Krominco Inc

CORPORATE PROFILE

KROMINCO, INCORPORATED

2nd Floor, UMC Building

2232 Pasong Tamo Avenue

Makati City, Metro Manila

Tel. Nos. 8191130/8132986

Fax No. (632) 8191125

COMPANY DESCRIPTION

PROJECT LOCATION AND ACCESSIBILITY

MALAYAN WOOD PRODUCTS, INC. Now known as KROMINCO, INC. began its

exploration activity way back in 1977 when it was awarded an Operating Contract by then

Surigao Mineral Reservation Board to explore and exploit the chromites deposit in Dinagat

Islands, Surigao del Norte. In 1979, it started chromites lumpy and concentrate production from

Libjo rich deposit. In 1980, the present Mt. Redondo deposit was discovered. Positive ore

reserves were blocked through diamond drilling.

A 600 MT per day washing plant was built at Mt. Redondo, Loreto, Surigao del Norte. The Libjo

operation was abandon Production of chromites concentrates began when the washing plant to

treat 600 MT per day of lateritic chromites sand was completed at the Redondo mine site. The
company registered with the Board of Investment as an export-oriented, non-pioneer expanding

enterprise.

In June 1986, the company forced to suspend its operation temporarily when the Government,

unilaterally cancelled the Operation Contract. The company appealed to governments unjust

cancellation of its agreement. As a compromise, the Government restored Malayan Wood

Products, Inc.s Operating contract after the company consented to reduce its operating area to

729 hectares, more or less. By 1990, Mining operation was back to normal as well as the Mill

operation. In July 21, 1989, the company changed its Corporate name to KROMINCO, INC. to

better reflect its main business (logging operation ceased in 1983) which is Mining. After the

lifting of the Cancellation Order by the Government and consequent signing of the new

Operating Contract, KROMINCO, INC. has maintained continuous operations.

The Mineral Production Sharing Agreement (MPSA) No. 291-200-XIII-SMR executed on

September 29, 2009 by and between the Philippine Government, thru the Department of

Environment and Natural Resources, and Krominco, Inc., covering a contract area of 757.118

hectares located in Barangay Sta. Cruz, Santiago and Esperanza, Municipality of Loreto,

Province of Dinagat Islands. The claim area is bounded by geographic latitude 102330, and

longitude 1253730 and 12538. The company has two products, chromites lumps and

chromite concentrates with the grade of 465% Cr 2O3 and 48% Cr2O3 respectively. The type of

Mineral Mined is Metallurgical Chromites. The mining method is open pit mining and type of

milling process is Gravity Concentration.

MILLING PROCESS

The milling grade ores goes to dump bin then to the jaw crusher to reduce the size to minus 1 .

The jaw crusher product is conveyed to the double deck vibrating screen where water introduced,

specifically at the top deck to separate the slimes. The screen oversize is recycled to the Symons

cone crusher to produce a product of minus 5/8. The screen undersize goes to the fine ore bin

feed the rod mill to reduce the size of the particle to about 80% of 100 meshes.

The road mill product goes to 2.5 mm aperture siere bend. The undersize is pumped to the

Riechert Spirals then to the shaking tables. The oversized is pumped to the Dis cyclone, the

cyclone underflow goes to the ball mill and the cyclone over flow goes to tailings thickener. At

the shaking tables, the chromites concentrate product, which is about 48% Cr 2O3, goes to the

final concentrate bins, the middling are fed to the ball mill for regrinding and the ball mill

product is recycled back to the shaking tables, while the tails go to the tailing thickener. At the

tailings thickener the overflow water is reclaimed back to the mill circuit using a pump. The

tailings thickener underflow goes to the setting pond. The solid wastes in the tails are allowed to

settle down and only water effluent leaves the setting pond. The Krominko Mill Plant has a rated

capacity of 600 MT. per day. Only plain water is introduced into the mill circuits to recover

chromite minerals. No chemicals are added to the entire process.

