‘Mining biz better left to private sector’

To ensure efficiency, mining activities are better left to the private sector, according to mining company JG Sablan.

Company president John Sablan said the government already faces too many problems to get directly involved in the mining business.

“I don’t think the government should do mining. They should just leave it to the private sector. I don’t know of any government that’s doing that. Nauru, they did it because phosphate mining is its only source of revenues and it has a very small population,” said Sablan in an interview.

This came about after Commonwealth Development Authority board chair Tom Glenn A. Quitugua proposed that the local government should directly engage in mining rather than allow a profit-oriented middleman to come in.

He said the government could strike a deal directly with the manufacturers of cement and receive dividends.

Having a middleman or a third party to do the mining and marketing of pozzolan, he said, only gives the government minimal royalty fees.

Quitugua cited that Alaska annually receives dividends from the exploration of its oil reserves while the Nauru government benefited greatly by excavating and exporting its vast deposits of phosphate.

Quitugua said the sale of pozzolan in the Northern Islands would bail out the CNMI government from a deep financial crisis.

There are some 200 million metric tons of pozzolanic ash on Mt. Pagan, which is considered a high-value volcanic ash used worldwide as a cement additive.

It is estimated to cost between $45 to $70 per ton.

JG Sablan, the only company that has so far been granted a permit to mine pozzolan since the early ’90s, is now partnering with U.S.-based BridgeCreek International to pursue the project.

“I understand that the government wants a bigger share. That’s understandable but, really, most governments only receive royalty fees from private mining companies,” Sablan said.

He said the average royalty fee is 3 percent.

“Check with the federal mining rights. It’s the going rate because it takes a lot of money to investigate, research, and keep mining activities going,” said the businessman.

He cited that JG Sablan has invested several millions in the business since the last decade but could not just go full swing for lack of enough funds to sustain international operations.

He said that, with BridgeCreek as a partner, the export of pozzolan would be easier.

Sablan said that initial estimates showed that the CNMI government would get $13 million annually in royalty and related taxes from the proposed pozzolan project.

Pozzolan mining in the CNMI is estimated to last up to 40 years.