Of Mining and Mountains
“Moving a mountain” is an oft-quoted phrase that could be traced back to the Analects of Confucius.
The dawn of the 20th century turned this idiom into a reality with the advent of a technology developed to advance man’s insatiable need for progress: modern mining.
It is the only industry that literally involves moving a mountain: a methodical chopping of layers of soil, rock and earth, extracting the mineral, and dumping the bulk of the unwanted material to create a mountain in another location…. a multi-year exercise that ravishes watersheds and rivers but creates billions of the dollars for the mining firm.
The Samarco Disaster
The picture below was from one of my trips to one of Brazil’s largest mining regions, the state of Minas Gerais, about 700 km north from the beaches of Copacobana.
Brazil is one of the world’s top producers of iron ore. Surface mining involves stripping layers and layers of bedrock to reach the ore, which is then mechanically- and chemically-processed to extract the metal.
Vale, which operates most of the mines around the state, grew into a $26 Billion Brazilian conglomerate with interests around the world.
On November 5, 2015 one of these iron ore mines owned by Samarco, a joint venture between Vale and BHP Billiton, had a mine tailing (unwanted waste in extracting metallic ores) dam burst open into the Rio Doce. Villagers were killed and hundreds of families were displaced when millions of toxic mud, waste and sludge flowed in the river, traveling across the state of Minas Gerais before making its way to the Atlantic Ocean, poisoning one of the region’s most valuable freshwater resources with heavy metals.
For this, Samarco settled a $5 Billion fine last year. However, the cost of the incident to the Brazilian economy and the environment is immeasurable – fish, turtles, plants and marine life were eradicated almost immediately. The region’s water supply will remain contaminated for decades to come. Needless to say, the long-term health and socio-economic impact of the disaster will be felt for generations.
Nickel in the Philippines
When Gina Lopez ordered the closure of more than half of country’s mines and canceled 75 mining contracts within a span of barely two weeks – I thought it was about time that the DENR and the Bureau of Mines finally exercised its mandate of safeguarding the country’s natural resources and equitably distributing the economic benefits.
The Philippines annually produces more than half-million metric tons of nickel, which is 10% of the world’s production, emerging as the worlds’ top producer.
Analyzing the industry for the last 10 years, mine tailings in the Philippines doubled to 20 million tons, driven by a 140% increase in the number of nickel mines from 18 to 44.
With surging commodity prices, the nickel value from mining quadrupled to ~37 Billion pesos this past decade, minting a significant fortune for the country’s elite operators.
The correlation between profit and mine tailings is indisputable. Hence, it is highly plausible that the protests against Lopez’s appointment is driven by an economic motivator – money.
Mine tailings are a major headache for mining companies for the simple reason that it has no economic value at all – it cannot be kept, sold, moved without incurring additional costs. If we flat out disregard its impact to the environment, it makes total sense to just dispose the tailings into a river rather than spend for the proper management of tailings for decades.
Corporate Social Responsibility (CSR)
CSR gained a wider acceptance this past decade, advocating for the idea that promoting the interests of society and the environment could lead to higher profits.
However, certain industries are lukewarm to CSR. High-capital industries such as oil, diamond, power-generation and mining have repeatedly played lip-service to CSR. They have been unable to self-regulate and therefore, require government regulations to preserve the well-being of its citizens.
Lepanto, one of the companies affected by Lopez’s directive as well one of the Philippines’ top mining firms, has a section on CSR in its latest annual report.
Lepanto’s CSR program is laughable. It discusses earthquake drills and fire exercises, and an occasional help to the community after a typhoon…. chump change. The annual report does mention tailings twice: as a major cost outlay (which was decreased to P451 million in 2015) and as a footnote under financial liabilities.
Just like most Philippine mining operators, Lepanto does not view mine tailings as part of its CSR program – it is astounding that the most important environmental issue for the mining industry globally is a mere financial footnote.
A new chapter for the DENR
The Philippines has benefited economically from mining, but it only represents less than 1% of the economy. However, its potential impact to the environment is significantly disproportionate relative to the benefits if the country is faced with its own Samarco disaster.
The Chamber of Mines is crying foul – opposing Lopez’s confirmation and stating that previous audits did not recommend mine closures. They would rather simply pay a fine since they could afford to do so.
Challenging this powerful industry before her confirmation hearing was an audacious gamble. But with mining companies literally moving our mountains, Lopez has also demonstrated that she will likewise move mountains against these vested mining interests.
We need an environmental steward that represents the interests of Filipinos.
We need more audacious Filipinos to lead the nation.
We need to have Gina Lopez’s appointment confirmed.