Mine profile: Hinatuan Mining Corp.

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QUICK FACTS

Name of mining firm: Hinatuan Mining Corp.
Location: Tagana-an, Surigao del Norte 
Mining area: 773.77 hectares
Metals extracted/mine products: Nickel
Nickel production (2019): 319,448 dry metric tons (direct shipping ore) valued at P414,112,951
Mining permit period: 2007-2032
Total manpower complement: 254

OWNERSHIP

Incorporation date: Sept. 10, 1979

Stockholders: 
Nickel Asia Corp.
Samson, Emmanuel L.
Ang, Philip T.
Zamora, Martin Antonio G.
Brimo, Gerard H.
Anievas, Jose B.

Chairperson of the Board: Brimo, Gerard H.

MINING REVENUE 

Current assets: P1.06 billion (2019)
Current liabilities: P460.73 million (2019)
Total revenue: P1.72 billion (2019)
Revenue from sale of nickel ore: P1.7 billion (2019)
Net income: P216.89 million (2019)

The company’s customers are solely from China.

MINE AUDIT FINDINGS (2016/2017)

According to the 2016 Mine Audit Report, Hining Mining Corp. had violated Conditions 1(a) and 9 of its Environmental Compliance Certificate. It was recommended that the firm be fined P100,000 for non-compliance. A notice of violation was also issued.

Other findings and recommendations cited in the audit include:

• “The clearance between the ship and ramp should be covered with metal planks or rubber sheets to capture spills or muds from tires and spills during loading. The berms should be re-engineered by replacing it with rock armors or concrete to avoid discoloration (of) Hinatuan Passage. Moreover, the silt collector sumps along the coastline should be made of three-chambered concrete tanks.

• A flow meter device must be installed at the outfall of the central settling ponds to determine the actual flow rate.

• (Policy recommendation) on vegetation in mineral rich areas as in the case of areas in the Dinagat Islands, Surigao del Norte (which) is different from the dipterocarp and pine forests. Trees are stunted and generally do not reach 15 centimeters in diameter at breast height (DBH). The usual Clearance to Cut issued pursuant to EO 23 does not apply to mining areas because “trees are not cut” but vegetation is completely removed in open surface mining sites.

• Come up with a policy recommending the appropriate plant species for the regreening of mined out and mineralized areas with emphasis on recommending an island endemic species and prohibiting potentially invasive alien species.

• As discussed with the company, the remaining intact cover within the MPSA would be retained since wildlife species are said to be present in the area. After the company established its reforestation activities, it has to conduct terrestrial faunal sampling to determine if the fauna listed during the wildlife assessment in 2012 still exists in the area.

• There is a need to review the land use of the island relative to its proclamation as part of the mineral reservation and as a small island as defined under DAO-2000-83 (Guidelines for the Management and Development of Small Islands, Including Coastal Areas).”


The report likewise states:

“In view of the foregoing, it is hereby recommended that HMC be suspended until such time that the penalty has been fully settled by the company and the violations stated are addressed with corrective measures and necessary improvement have been completely instituted.

Moreover, the company should show cause why they should not be suspended given the standards set by the new administration under Secretary Gina Lopez on small-island importance and citing the Nauru case as an example. This is for common good and given that more than half of the island (773.77 hectares) of the island with a total area of 1,275 hectares is considered as a small island and that (minerals) has been extracted (from the island) for 23 years. It is imperative that a study on the carrying capacity of the island be conducted by third-party experts to determine if it can sustain the impacts of continuation of mining operations.

It is also recommended that an updated study on the effects of the project on the health of the workers and affected residents including environmental risks assessment be conducted by a reputable third-party expert. The result (of the) study shall be submitted to DENR as basis for decision making.”

In addition, the Feb 8, 2017 Order issued to the company states that HMC had violated certain provisions of PD 1586 (“Establishing an Environment Impact Statement System including other Environment Management related Measures and for other Purposes”) and DAO 2003-30 or the IRR of the Philippine Environmental Impact Statement System. Further field validation of the DENR also showed that the mining operation of Hinatuan had impaired the functions of the watershed in the area and the integrity of the Hinatuan Island.        

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. 10, 2022 and made follow-ups on Mar. 2 and 24, 2022. We have not received a response as of this writing.

STATUS OF OPERATIONS

In February 2017, then Environment Secretary Gina Lopez ordered the closure of 23 mines, including Hinatuan Mining Corp.. No update on the status of the mining operations could be found. The full results of a review by the Mineral Industry Coordinating Council have yet to be released as of writing.

COMMUNITY PROFILE

Municipality class of mining location: Tagana-an, Surigao del Norte (5th class)
Population: 16,428 (2015)
Poverty incidence rate: 45.3% (2015)
Human Development Index: 0.51 (2012, province)

IN THE NEWS

DENR: Hinatuan nickel mine closure voluntary
Hinatuan Mining told to stop transporting nickel ore stockpile

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
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.