MW) conventional, pulverized coal–fired power plant built by the National Power Corporation (NPC). It consists of two 300 MW coal-fired units commissioned in 1984 and 1995. The plant occupies an area of 167 hectares in the municipality of Calaca, province of Batangas, about 115 kilometers south of Manila. It is currently under the control of DMCI Holdings, Inc. In 2016, it generated P 16,504,913,084 in annual revenues and 3,322 gigawatt-hours of electricity. Figure 11. Calaca Power Plant Page 21 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 3.3.11 Gold Mines There are seven(7) primary gold producers in the Philippines as of the end of 2016, namely, Table 3. Primary Gold Producers, 2016 1 Mine Location FTAA/MPSA No. Philippine Gold Processing and Refining Corp/ Filminera Resources Corp. Aroroy, Masbate MPSA-095-97V Aroroy, Masbate MPSA-2552005-XI Acupan, Itogon, Benguet Bunawan and Rosario, Agusan del Sur Mankayan, Benguet PC-ACMP002-CA MPSA-2622008-XIII MPSA-001-90CAR 948.9695 Mankayan, Benguet Mining Patents 335.1179 Maco, Compostela Valley MPSA-2252005-XI 2 Benguet Corp. 3 Philsaga Mining Corp. 4 Lepanto Consolidated Mining Company 5 Apex Mining Company, Inc. MPSA-2342007-XI 6 Greenstone Resources Corp 7 FCF Minerals Corp Total/Average Alegria, Mainit, Tubod and Bacuag, Surigao del Norte Quezon, Nueva Vizcaya MPSA-1842002-XIII FTAA-0042009-II Permitted Area hectares) 289.9500 TPD Grade (g/MT) Annual Revenues(P)* 419.6717 223.9925 12,000 112 1.12 7.71 13,566,213,132 827,809,161 2,538.7919 1,800 6.40 5,127,177,225 860 3.31 1,399,721,328 2,237.5200 3,288,7676 1,373 3,500 4.68 2.80 2,997,119,268 3,317,570,566 3,093.5100 4,000 1.89 494,692,639 13,765.3611 3,378 129.7217 1,284.0784 679.02 1,558.5000 27,730,294,319 * Gold and Silver Total approved MPSA/FTAA area is 13,765.3611 hectares with annual revenues of P 27,730,294,319. Page 22 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 12. Gold Mining and Milling Process Page 23 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 3.3.12 Copper Mines There are three(3) copper mines in the Philippines: Table 4. Copper Mines, 2016 1 2 3 Mine Location Carmen Copper Corp Toledo City, Cebu Toledo City, Cebu Naga and Toledo Cities, Cebu MPSA-210-2005VII MPSA-263-2008VII MPSA-307-2009VII Tuba and Itogon, Benguet Tuba and Itogon, Benguet Tuba, Benguet MPSA-156-2000CAR Nueva Vizcaya and Quirino FTAA-001 Philex Mining Corp Oceana Gold Phils., Inc. Total/Average FTAA/MPSA No. Permitted Area (hectares) 234.2875 TPD Grade (% Cu) Annual Revenues(P)* 45,678 0.321 11,172,548,988 6,887.0000 12,864.0000 31,197 12,000 0.20% 0.54% 10,104,547,389 13,808,905.982 21,907.4304 29,625 648.0159 1,274.1270 2,156.4304 3,848.0000 MPSA-157-2000CAR 2,958.0000 MPSA-276-2009CAR6 81.0000 35,086,002,359 * Copper, gold and silver Page 24 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 13. Didipio Open Pit Mine Page 25 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 14. Didipio Undergound Mine Page 26 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 3.3.13 Nickel Mines As of the end of 2016, there were a total of eighteen(18) operating nickel mines in the country: Table 5. Nickel Mines, 2016 1 2 3 4 Mine Location FTAA/MPSA No. Cagdianao Mining Corp Hinatuan Mining Corp Cagdianao, Dinagat Island Tagana-an, Surigo del Norte Bataraza, Palawan Claver, Surigao del Norte Quezon, Palawan Sta. Cruz and Candelaria, Zambales Claver, Surigao del Norte Carrascal, Surigao del Sur Carrascal, Surigao del Sur MPSA-078-07XIII MPSA-2462007XIII(SMR) MPSA-114-98IVB MPSA-2662008-XIII Carrascal, Surigao del Norte Cantilan, Surigao