GEOLOGICAL RESOURCES

In view its high potential for chromite mineralization much works done in the area. Preliminary

exploration work compromising of test pitting, X-ray drilling and deep diamond disclosed

economic and mine able ore reserves as follows:

Area

Redondo Open Pit

Sangay 1

Sangay 2

Southeast Redondo Prospects

Total Ore Resources

POWER SUPPLY

Milling Operation and other mine site facilities are supplied with 440 volts (3 phase) / 220 volts

(2 phase) by 3 units of Caterpillar Genset (250 KVA each) in Synchronized operation. One unit

of Caterpillar Genset (175 KW) serves as alternate supply. And another one unit (25 KVA

Perkins) as standby unit for lighting load only. All these Genset are owned and operated by the

company.
OVERVIEW OF SDMP (2011-2015)

RATIONALE

In junction with the new Rules and Regulations on the Implementation of the Social

Development and Management Program for Mining Projects, the company is mandated to

prepare a 5-year SDMP for the development of its host and neighboring communities.

The Social Development Management Program (SDMP) as a tool outlines the development

undertakings of the company for the directly and indirectly and activities integrated in the

SDMP, it is envisioned that these will transform the communities into self-reliant and self-

sufficient communities during the mining operation and even when the life of the mine ceases.

SDMP, as a particularly approach and strategy, is done in consultation and partnership with the

residents, LDUs, NGOs in the host and neighboring communities and these covers all

community development programs that will be implemented by the company in all phases of the

mining operation.
GOALS AND OBJECTIVES

The overall goal of the SDMP in the mining industry shall be the upliftment of the quality of life

of the people towards the end of mine life and even long after the mining company ceased its

programs.

To achieve this goal, the following objectives are established:

1. Established Livelihood Projects

2. Provide Basic Social Service to host communities.

3. Ensure social acceptability through proper information, communication, and

education dissemination campaign.

4. Develop and improve the existing infrastructure facilities.

5. Established and maintain networking and linkages with the local government

units, government agencies, non-government organization and private sectors.

ISSUES ABOUT KROMINCO INCORPORATED

Dinagat to sue 2 more mining firms for unpaid taxes

SURIGAO CITY (MindaNews/24 April) Two more mining companies will be included in the

lawsuit filed by the Province of Dinagat Islands for refusal to settle local tax obligations.

Provincial Information Officer Jane Mayola identified the companies as Wellex Mining Corp.

and AAM-PHIL Natural Resources Exploration and Development Corp.

These mining firms have been extracting nickel ore in Dinagat and shipping them abroad.

Mayola said Wellex Mining which operates in the towns of Libjo, Tubajon and Loreto has

unpaid taxes of P24.8 million, and Aamphil P12.4 million.

She said the provincial board has authorized Gov. Glenda Ecleo to file cases against these

companies for their failure to settle their Soil Depletion Tax Liability.

Three other mining firms, Cagdianao Mining Corp. (CMC), Krominco Inc. and Century Peak

Corp., which are also shipping nickel ore abroad, will be included in the lawsuit. CMC, a

subsidiary of Nickel Asia Corporation, has the highest liability amounting to at least P174.8

million. This includes interests and penalties since 2009 until 2014 shipments of minerals.

Century Peak has a liability of P22.5 million while Krominco has an outstanding balance of P6.9
million. Cagdianao Mining operates in Cagdianao town, Krominco has been mining in Libjo

town while Century Peak has been operating in Libjo and Loreto.

Enacted by the provincial board in 2009, the Soil Depletion Tax imposes a one-percent tariff on

gross receipts of all mineral ore extracted and/or shipped from the province.

The provincial government of Dinagat Islands is in the process of filing a case at Regional Trial

Court Brach 32 against these mining companies that were unable to pay Soil Depletion Tax,

said Board member Mario Menil.

Eight large-scale mining companies currently operate in Dinagat, which is a declared mineral

reservation. That means on top of the two-percent excise tax, mining companies in the province

also pay five-percent royalty based on the market value of the gross output of the minerals they

extract.

