JG Sablan insists validity of mining permit

Businessman John G. Sablan claims that his mining company holds a valid 20-year permit to mine pozzolan on Mt. Pagan.

Sablan, in an interview yesterday, said that despite protests from other sectors, the fact remains that he has paid the annual permit fee of $20,000 from 1995 to present.

“I’ve paid $20,000 a year. I’ve settled past dues, and I’m current up to this year. They’ve accepted my payments. It means that I have a permit,” said Sablan.

A non-government group, Pagan Watch, earlier said that based on documents from the former Marianas Public Lands Authority, the permit issued to Sablan is either voided or being voided.

It said that Sablan failed to pay MPLA at least $483,637.56 in rental and royalties, submit required reports to MPLA showing the amount of materials removed from Pagan, obtain MPLA permission to erect structures on Pagan, submit a proposal indicating how JG Sablan intended to develop a pozzolan and basalt on Pagan, and secure public liability insurance for its Pagan activities.

Further it said that Sablan’s Sept. 8, 1995 permit never included an exact description of the area and that the permit was amended on Feb. 15, 1996 to provide that the permit could be automatically terminated if the company failed to generate and or report any revenue to the government from its mining activities for two consecutive years.

For his part, Sablan admitted that he failed to pay for the yearly fees since 1997 or 1998 due to severe financial condition but he settled it in 2003.

“After that, they kept saying I need to pay [some more] so I paid for up to this year. They accepted the payment,”

He said he initially received a five-year permit in 1991.

In 1995, he got a 20-year permit.

Pozzolan discovery

Sablan, who is also into rock quarry and drinking water business, said he learned about pozzolan from a volcanologist, a certain Dr. Kayanagi from Hawaii in 1990.

He then visited Mt. Pagan that year and saw firsthand the rich deposit of volcanic ash, an expensive type of cement additive.

“I knew it’s rare. Not many volcanoes emit this kind of ash. Other pozzolanic ash has too much carbon which is not good for cement making,” he said.

Based on his estimate, there are about 100 million to 200 million metric tons of pozzolan in the area, which he says is Class N or natural pozzolan.

He said the rich deposit was a result of the 1981 Pagan eruption.

Before this, there was only a small amount.

“There’s an eruption in 1925 but it gave out very small amount,” he said.

Ship, helicopter investment

Sablan said he had the Pagan pozzolan tested in Atlanta in 1990 and “it came out very good.”

“I started talking to the government for a permit but they won’t give me until I qualify. To qualify I need to have a vessel and other means of transportation. So I did. I bought a ship and a helicopter,” said Sablan.

He said he bought a ship for $950,000 and a helicopter for $650,000 in 1991.

But for lack of expected activities, he ended up selling the helicopter in 1996.

He also chartered the vessel for other’s use in 2000 but in 2003, it ran aground in Yap.

“It’s too expensive to maintain a helicopter. As for my vessel, it got caught by a typhoon in Yap,” he said.

Sablan, 46, said he has his own 46-footer sports fishing vessel now.

He last went to Pagan in 2004.

“Imagine my investments in this project, plus my $20,000 a year payment since 1995. I’ve not seen any return of investment, but I remain hopeful about pozzolan mining,” said Sablan.

He said his losses so far exceed $7 million.

Sablan said his venture has not been commercially productive for lack of reliable marketing network overseas and the high shipping costs.

He is now partnering with U.S.-based Bridgecreek International to mine pozzolan on Pagan.

He said they would need some $10 million funding as a start up capital.

Initial estimate showed that the joint venture would be giving an additional $13 million revenues to the government a year.

It is based on a $2.50 per ton royalty fee and other taxes.

He said that once permitted, the company can begin exporting pozzolan in 10 months.

On the first year, it aims to export up to 2 million metric tons of pozzolan.

The project, however, is heavily opposed by Pagan Watch, which pushes for preliminary studies and environmental impact assessment in the area.

It also calls for a bidding process so the government could choose from more than one company.