del Sur Tubay, Agusan del Norte Sta. Cruz, Zambales Narra and Sofronio Espanola, Palawan Basilisa and San Jose, Dinagat Islands Claver, Surigao del Norte Libjo, Dinagat Islands MPSA-2432007-XIII Rio Tuba Nickel Mining Corp Taganito Mining Corp 5 Berong Nickel Corp 6 Zambales Diversified Metals Corp Platinum Group Metals Corp 7 8 CTP Construction 9 Carrascal Nickel Corp 10 Marcventures Dev and Mining Corp 11 SR Metals, Inc. 12 Benguet Corp 13 Citinickel Mines and Dev. Corp 14 AAM Philippines Natural Resources Exploration and Dev Corp Adnama Mining Resources, Inc. 15 16 Libjo Mining Corp Annual Revenues(P)* 4,700 Grade (% Ni) 1.80 773.7700 6,500 1.30 1,987,566,307 900.0000 5,500 1.20 1,874,120,000 4,584.4185 15,000 1.50 3,728,330,251 288.00 1,000 1.75 361,207,144 3,765.3853 310 1.51 93,484,705 MPSA-007-92X 4,376.0000 6,700 1.09 113,933,032 MPSA-018-93X 3,564.000 7,700 1.16 2,348,527,416 MPSA-158-00XIII 321.40000 487 0.94 113,933,032 3,885.4000 4,547.7630 8,187 5,800 1.09 2,462,450,278 1,462,452,593 MPSA-016-93X 4,799.0000 6,000 0.59+ 1,252,854,852 MPSA-2612008-XIII 1,079.0500 6,500 1.5 1,832,161,613 MPSA-22262005-III MPSA—2292007-IVB 1,406.70000 2,200 1.55 1,170,062,782 2,176.0000 540 1.50 203,777,222 636.0000 1,600 0.67 211,927,147 MPSA-2592007-XIII 1,086.5043 1,600 1.05 251,944,958 MPSA-2332007-XIII 4,226.2744 1,750 1.16 474,242,023 MPSA-2352007-IVB MPSA-1912004-III MOA PMDC with Permitted Area (hectares) 697.0481 TPD 1,222,853,336 Page 27 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 17 Agata Mining Ventures, Inc. 18 Century Peak Corp. Total/Average Jabonga, Santiago and Tubay, Agusan del Norte Loreto, Dinagat Islands Loreto and Libjo, Dinagat Islands MPSA-134-99XIII 7,679.000 6,300 1.04 1,327,015,771 MPSA-010-92X 1,198.0000 1,000 0.93 59,239,051 MPSA-2832009-XIII 3,188.2566 1,000 0.93 79,618,869 4,386.2566 51,613.9702 4,326 21,881.760,411 Figure 15. Nickel Mine Page 28 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 3.3.14 Chromite Mines There is only one(1) operating chromite mine in the country, Techiron Resources, Inc. located at Guian, Eastern Samar under MPSA No. 292-2009-VIII with an area of 3,516.2015 hectares an annual revenue of P 182,618.406. Its daily production is 86 MT per day. 3.3.15 Iron Mines There is only one(1) operating iron mine in the country, Ore Asia Mining and Development Corporation with Special Mines Permit No. 2013-01 located at Dona Remedios Trinidad, Bulacan. Its permitted area is 442.4600 hectares 3.3.16 Coal Mines There is only one(1) major coal mine in the country, Semirara Mining and Power Corporation located at Caluya, Semirara Island, Antique under Coal Operating Contract No. 3 with an area of 3,000 hectares. In 2016, its production rate was 40,000 MT per day and it had coal revenues of P 20,079,462,056. Figure 16. Semirara Coal Mine Page 29 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 4.0 Location of Mines The figures show the location of the various operating mines in the country: Figure 17. Operating Mines, Luzon Page 30 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 18. Operating Mines, Visayas Page 31 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 19. Operating Mines, Mindanao Page 32 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 20. Semirara Coal Mine, Location Map Page 33 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 7.0 Ranking of Operating Mines by Revenue Per Hectare The ranking of gold, copper and nickel mines are shown in the tables below: Gold mines generated P 27,730,294,319 in annual revenues in 2016 in an area involving 13,765.1311. Its