Photo: AFP
MANILA (AFP) - A Philippines official on Wednesday warned anti-mining groups blocking a major gold-copper project in the country's north that they were committing an illegal act.

Led by the governor of Nueva Viscaya province, opponents have erected a barricade on a road leading to the remote Didipio project of Australian miner Oceana Gold, Environment and Natural Resources Secretary Joselito Atienza said.

The Melbourne-based company is currently building facilities for mining the 320 million US dollar project, in the Caraballo mountain range near the town of Kasibu, about 200 kilometres (124 miles) north of Manila.

Production is scheduled for 2010.

Oceana Gold chief executive Steve Orr on the company's website describes Didipio as "one of the highest grade gold-copper porphyries in the world today," and said construction activities were on track.

Atienza said he had given the government's green light for Oceana Gold to proceed with the project despite efforts by Nueva Vizcaya governor Luisa Cuaresma to stop it.

Atienza said Cuaresma and other provincial officials and villagers are barricading the project after the company declined to pay local taxes and quarrying fees.

"It (Didipio project) cannot be delayed by an illegal order issued by the governor," Atienza said.

He said the national government has notified the interior department that the Nueva Vizcaya government was not owed a quarry tax and back taxes because "there should have been no such tax at all."

While local governments can impose taxes on quarries, "Oceana Gold is not in the quarrying business. They are now putting up their processing plant and have in fact bidded out this project to several bidders who will do the construction and development of the plant site," Atienza said.

The Philippines mining act excludes earth-moving, road building, and the construction phase of the development of a plant site from those activities that require local government permits, he added.

"The issue here is one of rule of law and we must uphold the law if we are to encourage investors, local or foreign for that matter, with consistent interpretation of the intent of the law.

"You cannot deviate from the intention of law one way or another depending on the thinking of a local official," Atienza said.

"If you stop it at this moment, in time everybody loses: the province of Nueva Vizcaya loses, the country will lose, the investor will lose," he added.

Atienza said the government expects the project to yield at least 30 billion pesos (701 million dollars) in national taxes during its 15-year operation, on top of local revenues and several thousand jobs.