Mine profile: BenguetCorp Nickel Mines Inc.

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QUICK FACTS

Name of mining firm: BenguetCorp Nickel Mines Inc.
Location: Sta. Cruz, Zambales
Mining area: 1,406.74 hectares
Metals extracted/mine products: Nickel
Nickel production (2020): 6,808 dry metric tons (direct shipping ore) valued at P11,730,016
Mining permit period: 2005-2030
Total manpower complement: 323

OWNERSHIP

Incorporation date: Oct. 2, 2009

Stockholders: 
Benguet Corp.
Mendoza, Reynaldo P.
Villegas, Bernardo M.
Fernandez, Lina G.
Arceno, Max D.

Chairperson of the Board: Mendoza, Reynaldo P.

MINING REVENUE

Current assets: P987 million (2019)
Current liabilities: P786.92 million (2019)
Total revenue: P64.65 million (2019)
Revenue from sale of nickel ores: P64.06 million (2019)
Net income: -P191.16 million (2019)

MINE AUDIT FINDINGS (2016/2017)

According to the Notice of Issuance of an Order sent to the company on Feb. 8, 2017 pertaining to operations under MPSA 226-2005-III, the company’s operations were suspended on July 7, 2016, along with that of Zambales Diversified Metals Corp., because of issues arising from tree-cutting and earth-balling operations and for not depositing the full amount of the Final Mine Rehabilitation Decommissioning Fund.

DENR’s audit conducted on Aug. 12-13, 2016 found that the company had violated several conditions of its ECC and provisions of:

• PD 1586 or “Establishing an Environmental Impact Statement System including other Environmental Management-related Measures and for other Purposes”;

• DAO 2003-30 or the IRR for the Philippine Environmental Impact Statement System;

• RA 7942 or the Philippine Mining Act of 1995;

• DAO 2010-21 or the Revised IRR of RA 7942;

• RA 8749 or the Clean Air Act of 1999 and its IRR;

• RA 9275 or the Clean Water Act of 2004 and its IRR; and

• DAO 2000-98 or the Mine Safety and Health Standards.


Field validation by the DENR also found that the company’s operations have impaired the functions of the watershed in the area.

The DENR review of the audit report as well as explanations from the company showed that it had violated certain provisions of the following laws, rules, and regulations:

• PD 1586 or “Establishing an Environmental Impact Statement System including other Environmental Management-related Measures and for other Purposes”;

• DAO 2003-30 or the IRR for the Philippine Environmental Impact Statement System;

• RA 9275 or the Clean Water Act of 2004 and its IRR;

• RA 8749 or the Clean Air Act of 1999 and its IRR;

• RA 7942 or the Philippine Mining Act of 1995;

• DAO 2010-21 or the Revised IRR of RA 7942;

• DAO 2000-98 or the Mine Safety and Health Standards;

• PD 705 or the revised Forestry Code of the Philippines;

• DAO 1987-80 or the regulations governing the measurement, assessment, and payment of forest charges on timber and other forest products; and

• DAO 2012-02 or the uniform replacement ratio for cut or relocated trees.


The violations, according to the order, were sufficient grounds for the cancellation of the firm’s MPSA.      

The full report and/or copy of the DENR order may be viewed here.

STATUS OF RECOMMENDATIONS / COMPANY RESPONSE (AS OF MARCH 2022)

PCIJ sent a letter to the company on Feb. 21, 2022 and made follow-ups on March 2, 2022 and March 24, 2022. We have not received a response as of this writing.
 

STATUS OF OPERATIONS

BenguetCorp Nickel Mines Inc.’s mineral production sharing agreement (MPSA) is suspended, according to the Mines and Geosciences Bureau’s list of MPSAs as of Feb. 28, 2021.

On Feb. 13, 2017, the company received an order from the Department of Environment and Natural Resources (DENR) cancelling its MPSA for the Sta. Cruz Nickel project. The order alleged that the company’s operation overlapped with a watershed. Prior to this order, the DENR in a separate report dated Oct. 3, 2016, found that the company had violated several conditions of its Environmental Compliance Certificate (ECC) and other legal provisions.

On Feb. 22, 2017, the company filed an appeal before the Office of the President to revise the DENR’s cancellation order. The company claimed it was operating within the Zambales chromite mineral reservation, which it said had been excluded from government-declared watersheds.

In its 2019 financial statement, the company noted that the Office of the President, as of March 20, 2019, had yet to respond to the appeal. The results of a review by the Mineral Industry Coordinating Council have yet to be released of writing.

In 2016, concerned citizens of Sta. Cruz, Zambales filed a petition for a Writ of Kalikasan, an injunction, against five mining firms including BenguetCorp. The Supreme Court granted the petition. But after petitions before the Court of Appeals, the provisional Writ of Kalikasan issued by the high court was lifted.

COMMUNITY PROFILE

Municipality class of mining location: Sta. Cruz, Zambales (1st class)
Population: 58,151 (2015)
Poverty incidence rate: 23.7% (2015)
Human Development Index: 0.53 (2012, provincial)
Major sources of livelihood: Nickel mining, farming, fishing

IN THE NEWS

SC issues Writ of Kalikasan vs 5 mining firms
Benguet Corp welcomes SC lifting of Writ of Kalikasan
Suspended Philippine nickel miner mounts first legal challenge to gov't crackdown

Sources:

General Information Sheet, 2020
Financial Statement, 2019
List of existing Mineral Production Sharing Agreements, Mining and Geosciences Bureau
Philippine Metallic Mineral Production, Mines and Geosciences Bureau
Social Development and Management Program
Santa Cruz, Zambales nickel mining impacts sustainable agriculture and fisheries, Environmental Justice Atlas
Poverty and socioeconomic indicators, Philippines Statistics Authority

Copy of full Mine Audit Reports by company, 2016
Copy of Notices of Issuance of an Order, 2017
Copy of Orders of Cancellation and/or Suspension, 2017

Acronyms used:

RA (Republic Act)
IRR (Implementing Rules and Regulations)
PD (Presidential Decree)
DAO (Department Administrative Order)
MPSA (Mineral Production Sharing Agreement)
SDMP (Social Development and Management Plan) 
 

Disclaimer: The mine audit was conducted in 2016 after Regina “Gina” Paz Lopez assumed the post of environment secretary. The findings in the reports, which authorities sent to the mining firms in 2016, were likely addressed in the succeeding years following a review conducted by the Mining Industry Coordinating Council after the audit led by Lopez, who died in 2019. PCIJ has verified the reports and reached out to each company for comment. We suggest you also confirm findings included in the reports as some information may have changed over time.

The reports come from files that PCIJ has received in connection with various environmental investigations. We are releasing them in full, recognizing the public value of the files to mining communities, miners, policymakers, civil society, and researchers.

Note: The Human Development Index is a measure of how well a country has performed, not only in terms of real income growth, but also in terms of social indicators that measure people's ability to lead a long and healthy life, acquire knowledge and skills, and have access to the resources needed to afford a decent standard of living. An HDI value below 0.550 is considered low and below 0.399 is very low. The national average for the Philippines is 0.718 as of 2020.

This article was produced with the support of Internews' Earth Journalism Network.