http://www.mb.com.ph/BSNS2006091374260.html
By MELODY M. AGUIBA

The Philippine Mineral Reporting Code (PMRC) should indicate provisions that will encourage mines to be exhausted at a breakeven cutoff grade to keep the project economically sustainable and more environmentally and socially beneficial.

The Philippines is presently drafting its own reporting code similar to the Joint Ore Reserve Committee (JORC) Code of Australia which is an internationally acceptable standard for reporting mineral reserves.

Mines and Geosciences Bureau (MGB) Director Horacio C. Ramos said the indication of a break-even cutoff grade in the PMRC should encourage mining projects to use up all resources in a mine—not only the high-grade but also the low-grade minerals.

“The high-grade is only profitable when the price is high. But there should be a schedule to also mine out the lowest grade. When you expose it, you should mine it. Or else where will you store the low grade minerals?” Ramos said in an interview.

The break-even cut off grade is reference of a mine’s economic feasibility as it indicates the lowest grade at which a mineral can be mined without profit or loss.

“Mining only the highgrade is a practice of the greedy. After that, they leave the low grade as waste,” said one industry official.

Ramos said the other crucial provision in the PMRC is the identification of professionals who will be authorized to assess the volume and value of a mineral reserve.

This, he said, is a key to controlling the practice of mineral audit which is pivotal in protecting the interests of investors intending to put in their money in a mining stock.

Mining the high-grade ores has been the practice of small scale miners which do not a have a program for rehabilitating mines or controlling acid mine drainage that destroys the environment and pose health risks to human. Small scale mining is also inefficient with its manual operations.

Fully exhausting a mine (mercury for instance or a copper sulfide which can cause polluting acid mine drainage when exposed to oxygen and water) becomes beneficial to the environment since cause of the pollutant is eliminated.

Moreover, bigger employment is associated with mining low-grade ore since life of the mine is stretched lengthily over the bigger volume of mineral ore to be mined compared to the usually lesser high-grade ore.

A mineral reporting standard is pertinent in ensuring that another Bre-X Busang mine in Indonesia (where a Filipino has been involved fraud in reporting the mine’s reserve) will not recur in the Philippines.

Then, Toronto Stock Exchange investors were lured in early 1997 to the $ 400 million Indonesian mine only to see the stock collapse in one day from $ 85 to $ 35 per share in an apparently bloated reserve report in a mine that never really contained an economic reserve.
Government has spearheaded the drafting of the PMRC together with the Philippine Stock Exchange (PSE) and associations of mining professionals— mining engineers, geologists, and metallurgical engineers.

Since government has programmed a $ 6 billion investment in mining to stir up economic activity, international and local mining companies have expressed interest to list with the local stock market.

However, the Department of Environment and Natural Resources and the PSE have initially agreed that only companies that have completed a feasibility study (indicating economic reserve of a mine) can list in the stock market as a guarantee to investors.(MMA)