MacArthur Assessment Results - GIZ “WHERE HAVE ALL THE RICEFIELDS GONE, GONE TO MINING…” THE CASE OF MACARTHUR, LEYTE Presented by Maria Aurora T.W. Tabada, Director, Institute of Strategic Research and Development Studies, Visayas State University, during the GIZ-ENRD Program 4th Quarterly Team Meeting on 14 October 2011 @ CCE, VSU

1. “WHERE HAVE ALL THE RICEFIELDS GONE,
GONE TO MINING ”
GONE TO MINING…”
THE CASE OF MACARTHUR,
LEYTE
Presented by Maria Aurora T.W. Tabada, Director, Institute of Strategic Research and Development
Presented by Maria Aurora T.W. Tabada, Director,
Studies, Visayas State University, during the GIZ‐ENRD Program 4th Quarterly Team Meeting on 14 October
Studies, Visayas State University, during the GIZ‐
2011 @ CCE, VSU

2. OVERVIEW
• VSU created a TEAM to respond to the request
VSU created a TEAM to respond to the request
of Liwayway‐Danao‐Romualdez‐ Imelda‐Maya
Irrigators Association (LIDAROIMA) through
Irrigators’ Association (LIDAROIMA) through
NIA, Archdiocese of Palo, and the Macarthur
Parish
• General objective of the study was to
p y , ,
determine the biophysical, social, and
economic effects of the mining activities of
NICUA Corporation in MacArthur, Leyte

3. OBJECTIVES
• Describe the general profile of the affected
g p
communities;
• Describe the profile of the mining project;
Describe the profile of the mining project;
• Describe differences if any, observed in the
community since the start of the mining
community since the start of the mining
activities;
• Identify the perceived effects/problems of the
d f h d ff / bl f h
mining activities in the area
• Recommend specific courses of action

4. METHODOLOGY
• Bi h i l
Biophysical aspects: collection of soil and
ll i f il d
water (freshwater and marine) samples for
analysis, ocular inspection
l i l i ti
• Social & economic aspects: focus group
discussions, key informant interviews, review
of secondary data
• Data collection: August – October 2010

5. THE MINING PROJECTS IN
THE MINING PROJECTS IN
MACARTHUR, LEYTE

6. MAGNETITE MINING
MAGNETITE MINING
• Magnetite mining; black sand/iron sand with
titanium
tit i
• Leyte Ironsand Project of the Strong Built (Mining)
Development Corporation (MPSA No. 254‐2007‐VIII)
Development Corporation (MPSA No 254 2007 VIII)
issued on July 28, 2007 covering 7,411.556 ha in
the municipalities of MacArthur and Javier, Leyte
p , y
• Mt. Mogan Resources and Development Corp. (EP‐
VIII‐0MR‐11‐2009) issued on Dec. 23, 2009 – Dec.
22, 2011 covering 15,781.6110 ha in the offshore
areas of Tanauan, Tolosa, Dulag, Mayorga
MacArthur & Abuyog, Leyte
MacArthur & Abuyog Leyte

8. Leyte Magnetite Project
Leyte Magnetite Project
MPSA NO. PERMITEE AREA (ha) LOCATION DURATION REMARKS
290‐2009‐VIII Vincent 523.57 Javier and 29 Sep 2009 – Mines
Tan Tiong
i MacArthur,
A h 28 Sep 2034
28 S 2034 Operating
O i
Leyte Agreement
with NICUA
Corp. dated 2
November
N b
2009
317‐2010‐VIII Edgar L. 776.88 MacArthur, 10 Feb 2010 – Mines
Lim
Li La Paz and 9 F b 2035
L P d 9 Feb 2035 Operating
O ti
Mayorga, Agreement
Leyte with NICUA
Corp. dated 30
April 2010
April 2010
Total 1300.45
• ECC (Ref. Code: 1006‐0016) issued on 11 June 2010
• Maximum annual production of 2 million WMT
Maximum annual production of 2 million WMT
• Use of Chinese technology and skilled manpower

9. LEYTE IRONSAND CORPORATION
LEYTE IRONSAND CORPORATION
The Nicua group has over a period of the past 5‐6 years,
The Nicua group has over a period of the past 5‐6 years
conducted extensive exploration and metallurgical
testwork on its Leyte magnetite iron ore project. HSMC
farmed in on a large portion of the project late in 2009.
f d l f h l
http://hengshengmining.com/ downloaded 27 October 2010

10. • The venture is well located logistically, being
The venture is well located logistically, being
near to existing low cost geothermal power,
and adjacent to the coast for ease of shipping.
It has social and political support and is
environmentally sound.
• LIC controls some 20,402 ha of claims in Leyte,
and the claims are all mineralized and cover a
flat area of rice paddies and coconut
plantations.

