Senate reinstates JG Sablan mining permit

The Senate passed yesterday a bill reinstating the 1995 mining permit of JG Sablan on Pagan.

This came more than a week after the Executive Branch terminated the permit due to alleged violations, including the company’s “unauthorized” partnership with Bridgecreek International.

During a session on Tinian yesterday, the Senate approved Senate Bill 15-45, which asks the Department of Public Lands “to reinstate JG Sablan’s permit.” The bill was introduced in yesterday’s session. It now goes to the House of Representatives for similar passage.

Senate President Joseph Mendiola said the bill was based on accounts that the former DPL—Marianas Public Lands Authority—“went on record that JG Sablan is in good standing.”

“MPLA received the funds, the fees from JG Sablan, honoring its permit,” said the senator.

He said the bill was introduced by Sen. Felix Mendiola.

The measure “grandfathers” JG Sablan “to go ahead and start the project.”

The Senate president said this would not hinder the Fitial administration’s newly created task force from conducting a feasibility study on Pagan mining and opening the project to other bidders.

“We grandfathered only JG Sablan, which does not occupy the whole area. Other sections of Pagan are not permitted. We can have those remaining areas under the task force,” said Mendiola, echoing his colleagues’ position during yesterday’s session.

He said he believes that JG Sablan’s permit covers a fourth of Pagan.

Validity

Earlier this year, businessman John T. Sablan said that his mining company holds a valid 20-year permit to mine pozzolan on Mt. Pagan, refuting claims by critics to the contrary.

Sablan said he had paid the annual permit fee of $20,000 from 1995 to present.

“They [MPLA] accepted my payments. It means that I have a permit,” said Sablan.

Non-government organization PaganWatch had argued that, based on documents from the MPLA, the permit issued to Sablan was either voided or being voided because the company 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 mine 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 fails to generate and or report any revenue to the government from its mining activities for two consecutive years.

Sablan admitted that he failed to pay for the yearly fees since1997 or 1998 due to severe financial condition but insisted that he had settled his dues in 2003.

He said he paid additional fees up to this year.

Over a week ago, Public Lands Secretary John S. Del Rosario said Sablan’s permit must be terminated for:

* failure to generate any revenue to the CNMI for two consecutive years after the 1995 permit issuance as provided in Article 3 of the permit;

* failure to provide the government within 18o days after issuance of the permit, of a detailed proposal how it intends to develop pozzolan and basalt recovery as provided in Article 10;

* failure to get a prior consent from the government when it entered into a joint partnership agreement with Bridgecreek on December 3, 2005 as provided in Article 14;

* violation of Article 1 of the permit by operating outside the designated area;

* failure to pay royalties and other payments under an earlier permit in 1993, now totaling $345,914;

* failure of the company to clearly implement the 1995 permit for more than nine years.

Del Rosario said that both JG Sablan and Bridgecreek failed to comply with Article 14, which requires getting the government’s approval for their joint venture.

He said the agreement assumes that the price of pozzolan per metric ton is about $35, and projected a payment of $3.50 to the CNMI government; $2 for extraction; $2 for transportation; $8 for undefined operational costs; and $1 for return of invested capital.

Of the remaining amount of $18, the agreement provides that $6 goes to JG Sablan and $12 to Bridgecreek.

He said the partners put the Pagan pozzolan deposit at “a modest figure” of “no more than 30 million tons.”

Others have estimated the deposit at 180 million to 200 million metric tons.