Philippine rights body wants OceanaGold deal revoked

MANILA Mon Jan 17, 2011 5:50am EST

MANILA Jan 17 (Reuters) - The Philippines' human rights commission said the government should consider withdrawing OceanaGold Ltd's rights to a mining project because the Australian miner had violated rights of indigenous people.

Leo Jasareno, acting director of the Mines and Geosciences Bureau (MGB), told Reuters he had not yet seen the recommendations, but the bureau would have to look into them.

"If there is such a recommendation by the Commission on Human Rights, then the MGB is duty-bound to open an investigation and find out if there is ground," he said in a text message.

The Didipio mine, with a reserve life of 20 years, holds 1.41 million ounces of gold and 169,400 tonnes of copper, based on a report released last year by OceanaGold, Australia's fourth-largest listed gold miner.

OceanaGold planned to start operations at the project in the northern province of Nueva Vizcaya in 2013. It is due to restart construction work this year, with the initial cost estimated at $140 million over four to five years.

The government sees mining as a sector with great potential to attract foreign investors and generate jobs in the poor South East Asian nation, but has run into some obstacles.

Two provinces have banned types of mining activity, including a ban on open pit mining in South Cotabato that could jeopardise the country's biggest mining project, the $5.2 billion Tampakan project majority owned by Xstrata Plc .

In a statement on Monday, Loretta Ann Rosales, head of the human rights commission, said they found OceanaGold had violated indigenous people's right to adequate housing, freedom of movement and to manifest their culture and identity.

Officials from OceanaGold Philippines Inc were not immediately available for comment.

Rosales said civil and political rights were often sacrificed in the effort to lure in investments to fuel growth and development.

"Nothing compares, however, to the sufferings endured by the indigenous peoples in whose community lands these projects are made to be located," Rosales said. "They lose their homes, livelihood and property."

OceanaGold halted construction in late 2008 after spending $80 million due to high cost estimates, initially set at $320 million.

During the initial construction, there were protests by the indigenous community, supported by the local government and church leaders, after nearly 200 houses were demolished.

(Reporting by Manny Mogato; Editing by John Mair)