Philex Mining incurs net loss in 2012

Weighed down by the closure of its Padcal Mine in Benguet since August 2012, Philex Mining Corp. on Thursday revealed it suffered a net loss of P224.95 million last year from P5.8 billion in profit booked a year earlier.

           

Padcal Mine, one of the most profitable mining operations, halted operations on Aug. 1, 2012 after its waste pond broke at the height of enhanced monsoon rains and—in the process—let loose 20.6 million metric tons of mine tailings. It was billed by the Mines and Geosciences Bureau as the biggest mining disaster in terms effluence in Philippine history.

 

But the loss suffered by parent Philex Mining was also attributed to the P295 million in net loss incurred by subsidiary Philex Petroleum Corp. on P389 million of investment write offs covering the North Cebu oil field under Service Contract No. 40 and and on P578 million worth of coal assets written off by Brixton Energy & Mining Corp under operating contract No. 130 in Zamboanga Sibugay.

 

The write offs and the unrealized earnings resulted in a 43-percent drop in revenues to P8.7 billion, of which P4.95 billion came from gold production and P3.86 billion from copper operations. Operating income slid 57 percent to P3.45 billion.

 

Despite a significant decline in revenue from the prolonged suspension of Padcal Mine, Philex Mining managed to cough up core net earnings of P1.7 billion even after provisioning for the P1.034 billion in mine waste and tailings fees assessed by the Mines and Geosciences Bureau. 

 

Core net income was down 69 percent to P1.705 billion from P5.57 billion year-on-year.

 

Ore mined was reduced to 5.5 million tons, with 71,297 ounces of gold and 22.3 million pounds of copper extracted. A year earlier, the company mined 9.5 million tons of ore and extracted 140,113 ounces of gold and 38  million pounds of copper.

 

Philex Mining said it was successful in containing cost and expenses which dropped by 29 percent to P5.25 billion from P7.38 billion.

 

Expenses for the repair of the Padcal Mine's Tailings Storage Facility No. 3 were capitalized as part of the carrying cost for future amortization.

 

“We are at a situation where we can regard Philex’s lower core income for the year as not entirely negative, considering the prolonged suspension of our Padcal operations,” said chairman and CEO Manuel V.Pangilinan.

 

The company exerted every effort to “remediate and rehabilitate the tailings pond and the affected areas, and restore operations and the environment to normalcy as quickly as we could,” he said.

 

“I believe we have gone a long way in the effort and that the performance of Philex will be restored as soon as Padcal recommences operations,” he added.

 

According to the tycoon, the construction of the spillway in place of the penstock is ongoing and would be completed on schedule.

 

Last Tuesday, the Mines Bureau issued an order allowing Philex Mining to reopen Padcal Mine for four months as part of the rehabilitation effort—provided that an independent company be commissioned to monitor and audit the progress of the remediation. — VS, GMA News