Strike Continues to Paralyze Gold Production at the Lepanto Mines

On Feb. 1, 9 p.m., miners working in the underground tunnels of Mankayan took off their helmets and laid down their mining tools, not to end a day of work but to start a strike that would paralyze the operation of the country’s largest gold producer – the Lepanto Consolidated Mining Company (LCMCo).

BY AUDREY MARY BELTRAN
Bulatlat.com

Mankayan, Benguet – Lepanto workers say that management policies on a new job classification scheme, compulsory holiday work, early reporting time for underground workers and labor-only contracting curtail their economic and democratic rights. 

The two unions, the Lepanto Local Staff Union and the Lepanto Employees Union, filed their Notices of Strike last Dec. 26, at the National Conciliation and Mediation Board.  Series of meetings between the management and the two unions were held at the office of the NCMB-Cordillera Administrative Region office but no settlement was reached.

To pre-empt the strike, the LCMCo immediately petitioned Labor Secretary Patricia Sto. Tomas to assume jurisdiction over the dispute after their Jan. 10 dialogue. The management claims that LCMCo is engaged in an industry indispensable to national interest and that the strike will adversely affect this. 

Defying company pressure, 96.74% or 1,364 members of the Lepanto Employees Union and 99.99% or 160 members of the Lepanto Local Staff Union decided to stage their protest in a strike vote referendum last Jan. 24.

Lepanto and its gold production

The Lepanto mines’ operation at Mankayan started in 1936.  It was owned by the Americans until the 1970s when Philippine laws required 60% Filipino ownership of companies. 

Starting 1936, LCMCo focused on copper mining until the discovery of rich gold deposits in the area in September 1995 and it shifted to gold production.

The gold mining operations named “Victoria Gold Project” started in March 1997.  In that year, LCMCo produced 3,432.27 kilos of gold valued at $36, 245,852 or P1.47 billion.  This gold harvest and the production that continues to the present produced the highest rates of profit since the company started.

Due to the aggressive mining explorations, the company discovered another gold ore deposit in Mankayan and named it Victoria II in Sept. 1999. 

As of January last year, the combined gold reserves of Victoria I and Victoria II have been estimated at 110,418 kg.  The Far Southeast ore deposit, another of its operations, is not yet included in the estimate.

As soon as the company acquires loans, it will begin its expansion operations in Palasaan-Suyoc, Binucong-Loo in Buguias,Benguet and in Tadian and Mainit in Mountain Province where it targets to get 6,221 kg. of gold every year.

The LCMCo has stepped up its mining operations especially after the Sept. 11 attacks in the U.S. that has been instrumental in the rise in the price of gold.  Currently, an ounce of gold is valued at $370. It continues to rise as the international recession worsens and as the preparations for war in the Middle East goes on.

Its operations are currently partially financed by long-term credit arrangements with big foreign corporations.  It has a Loan and Hedging Facility Agreement with NM Rothschild and the Dredsner Bank AG which allows it to borrow up to $30 million plus the value of 300,000 ounces of gold bullion.  It has other long-term loans with other financing institutions, totaling more than $25 million as of yearend 2001. 

NM Rothschild is the biggest mercantile financing house in the world of mining; it is the number one bullion trader on the London Metal Exchange, where a large majority of the world’s gold is bought and sold. Dredsner and another of Lepanto’s bankers, Citibank, are similarly giants in world financing.

The workers’ situation

The history of mining has shown that those who bring out the ore from the earth are the ones who are the most exploited. 

In the Lepanto Mine Division, the salary of the 1,907 regular miners in 2001 totaled to P17 million – only .72% of the P9.2 billion the company raked in.  The contractual workers receive only P180 a day and no benefits from the company. 

Since the start of the mechanization of mining operations in the LCMCo., a great number of workers have been retrenched.    

The miners also suffer from the poor working conditions in the mines.  The Occupational Health and Safety study conducted last September by CHESTCORE reveals that hazards are experienced in the various stages of mining.  These included noise, heat, vibration, dust, fumes and chemicals such as cyanide and nitric acid.  Personal protective equipment is scarce and use is rarely monitored.  In 2001, there were two fatalities from February to April 2002, all caused by rock fall due to inadequate ground support. 

One of the striking workers, they says have suffered enough.   

The strike 

The workers are on their ninth day of strike.   

The workers and their families are not just braving cold nights and hunger in the picket lines.  Violent attempts to disperse the workers’ ranks have occurred. 

The union leaders received termination papers last Feb. 5.  They were ordered to vacate their barracks in 10 days. 

A Captain Amsiwen of Camp Dangwa brought two union leaders, Ernesto Dulag of the LLSU and Panelo Ambas of LEU, to the Nayac Police Station last Thursday, Feb. 6. This is in line with the labor secretary’s assumption of jurisdiction over the labor dispute. 

Last Feb. 7, about 50 members of the Philippine National Police (PNP) took over the Tubo picket line hurting some of the workers in the dispersal.  About 120 PNP policemen are currently deployed in the area in addition to the Armed Forces of the Philippines (AFP) troops stationed there. 

The strike has reportedly gained support from the people of Mankayan and Baguio.  An ecumenical service was held yesterday at the picket line “to strengthen the workers in their quest for social justice.”  Different organizations continue to accompany and provide support to the striking workers. 

The LCMCo has lost about P40 million since Feb. 1 yet management has not acted on the issues raised by the workers.    

In a Sunstar Report last Feb. 4, Flor Fajilan, the company’s Human Resource Division Chief and information Officer said, “We decided not to engage with them because it would appear that their sentiments are valid if we act in their favor.” 

Currently, seven picket lines are guarded by the workers – Nayak, Tubo, Buaki, Mill, 900 Level,CMI Gate 11 and the CPJ. Bulatlat.com

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