Lepanto’s P4-B project gets BOI okay

The moribund local mining industry is getting a badly-needed boost with the expected approval by the Board of Investments (BOI) of Lepanto Consolidated Mining Co.’s (LCMC) proposed P3.964-billion investment in the Victoria II copper-gold project in Benguet province.

The Victoria II project will require a capital investment of $73.41 million over a seven-year period. It is projected to generate $78.2 million in net cash flow. Its net present value at a 12 percent discount is $48.06 million.

Ore extraction at Victoria II is scheduled to start next year with ore extraction anticipated to increase from 2,000 tons per day in 2004 to 2,700 tons by 2007.

The approval of the Victoria II project is seen as a chance for the Arroyo administration to prove its seriousness in reviving the ailing mining industry and promote new mining investments.

"The decision of Lepanto to pour in millions of dollars in what is yet another opportunity to boost mining investments in the country, is a welcome development; local and international investors will be on a tight watch on every move and decision that this government make, with regards to the said investment."

The local mining industry has been on a skid since oppositors to the Philippine Mining Act of 1995 which gives full concession mining rights to foreign companies, filed a petition with the Supreme Court SC), challenging the constitutionality of the mining law. The SC has yet to issue its decision, and this has kept foreign investors at bay.

On the other hand, investors are wary about a provision in the Indigenuous Peoples Rights Act which prohibits mining firms from operating in ancestral lands.