Philex units considering court action

Two subsidiaries of Philex Mining Corp. are considering civil and criminal cases against “all parties” responsible for Environment Secretary Regina Lopez’s announcements that their mineral production sharing agreement (MPSA) should be canceled as these cover watersheds where no mining should be done.

Silangan Mindanao Mining Co. Inc. (SMMCI) and Philex Gold Philippines Inc. both received from the Department of Environment and Natural Resources show-cause notices, asking both to explain why their MPSA should not be cancelled.

Danny Y. Yu, Philex senior vice president for finance, told the Philippine Stock Exchange that both subsidiaries had sent their replies, addressed to Lopez herself.

“The letters also reserved SMMCI’s and PGPI’s civil and criminal rights and remedies against all responsible parties, including rights for enforcement and compensation under applicable investment treaties,” Yu said.

Last Feb. 14, Lopez said she wanted one MPSA for SMMCI and four MPSAs for PGPI canceled.

The contracts pertain to projects in Surigao del Norte, Surigao del Sur, Zamboanga del Norte amd Negros Occidental.

In the letter to Lopez dated Feb. 24, SMMCI chief finance officer Jerome Jovellana told Lopez that, first, there was no legal basis for the MPSA cancellation.

He argued that the MPSA was issued following all relevant legal requirements and procedures including regulatory clearance that the areas covered by MPSAs are open to mining—that the area was not part of a watershed that was declared part of a forest reserve.

Also, Jovella told Lopez that she “ha(d) not observed due process.”

“Your actions have been taken with a complete and wanton disregard of all these basic considerations and for the fair treatment of a party whom the Republic has contracted … which have resulted not just in actual losses in billions of pesos but in significant damage to the reputation of the company and the erosion of investor confidence,” the CFO said.