Surigao del Norte mines sustain P3B property damage in NPA raids

MANILA, Philippines—A coordinated raid by armed communist New People’s Army (NPA) rebels in key mining sites in Surigao del Norte, damaged P3 billion worth of property and equipment, reminding investors of the security risks in investing in the Philippines despite it being one of the most mineralized countries in the world.

“It’s like a Pearl Harbor of the mining industry,” said a Surigao del Norte-based industry source who inspected the compounds of Taganito Mining Corp. (TMC) and Platinum Group Metals Corp., (PGMC), in Taganito, Claver, the day after the raids.  The source added this was mining’s “day of infamy” and the “singular most devastating attack on private investment mounted by the NPA.”

The estimate came from the assessment of vehicles, physical infrastructure as well as barges or tugboats that were burned down.  Inquirer sources said TMC lost 41 dump trucks, on top of other major equipment while PGMC lost 91 dump trucks and nine barges.  The PGMC, likewise, lost 18 firearms to the communist rebels.

The majority of equipment burned belonged to the two mining companies while the subcontractors were spared.

The attack triggered rumors that the Sumitomo group of Japan, the foreign partner of Nickel Asia Corp., the parent company of TMC, would pull out its investments from the country but this was denied by the local nickel mining giant.  “Of course not,” Nickel Asia president Gerard Brimo said in a short phone interview.  “If that’s true, we would have disclosed that and we haven’t.”

Sumitomo Metal Mining Co. Ltd. owns around 25 percent of Nickel Asia.  The Japanese firm is also the controlling stockholder of the Taganito HPAL Nickel Corp., which has been building a $1.3-billion smelting facility that uses high-pressure acid leaching (HPAL) process, a technology that enables the recovery of nickel and cobalt from low-grade nickel oxide ore.  When the raids happened, the project was 65-percent complete.

Brimo said he could not issue a statement at this time on the magnitude of the damage on Nickel Asia. “We’re still assessing the damage. We’ll disclose in a day or two,” he said.

Nickel Asia has a 22.5 percent equity interest in Taganito HPAL, which was scheduled to commence commercial operations at full capacity in August 2013. The facility is expected to produce approximately 30,000 tons of contained nickel in 2014, the first full year of commercial operations at full capacity.

There are numerous contractors and subcontractors in the area. Sumitomo Metal and Chiyoda Corp. have scores of Japanese executives and engineers at any one time. All in all, more than 6,000 local workers are employed in the area.

The nearest Armed Forces contingent at the time of the attack was the 30IB Philippine Army Headquarters located in Brgy. Sta. Cruz, Placer, about 50 kilometers away from Claver, ground sources said.  However, all 30IB PA elements were attending training, and the area was being “manned” by a small augmentation force from the 402nd Brigade PA.

The attack in broad daylight, as it was carried by the son of NPA leader Ka Oris, was seen by local industry leaders as an exercise to showcase the strength of the NPA’s young recruits. “One could call this as their “test mission” or “debut” of the young emerging leader. They also exploited the absence of the 30th IB during this time,” a source from the ground said.

Witnesses said the communist rebels did not speak the same local dialect, suggesting that the attack force was reinforced by contingents from other nearby provinces or regions. One group attacked the PGMC compound, the main force controlled the center at the TMC compound and another group provided lookouts and put up barricades.

According to reports received by mining industry sources, the leader of the attack, a certain Ka Edron, used four issues in justifying the attack: a) that mining is destroying the environment; b) low salaries of workers; c) a sentiment in the community to stop mining at all costs; and issues concerning indigenous peoples in the area.

The communist rebels allegedly held Japanese nationals on site briefly and told them of these reasons. “There was never a mention of revolutionary taxes. The (communist rebel) leaders kept on saying that they will destroy the mining infrastructure in the area,” the source said.

As the mining boom in Caraga and Surigao areas continues, businesses are concerned that the communist rebels would thrive through extortion activities and use the anti-mining platform as reason for their existence. Since the mining boom in 2010, there has been a rising number of New People’s Army-related-incidents in Caraga.

