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Building the community and striking gold

Article - July 27, 2011
Honesty and concern for the people really distinguish Jose Ernesto Villaluna, president and chief operating officer of Philex Mining, and the way he does business
The president and COO of Philex Mining Corporation sees helping people to be a top priority, connecting the industry with community development.

Philex prides itself on its corporate social responsibility (CSR) practices, with initiatives such as building schools, hospitals, and free healthcare. Philex even donated a power line so that children in surrounding communities could study with incandescent lamps instead of gas lamps, and provided a water and storage pump for irrigating crops. Mr. Villaluna believes the mining industry to be an integral part of the Philippine economy and in this Q&A, he reflects on the role of mining in the Philippines, what makes Philex a successful business, and his vision for future expansion.

How do you think the mining sector is going to contribute to the nation by improving its competitiveness in terms of trade?

It has been reported that the potential mineral resources of the Philippines is worth $800 billion. This amount, if tapped and realized in terms of the country’s revenue, is large enough to pay for the country’s foreign debt and provide the foreign exchange component of infrastructure projects that will support economic growth.

The mining industry has been a major export earner since 40 years ago. Our revenues depend on world commodity prices, but we remain competitive because of low operating cost. Improving on this competitiveness would mean more mines that could operate profitably. And more mines would mean more economic activities, not only from the mining operations by themselves but from the related businesses and satellite activities as well. All of these could generate more revenues for the country that could contribute to its economic, as well as social, uplift.

Although gold and copper is your primary business, Philex Mining also has other subsidiaries.

Yes. Our corporate structure is basically in two main areas: mining and energy. The mining side is under the parent company. The energy side is under a wholly owned subsidiary, Philex Petroleum Corporation, whose investments include a natural gas deposit in Palawan and coal in Zamboanga, Sibugay.

How important are CSR initiatives to Philex Mining?

CSR is indeed important to any mining venture. Realizing this, before we start exploration on a mineralized area, we have to build goodwill with the community by reaching out and by being clear on what we plan to do on the ground. We have to manage the perception and expectation of stakeholders, to balance the windfall mentality. Stakeholders are not mere beneficiaries of a future mining operation but partners in progress.

How do you see the company expanding over the next five years?

I see the company achieving its aim for growth. We are right now preparing for the eventual development of the Silangan Project over five years. We are also in the debugging stage of our coal operations. We continue to explore for additional ore reserves in the Bulawan gold property in Negros Occidental and perhaps, if we are lucky, this could justify the reopening of the mine for operations.

The exploration in the areas around the vicinity of our Padcal mine could hopefully add more sources of ore for the Padcal mine. Over this time, we aim to have at least another operating mine in addition to Padcal. Should and when this happens, we would have no less than two mines generating earnings for the company.