Philex gains more time for P1B fine defense

MANILA, Philippines—The Philex Mining Corp. has obtained a week’s extension to comment on the P1.034-billion penalty imposed by government for the sediment breach at its Padcal mine tailings dam in Benguet province.

A copy of the Mines and Geosciences Bureau’s (MGB) letter to Philex Mining said that the agency has decided to give the company seven more days or until October 10 to file its response. The original deadline was October 3.

MGB director Engr. Leo L. Jasareno said earlier in the day via text message that the agency received on Tuesday a letter from Philex seeking a seven-day extension to respond to the penalty that government wanted to impose.

“We gave them seven days, which expired on Tuesday, to present evidence and refute the report. Instead, they sent us a letter requesting for another seven days. They (Philex) cited that they have to further study and collect voluminous documents that they will submit to us,” Jasareno said later in a phone interview.

He said the MGB decided to give the respondent enough time to explain out of due process and in consideration of all factors in settling the case.

Philex Mining senior vice-president for corporate affairs Michael Toledo confirmed via text message that the company had sought an extension.

“A request is normal and it is usually granted, like in the courts,” Toledo said.

Philex Mining chairperson Manuel V. Pangilinan has said the company may miss its bottomline target by about two-thirds as costs add up amid the prolonged closure of its only operating mine.

Separately, Philex Mining senior vice-president for finance Renato Migrino said in a report that the country’s largest miner has “controlled” the leak and would contest a fresh set of fines sought by the Department of Environment and Natural Resources (DENR).

At this time, Migrino said, the tailings leakage from the breached tailings pond in Padcal has been “effectively contained” with the plugging of the sinkhole with concrete spheres of various sizes that has also been acting as filtering medium to the small volume of water that has been flowing from the hole.

“This has allowed the pouring of concrete to bulkhead the underground tunnel of Penstock A which, when completed, would eventually seal the tunnel and stop any level of tailings leakage from the pond,” Migrino said.

Philex Mining has confirmed having received government notice penalizing the company for allegedly violating the Clean Water Act due to “effluent discharge” as a result of the breach at its Padcal mine tailings dam in Benguet province. This is on top of the P1.034-billion penalty for the breach.

The company said it would submit its written reply explaining why it should not be penalized under the terms of its environmental compliance certificate (ECC). The DENR-Environmental Management Bureau (EMB) said in a letter to Philex Mining that the ECC issued for its project stated that the company might be fined P50,000 for every violation.

The miner was advised to submit within 10 calendar days a written explanation on why it should not be penalized for violating the ECC.

“The company will submit its written reply to the EMB contesting its notice of adverse findings and explaining why the company should not be penalized or fined under the terms and conditions of the ECC,” Migrino said.

Costs due to the tailings dam breach are expected to make a dent on Philex Mining’s finances. At the end of the Mining Philippines 2012 Conference, Pangilinan said in a pre-taped interview, “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.”

Pangilinan said penalties that might be imposed on Philex related to the tailings dam breach in its Padcal mine in Benguet province might have “severe and substantial” effect.