Mystery of the mining loan
By Conrado R. Banal III
Mystery shrouds the
deal between the Singapore office of Deutsche
Bank and the local mining company called
Platinum Group Metals Corp.
Last October, Deutsche Singapore gave Platinum
Metals a loan of $40 million, which -- even
with the shrinking dollar -- should be more
than P1.6 billion.
It is now the talk of mining town, and word
has it that Platinum Metals has a backer at
the Palace, aided even by an influential lady
The $40-million loan should go to the Platinum
Metals’ project to build a ferronickel
smelting plant in Mindanao.
Questions arose in financial circles about the
ability of Platinum Metals to get enough
nickel ore supply for the smelting plant.
It seems Platinum Metals lost a big nickel
mining rights in Palawan even before Deutsche
Singapore gave the loan.
If this dirt hits the fan, this country may
again suffer a big black eye before the world
Of course, you can only expect Deutsche Bank
to do something about the Platinum Metal ease.
And it’s really an old boy’s club out there in
Two factors seem to figure prominently in the
Platinum Metals smelting project, which
financiers like Deutsche Singapore surely
One is the loan guarantee of Philippine
Export-Import Credit Agency, or Philexim,
amounting to P500 million given to the mining
firm in April 2007, in what prominent figures
in the mining sector believed to be a
Oops, that’s another agency under the
Department of Finance.
The finance department is the same one that’s
handling the controversy-laden lease of the
Philippine government’s prime property in
Our contacts at the Department of Foreign
Affairs wonder why one ranking official of DOF
was often seen in Tokyo during the
negotiations on the lease.
And nobody in the Tokyo embassy of the
Philippines was informed about his trip to
that city? Hmmm.
Anyway, the fast approval of the Philexim
guarantee to Platinum Metals went around town
as the work of the long arms of the Malacañang
official and that lady lawyer.
* * *
The other crucial factor in the smelting
project is an operating agreement between
Platinum Metals and a company called Oriential
Peninsula Resources Group.
The latter had a successful initial public
offering (IPO) of stock last month, apparently
on the strength of its thousands of hectares
of mining claims in Palawan province.
But Oriental Peninsula also disclosed in its
IPO that the government had already canceled
the “operating agreement” that was brandied
about by Platinum Metals to Philexim and,
possibly, Deutsche Singapore.
That sent Philexim for cover, and its
officials quickly withdrew the P500-million
guarantee to Platinum Metals.
It turned out that the Department of
Environment and Natural Resources (DENR) had
already canceled the same “operating
agreement” because of Platinum Metals’
violation of mining rules.
For instance, the rules say that small-scale
mines are allowed an extraction rate of only
50,000 tons a year.
According to our DENR sources, Platinum Metals
extracted about a million tons in just one
* * *
Even Environment and Natural Resources
Secretary Lito Atienza seems to be watching
He said it could affect the entire mining
industry, which is supposed to be this
administration’s lead sector for our economic
Sure, said Atienza, Platinum Metals might have
disclosed that the operating agreement was
Still, the company did not say that the DENR
actually canceled it when Angelo Reyes, now
the secretary of energy, was the DENR boss.
* * *
According to a press statement purportedly
coming from his office, Transportation and
Communications Secretary Leandro Mendoza
welcomed the Senate investigation on the
embarrassing downgrading of the Philippines in
the aviation rating of the US Federal Aviation
Everybody seems to enjoy congressional
inquiries nowadays, is that it?
Anyway, I heard that some personnel of the
government agency in the center of the FAA
storm, the Air Transport Office (ATO), are
preparing to testify in the Senate
Word has it that they intend to talk about a
lot of corrupt practices at the ATO.
Anyway, in so many words, the press statement
from Mendoza’s office indicated that the
legislature also had lapses that led to the
FAA downgrading of the country.
Congress still has to pass a modern law on
aviation, for instance.
Still, the lack of modern legislation on
aviation was not just the problem. In fact,
the FAA noted six areas in which the
Philippines did not meet international
standards. The glaring lack of aviation law
was just one of them.
For instance, the administration regulations
of the ATO did not meet international
standards, simply because ATO stopped issuing
them since more than five years ago.
And those were just administrative orders,
mind you. They did not need Congress to be
Also, according to the FAA, the ATO did not
have qualified technical personnel to inspect
the “air-worthiness” of the aircraft of
Gosh, the ATO does not even have a training
program for its personnel to become qualified
Did Mendoza know that to test the licensed
commercial pilots of foreign airlines, for
instance, the ATO used to borrow “check
pilots” from the Philippine Airlines?
Did he know that pilots of Korean airlines get
the license from ATO to fly here, even if they
do not speak English, which is a requirement
for the freaking license?
Alright, so in terms of investment in
technology, the Department of Transportation
and Communications had already invested almost
P200 million to rehabilitate the flight radar
in Tagaytay City. You know, that huge circular
contraption on the road leading to the famous
Antonio’s garden restaurant.
The radar should become operational again this
There is only one minor problem: The ATO does
have the facilities to process the data coming
from the radar.
Let me see, and so ATO will have that working
radar, but it still cannot read what’s going
on in our friendly about-to-be-opened skies.
What good is that, really now, boss?