Advertisement

DOF forming interagency team to review privatization of gov’t mining properties

The Department of Finance said over the weekend it is working to untangle the legal issues tying down idle mining interests held by the government to speed up the privatization of these assets and revive their operations.

The Privatization and Management Office, an attached agency of the DOF, said lawsuits filed by the private sector proponents in the operation of these once-flourishing mining assets had hampered efforts by the government to privatize them.

“We are forming an interagency team to study ways on how we can clear the path for these assets to be privatized and revive their operations,” Finance Secretary Carlos Dominguez III said.

Dominguez said the team would be composed of representatives from the DOF, Department of Environment and Natural Resources, Mines and Geosciences Bureau, PMO and the Office of the Solicitor General.

A memorandum by the PMO to Dominguez identified the copper-gold project of the Maricalum Mining Corp. in Negros Occidental, the nickel mines of the Nonoc Mining and Industrial Corp. (Nonoc Mining) in Surigao del Norte and the gold- and copper-rich North Davao Mining Property (North Davao Mining) in Davao del Norte as among the idle mining assets held by the government that were under litigation.

The PMO also said the copper mines of the Basay Mining Corp. (Basay Mining) in Negros Oriental and the nickel mine once operated by the Marinduque Mining and Industrial Corp. (MMIC Bagacay Mine) in Western Samar remained nonoperational because of the legal concerns on how these assets should be disposed.

Dominguez told business leaders during the 46th Philippine Business Conference and Expo hosted by the Philippine Chamber of Commerce and Industry that the DOF had done a comprehensive assessment of state-held mining assets.

He said the government was pushing the revival of the mining industry to provide jobs and energize economies in the countryside, as part of national efforts to restart the economy in the face of the pandemic-induced global economic downturn.

The mining industry, Dominguez has said, “provides jobs in [rural] areas where there are no other alternative jobs” available.

“Definitely, we are pushing for the revival of the mining industry,” he said during the PCCI virtual conference.

PMO said Maricalum Mining, Nonoc Mining and North Davao Mining were once successful mining companies that failed to settle their debts with government financial institutions, leading to their

foreclosure and transfer of their assets and shares of stocks to the national government.

The government then auctioned off the shares of these mining firms, but the firms with the highest bid failed to fulfill their obligations, which resulted in decades of litigation that had left these mining assets idle.

Maricalum Mining, led by its president, Teodoro Bernardino, has been tied up in litigation since 1995. The winning bidder, G Holding Inc., refused to pay the balance of the price of its purchased shares under its purchase and sale agreement with the government.

The last General Information Sheet filed by GHI with the Securities and Exchange Commission in 2005 named Michael Bernardino as the chairman of its board and Eleanore Gutierrez as its major stockholder.

Nonoc Mining was acquired by the Development Bank of the Philippines and the Philippine National Bank in 1984 and turned over in 1987 to the then-Asset Privatization Trust. In 1996, APT sold 22.5

million shares of stock of Nonoc Mining to Philnico Mining and Industrial Corp., now Philnico Industrial Corp.

Based on its 2018 GIS, the PIC chairman of the board is Ramon Ang, and its president is Horacio Ramos. The sale represented 90 percent ownership of Nonoc Mining.

Under the Amended and Restated Definitive Agreement between the two parties, PMIC agreed to pay APT the peso equivalent of $263.762 million as purchase price, payable in two sets of installments and in accordance with the schedule set in the ARDA.

The government moved for the reversion of the shares sold to PMIC when the latter defaulted.

The PMO said this led to numerous cases filed by both the private sector and the government against each other that eventually reached the Supreme Court. The issue is now awaiting resolution by the high court, the PMO said. To date, there has been no collection on the P14.9 billion purchase price.

The North Davao Mining case involved the bidding for a joint operating agreement to develop its mining assets in partnership with the Philippine Mining Development Corp., a wholly owned and controlled government corporation designated as the new implementing arm of the DENR in undertaking the mining and mineral processing operations in Compostela Valley Province, among others.

The Asia-Alliance Mining Resources Corp. led by its president Simon Paz, was qualified and considered as the highest calculated and responsive bid, failed to comply with the conditions of the notice of award in 2009, including failure to pay the commitment fee, secure a performance bond and execute the JOA.

A series of litigation ensued and is still pending with the Court of Appeals.

Basay Mining, formerly the CDCP Mining Corp., was established in 1970, but its operations were suspended in 1983 because of lack of working and operating funds. Basay Mining had entered into a deed of assignment of mining claims and leasehold rights with the PNB to secure credit and loan accommodations from the bank.

Technical studies by the PMO indicate that the Basay mine is estimated to contain at least 105 million tons of copper ore and could generate at least P1 billion.

Topics: Department of Finance , DOF , mining , Finance Secretary Carlos Dominguez III
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementGMA-Congress Trivia 1
Advertisement