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Aug 8, 2018 @ 21:45

Govt loses P2.7 billion because Paje didn’t collect royalties from mining firms SR Metals, Marcventures, Philsaga, Agata, JCG Greenstone


The government lost P2.67 billion for its failure to collect five percent royalty on the minerals extracted by five mining companies from 2012 to 2016.

This was revealed by the Commission on Audit in its 2017 annual audit report on Mines and Geosciences Bureau (MGB).

The five mining firms and their npaid ryalties are:

1) Philsaga-Medusa Mining Ltd. of Australia (gold mine) – P1.05 billion

2) SR Metal Inc. (nickel mining in Tubay, Agusan del Norte) owned by bilyonaryo Eric Gutierrez – P728.5 million

3) Marcventures Mining & Dev’t. Corporation (nickel mining in Cantilan, Surigao del Sur). It is led by chair Cesar Zalamea and Sid Alcantara – P475.4 million

4) JCG Resources Corp. (formerly Greenstone-Suricon) owned by RED 5 Ltd. Of Australia (gold project in Surigao del Norte) – P393 million

5) Agata Mining which is 60 percent owned by TVI Resource Development Philippines Inc. (TVIRD) where the son of bilyonaryo Manny Villar, Paolo, sits as vice chair (Agusan del Norte) – P25 million

COA said the five mining companies should have paid a five percent royalty and not just the excise tax on minerals that they produced out of their Mineral Reservations Area (MRA) in Region XIII or Caraga.

“Under the law, mineral resources are owned by the State. There is no distinction between minerals found or located within or outside mineral reserved area. Although the implementing rules and regulations of RA No. 7942 did not include the imposition of royalty against mining companies operating outside the declared MRAs, royalty should have also been imposed against these mining companies as these companies also extract mineral resources owned by the State,” said COA.

COA noted that the five mining firms were granted by then Environment Secretary Mon Paje an operating permit without a specific requirement to pay royalty.

CCOA said Paje ignored the MGB’s recommendation to collect royalty on non-MRA output. COA also said Paje should have declared these subject areas a mineral reservations so that the five firms should have not evaded the payment of P2.67 billion in royalties.

COA also records the Ore Transport Permits (OTP), Mineral Ores Exportation Permits (MOEP), shipment reports and related documents were not systematically filed in a database system by MGB. COA said it had difficulty retrieving the files from 2012 2017 due to MGB’s failure to handle the records.

“Matching of OTP and MOEP against the official receipts issued had been a tedious task. As such, determining as to whether corresponding fees and charges were paid before the issuance of the OTPs and MOEP were not made possible,” said COA.

“Folders were just scattered anywhere and were not securely kept since there was no specific place or room where those records were filed,” it added.

COA said the Environment Secretary should recommend to the President to include area outside the mining firms’ MRA in the mandatory imposition of royalties regardless of whether they operate within or outside the MRAs.

COA said MGB should improve its filing system by assigning a dedicated records officer and a record room for a mineral resource database system for the region.

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