Local miner accuses Canadian firm of using dummies

MANILA, Philippines - Local mining firm Redmont Consolidated Mines Corp., has asked corporate regulators to revoke the registration of eight competitors for allegedly violating the constitutional limit on foreign ownership in mineral exploration and production. Redmont Consolidated filed the complaint last month against McArthur Mining Inc., Tesoro Mining and Development Inc., Narra Nickel Mining and Development Inc., Sara Marie Mining Inc., Patricia Louise Mining and Development Corp., Madridejos Mining Corp., Betlehem Nickel Corp., and San Juanico Nickel Corp. for allegedly acting as dummies for Canadian MBMI Resources, Inc. Redmont, which is competing with the eight firms for mining areas in Palawan, said MBMI had organized, funded and controlled the eight corporations in violation of the 40% limit on foreign ownership of mining firms. In 2004, the Supreme Court reversed an earlier decision that year nullifying the Philippine Mining Act for allowing foreign mining companies to operate in the Philippines. The Mining Act allows foreign firms to enter in "financial and technical agreements" with local counterparts, allowing them to operate here. But Redmont lawyer Lea Marie Picar said the eight are still subject to foreign limits on ownership since what they had applied for were mineral production and sharing agreements, not financial and technical deals. Redmont claimed MBMI had paid three-quarters of the paid-up capital of McArthur, Tesoro, Narra, and Betlehem and 99% of the paid-up capital of Madridejos, Patricia Louise, Sara Marie and San Juanico. The firm said MBMI had used dummies to hide its true ownership. "The equity composition of all the respondents at first glance purports to show compliance with the maximum cap for foreign ownership of stocks of 40%. But a closer scrutiny and examination would reveal that none of these eight corporations over which MBMI has controlling interest and investments have met the maximum cap for foreign ownership of stocks,’’ Redmont said. — Don Gil K. Carreon, BusinessWorld