BPL cancels mining permits in Pagan

The Board of Public Lands last week voted to cancel commercial leases held by three mining companies bound under signed agreements to perform pozzolan and basalt extraction on the island of Pagan.

According to sources, the board moved to revoke the 20-year contracts following complaints of an apparent lack of progress in the mining projects which has resulted in substantial loss to the local government due to non-payment of permit and royalty fees.

J.G. Sablan Rock Quarry Inc., Fareast Mining Inc., and CNMI Mining Inc. were stripped last Thursday by the public lands board of authority to further quarry, mine, remove, or market pozzolan and basalt on the remote island.

Pagan Permit Mining holders under the commercial lease agreement are obliged to pay government fees for the use of the premises a yearly sum of $20,000 and royalty fees that cost $2.50 per cubic yard of pozzolan and basalt materials extracted from the island during the first five years from the date the permit is issued.

Since the first mining permit was issued ten years ago, the companies have reportedly failed to comply with the specific terms and conditions stipulated under the agreement.

While some concerned parties expressed satisfaction over the recent termination of the three allegedly non-performing Pagan permits, concerns have also been raised as to how many more public land lessees are out there being allowed to hold on to their contracts despite poor compliance with the agreements.

Sources who have requested anonymity are worried that continued acts of leniency on the part of authorities to tolerate delinquent lessees will further cost government coffers millions of revenues.

Citing a March 1996 U.S. Dept. of the Interior Inspector General’s report, it has been learned that then Division of Public Lands, now the Office of Public Lands, did not effectively develop management policies, procedures, and controls related to public land.

As a result, the report stated, the Commonwealth lost $118.4 million on completed exchanges of public land and could lose $70.1 million on pending exchanges, and lost revenues of $25.1 million on exchanged public land that was leased to a developer by landowners.

The audit report added that lease revenues of $565,000 were lost and the government may lose additional lease revenues of $469.2 million over the unexpired period of the leases; homestead recipients improperly received $7 million from the unauthorized sale or lease of the lots; and homestead lots were awarded to applicants who are ineligible or who did not have the greatest need.

The ‘fairness’ clause

For years, concerned citizens and local officials have tried to probe into what is perceived to be an “anomalous” process of the retention and termination of contracts of some Pagan mining permit holders.

Issues have recently surfaced over the 1997 termination of commercial permit holder Pacific Ventures Limited for non compliance of the annual $1,500 permit fee and royalty fees.

Sources are questioning why Pacific Ventures’ permit was revoked when other companies are equally guilty of non-payment of their financial obligations to the government with respect to the same project.

Said a concerned citizen, “This is clearly an abuse of discretion. We should promote fairness in the government.”