Apollo Global announces subsidiary’s start of magnetite mining operations in Cagayan

Apollo Global Capital said subsidiary JDVC Resources will start the commercial operations of the country’s first offshore magnetite iron mining project in Cagayan next month.

The company assured the government of a minimal impact on the sea environment as studies by a Singapore-based survey company showed that there is no coral or aquamarine life within the mining area located 150 meters below sea level.

Jun Herrera, JDVC and APL consultant, said the first newly-built deep sea mining vessel arrived in Cagayan and was taking shelter because of strong waves.

Mining operations are expected to start by mid or end-February as soon as the ocean swell subsided, he said.

“The first vessel has arrived and three more vessels are expected to arrive this year,” Herrera said.

The vessel is capable of commercial extraction, testing and sampling and production of magnetite iron.

APL said the complaint from certain residents of Ballesteros, Cagayan alleging that the planned offshore mining operations of JDVC Resources would cause damage to coral beds had no basis.

“We won’t even be mining in their waters. In the first place, our mining operation will be in the waters of Buguey and Gonzaga towns, and at a distance of over 14 kilometers. That’s more than two horizon lengths away from the shoreline,” the company said.

Ballesteros resident Lazaro Ramos, in a letter to Environment Secretary Roy Cimatu, described the JDVC project as a “catastrophe”, citing a study by University of Hawaii oceanographer Craig Smith on the ocean seabed in the northeast Pacific abyssal waters.

APL said the study cited by Ballesteros identified a different part of the ocean compared to the mining site.

“That’s a different part of the Pacific. It looks at the ocean bed more than 200 meters below sea level, whereas we can only go down to 150 meters with current technology. Moreover, the Smith study did not look at magnetite iron reserves. From the experience of countries like Indonesia, Japan and New Zealand, magnetite iron is known to be toxic to corals, fish and other aquamarine life,” the company said.

JDVC said it commissioned a Singapore survey company to conduct a full “sea bottom profile” of its mining tenements off Cagayan. The study said no corals or aquamarine life were to be found in the area.

The company said they consulted the residents of Buguey and Gonzaga and conducted corporate social responsibility activities over the years.

“We’re proud to say that over 90 percent of the residents support us and are even anxious for us to get started,” APL said.

Herrera said the mining project, located in the municipalities of Aparri, Buguey and Gonzaga in Cagayan, received funding from the Development Bank of the Philippines,

DBP granted an $8-million credit line for the JDVC magnetite iron mining project “We have proven to them [DBP] that it’s environmentally safe,” the mining consultant said.

“The DBP loan  has zero borrowings yet as of now, hence, our company remains to be zero debts and internally funded by our shareholders. The DBP loan will only kick off once we have the letter of credit is presented to the bank for the discounting the letter of credit of export buyers to obtain a 90-day working capital to fund the production of the ordered iron ore,” Herrera said.

He said JVDC, as an ISO-certified company, should maintain standards which include submissions of compliance to ecological and environmental standards.

Herrera said magnetite mining has a strong market around the world including China, which made “the steel industry as their roadmap for their economic recovery.”

Topics: Apollo Global Capital , Jun Herrera , Development Bank of the Philippines
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