Philex core net income drops 69%

Still reeling from the suspension of operations at its Padcal mine in Benguet, the country’s largest gold and copper producer Philex Mining Corp. reported that its core net income in 2012 plunged by 69 percent to P1.705 billion from P5.568 billion a year earlier.

In a disclosure to the Philippines Stock Exchange, the company also reported a net loss of P295 million for the year as Philex Petroleum Corp., a 64.79-percent owned subsidiary, revealed a net loss of P1.086 billion.

The previous year, the Philex unit registered a net income of P538 million.

The Forum Energy Plc, a subsidiary of Philex Petroleum, wrote off P389 million of its investments in the North Cebu oil field under Service Contract No. 40.

Another Philex Petroleum subsidiary, Brixton Energy & Mining Corp., also wrote off P578 million of its coal assets under Coal Operating Contract No. 130 in Zamboanga Sibugay.

Philex’s Padcal mine has yet to start operations since one of its facilities leaked 20 million metric tons of tailings, contaminating two bodies of water—Balog Creek and Agno River.

Despite the significant reduction in revenue because of the tailings spill—for which the company settled P1.034 billion in penalty, as assessed by the Mines and Geosciences Bureau—Philex said it still managed to generate a core net income in 2012.

“We are at a situation where we can regard Philex’s lower core income for the year as not entirely negative, considering the prolonged suspension of our Padcal operations,” said Manuel V. Pangilinan, chair and CEO of Philex Mining. “Since that regrettable accident, every effort has been made to rehabilitate the tailings pond and the affected areas, and restore operations and the environment to normalcy as quickly as we could.”