Philex sees net profit dropping to P1.5-1.7B

Philex Mining Corp. may miss its bottomline target by about two-thirds as costs add up due to the prolonged closure of its only operating mine.

“We had forecast profits for this year to reach about P4 billion; it’s likely to drop to somewhere between P1.5 billion and P1.7 billion,” Philex chair Manuel V. Pangilinan said in a video interview presented at the end of the Mining Philippines 2012 Conference.

Pangilinan said that setting aside penalties that might be imposed on Philex following the tailings dam breach at its Padcal mine in Benguet province might have a “severe and substantial” effect.

The firm reported P2.11 billion in profit for the first semester. For the whole of 2011, Philex posted a net income of P5.77 billion, or a 47-percent growth on the back of higher production and strong metal prices.

Environment and Natural Resources Secretary Ramon J.P. Paje earlier said Philex could be fined double or triple the P325 million earlier computed for the sediment spills at its Benguet facility because of six additional incidents. He said the DENR was also set to impose a P200,000-a-day fine, ongoing since the accident occurred on Aug. 2.

Philex earlier said it has started collecting and transporting silts from the Balog Creek, where sediments from the Padcal mine tailings dam in Benguet province ended up during the monsoon rains that triggered flooding in Luzon and some parts of Western Visayas.

Operations at the Padcal mine have been suspended since Aug. 1, when there was an accidental leak in the Tailings Pond No. 3 due to heavy rains. Internal and external experts pronounced the water and sediment discharge as nontoxic and biodegradable. There were also no reports of fatalities or injuries as a result of the tailings leak.

Philex Mining said it was taking what it called an “ecosystems approach” to cleaning up and rehabilitating the Balog Creek, which has been affected by the tailings leak from Padcal mine. Senior vice president for corporate affairs Michael Toledo said this meant putting manpower, technical know-how and funds into various measures focusing on aquatic, terrestrial (land), water resources management and forging partnership with the local communities.