Oriental Peninsula secures IP consent for its nickel MPSA

Oriental Peninsula Resources Group Inc. said over the wheekend that its mineral production sharing agreement (MPSA) for nickel mining in Palawan has secured a consent from indigenous communities through Platinum Group Metals Corp. and Olympic Mines and Development Corp..

In a letter submitted to the Philippine Stock Exchange, (SEC), Oriental Peninsula said its subsidiary Citinickel Mines and Development Resources Group obtained the consent through a deed of assignment from Olympic which has an operating agreement with PGMC for the nickel mines.

“PGMC entered into a memorandum of agreement with said indigenous communities for and on behalf of OMDC, in its capacity as the latter’s contractor. Thus, with the deed of assignment, all title and rights of OMDC over the MPSA application AMA-IVB-40 were transferred to Citinickel,” Oriental said.

However, copies of the memorandum of agreement between PGMC and the Tagbanua and Palawano indigenous peoples and indigenous cultural communities specifically provide that the “free and prior informed consent granted by the Palawano/Tagbanua ICCs/IPs to the PGMC for the conduct of the project activities shall not be transferable to any other entity.”

The agreement added that the consent can only be transferred in cases of merger, transfer of rights, acquisition, reorganization, joint venture provided that the interest and rights of the indigenous peoples over both mine sites in Narra and Sofronio Espanola, Palawan are preserved.

In a letter to PGMC president Rafael Atayde in May 2, 2006, then National Commission on Indigenous Peoples chairperson Jannette Serrano had denied a request from PGMC to change the name of its certification precondition into the name of Olympic.

Serrano noted that the name in the certificate cannot be changed since it was processed by the NCIP under the name of PGMC which had conducted the free prior and informed consent activities and negotiated with the Tagbanua and Palawano and, as a result, the consent was given only to PGMC.

Atayde said PGMC has not signed any agreement for a merger, joint venture or any reorganization that would have legally transferred the consent of the indigenous people from PGMC to Citinickel or Oriental Peninsula.

The validity of Oriental Peninsula’s claim over the two mining sites in Palawan is being questioned by the indigenous people since they have not given the company permission to conduct mining activities as required by law.

In a letter to National Commission on Indigenous Peoples (NCIP) chairman Eugenio Insigne, senior leaders of the Tagbanua and Palawano of Narra and Sofronio Española asked for help in nullifying the MPSA granted to Oriental Peninsula’s operating unit Citinickel.

The indigenous people said PGMC is the only company they have given permission to mine in their ancestral land and thus cannot understand how Citinickel could have secured an MPSA for nickel mining there.

They claimed that Citinickel’s MPSA is illegal since they have not given it permission to mine their land and noted that the Philippine Mining Act and the Indegenous Peoples Rights Act provides that MPSAs can be granted only to companies that have the permission of the indigenous people.

“We are thus alarmed by reports that Citinickel is now the holder of the contract with government to conduct mining operations in Narra, Palawan even though we never gave them permission nor have we signed any agreement that will safeguard our rights as natives of the land covered by the mining area,” they said.

Oriental Peninsula recently completed its P800 million initial public offering mainly to finance Citinickel’s capital expenditures for the Palawan mines, working capital requirements and for other general corporate purposes.