_______________________________ XSTRATA’S MINING MONEY MYTHS Large Scale Mining firms are fond of extolling the economic benefits of mining to justify their projects which are the subject of protests from all sectors of society. Their purpose is to make people blind to the social and environmental damage and drool over the economic benefits. But most often, these benefits are myths, bloated out of proportion to impress. Let us give an example.
They claim the Philippines has about $150 trillion dollars worth of un-mined minerals, dollars mind you, which, if translated, is about Php6 quadrillion. First, this is a very arbitrary figure. But let us just suppose, for the sake of argument, that this is a good reflection of actual figure. They say this figure is enough to pay for our external debt a hundred times over. It will boost our economy to the high heavens. We may in fact become a developed nation. Not in our life and not on solid earth.
The figure is quite impressive, enough to wow any reader, until you break it down and discover it is all a game of numbers. The $150 trillion is the gross value of total global prices of finished products. If you remove the cost of exploration, processing, transport, taxes, not to mention the ‘development’ funds to appease protesting host countries and host communities, you are left with about a quarter of that, or $37 trillion.
The lion’s share of that total net sales goes to the mining firm, about 92%. The 8% goes to the government in terms of 1) taxes, a miniscule 2%, which are largely unpaid in the first five years due to tax ‘incentives’, and 2) shares of the local host communities, and the private sector, including local partners who are but fronts. So we Filipinos are left with 8% of $37 trillion or $2.96 trillion. Still quite a sum, you would think, until you break it down further.
A mining project has a life span of about 25 years, so we spread that amount to get a figure of $118 billion or Php47 trillion per year. So you see, we are down from the trillions to the billions in terms of dollars, and down from the quadrillions to the trillions in terms of pesos.
Remember that the original figure of $150 trillion is a broad estimate of ‘total un-mined minerals’ of all sorts from gold to copper to nickel to zinc, etc. The proposed Xstrata-SMI gold copper mine in Tampakan, South Cotabato, to be the largest nationwide, and the fifth largest worldwide, is a miniscule $8 billion, a mere 0.00053% of that towering figure of $150 trillion. Immediately, you see the flaw. It will take two centuries perhaps to get the $150 trillion.
If we go through the same route to breakdown the Xstrata-SMI figure and compute what would benefit the Philippine economy, the gross $8 billion becomes $2 billion after expenses, then becomes $16 million after getting our 8% share, then becomes $640,000 per annum, or Php25 million. Php25 million per year is pure peanuts and will hardly make a dent as an ‘economic benefit’ to the nation. This is dwarfed by our other incomes like from our Overseas Foreign Workers (OFWs). So you see how the ‘wowing’ figure of $8 billion creates an illusion of economic growth. It is all a numbers game perpetrated by large mining firms everywhere.
What we will lose in our agrarian economy from mining is far far greater and is incomprehensible and unquantifiable because the damage is irreversible and is in perpetuity. The Xstrata-SMI proposed 1.35 billion-metric-ton tailings dam is ‘in perpetuity’, meaning forever. This massive toxic material will sit there forever on top of the mountain long after Xstrata-SMI has left with its billions. Forever, yes, until an earthquake or typhoon, similar to that one that devastated Cagayan de Oro, brings that ‘forever dam’ down the lush valley below.
The fault line of the recent Saranggani earthquake, 5.5 on the Richster scale, is very close to Tampakan. The Xstrata mine site in fact sits above a complex network of faultlines that originate in Negros.
Let us not even attempt to quantify the loss in crops across millions of hectares of prime agricultural lands, part of the Central Mindanao bread basket that contributes considerably to the food security of Mindanao, not to mention the entire nation. The Boac river in Marinduque is now dead. It is beyond rehabilitation in spite of the millions of dollars Placer Dome-Marcopper gave to the Philippine government, a drop in the bucket compared to the billions it earned from the mine. We do not even know where that rehab money went into. The Xstrata-SMI tailings dam is about 20 times bigger than that of Marcopper in the Boac River.
This means the damage across the lush valleys of South Cotabato and Davao del Sur will be irreversible, denying food to millions. If Noynoy awards the license to Xstrata in the name of the myth of ‘economic development for the nation’, he will be inducing famine, insurgency, and set back the poverty level five times over. And since this is irreversible, we are talking of hunger for generations to come across a vast area of Central Mindanao.
Xstrata does not care. It did not even say in its EIA what happens if the dam breaks, no substantial mitigating measure, no study on the effects of such a massive cataclysm. They expect Noynoy to give the mine on a silver platter because they said it will benefit us, when it will destroy us. If Noynoy falls for it, we are all dead. He will also be the laughing stock 25 years from now, if the dam finally breaks. If he is still alive, his conscience will bother him so much, he will have nightmares about the millions of his countrymen he has rendered more poor and hungry, killing each other for the last morsels. The money we will earn from Xstrata is incomparable, so vastly miniscule compared to what we will lose in terms of food and agrarian lands through the generations.
[This article is being emailed to Executive Secretary Jojo Ochoa, DBM Secretary Butch Abad, DENR Secretary Paje, Mining Study Group Secretariat Atty. Grip Bueta, MGB Director Jasareno, NCIP Zenaida Pawid, CHR Chair Rosales, South Cotabato SP Member Ernie Catedral, British Ambassador Stephen Lillie, SMI Environment Manager Ian Callow, ECJP-NASSA Chair Broderick Pabillo, Marbel Bishop Dinualdo Guttierez, NASSA Executive Secretary Fr. Edwin Gariguez, AMRSP Archie Casey, Ateneo de Davao University President Fr. Joel Tabora, SJ, SAC Marbel Fr. Joy Pelino and Rene Pamplona, Christian Monsod, Philippine Misereor Partnership Atty. Mario Maderazo, Alyansa Tigil Mina National Coordinator Jaybee Garganera, ABS-CBN Foundation President Gina Lopez, orking Group on Mining in the Philippines Clive Wicks and Robert Goodland, Philippine Daily Inquirer Editor in Chief Letty Magsanoc, Mindanews Editor in Chief Carolyn Arguillas, and about 7,000 thousand mine watchers nationwide and abroad.]
Bernie Lopez, eastwind journals Opinyon Magazine, June 25, 2012 firstname.lastname@example.org