Local leaders said miners have been asking for a sizable AFP security force with naval capability that would be permanently stationed right in the area (a particular request from the mining companies).  They also urged the national government to use diplomatic channels to explain to the Japanese government and foreign investors about future proactive security and pacification measures.

“The provincial government, with assistance from the national government, must also address the plight of displaced workers and render financial assistance to affected families,” the source said.

This was the attack timeline provided by Inquirer sources:

1st Barricade — Baoy bridge blocked by a dumptruck and gravel (7 kms away from the site)

2nd Barricade — various vehicles blocking the road (5 kms from the site)

3rd Barricade – road blocks / bridges dumped with materials (2 kms from the site)

9 a.m.: The NPA  led by Ka Edron (son of George Madlos a.k.a. Ka Oris) onboard two dumptrucks barged into the TMC compound while others were posted on the mountain ridges.

—  Estimated attack force was 200 to 300 cadres (between 15-25 years old, male and female, wearing fatigue and police uniforms), with M16 armalite and AK-47 rifles.

—  They raised the communist flag atop company flagpole and took away personal and company laptops, and cellphones of employees.

—  TMC general manager Jose Anievas asked the rebels to release all other employees in the TMC site. An estimated 5,000 to 6,000 workers started to walk out of the area towards Claver poblacion.

—  Ka Edron and leaders took Anievas and staff to THPAL construction site to look for the “strike force” (Sumitomo has a 12-member reaction team with high-powered firearms) but failed to locate them as the Sumitomo security manager hid them earlier.

—  Japanese engineers from two Japanese firms were able to assemble in their quarters. Another group of communist rebel leaders got to talk to them. They were left unharmed.

—  Some NPA leaders  conducted a brief “indoctrination” session among the employees outside the TMC gate.

11 a.m.:  Gov. Sol Matugas convened a crisis committee with Jake Miranda (Mindanao Development Authority director and a representative for the Mindanao Business Sector)

1 p.m.:  After his cellphone was returned, TMC adminstrative officer Rogel Cabatuan called MinDA by mobile phone and Jake Miranda consequently gave the phone to Governor Matugas.

— Matugas was able to talk with Ka Edron (leader of attack force), over the phone.

— Ka Edron requested the governor to call for a halt to military pursuit operations.  Governor Matugas said she would agree to do so if the NPA released all of their hostages (which at this time still numbered 3,000 workers including 100 japanese nationals.)

— Matugas deployed the crisis team (Jake Miranda, Surigao del Norte Provincial Administrator Ramon Gotinga, and MinDA staff Ireneo Piong) to proceed to TMC.

3 p.m.:  Team arrived at the vicinity of Claver, and caught up with advancing army units. The Armed Forces of the Philippines asked for a written request to halt military operations.

4 p.m.:  Matugas and the crisis team coordinated with the Philippine National Police and the Armed Forces of the Philippines in halting the military offense at the 1st barricade line.

— Upon hearing that the military had halted operations, the NPA rebels took with them Anievas, Cabauatan and the TMC chief of the security on their way out. The rebels and the TMC executives boarded seven vehicles and proceeded north to Barangay Cabugo, Claver.

— Interior and Local Governments Secretary Jess Robredo arrived in Surigao City

— Crisis team finally arrived at TMC gate as the first government representatives entered the area.

4:30 p.m.:  At Brgy. Cabugo, the NPA rebels alighted from the vehicles and Anievas, Cabauatan and the TMC chief of the security were released. The three drove back to the TMC compound. As soon as they arrived, Anievas briefed Robredo.

— Fires set by the NPA were put under control soon after.

— Crisis Team conducted a head count of Japanese nationals in the area. Ramon Gotinga had a debriefing session with Japanese nationals regarding the attack.

7:45 p.m.:  All roads were cleared for traffic.

— The crisis team finished its preliminary information gathering.

— Around 50 personnel from the Armed Forces of the Philippines and the Philippine National Police were still conducting foot patrol and clearing on the road leading to TMC.

10 p.m.:  AFP and PNP personnel finally arrived at TMC.