Philex Mining to advance payment of P1.034-B fine

MANILA, Philippines - Philex Mining Corp. will advance the full payment of the tailings spill fine of P1.034 billion after the government insisted it be paid in a single tranche instead of on installment basis as the company requested.

Philex was informed of the government decision in a letter dated Feb. 13, 2013.

“We asked Philex to pay the fine in a single full payment,” said Mines and Geosciences Bureau (MGB) director Leo Jasareno in a phone interview.

The fine would be remitted to the National Treasury in a reserve fund that would be used to finance the claims of persons affected by the spill.

In a statement, Philex said it will pay the fine on Feb. 18, a day before the deadline imposed by the MGB.

Philex is also petitioning the MGB to allow a portion of the fine to be used to defray the cost of rehabilitation of the Agno River and Balog Creek, the major waterways affected by a series of tailings spill that began in August 2012.

Philex has since implemented rehabilitation and cleanup measures within the tenement. In line with this, the company is also asking the MGB to be allowed to temporarily resume operations to produce fresh tailings that would be used to fill the void in the compromised Tailings Pond No. 3 (TP3) of its copper-gold mine in Padcal, Benguet.

The company needs to produce 3.5 million tons of fresh tailings in three to four months to fill up the conical void and create a beach in the pond. The beach would push the accumulated water in the pond away from its embankment and into a spillway.

The concentrate produced from the temporary resumption of operations, however, would not be sold until the mine is allowed to resume full operations. It would instead be made part of the stockpile. Jasareno said the company’s other requests would be processed after the full payment of the fine has been made.

“We believe the incident was caused  by force majeure but we will pay the fine ahead of schedule. We share the concern of the government for the environment, thus we are paying the fine so that this can be used to cover the costs of cleanup and rehabilitation,” said Philex spokesman Mike Toledo. He said  the company will continue to cooperate with the government to ensure the safety and integrity of its TP3 and the completion of the rehabilitation of the areas affected by the tailings spill.

“Despite our differences in opinion with the government, we are paying the fee to create a fund for theremediation and rehabilitation program that will be approved by the government,” Toledo said. “To show that cooperation is possible between the regulators and the regulated, and so that we can move forward to ensure the stability of TP3 and continue serving our stakeholders and continue our share in nation-building.” The Padcal mine’s operations remain suspended until rehabilitation and cleanup have been completed.

Philex Mining voluntarily stopped its gold and copper production at Padcal when the mine-spill incident happened on Aug. 1.