TAMPAKAN – As gold shines through the coronavirus pandemic, touching new highs as a precious metal hedge to the dollar, the stakes for Southeast Asia’s largest undeveloped copper and gold minefield have never been higher.

Nestled 1,300 meters above sea level, huge gold and copper deposits lie untapped in the mountains surrounding the sleepy Philippine town of Tampakan on the southern island of Mindanao.

Over three decades since the deep, rich deposits were first discovered, controversy still burns over who has the right to mine and profit from the precious metals, pitting central government agencies and their corporate concessionaires against local tribal communities.

Over the years, the center-versus-periphery struggle has often devolved into violence and even death, and the prospect for more bloody turmoil is on the rise in line with the surging price of gold, now at well over US$2,000 per ounce on global markets.

The $5.9 billion Tampakan project, situated in South Cotabato province, is officially owned by the local Sagittarius Mines Inc (SMI). The company’s exploration surveys show that the deposit holds 17.6 million tons of gold and 15 million tons of copper.

If the project is approved for extraction, it will be the largest in the Philippines and among the biggest such mines in the world, according to SMI. The mine could yield an average of 375,000 tons per annum of copper and 360,000 ounces per year of gold in concentrate form over a 17-year period of mining and ore production if allowed to proceed, SMI says.

Yet the project has stalled for years due to opposition from the local Blaan tribe, which has threatened bloodshed if SMI’s operations resume. In Bong Mal, a restive Blaan community within the Tampakan area, more than a dozen pro- and anti-mining supporters have been killed since the project was first broached.

The Tampakan project has also been hobbled by national-local regulatory contradictions, including a ban on open-pit mining imposed by the provincial government of South Cotabato which SMI argues contravenes the national Philippine Mining Act of 1995, which includes no such ban on the method.

Sagittarius mines may or may not be able to tap Tampakan’s wide and deep reserves of cooper and gold. Image: Bong S Sarmiento

But a bigger blow to SMI’s aspirations arguably came last month when local government officials in Tampakan, some 1,000 kilometers south of the capital Manila, unilaterally terminated the municipal principal agreement (MPA) it had signed with SMI back in 2009.

The resolution, approved by the municipal council, a collegial body that legislates local laws and resolutions and appropriates funds for the township’s general welfare, could be the long-contested project’s death knell, some observers say.

The resolution, signed by all 12 council members and released on August 14, expressed open resentment that the MPA was not updated despite a provision that it should be reviewed every four years to account for changing circumstances.

“After scrutiny, there are provisions in the MPA that are considered vague, disadvantageous to inhabitants of Tampakan and unduly tie the hands of the local government unit (LGU) of Tampakan as ‘parens patriae’” – Latin for “parent of the nation” – “to protect its people and the environment,” the resolution said.

“As such, the LGU cannot sit and fold its arms not to intervene in any action initiated by its people if, indeed, their rights have been violated contrary to some provisions of the agreement,” it said

Municipal legislators stressed they are no longer interested in reviewing or updating the 2009 MPA, but rather would consider a wholly new agreement, which likely means new rounds of negotiations that will inevitably force SMI through the eye of a needle.   

The resolution was passed days after Tampakan mayor Leonard Escobillo rebuked SMI for the alleged pittance it has proposed to pay for the rental of the Blaan tribe’s ancestral lands. From an original mining contract area covering 28,539 hectares, SMI has reduced the final mines development area to 9,495 hectares.

If operations ever start, the company has proposed to pay 160,000 pesos ($3,300) for 25 years, amounting to what critics see as a paltry 6,400 pesos ($131) per year, or 533 pesos ($11) per month, for the right to mine the land.

“I believe there’s no justice in that. You rent one hectare of land and you’ll use it for 25 years, that’s only 500 pesos a month. How will a family live with such amount?” Escobillo said in an interview aired live over a state-owned radio station.

SMI did not immediately reply to Asia Times’ request for comment for this story.

But Daguel Capion, who once led more than a dozen armed tribal men to resist the mining venture, warned in an interview with Asia Times of possible renewed violence if SMI resumes its activities in the area.

“Tribal people will kill each other,” he predicted ominiously on a recent foggy afternoon in the mountains of Bong Mal district.

Blaan tribe representatives protest against the mine project in a file photo: Image: Facebook

To be sure, the SMI-led project has brought certain gains to the remote and underdeveloped area. Since 2018, SMI claims to have poured in at least 103 million pesos ($2.1 million) into road rehabilitation spanning 17.4 kilometers in at least two villages crisscrossed by the project, according to a 2019 company report.