revenue per hectare is P 2,014,498.14 which is way below the revenue per hectare of Boracay Island of P 47,379,311.19. Table 6. Ranking of Gold Mines 1 2 3 4 5 6 7 Mine Permitted Area(hectares) Grade, Grams/MT Annual Revenues(P) Philippine Gold Processing and Refining Corp/Filminera Benguet Corp Philsaga Mining Corp Apex Mining Company, Inc. Lepanto Consolidated Mining Co. Greenstone Resources Corp FCF Minerals Corp Total/Average 419.6717 1.12 13,566,213,132 Revenue Per Hectare (P/hectare) 32,325,775.44 223.9925 2,538.7919 2,237.5200 1,284.0874 7.71 6.40 4.68 3.31 827,809,161 5,127,177,225 2,997,110,268 1,399,721,328 3,695,700.33 2,019,534.26 1,339,478.65 1,090,051.45 3,288.7676 3,093.5100 13,765.1311 2.80 1.89 3,317,570,566 494,692,639 27,730,294,319 1,008,757.98 159,913.06 2,014,498.14 Figure 21. Ranking of Gold Mines Revenue per Hectare 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Boracay Filminera Benguet Philsaga Apex Lepanto Greenstone FCF Revenue per Hectare Copper mines had a total permitted area of 21,907.4304 hectares and annual revenue of P 35,086,002,359 in 2016 with a revenue per hectare of P 1,601,557.18 which is way below the revenue per hectare of Boracay Island. Page 34 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Table 7. Ranking of Copper Mines Mine 1 2 3 Carmen Copper Corp Philex Mining Corp Oceana Gold Philippines, Inc. Total/Average Permitted Area(hectares) Grade,%Cu Annual Revenues(P) 2,156.4304 6,887.0000 12,864.0000 21,907.4304 0.32 0.20 0.54 11,172,548,988 10,104,547,389 13,808,002,359 35,086,002,359 Revenue Per Hectare (P/hectare) 5,181,038.53 1,467,191.43 1,073,453.51 1,601,557.18 Figure 22. Ranking of Copper Mines Revenue Per Hectare 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 Boracay Carmen Copper Philex Oceana Nickel mining had annual revenues of P 21,881,760,411 with a permitted area of 51,613.9702 hectares and a revenue per hectare of P 423, 950.04. It was the worst performing sector of the mining industry in terms of revenue per hectare. Table 8. Ranking of Nickel Mines 1 2 3 4 5 6 7 8 9 10 11 Mine Permitted Area(hectares) Grade,%Ni Annual Revenues(P) Hinatuan Mining Corp. Rio Tuba Nickel Mining Corp. Cagdianao Mining Corp. SR Metals, Inc. Berong Nickel Corp. Benguet Corp. Taganito Mining Corp. CTP Construction Platinum Group Metals Corp AAM Philippines Natural Resources Carrascal Nickel Corp. 773.7700 900.0000 697.0481 1,079.0500 288.0000 1,406.7000 4,584.4185 3,885.4000 4,697.4000 636.0000 1.30 1.20 1.80 1.50 1.75 1.55 1.50 1.16 1.09 0.67 1,987,566,389 1,874,120,000 1,222,853,336 1,832,161,613 361,207,144 1,170,062,782 3,728,330,251 2,462,450,278 1,826,451,509 211,927,147 Revenue Per Hectare (P/hectare) 2,568,678.43 2,082,355.56 1,754,331.35 1,697,939.50 1,254,191.47 831,778.48 813,261.32 633,770.08 388,821.80 333,218.78 4,47.7630 1.09 1,462,452,593 321,576.25 Page 35 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 12 13 14 15 16 17 18 Marcventures Mining and Dev. Corp Adnama Mining Ventures, Inc. Agata Mining Ventures Libjo Mining Corp Citinickel Mines and Dev. Corp Century Peak Corp Zambales Diversified Metals Corp Total/Average 4,799.00 0.59 1,252,854,852 261.065.82 1,086.5043 7,679.0000 4,226.2744 2,176.0000 4,386.2600 3,765.3853 1.05 1.04 1.16 1.50 0.93 1.51 251,944,958 1,327,015,771 474,242,023 203,777,222 138,857,920 93,484,705 231,885.84 172,811.01 112,212.79 93,647.62 31,657.50 24,827.39 21,881,760,411 423,950.34 51,613.9702 Figure 23. Ranking of Nickel Mines Revenue per Hectare 50,000 45,000 47,379 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 2,5682,0821,7541,6971,254 