11. Floating dredges suck up the sand
and upgrade the iron sands using an
onboard rougher magnetic separator
(MSU) to a concentrate containing
approx 56% Fe.
upgraded by hauled by trucks a distance of 1.5 km
grinding in to the port owned by LIS ready for
to the port owned by LIS ready for
ball mills shipping.

12. Congratulations
to Leyte Iron
Iron-
sand Corp on
the first batch of
iron concentrate
October 20 2010
20,
Group photo of
part of Chinese
engineers &
technicians.

13. Timeline http://hengshengmining.com/
Time Event
MAY 2009 Start to develop and prepare southern part of the mine area in 1200 hec.
July - Nov
Nov. Complete the construction of roadwork in mine area and connection towards the
2009 port.
Complete the construction of the port, capable of handling monthly turnover of
Feb 2010
150,000-200,000 ton
Complete the construction of an initial magnetic separator plant and another
Feb 2010
final magnetic separator plant for a total of two plants.
Complete the first p
p production line, and p
pilot run capable of monthly p
p y production
Feb 2010
of 15,000 ton iron with the grade of 60%
Mar - Apr Install another six production lines and reach the capacity of 60,000-80,000 ton
2010 monthly
Jul-Aug Install two more production lines and reach the capacity of 100,000 ton monthly
2010 to meet the demand of Chinese customers.
2011 We plan to reach annual capacity of 1-1.5million ton
2012 We plan to reach annual capability of 2million ton

14. THE AFFECTED COMMUNITIES
THE AFFECTED COMMUNITIES

15. MACARTHUR PROFILE
MACARTHUR PROFILE
• Income class: 5th class
• T l
Total population:
l i 17,608 (9,802; 50% of
17 608 (9 802 50% f
population)
• Total households: 3,133
• Total land area: 7,344.6627 sq. km
• No. of barangays: 31 (14 affected)
• Primary livelihoods
Primary livelihoods agriculture: rice
agriculture: rice
fisheries
• Others mining (2010)
mining (2010)
Source: LGPMS, 2009

16. FINANCIAL PROFILE
FINANCIAL PROFILE
• IRA: 32, 121,629.00
32 121 629 00
• Local sourced revenue: 2,461,436.39
• Other revenues: 4,553,419.55
• Total LGU income: 39,136,484.94
Source: LGPMS, 2009

17. Mostly rice farmers, some have coconuts
Other sources of income: driving;
Land tenure: 80% are tenants; many
landowners reside outside MacArthur
Produce sold at farm, to the financier or in
neighboring Abuyog since no market in town t

18. WATER

19. Declining rice and coconut harvests
partly due to extreme weather
conditions, lack of water, pests
conditions lack of water pests

20. WHAT IS AT STAKE?
WHAT IS AT STAKE?
LAKE BITO &
LIVELIHOODS OF
LIVELIHOODS OF
TILAPIA FISHERS
Irrigated RICE FIELDS
I i t d RICE FIELDS
and the LIVELIHOODS
of 374 farmers

21. Balire South River Irrigation System
Balire South River Irrigation System
• Total rice field area 275.9731 has
covered by mining firm
• Average rice yield per hectare 80 cavans/ha
• No. of cropping seasons per year 2
• Annual production 10,132 MT
• Total no. of farmers in area 374 farmers
• Amount of investment P120M
Source: NIA BIG Irrigation System, Macarthur, Leyte

23. OBSERVED PROBLEMS WITH MINING
OPERATION
Livelihood displacement (no more farms to farm)
Not all affected farmers are employed at NICUA
Not all farmers in the area agree with the mining
Not all farmers in the area agree with the mining
Other owners who sold their lands to NICUA are
not living in the place
t li i i th l
Adjacent unsold rice areas are affected by the
mining operation
Water level of Lake Bito seems to be lower:
report of fish kill

