Philippines' Duterte says cancellation of mining contracts based on law

Philippine President Rodrigo Duterte announces the disbandment of police operations against illegal drugs at the Malacanang palace in Manila, Philippines early January 30, 2017.      REUTERS/Ezra Acayan

US-PHILIPPINES-MINING:Philippines' Duterte says cancellation of mining contracts based on law

By Manolo Serapio Jr

MANILA (Reuters) - Philippine President Rodrigo Duterte on Wednesday supported his environment minister's decision to cancel nearly a third of contracts for undeveloped mines, saying it was based on law.

Duterte has backed Environment and Natural Resources Secretary Regina Lopez's tough stance against miners she says have damaged the environment, warning shortly after taking office in June that the country can survive without a mining sector.

Lopez on Tuesday ordered the rescission of 75 mineral production sharing agreements, or MPSAs, because they are located in watershed zones and developing them would threaten water supply and quality in those areas.

That came less than two weeks after she ordered the closure or suspension of 28 of the country's 41 mines for damaging watersheds and for siltation of coastal waters and farmlands.

The Philippines is the world's top nickel ore supplier and the shuttered mines would account for about half the country's output.

Duterte also backed that action, which the industry has said will affect 1.2 million people.

The cancellation of the 75 agreements is consistent with Philippine laws "that mining applications are closed to proclaimed watershed forest reserves," Duterte spokesman Ernesto Abella said in a statement.

But Abella said Lopez's agency should "establish that it has gone through due process before enforcing the applicable laws, rules, or regulations."

One of the mining contracts Lopez canceled is the $1.2 billion Silangan copper-gold project of Philex Mining Corp, among the country's biggest miners, in the southern Philippines.

Philex told the Philippine Stock Exchange in a filing on Wednesday that "none of the areas covered by the Silangan Mining MPSA is located in a proclaimed watershed forest reserve where mining is prohibited."

The company said "Silangan Mining is, therefore, confident that its MPSA is valid and can withstand any legal challenge."

Australian miner OceanaGold Corp, which runs the Philippines' biggest gold mine and was earlier ordered suspended, said it has filed an appeal with Duterte's office "which, in accordance with the rules and regulations, stays the execution of the suspension order."

(Reporting by Manolo Serapio Jr.; Editing by Christian Schmollinger)

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