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Open-pit mining ban questioned

November 23, 2011 ·  By Reuters

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Open-pit mining ban questioned

Mine's environmental impact forum. PHOTO BY BONG SARMIENTO

MANILA, Philippines — Officials of a southern Philippine city are questioning the legality of a local law prohibiting open-pit mining in their province, providing support to a battle waged by the local unit of Canada’s TVI Pacific Inc. against the ban.

The legislative council of Dipolog City in Zamboanga del Norte province on the southern Mindanao island passed a resolution last week giving the city mayor powers to undertake ”appropriate legal action questioning the validity” of the ban, according to a copy of the resolution obtained by reporters.

The resolution came just days after TVI Resource Development (Phils.) Inc. filed a petition with the local court seeking to stop the provincial government from implementing the open pit mining ban.

TVI’s $60-million copper and zinc mine in Zamboanga del Norte continues to operate normally and remains fully supported by the local community despite the ban, a company spokesman had said.

The ordinance gives the company one year to close the mine.

TVI Resource has estimated foregone revenues of $500 million if it would be forced to close the mine by November 2012. It added it could extend the project’s life by 4 to 5 years from next year.

The city council’s resolution says certain provisions of the ordinance are beyond the powers of provincial officials to enact and could adversely affect the city’s sand and gravel businesses.

Dipolog officials also questioned the provision authorizing the provincial governor to issue an order stopping or suspending any mining operations or utilization of natural resources, saying the provision usurps the power of the government body issuing permits for such activities.

A similar ban in South Cotabato, also in southern Philippines, has put at risk the $5.9-billion Tampakan copper-gold project of global miner Xstrata Plc and Indophil Resources NL.

Manila is crafting a new mining policy to address thorny issues hampering the industry, including how to overrule provincial bans.

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