24. OBSERVATIONS WITH THE MINING
OPERATION
Operation is 22 hours; VERY NOISY; children
cannot study because of noise; have difficulty
sleeping; ground shakes like there is an
earthquake
Water source disturbance/competition during
Water source disturbance/competition during
operation: no water when pumps operate;
water is muddy; even at 20 ft. no more water
water is muddy; even at 20 ft. no more water
unlike before at 15 ft. can get water
Water in the ricefields do not get impounded
Water in the ricefields do not get impounded
anymore

25. PROCESSES FOR OBTAINING SOCIAL
ACCEPTABILITY
• No posting of notice
No posting of notice
• People aware because NICUA already
operating
• No assembly done in barangays (EIS show one
public consultation in the municipal gym held
bli l i i h i i l h ld
on 28 May 2010)
• Only barangays covered by LIDAROIMA signed
a petition against mining

26. FARMERS PERCEIVED IMPACTS
FARMERS PERCEIVED IMPACTS
• Destruction of area (Kadaot; magun‐ob)
• Hunger for the farmers (Gutom sa mag‐uma)
H f th f (G t )
• Children cannot study (Dili na maka‐eskwela)
• No farm work available because no more farms
No farm work available because no more farms
(Wala nay magpasuhol kay waray tuna)
• If the Balire river overflows, will drown (Kon
, (
magbaha ang Balire, malunod kami)
• Fish kill (Ma‐poison ang isda sa Danao Lake)
• Villa Imelda will transfer to Pongon (because of
ponding; mabalhin sa Pongon)
• Lower water level at Lake Bito
Lower water level at Lake Bito (Mobali ang tubig
tubig,
naibanan na ang tubig sa Lake Bito)

27. PROTEST OUTSIDE
THE NICUA
THE NICUA
COMPANY SITE ON
15 FEBRUARY 201
15 FEBRUARY 2010

28. BIOPHYSICAL FINDINGS
BIOPHYSICAL FINDINGS

29. Table 1. Summary of soil physical properties.
Bulk Particle
Sampling Depth density density (g Ksat
Spot (cm) Texture (g cm-3) cm-3) Porosity (cm d-1)
A 0-30 Sandy Clay 0.87 2.66 0.67 3,177.66
30 60
30-60 Loamy Sand 1.53 2.88 0.47 4,305.72
B 0-30 Sandy Clay 0.93 2.54 0.64 1,296.92
30-60 Loamy Sand 0.91 2.47 0.63 999.85
C 0-30 Sandy Clay 0.90 2.28 0.61 not determined
30-60 Loamy Sand 1.16 2.67 0.56 887.02
D 0-30
0 30 Sandy Clay
S d Cl 0.88
0 88 2.36
2 36 0.63
0 63 996.26
996 26
30-60 Loamy Sand 1.43 2.92 0.51 1,472.43
Ksat values of the soil range from around 900 cm d‐1 to over 4,000 cm d‐1. These
values mean that the soil very effectively allows water to pass through.

30. Table 2. Estimation of groundwater drawdown
and volume of water drawn into excavation (VWDE)
Average Porosity* 0.54
Sample Excavation
Depth (m)
Depth (m) 10.00
10 00
Average Depth to WT
(m)** 0.24
Sample Area – one
l
hectare (m2) 10,000
Ground Water
Drawdown (m) 4.33
VWDE per hectare
(m3)
) 44,603
44 603
*- average porosity of the 30- 60 cm layer of the four sampling spots
** - average depth to the water table at the four sampling spots at the time of sampling

31. • Mining operations with an excavation depth of
Mining operations with an excavation depth of
10 to 15 m.
• That a 10 m deep excavation could lead to
That a 10 m‐deep excavation could lead to
drawdown from the observed WT depth of
0.24 m to as deep as 4.33 m from the surface.
0 24 m to as deep as 4 33 m from the surface
• the presence of a nearby source of water, as a
hi h 44 603 3 of water could be drawn
high as 44,603 m f t ld b d
into the 10 m deep excavation for every
hectare of area excavated
h t f t d

32. • If there is a source of water nearby such as a
river or a lake, an actual drawdown of the WT
level may not be observed. This is because water
from a river or lake, or even from the
surrounding locations of the aquifer (including
subsurface drinking water sources) may be
drawn into the excavation;
• expected in areas with very high Ksat such as the
surveyed site

33. • Continued excavation in an area with a very
Continued excavation in an area with a very
conductive soil would continue to draw water
from surface water sources such as nearby a
from surface water sources such as nearby a
river or lake, or from the aquifer adjacent to the
excavation. The water budget in a nearby lake
excavation The water budget in a nearby lake
could be disturbed which may endanger the
year‐round water supply in a lake.
year‐round water supply in a lake

34. 2. It is likely that during times that the
excavation pumps in the mining site are
turned on water supply in water wells in
nearby home sites may be adversely affected.
b h i b d l ff d
3. Ponding of the deep excavations in mining sites
is almost guaranteed. This means that it would
is almost guaranteed This means that it would
be very difficult to rehabilitate the site to
revert the area to its previous agriculturally‐
p g y
productive state.