831 813 633 388 333 321 261 231 172 112 93 31 24 0 Revenue per Hectare 8.0 Total Permitted Area, Annual Revenues and Revenue Per Hectare The total permitted area for mining is 90,286.7617 hectares compared to Boracay’s land area of only 1,032.0000 hectares: Table 9. Permitted Area, Annual Revenues and Revenue Per Hectare, Mines Versus Boracay Mine 1 Gold Mines Permitted Area (hectares) %, Total Area Annual Revenue (Pesos) %, Annual Revenue Revenue Per Hectare 13,765.3611 7.71 27,730,294,319 18.05 2,014,498 %, Revenue Per Hectare 3.66 Page 36 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 2 3 4 5 Copper Mines Nickel Mines Sub-Total, Metallic Mines Semirara Mining and Power Corp Total Boracay Island Total 9.0 21,907.4304 51,613.9702 87,286.7617 12.27 28.90 48.87 35,086,002,359 21,881,760,411 84,698,057,089 22.82 14.24 55.12 1,601,557 423,950 970,343 2.91 0.77 1.76 3,000.0000 3.29 20,079,462,056 13.07 6,693,154 12.16 90,286.7617 98.87 104,777,519,145 68.18 7,663,497 21.26 1,032.000 1.13 48,895,469.783 31.82 47,379,331 86.08 91,318.7617 100.00 153,672,988,928 100.00 55,042,828 100.00 Comparative Ranking by Revenue Per Hectare The highest revenue per hectare was that of PASAR Corporation followed closely by the Bangko Sentral ng Pilipinas Gold Refinery. If PASAR had a copper fabrication plant and we had a gold jewellery industry and we had a nickel refinery, annual revenues per hectare would be a lot higher. Table 10. Comparative Ranking by Revenue per Hectare Direct Impact Area(hectares) Revenue Per Hectare(P/hectare PASAR 80.00 772,225,000.00 BSP 62.20 730,695,578.78 Coal-Fired Power Plant 167.00 98,831,814.97 1,032.00 47,379,331.19 Ferro-nickel Smelter 80.00 22,030,150.00 Victorias Milling 611.89 8,684,596.90 Nickel Processing 1,765.34 8,536,718.51 Coal 3,000.00 6,693,154.02 Gold Mining 13,765.36 2,014,498.14 Copper Mining 21,907.43 1,601,557.18 Nickel Mining 51,613.97 423,950.35 Sugarcane Plantation 419,207.00 189,489.15 Palay Plantation 4,556,040.00 69,100.03 Chromite Mining 3,516.20 51,936.27 Iron Ore Mining 442.46 27,739.44 Boracay Page 37 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 24. Comparative Rankings by Revenue per Hectare Revenue per Hectare Revenue per Hectare BSP Gold Refinery PASAR Calaca Power Plant Boracay Ferro-nickel Smelter Victorias Milling Nickel Processing(HPAL) Coal Mining Gold Mining Copper Mining Nickel Mining Sugarcane Plantation Palay Plantation Chromite Ore Mining Iron Ore Mining 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Page 38 of 39 Comparative Study on Mining, Eco-tourism and Agriculture September 23,2017 Figure 25. Comparative Rankings, Mining Industry Versus Boracay Boracay 47,379 Coal-Fired Power Plant 16,504 HPAL 8,537 Coal Mining 6,693 Gold Mining 2,014 Copper Mining 1,601 Nickel Mining 423 Chromite Ore Mining 51 Iron Ore Mining 27 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Revenue per Hectare Figure 26. Permitted Areas Larger than the City of Manila Industry Area(hectares) City of Manila Oceana Gold Philippines, Inc. 3,855.0000 12,864.0000 Copper and Gold Agata Mining Ventures Nickel 7,679.0000 Philex Mining Corporation Copper and Gold 6,887.0000 Marcventures Development and Mining Corp Copper and Gold 4,799.0000 Taganito Mining Corp Carrascal Nickel Nickel Nickel 4,584.4185 4,547.7630 Century Peak Corp Platinum Group Metals Corp Nickel Nickel 4,386.2566 4,376.0000 Libjo Mining Corp Nickel 4,226.2744 CTP Construction Nickel 3,885.4000 Semirara Mining and Power Corp Coal 3,000.0000 ENGR. GRACIANO M. CALANOG,JR. Registered Mining Engineer No. 1265 Page 39 of 39