PNPI denies defaulting on dues

Pacific Nickel Philippines Inc. (PNPI), a subsidiary of Philnico Processing Corp., is fighting the government’s suspension order over its operations in the Surigao Mineral Reservation.

In a statement, PNPI president and CEO Evaristo M. Narvaez Jr. said the miner had been paying its dues to the government, contrary to the finance department’s claim.

PNPI, which operates in the mineral reservation in Surigao del Norte on behalf of Philnico, was recently served a notice of suspension by the Mines and Geosciences Bureau (MGB).

Narvaez said the firm’s deal with the government provided that the payment would fall due when a new plant was already operating, although some payments had been made.

“The company returned the bulk of the original nickel refinery, which cost $200 million, to the government without getting any financial credit or reduction in its obligations to the government,” Narvaez said.

Finance Secretary Cesar V. Purisima earlier urged Natural Resources Secretary Ramon Paje to take necessary actions—suspension of mining operations, revocation of mining rights and suspension and revocation of Ore Transport Permits of PNPI, which is operating in a 23,000-hectare mine site in Nonoc Island, Surigao del Norte.

In a letter dated May 16, Purisima said the PNPI paid only $1.25 million of the $263.8 million owed by the firm to the government since 1996.

Narvaez said the finance department issued a press release on May 19 on its letter to the environment department and the following day, the MGB ordered the suspension of PNPI’s mining operations and its Ore Transport Permit and Mineral Ore Export Permit.

Philnico acquired the shares of Philnico Processing Corp. (PPC) from PMO in 1996 through an Amended Restated Definitive Agreement (Arda), which states that the major portion of the obligation would be paid through installment and with the proceeds from the project’s commercial operations.

The 1996 Arda was amended in 1999 with the two parties agreeing to restructure the entire obligation and the schedule of payments.

On the allegation that the company has been depleting the resource, he said its mining operations had been limited to only a small portion of the 23,000-hectare concession.

Narvaez said mining was confined to the ores that could not be processed by the new plant, those left over from previous operations and iron tailings, or waste products of the refinery.