Press Release
April 8, 2008


Senate Minority Leader Aquilino Q. Pimentel, Jr. (PDP-Laban) today warned Malacañang against a government plan to allow China' ZTE Corp. to operate a mining concession in the gold-rich Mount Diwalwal in Mindanao.

Pimentel said the reported impending entry of ZTE as a major player in the Mount Diwalwal gold rush area has caused restiveness among the various stakeholders, there particularly the small scale miners who fear that their mining right there is being undermined due to competition from big companies that are favored by the government, including foreign ones.

"The news that ZTE will now be a major player in the Diwalwal mining area as a terrible blow to small miners, including lumads and prior locators," the senator from Mindanao and principal author of the Small Scale Mining Act of the Philippines said.

"Aside from complicating matters, it may even cause bloodshed."

The possible grant of a mining concession to ZTE was first revealed by Trade and Industry Secretary Peter Favila during his testimony before the Senate on the controversy over the $329 million national broadband network-ZTE contract on March 11.

Favila informed the joint Senate investigating panel that on July 12, 2006, he signed in behalf of the Philippine government a memorandum of understanding with the ZTE International Investment Ltd. involving exploration, development and operations of mining areas in Diwalwal and Davao, establishment of an information technology school and establishment of an economic zone in Davao.

The proposed mining operations of ZTE International Investment Ltd. - the investment arm of ZTE International - was supposedly part of a long-term Chinese investments in the Philippines worth $32 billion that have been agreed upon by the two governments.

Pimentel expressed apprehension that the Arroyo government will now be more obliged to go ahead with the plan to allow ZTE to engage in mining operations in Diwalwal to compensate for the cancellation of the NBN-ZTE contract after grave anomalies in the deal were uncovered in the Senate inquiry, including overpricing and bribery by the Chinese telecommunications firm of Filipino government officials.

Further giving credence to the administration's plan to implement its agreement on mining venture with China in Diwalwal was a June 23, 2006 ruling of a division of the Supreme Court which cancelled all mining rights and operations in the Diwalwal gold rush area.

The mining area covered by the court ruling is the same area covered by the 2006 memorandum of agreement signed by China and the Philippines.

The court ruling is being disputed by the Mindanao Gold Mining Corp. through a petition which the Supreme Court is scheduled to take up in today full court session in Baguio City.

The minority leader said that the entry of foreign investors in the Diwalwal mining areas is uncalled for since Filipinos have proven their capability to explore, develop and operate these areas for the benefit of the greatest number of the people.

Pimentel said the government should refrain from making decisions that will threaten the interest and livelihood of Filipino miners, big or small, and spark social discontent in that politically volatile region.

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