35. WATER QUALITY
Sampling pH Hardness DO TDS TSS
Site (ppm CO3) ppm ppm ppm
S1 7.3 Hard 8.4 8110 300
(163) (-)
S2 7.5 Very Hard 8.3 8550 380
(204) (-)
S3 8.2 (6.8)* Soft 8.4 560 20
(10) (-)
S4 7.2 Soft 7.6 70 30
(11) (11)
S5 7.0 Soft 8.5 50 30
(11) (11)
S6 7.2 Soft 8.2 120 40
(11) (16)
Source: F b
S February 2010 ecological i
l i l investigation team
ti ti t

36. WATER QUALITY
WATER QUALITY
• Results obtained are inconclusive because
Results obtained are inconclusive because
they reflect only one sampling incidence
• pH values obtained were tolerable but Lake
pH values obtained were tolerable but Lake
Bito water was found to be rather alkaline
• DO values showed well aerated water in all
l h d ll d i ll
sampling sites; Sites S4‐S6 showed high
organic matter content
i

37. MARINE WATERS
• Biodiversity Fishes
Banak
Invertebrates
Shells (24/m2)
Bangus Kuhol
−Fishes and invertebrates were observed
Fishes and invertebrates were observed Talakitok
T l ki k Alimango
Ali
mainly. Interview showed that the Mangagat Lambay
estuary of Balere River is a fishing Tilapia Banagan
ground for economically important Saminsamin Balat
fishes (Table 1). Gobies Sea stars
−Fishes and invertebrates were not Turnos Corals
abundant. Fishes caught were usually of Bolinao
Mayamaya
small size.
small size
Mamsa
−Empty shells of kuhol, a freshwater
Katambak
univalve, were abundant which indicate Sapsap
that they were carried by the water from Lapalapa
the upland to the estuary.
h l d h Bulanbulan
Balo
Bugsong
Tambangongo/hito
g g
Talho/tiktiki
Bisugo
Pata

38. RESULTS
• Biodiversity

39. SEDIMENTATION
• Sedimentation
−Dominant sediment is sand.
−Highest deposition was at the
Highest deposition was at the
mouth of the river (station 3) and
lowest at 100m upstream.
−These indicate strong water flow.
−Sand covers and smothers the
aquatic organisms.
−Gills of fishes and invertebrates
would be blocked resulting to
would be blocked resulting to
suffocation and death of the
organisms.
−silt and clay mostly towards the
marine area.
−seawater was highly turbid; this
lessen the amount of light
penetration in the water column
penetration in the water column
that could affect the productivity
and growth of marine plants and
corals.

40. PHYSICO‐CHEMICAL FACTORS
−increasing trend of stream
flow towards the river
mouth.
−as the width decreases
towards the mouth of the
river, the water speed
increases resulting to high
sediment load at the
di t l d t th
estuary.
−dissolved oxygen was
highest at the marine
highest at the marine
environment due to wave
action.

41. • The low abundance of aquatic fauna
could be due to the high sedimentation
could be due to the high sedimentation
of the Balere estuary.
• Anthropogenic activities, such as
mining, in the upland area would likely
to exacerbate the sedimentation, and
ultimately will lead to the ecological
instability of the estuarine ecosystem.

