Marine life or mining? ARMM investments in Tawi-Tawi face scrutiny

Ever since the peace deal between the government and the Moro Islamic Liberation Front was signed in 2012, investments have been pouring into the Autonomous Region in Muslim Mindanao (ARMM).

 

One of the industries that has been taking advantage of the favorable investment climate is mining and quarrying. 

 

In the past two years, the mining industry recorded investments worth P1.227 billion. All of these went to the island province of Tawi-Tawi, which has reserves of nickel, iron, chromite, gold, and sand and gravel. 

 

However, in the town of Panglima Sugala, residents claim that mining companies have started digging the land and cutting down trees to look for possible areas for a nickel ore mining project without government permits.

 

Fearing environmental degradation of their coastal areas, about 300 residents of Barangay Buan signed a petition addressed to ARMM regional governor Mujiv Hataman to put a stop to the mining activities.

 

They argued that the surrounding waters of their village should be preserved, as the Buan Reef was declared a protected area by its municipal government.  The coastal area is also the site of the government's mangrove rehabilitation project.

 

"The people are surviving because of the sea,” Mindanao State University Tawi-Tawi campus chancellor Lorenzo Reyes, a native of Barangay Buan, told GMA News Online. “With mining, goodbye na sa marine industry." 

 

According to the petition, siltation and soil erosion from mining would have adverse environmental impacts that would affect their livelihood, which revolves around fishing and seaweed farming.

 

Of the three other mining companies named by the residents, ARMM Mining Corporation and Adnama Mining Sources, Inc. could not be reached due to lack of contact details in their SEC documents. Meanwhile, Southern Nickel Corporation officials have yet to reply to GMA News Online’s queries.

 

Nickel mining

 

Currently, there is only one active mining project in the province, which is jointly operated by Altawitawi Nickel Corporation (ANC) and S.R. Languyan Mining Corporation.

 

ANC poured in P707.9 million investment in 2013 while S.R. Languyan contributed P520 million early this year for the mining operation in Tumabagaan Island in Languyan, Tawi-Tawi, government data showed. 

 

The nickel ore project, which has a production capacity of up to one million metric tons, is covered by a Mineral Production Sharing Agreement awarded to S.R. Languyan in 2010.

 

In 2012, ANC entered into an agreement with Darussalam Mining Corporation transferring the latter's rights and physical possession to ANC.

 

 

Photos from Altawitawi Nickel Corporation website

ARMM Gov. Hataman said the mining companies’ investors are all residents of Languyan, but documents from the Securities and Exchange Commission showed otherwise.

 

Based on SEC Data, the Sali family dominates the incorporators of both Darussalam and S.R. Languyan mining companies. But ANC, which was incorporated less than a year before it financed the massive mining project, has at least two Chinese investors on board.

 

Leo Jasareno, chief of the Mines and Geosciences Bureau of the Department of Environment and Natural Resources, said ARMM has its own counterpart of his agency but it still adheres to national laws because the regional government has yet to craft local mining legislation. 

 

Among the regulations is that a mining company should have at least P100 million authorized capital stock, and P6 million paid-up capital.

 

However, records show that ANC's initial capital stock stood only at P5 million, or less than one percent of its mining investment in Tawi-tawi, while its paid-up capital was P3.2 million.

 

Like ANC, Darussalam was only registered with SEC in December 2012 with a capital stock of P10 million, and paid-up capital of P2.5 million.

 

For its part, S.R. Languyan had a capital stock of P10 million, or roughly two percent of its investment, and paid-up capital of P2.5 million.

 

Contacted for an explanation, DENR-ARMM regional secretary Kahal Kedtag has yet to issue a response. GMA News Online also repeatedly asked ANC for comment, but the authorized representative of the company has remained unavailable.

 

Bangsamoro investments

 

From January to June this year, investments in ARMM surged by 72 percent compared to the same period last year, with the renewable energy sector posting the largest gains.

 

For the first six months of 2014, three biomass renewable projects worth P1.773 billion were pledged in Maguindanao. These will add at least 18 megawatts electric capacity in Mindanao. 

 

"Investors want to take advantage of the better investment climate now,” said ARMM Board of Investments director Ishak Mastura. “They are confident that the peace process will continue."

 

 

Mastura noted that mining companies are not given fiscal incentives, as directed by ARMM Gov. Hataman.

 

"Hindi pro-mining ang rules," he said, stressing that no mining agreements were approved under Hataman’s administration. 

 

Mastura said energy and agriculture would be the most ideal investments in the region, but the local Board of Investments cannot ignore other industries that show interest in investing in ARMM.

 

"[The Board of Investments] is here to provide and manage fiscal incentives. Who are we to judge investments?" he said.

 

Lowest poverty rate

 

Hataman agrees, saying: “Mining might not be the best industry fit for the residents but considering the presence and abundance of these resources in Tawi-tawi, it can be one of the industries we can tap in order to uplift the living conditions of the residents in the area.

 

Tawi-tawi currently has the lowest poverty incidence in ARMM, posting a poverty rate of 21.9 percent in 2012. This is a remarkable improvement from its previous record in 2006, when poverty incidence in the province reached 50.2 percent. 

 

From 2012 to 2014, Hataman said ARMM has collected P105 million in taxes from the mining industry.

 

“Revenues generated from the mining operations can support programs and projects of the regional government aimed at alleviating poverty,” he said. 

 

Bantay Mina national coordinator Cielo Magno told GMA News Online that reduction of poverty through mining will depend on how the new Bangsamoro autonomous government uses taxes to provide economic benefits.  

 

"It is one thing to extract the minerals but it is another thing to transform [the mining taxes into] benefits,” she said. “That's why we have to fix the governance aspect."

 

Chancellor Reyes of MSU in Tawi-tawi suggested that instead of mining, the province should focus on invigorating current industries, particularly seaweed farming and live fish trading.

 

Tawi-tawi is known as the seaweed capital of the country. Its products reach Europe, USA, Japan, Australia, and the Middle East, according to the fisheries bureau.

 

Reyes said the government may also consider ecotourism in Tawi-Tawi’s 307 islands and islets, as this could generate a lot of economic activity.  — with reports from Danessa Rivera/YA, GMA News