Earlier, Dulmar M. Raagas, president of the Chamber of Mines-Caraga Region Inc., said most of

their members consider the Dinagat tax to be a form of double taxation. Raagas considers this tax

excessive saying other mining provinces dont have the same tax scheme. Menil said Krominco

questioned the legality of the Soil Depletion Tax in a local court and asked for a restraining

order.

But he said the court ruled in favor of the provincial government. Menil, however, said that while

the provincial government will do what is necessary to collect the taxes it is amenable to an

amicable settlement with the mining companies. (Roel N. Catoto/MindaNews)

ACTION TAKEN BY DEPARTMENT OF ENVIRONMENT AND NATURAL

RESOURCES (DENR)

Environment Secretary Gina Lopez will announce on Thursday her final decision whether to

close down 30 mining operations that failed their initial audit a few months ago.

The Department of Environment and Natural Resources (DENR) reviewed the audit results made

known on Sept. 27, which ordered suspended 10 mining operations and recommended for

suspension the operations of 20 others.

The audit team reportedly found that the mining operations violated the terms and conditions of

their environmental compliance certificate (ECC), the DENR rules on mine safety and health

standards, and implementing rules of the Philippine Mining Act of 1995.

DENR said out of the 41 operating metallic mines in the country, only 11 complied with

environmental standards.

DENR gave the erring mining companies the opportunity to explain why their operations should

not be suspended.
Ordered suspended

The 10 mines that were ordered suspended belong to Benguet Corp. Nickel Mines Inc.; Berong

Nickel Corp.; Citinickel Mines and Development Corp.; Claver Mineral Development Corp.;

Emir Mineral Resources Corp.; Eramen Minerals Inc.;

LNL Archipelago Minerals Inc.; Mt. Sinai Mining Exploration & Development Corp.; Ore Asia

Mining and Development Corp.; and Zambales Diversified Metals Corp.

The 20 mines that face suspension belong to AAMPHIL Natural Resources Exploration and

Development Corp. (Parcels 1 and 2B); Adnama Mining Resources Inc.; Agata Mining Ventures

Inc.; Benguet Corp.; Carrascal Nickel Corp.; Century Peak Corp. (Casiguran Nickel and Rapid

City Nickel projects); CTP Construction and Mining Corp.;

Hinatuan Mining Corp.; Krominco Inc.; Filminera Resources Corp./Philippine Gold Processing

and Refining Corp.; Lepanto Consolidated Mining Co.; Libjo Mining Corp.; Marcventures

Mining and Development Corp.; OceanaGold Phils. Inc.; Oriental Synergy Mining Corp.;

Oriental Vision Mining Philippines Corp.; Sinosteel Philippines H.Y. Mining Corp.; Strongbuilt

Mining Development Corp.; Wellex Mining Corp.; and SR Metals Inc.

The audit team was composed of representatives from the DENR central and regional offices, the

Mines and Geosciences Bureau, Environmental Management Bureau, Biodiversity Management

Bureau, Ecosystems Research and Development Bureau, the Department of Health, the

Department of Agriculture and civil society organizations.

Lopez earlier said the DENR would not hesitate to shut down mining operations found to have

violated environmental, health and safety regulations and standards.

A week after assuming office on July 1, she created an audit team to look into possible violations

of environmental safeguards of all 41 operating metallic mines.

The mining audit focused on issues of safety and health, environmental management, social

development, mining tenement and standards under the Clean Air Act, Clean Water Act and laws

on hazardous and solid waste management.

We will not just look at the technical side but also the social practiceswhat are the effects of

these firms on the residents, on the water supply, among others, Lopez had said before the audit

began.

POINT OF VIEW

Close Krominco, Inc.? Why or why not?

I support Gina Lopez on her decision in closing the 20 mining companies including Krominco,

Inc. for they have violated environmental, health and safety regulations and standards set by the

Department. The environmental impact of mining includes erosion, formation of sinkholes, loss

of biodiversity, and contamination of soil, groundwater and surface water by chemicals from

mining processes. Besides creating environmental damage, the contamination resulting from

leakage of chemicals also affect the health of the local population.