Finance, PNPI trade barbs over nickel mine
The dispute between the Department of Finance (DoF) and Pacific Nickel Philippines Inc. (PNPI) continued to rage with the nickel mining firm disputing on Thursday allegations that it had cleaned out its mine reserves without paying the government its dues.
In a statement, PNPI denied depleting the resources of its mine site on Nonoc Island, Surigao City. PNPI said the total volume they shipped from 2003 to 2010 totaled 2,276,095 dry metric tons (DMT), or 284,511 DMT per year.
This is equal to only 1.61 percent of the total resources of 141.3 million DMT.
The company made the statement in reaction to the claim of the DoF that PNPI was exploiting the reserves on Nonoc while it was in default of its obligations to the government.
PNPI said it was basically preserving its ore reserves for the requirements of the proposed High Pressure Acid Leach (HPAL) plant.
Thus, the firm actually limits its mining operations to ore that cannot be processed economically by the HPAL plant, such as low-grade overburden or topsoil with nickel content of less than 0.9 percent; higher-grade ore that contains excessive amount of magnesium; scavenging ore left from previous mining operations; and iron tailings.
These materials do not form part of the reserves definition of the company.
“The small volume shipment will prove that the other claim of the DoF that the company ‘shipped to China $1 billion worth of minerals’ is totally false,” it said.
Revenues generated from 2003 to 2010 amounted to $44.585 million, or an average of $5.57 million per year only, PNPI said, adding that out of the amount, it was able to pay the government P423 million in royalties, national and local taxes, and fees for the eight-year period.
The DoF, however, released a statement citing documents from the Department of Environment and Natural Resources saying that PNPI had exported about $1 billion worth of non-renewable minerals to China.
The DoF said this was done by the company despite the fact that it had not paid its obligations to the Department of Finance, through the Privatization Management Office, under the Amended and Restated Definitive Agreement signed in 1996.
“To date, PNPI has only paid the government $1.25 million, or less than 1 percent of the total $263.8 million it owes through an installment basis,” the DoF said.
The company continued to deny this, pointing out that its shareholders had even spent about $60 million of their own resources for the project.