On the way up to the mountains in Bong Mal, passing through several Blaan communities, the road has visibly been recently repaired, with some sections traversed by creeks connected by brand new bridges.

Other development boons are apparent. In Bong Mal, tribal residents could be heard singing songs from videoke machines, while other groups were glued to television sets watching telenovelas or movies, signs of newly connected electricity lines in the previously blacked out remote enclave.

SMI is pursuing the Tampakan project partly on the strength of a Financial and Technical Assistance Agreement (FTAA) it entered with the national-level Department of Environment and Natural Resources (DENR).

The agreement was set to expire on March 21, 2020, but was extended for another 12 years in an order dated June 8, 2016. That extension was only made known to local authorities and community leaders earlier this year, based on a three-page document reviewed by Asia Times from the DENR’s Mines and Geosciences Bureau – Region 12’s (MGB-12) office in South Cotabato.

Leo Jasareno, then the national director of MGB, approved the June 8, 2016 extension citing  “force majeure” or “acts or circumstances beyond the reasonable control of contractor.”

It cited rebellion, insurrection, civil disturbance, blockade, sabotage and adverse actions by the government to justify the force majeure extension, a common clause in contracts that deal with unforeseeable circumstances that prevent the fulfillment of an agreement’s terms.

Felizardo Gacad Jr, MGB-12’s director, said that the 12-year extension will be enacted from the expiration of the original FTAA on March 21, 2020, or until March 21, 2032.

He added the company has the option to renew the FTAA for another 25 years, which, if granted, would give SMI national level permission to operate in the area until 2057.

Those, however, are fighting words to local anti-mining advocates. “This midnight mining deal was done without the knowledge of the affected stakeholders, including the LGUs, farmers and indigenous peoples in Tampakan,” said Jaybee Garganera, coordinator of the Alliance to Stop Mining. 

Describing the Tampakan project as the “largest open-pit copper-gold project in Asia,” Garganera’s group claims it will “displace an estimated 4,000 Blaan families and 10,000 lowland farmers from neighboring communities that rely on the nearby watershed for agricultural use” if allowed to proceed.

Workers put in place soil erosion blankets made from coconut husks within the Tampakan project area in Barangay Tablu, Tampakan, South Cotabato. Photo: Bong S Sarmiento

The company plans to extract the deposits – now potentially more lucrative than ever with global gold prices near or above record highs – using open-pit mining, a method banned by the South Cotabato provincial government that project supporters maintain is at odds with the Philippine Mining Act of 1995.

But resistance to the mining project has a lawless element. Blaan tribal leader Capion openly warns of extra-legal chaos and bloodshed within the Tampakan mine site should SMI proceed in excavating the mineral deposits.

“In the years leading to and during the exploration phase, the company would approach and consult with us. But nowadays, there are no more negotiations, the community is being kept blind. I hope the company will be more transparent to us,” Capion claimed.

At least six of Capion’s immediate family members and relatives, including his wife Juvy and their two children, have been killed separately within the Tampakan project area.

Juvy and their two children were killed in October 2012 during a military operation that aimed to arrest Capion, who was then facing murder charges for the death of three people working for a road project funded by SMI the year before.

Capion, who used to work as a community relations officer of SMI before leading an armed group opposed to the Tampakan project, was subsequently arrested in 2015 in Sarangani province but was released almost a year later, according to him, due to “lack of evidence.”

Speaking in the local language, Capion warned that “more lives will be lost if the large mining project will be allowed to proceed.”

He warned that those Blaan do not benefit from the project might resent those who do, while project supporters might move to silence those who oppose it. He warned that “chaos will also prevail in the mine’s development site if the tribe’s hallowed and hunting grounds will be destroyed” without their consent.

The bulk of the copper and gold deposits lie in the villages, or barangays, of Pulabato, Danlag and Tablu, all situated within the town of Tampakan, a municipality with a population of almost 40,000. The project site also covers the barangays of Kimlawis in Kiblawan, Davao del Sur province and Datal Blao in Columbio, Sultan Kudarat province.

Escobillo, the Tampakan mayor, told Asia Times earlier this year that SMI aims to start mining operations within three years if it can acquire the needed permits from government agencies, including the DENR and the National Commission on Indigenous Peoples (NCIP).

Tampakan mayor Leonard Escobillo supports the stalled mining project. Image: Bong S Sarmiento

The NCIP needs to issue a Certification Precondition, a document attesting that the concerned tribal communities have granted their free, prior and informed consent to the project.

On the other hand, DENR, through its Environmental Management Bureau (EMB), issues environmental compliance certificates (ECC) to projects such as SMI’s. The requirements are on top of the endorsements needed from the local government units straddled by the mining project.

