The communist New People’s Army attacked three mining companies in Surigao del Norte province last Monday (October 3).

The rebels burned equipment, vehicles and facilities of Taganito Mining Corp., Taganito HPAL Nickel Corp. and Platinum Group Metals Corp. in the town of Claver.

Surigao del Norte Gov. Sol Matugas said among those razed were the whole smelting plant of Taganito HPAL Nickel Corp., 132 dump trucks, 22 backhoes, 9 barges, 2 cranes, 2 bulldozers, a compactor, and a grader. The guesthouse of Taganito Mining Corp. was also burned.

Rebels also bombed the MV Con Carrier-7, a cargo ship of Aleson Shipping docked at Taganito Mining Port, shortly before noon last Monday (October 3). The rebels ordered the 19 crew to disembark before the bombing.

The Philippine Coast Guard (PCG) said the cargo ship was loaded with 9,000 liters of fuel oil, 368 liters of lube oil and 138 liters of hydraulic oil. PCG spokesperson Lieutenant Commander Algier Ricafrente said five foreign vessels anchored about five kilometers north of Taganito had been advised to proceed to a safer area.

The National Democratic Front, the political arm of the Communist Party of the Philippines, said the three mining companies had damaged the environment, displaced indigenous peoples and violated workers rights.

Expressing displeasure over the incident, Philippine President Benigno Aquino III has relieved officials and said, “corrective actions are being undertaken.”

According to Interior Secretary Jesse Robredo, damage reached up to US$1.5 billion. Robredo, who inspected the damage himself on Tuesday (October 4), said the attacks were isolated and were meant as a “show of force” by the rebels.

However, Nickel Asia Corp., the mother company of Taganito Mining Corp., said it is suspending indefinitely its mining operations and nickel ore loading in the province.

In a disclosure to the Philippine Stock Exchange (PSE), the company said, “we understand that certain equipment of TMC, as well as our affiliate, Taganito HPAL Corporation, were burned.” It estimated damage to PhP500 million.

Police authorities said the NPA rebels were wearing military uniforms when they seized three TMC officials at roadblocks to gain entry into the mining sites. Thereafter, the rebels disarmed private security guards, herded all the people in an open area, and commenced with the burning of equipment and facilities.

Many believe the incident would bring a significant effect on the country’s foreign investment climate. Already, the incident has highlighted the government’s inability to secure businesses in remote areas.

Such attacks pose considerable risks to investments particularly in the mining industry. Aside from damage to property, the incident will cause the displacement of some 5,000 workers directly hired by the companies. Overall, the incident will have an impact on efforts of the Aquino administration  to raise revenues.

At the same time, the incident will have an influence on plans to resume peace negotiations with the communist rebels. The latest incident surely does not build confidence between the two sides. Unlike the Moro Islamic Liberation Front (MILF), the communist rebels do not have a general ceasefire agreement with the government.