DENR says Philex faces P325M in fines

Philippine Environment Secretary Ramon Paje AFP PHOTO/Jay DIRECTO

Philex Mining Corp. will be required to pay at least P325 million in penalties for the accidental tailings discharge from its Padcal mine site in Benguet province, according to Environment Secretary Ramon Paje.

Paje said in an interview that four accidental discharges were monitored at Padcal’s tailings pond. The first discharge was estimated to have leaked 5 million cubic meters of sediment, which translates to about 6.5 million tons. The penalty prescribed under national mining laws is P50 per ton, resulting in P325 million in initial penalties.

“That’s just the first of four discharges. We are still assessing how much was the total discharge,” Paje said.

Mike Toledo, Philex senior vice president for corporate affairs, said the company will comply with whatever is required of it. As of Wednesday, however, he said Philex has not received any notice from authorities on penalties.

The Mines and Geosciences Bureau and Environmental Management Bureau are still checking the tailings pond, said Toledo.

“When we do receive the final assessment, we will of course study it and comply with whatever is required of us,” he said.

“In the meantime, while mining is suspended at Padcal, our staffers are working round the clock to make rehabilitation as fast as possible and are also busy helping with the cleanup of Balog River,” Toledo said.

In a report to the Philippine Stock Exchange, Philex said the suspension of operations at the Padcal mines will have an effect on its profits this year.

Philex said although Padcal is on a standstill, it has the capability to pay for the cost of repairing its tailings pond that was damaged due to heavy rains.

It said, however, that it expects earnings to decline as a result of the suspension of operations in Padcal.

Philex said it has tapped local and foreign consultants to develop a rehabilitation plan to ensure the safety of the tailings pond and an environmental program to prevent the same accident in the future.

The company said water and sediment from its tailings pond are nontoxic and biodegradable.

No injuries or fatalities have been reported as a result of the accident.

Philex, a company statement said, is working closely with affected communities and local governments.

The company said gold production from its Padcal mine in the first six months of 2012 fell by 19 percent to 58,681 ounces from 72,784 ounces in the first half of last year because the mines had yielded lower-grade ore.

It said it spent P7.472 billion for operations in the first half of the year.

Revenue from gold and copper stood at P4.071 billion and P3.260 billion, respectively, from P4.401 billion and P3.318 billion a year earlier.

Revenue from silver dropped to P67.7 million from P100.4 million for the same period due to lower prices.

The tailings pond leak came just weeks after President Benigno Aquino issued an executive order that outlined his administration’s new policy on mining.

The EO listed areas that are off limits to mining, including tourism sites and watersheds.

It also directed Congress to pass a new law that would require mining firms to give more shares to government from mining revenues.