Philex worries over cancelled mining contracts

MANILA, Philippines - Pangilinan-led Philex Mining Corp. has expressed serious concern over the cancellation of subsidiary Silangan Mindanao Mining Co. Inc.’s mining contract involving a copper and gold project located in Surigao del Norte, which it expected to be its next big prospective mine with an investment opportunity of P40 billion.

“This is really a serious concern and the impact was definitely severe. On the day of announcement, we lost about P6 billion and the value of our shares was also reduced,” said Francis Ballesteros, public and regulatory affairs head of Philex.

Lopez announced Tuesday the cancellation of 75 mineral production sharing agreements, including that of Silangan Mindanao Mining on the ground that these MPSAs are located in watershed areas.

An MPSA is an agreement wherein the government shares in the production of the contractor, whether in kind or in value, as owner of the minerals, and the contractor gets the rest. In return, the contractor provides the necessary financing, technology, management and personnel for the mining project.