42. ECONOMIC ASPECT
ECONOMIC ASPECT
Table 1. N e t I n c o m e f r o m r i c e f a r m i n g p e r h e c t a r e.
Average Net Income Net Income Per
Yield per Per Year (P) Cropping (P)
hectare
(cavan)
N I C U A r e p o r t 73 57,660 28,830
N I A 80 48,880 24,440
Note: If we follow the rice farming period which is
3‐4 months, the farmers must have other sources
of income as an add‐on from rice farming.
of income as an add on from rice farming

43. • Hiring rate at NICUA Corporation vs Income from rice farming
Hiring rate at NICUA Corporation vs Income from rice farming
Table 2. Labor employment of Nicua.
A) @ 22‐days work per month
@ 22‐days work per month
Wage Rate per Monthly For Three For Four
Day (P) Income (P) Months Months
Labor
Labor 220 4,840
4,840 14,520 19,360
Mason‐Carpenter 250 5,500 16,500 22,000
Electrician 280 6,160 18,480 24,640
B) @ 30 days work per month
Wage Rate (P) Monthly For Three For Four
Income (P) Months Months
Labor 220 6,600 19,800 26,400
Mason‐Carpenter 250 7,500 22,500 30,000
Electrician 280 8,400 25,200 33,600
Note: Average Income from Rice Farming per Cropping
Nicua Report P 28,830
NIA P 24,440

44. Value of Rice Fields as per purchase price of NICUA
Value of Rice Fields as per purchase price of NICUA
TWO OPTIONS
1. Outright Sale of Land
• N
Negotiated, not below Market rates
ti t d tb l M k t t
2. Buy‐back Option (1/2 of the amount is given to the
farmers, the other ½ is held in trust in the bank
farmers, the other ½ is held in trust in the bank
which will serve as payment for the “buy‐back” of
the land)
• Foregone income is given
g g
Farmers have very minimal
opportunity cost of capital
opportunity cost of capital
thus, the purchase price of
rice lands by NICUA is low.
rice lands by NICUA is low.

45. • Value of Rice Fields as per purchase price of NICUA
Value of Rice Fields as per purchase price of NICUA
Table 3. P u r c h a s e p r i c e o f N i c u a p e r h e c t a r e.
P U R C H A S E P R I C E O F N I C U A
P E R H E C T A R E
M INING 160,000 170,000 180,000
OPERATION
L A N D R E N T
(Years) Per Year Per Month Per Year Per Month Per Year Per Month
10 16,000 1,333.33 17,000 1,416.67 18,000 1,500
15
15 10,667
10 667 888.89
888 89 11,333
11 333 944.44
944 44 12,000
12 000 1,000
1 000
20 8,000 666.67 8,500 708.33 9,000 750
25 6,400 533.33 6,800 566.67 7,200 600

46. FOOD SECURITY
FOOD SECURITY
• As a consequence of conversion there is less area for
rice production.
rice production
• These areas covered by the LMP overlaps with the
service area of the Balire South River Irrigation System
under the National Irrigation Administration based at
d h N i l I i i Ad i i i b d
MacArthur, Leyte.
• The NIA service area at MacArthur covers a total area
of 275.9731 hectares affecting 374 farmers, or an
average area of 0.74 ha/farmer. There are two
croppings per year (wet and dry) with an average yield
pp g p y ( y) g y
per hectare of 80 cavans. Total yield for the entire area
is 22,077.848 cavans or 1,103,892.4 mt.

47. GENERAL LAYOUT
BALIRE SOUTH IRS
BALIRE SOUTH IRS
Area Mined By NICUA = 15 - 20 has
As of 11/5/2010

48. ISSUES
• Processes to ensure community y
participation were circumvented; people
were not informed
were not informed
• Absence of transparency and failure of
national agencies and concerned LGUs to
g
perform their legally mandated functions

49. ISSUES
• Conversion of rice fields without following g
approved process (NICUA argues that this is
j
just temporary in nature and not
p y
permanent),
• Damage to the irrigation system and
Damage to the irrigation system and
ricefields of farmers
• Decline in rice yields which are likely to lead
Decline in rice yields which are likely to lead
to a loss of food security for municipality
and Leyte province
and Leyte province

50. CONCERNS
• The basic issue is really whether mining should be
allowed to continue in Leyte Island
• Need to review existing policies that are
conflicting:
– mining and ecotourism
– Mining and becoming the food hub of Eastern Visayas
• Passage of policy on NO GO ZONES for mining
• Preparation of CLUPs by LGUs must be strictly
enforced and sanctions done

51. CONCERNS
• Mechanism for ensuring communities are
aware of applications, etc need to be reviewed
f li ti t dt b i d
and put in place
• If mining continues, communities should be
trained to monitor the mining activities
• The need for the civil society groups especially
the church to engage the mining companies
from the perspective of stewardship and
sustainable development