Gov’t suspends Philnico mineral operations

MANILA, Philippines—The Mines and Geosciences Bureau (MGB) has suspended the operations of Philnico Industrial Corp. (PIC) allegedly for neglecting to pay up to $262.55 million in government dues.

Philnico started to rack up the liabilities after it secured the rights to operate a mineral reservation in Surigao del Norte.

The MGB, an agency attached to the Department of Environment and Natural Resources, was acting on a Department of Finance report detailing Philnico’s failure to pay its dues to the government, when it issued the order directing the mining firm to stop operating and transporting mineral resources.

The MGB also ordered Philnico to explain why its mineral production sharing agreement with the government should not be revoked.

MGB director Leo L. Jasareno told the Inquirer that Philnico had been served the suspension notice on Tuesday.

“As far as we know, Philnico is supposedly still negotiating a possible partnership with Jinchuan Group Ltd. of China. However, we cannot overlook this issue. If Philnico has been delinquent in paying government dues while mining is ongoing and its subcontractors are paying their royalties, what more when the resources in its contract area run out?” Jasareno said.

In its suspension order, a copy of which was secured by the Inquirer, the MGB also said it would not entertain applications for similar permits for minerals and ore extracted from the contract area.

In a letter to Environment Secretary Ramon J.P. Paje that was sent last week, Finance Secretary Cesar Purisima said Philnico had not fully paid the government for acquiring the mining rights of Nonoc Mining Industrial Corp. to operate the Surigao mineral reservation.

Purisima said Philnico had paid the government only $1.25 million of the $263.8 million it owed since 1996, when it purchased the state’s interest in Nonoc.