The late Environment Secretary Gina Lopez canceled the Tampakan project’s ECC in 2017 “due to environmental and social concerns.”

But in July, Omar Saikol, EMB-12’s director, said the Office of the President (OP) of the Philippines had restored SMI’s ECC, a move that caught environmentalists by surprise since the reinstatement order was dated May 6, 2019, indicating that the change was made more than a year ago but only announced recently.

The mining development site straddles five tribal councils in five barangays under three separate towns – Tampakan in South Cotabato, Kiblawan in Davao del Sur and Columbio in Sultan Kudarat. All have expressed support to SMI under principal agreements that provide financial assistance to them even if the firm has yet to begin extracting the copper and gold deposits.

Six more indigenous cultural communities outside the areas that would be directly affected by the Tampakan project have also endorsed the venture. Mayor Escobillo succeeded his father, Leonardo, who served in the position for three terms from 2010 to 2019. The elder Escobillo also supported the Tampakan project.

“SMI is planning to start the construction of their facilities such as roads and the buildings to be used for mining production this year, for target completion in the next three years,” the younger Escobillo said.

He noted the local government and SMI have been hammering out a new “municipal agreement” that would clearly spell out the terms between the two parties, because the original “municipal principal agreement (MPA) is no longer in step with the present time,” having been inked over two decades ago.

When the MPA was executed in 1997, Tampakan received 2.75 million pesos ($56,487 at current market rates) per annum from SMI as part of the agreement, data from the Commission on Audit shows. That was when foreign miners were driving the venture.

Australian firm Western Mining Corp, which announced the initiation of the Tampakan project in 1994, sold its rights to the mining venture to SMI in a deal approved by the Philippine national government in 2001. The related FTAA was granted on March 22, 1995.

Gold deposits were found in the Tampakan area over three decades ago. Image: Facebook

In 2002, another Australian company, Indophil Resources NL, acquired an interest in the Tampakan project and, together with Mindanao-grown conglomerate Alsons (Alcantara and Sons) Group, resumed active exploration.

Later, through the exercise of corporate options, foreign firms Xtrata Copper and Glencore PLC became Tampakan project shareholders. In 2015, Alsons Group gained control of the Tampakan project after Glencore pulled out in a deal reportedly worth $290 million that included two other mining assets abroad.

According to the December 2017 “quick facts” published by the MGB regional office, SMI’s company structure is “100% Filipino,” but it did not name the company’s active shareholders.

Based on SMI’s exploration studies, the most viable way to extract the vast deposits is by open-pit mining, a method banned by the South Cotabato provincial government through a local environment code passed in 2010.

In November 2017, President Rodrigo Duterte rejected the recommendation of the Mining Industry Coordinating Council (MICC) to lift the ban on open-pit mining that was first ordered by his then Environment Secretary Lopez.

Mayor Escobillo, a registered nurse, claimed that instead of extracting the huge deposits in one big scoop “concentrated in about 500 hectares in Tampakan town,” SMI now plans to tap the deposits in three phases.

Escobillo said the first phase will entail 10 years of extraction and rehabilitation, targeting one-fourth of the minerals. The second phase, involving another one-fourth of the deposit, will follow the same scheme of extraction and rehabilitation in the following decade, he added.

The final phase, involving the same extraction and rehabilitation scheme, will mine one-half of the remaining deposits, Escobillo said.

The mayor is confident that SMI’s planned venture will bring economic progress, including through taxes, employment and downstream businesses, not only in his town but also in surrounding areas, if the company and the local government come to terms.

Tampakan project supporters have filed a petition before a local court seeking to lift the ban on open-pit mining imposed by the South Cotabato provincial government, but a decision has yet to be rendered.

A resident maneuvers over a dirt road passing a bridge under construction at the Tampakan project area in Tampakan, South Cotabato. Photo: Bong S Sarmiento

But indications that SMI is preparing to mine the Tampakan project are visible and steadily progressing, despite broad opposition and security threats.

The Roman Catholic Diocese of Marbel, which opposes the Tampakan project on environmental, food security and human rights grounds, says it did not know until recently that SMI had been granted a 12-year extension of its original FTAA.

In September 2019, during a public forum in South Cotabato province, the diocese urged the national government not to renew SMI’s FTAA for another 25 years. At the time, Marbel Bishop Cerilo Casicas pledged to sustain opposition to the project spearheaded by his late predecessor.

Casicas deplored the Tampakan project, a venture which he said, “even God will not approve” considering its potential negative impacts on the environment, indigenous peoples and other residents.

Vowing to sustain the local Catholic church’s resistance, Casicas said: “God created humans to protect the environment.”