Itogon Folk Reject Anvil

Itogon folk reject Anvil

Nordis - http://www.nordis.net/blog/?p=1387

19th August 2007

ITOGON, Benguet (Aug. 16) --- "Your presentations are very informative. But they cannot convince us because experience tells us differently. No matter what you say in your efforts to shed light on the issue, what our people see in before us is black."

A schoolteacher told the representatives of the transnational firm Anvil Mining, Ltd. and its local business partner, Itogon-Suyoc Resources, Inc. (ISRI), in a consultation held on the 11th of August between the two companies and the constituency of Barangay Ampucao in the Municipality of Itogon, Benguet Province. The teacher's words put an end to a two-hour debate between the small-scale miners of Ampucao and the large-scale mining company engineers regarding the impact of diamond drilling on their water sources.

While the engineers presented technical data to support their assertion that the drilling planned by Anvil would not affect the community water sources, the small-scale miners drew on their own familiarity with the mineral veins and water channels beneath Ampucao's mountains, plus their communities' past trauma from exploration drilling, to contest the engineers' claims.

Anvil is evaluating the mineral tenements that it is buying from ISRI (successor to Itogon-Suyoc Mines, Inc. , or ISMI). The plan it has drawn up for exploration drilling in these tenements threatens the water sources of several communities in northern Ampucao.

Aside from the impact on community water sources, a number of other issues attend the plans of Anvil.

The Anvil-ISRI deal

Anvil is an Australian firm that is listed in the Toronto stock exchange in Canada and that operates several large mines in the Democratic Republic of the Congo. It is among the world's major producers of copper and one of its most cost-efficient. It has just started to venture into Asia, selecting Vietnam and the Philippines for its first projects.

Anvil's sole concern in the Philippines at present is its Itogon project. It has paid ISRI a total of US$ 2.12 million as a sort of downpayment for 2,896 hectares of mineral tenements, including the Sangilo gold mine, which has lain idle for 11 years. This covers old patented claims, Sangilo mine (35 has.); old but unpatented Sangilo mining claims (582 has.); Under new Mineral Production Sharing Agreement or MPSA (317 has) and those subject of new Exploration Permit (EP) Application (1962 has.) or a total of 2,896 hectares.

Until February 2009, Anvil will be doing a detailed evaluation of ISRI's mineral tenements, and afterwards prepare a feasibility study in which it will determine the most profitable means of mining these. It expects to spend at least US$ 2 million on exploration.

Upon the transfer of ISRI's mining rights to Anvil, Anvil will pay ISRI another US$ 500,000. Once its mining becomes productive, Anvil will start paying ISRI a Net Smelter Return Royalty of 2.5% for silver, 3% for copper, and 1% to 5% for gold, depending on the prevailing gold price. Once it has recovered its first 200,000 ounces of gold from ISRI's mineral tenements, Anvil will pay ISRI a one-off production bonus of US$ 1.25 million.

In its stock market news releases of 18 August 2006 and 31 March 2007, Anvil indicated that it was banking on the geology, minerology, and mineral production history of the Itogon area to make this relatively expensive deal with ISRI worth its while.

Drill holes and open pits

According to the Anvil representatives who came to the 11 August consultation, the company's exploration plans include the installation of 13 drilling pads and the boring of 20 drill holes about four centimeters wide and a hundred meters deep for the purpose of extracting a total of 4,000 meters of core sample from the Frog Vein. The vein is situated between the tunnels of ISRI's Sangilo mine and the land surface of Ampucao and the Itogon Poblacion. According to the small-scale miners of Ampucao, their area's water table lies just beneath this vein. If punctured, the water it holds will drain into the tunnels of the Sangilo mine instead of discharging to the surface through the Pitang springs and towards the Maupa creek. These are the springs and creek that supply potable water to the households of sitios Abucay, Ampucao Proper, Cruz, Dalicno, Hartwell, Manganese, Station, Tangke, Tipong, and Upper Lolita. One of the Pitang springs also supplies potable water to sitio Lower Lolita in the neighboring barangay of Virac.

"How can we believe that with the number of holes you will be drilling, our water sources will suffer no impact?" a Dalicno elder said to Anvil's engineers during the 11 August consultation. "In 1969, ISMI damaged one of our water sources with just one drill hole. Then in the 1990s, while we weren't looking, Benguet Corporation did the same. That's how we lost Pitang 1, and why we had to seek out Pitang 2 and 3. Now, you will deprive us of these new sources."

Conceding that they might inadvertently puncture Ampucao's relatively shallow and fragile water table, Anvil's engineers told the participants in the consultation that they could undo such damage by refilling the drill holes after collecting their core samples. But a small-scale miner retorted, "If it were to end with drilling, the problem would be easy to solve. Just plug the drill holes. But if it went on to mining, the hole would be too big to plug."

"And that is where all this will lead -- mining," he continued. "Do not try to tell us differently. Do not try to tell us that you have no plans in store beyond two years of exploration. . . You are going to mine. Otherwise, how will your company recover the money it is investing in exploration? . . . And I doubt that you will engage in stoping because ISMI has already extracted the ore from Sangilo's high-grade stopes. You will do bulk mining. And for that you will need to make a very large hole."

>From the back of the hall that served as the consultation venue, a woman called out, "No to large-scale mining! No to diamond drilling!"

In fact, without his knowing, the small-scale miner had pinpointed the main problem that the Kankanaey communities of northern Ampucao would face if Anvil were to be allowed to operate in the area. Anvil is an open-pit miner. This is the main reason for its cost-efficiency in the production of copper. The holes Anvil digs are big enough to swallow entire villages.

Lulu A. Gimenez/APIT TAKO Benguet Committee/Cordillera Peoples' Alliance.