While China’s brazen occupation of the Philippines’ Scarborough Shoal, located just 125 nautical miles from Masinloc, Zambales, has captured all the national and international attention, little has been mentioned about China’s occupation of the Philippine mining industry, an entirely different issue from the Filipino Chinese (“Chinoys”) domination of the Philippine economy.
One of China’s vast army of mining companies operating under the radar in the Philippines is located near the Scarborough Shoal in the coastal town of Masinloc where China’s Wei-Wei Group has set up a US$100 million nickel processing plant. In nearby Botolan, Zambales, China’s Jiangxi Rare Earth and Rare Metals Tungsten Group Company Ltd. operates a US$150 million nickel exploration and cobalt processing project.
As the Asia Sentinel reported on November 12, 2012 (“China’s Filipino Gold Rush”), “With an estimated US$1 trillion in untapped mineral resources in the Philippines, according to the Mines and Geosciences Bureau, Chinese mining companies, many of them operating illegally, have been exporting gold, nickel and other precious minerals out through the island country’s porous coastal ports, where there are no customs officials and plenty of bribable officials to turn their eyes the other way.”
With its occupation of the Scarborough Shoal (what China calls “Huanyin Island”), smuggling precious metals from the Philippines to a China base will be even more convenient especially after it is transformed into a four story fortress, as China did with the Philippines’ Mischief Reef, located just 75 miles from Palawan, which China occupied in 1996.
The Asia Sentinel’s investigation reported that “as of now, of the gold registered as leaving the Philippines, only 3 percent of the exports are registered with customs officials. The other 97 percent arrives in Hong Kong without being taxed by the government in Manila, resulting in a massive tax [revenue] loss for the Philippine government.”
While that 97% of the gold is leaving the Philippines illegally, it is somehow legally entering Hong Kong as HK trade statistics showed that “gold consignments imported from Philippines into Hong Kong had been declared,” the Sentinel added.
In April of 2011, Pacific Strategies and Assessments (PSA), a company supplying foreign embassies and corporations in Manila with intelligence and business climate reports, released a study titled “Exploitive Chinese Mining in the Philippines” which reported that the incursion of Chinese mining firms into the Philippines has had a disastrous effect on the Philippine environment.
“While few are surprised over the assertiveness and penetration of Chinese mining investors, there is substantial evidence of unaccountability, misconduct and corruption in many Chinese mining deals,” the PSA reported.
These firms do not “deliver correct compensation for environmental damage and value of minerals extracted from devastated mining areas. Chinese mining companies have a reputation for poor adherence to environment standards, especially with regard to small-scale mining projects,” the report added.
Mine Safety Record is the Worst in the World
China’s mine safety record is the worst in the world. More than 2,600 Chinese miners died in mining accidents last year. While China accounts for 40% of the world’s global coal output, it accounts for 80% of mining deaths in the world.
In 2008, the Philippine Department of Environment and Natural Resources admitted that at least 3 million metric tons of various mineral ores were brought into China that were untaxed in the Philippines.
The Chinese mining companies’ occupation of the Philippines began in earnest during the administration of Pres. Gloria Macapagal-Arroyo when 26 Chinese corporations registered in the Philippines to mine for gold, iron ore, nickel, copper, manganese, lead, zinc, chromate and cobalt. They operate in 16 provinces in the Philippines: Cagayan, Benguet, Zambales, Camarines Norte, Camarines Sur, Palawan, Leyte, Eastern Samar, Bohol, Cebu, Misamis Oriental, Davao Oriental, Surigao del Norte, Sultan Kudarat, Zamboanga del Norte and Zamboanga del Sur.