Philex losing big time in Padcal Mine closure, may not reach 2012 revenue goal

Ten days after it closed its Padcal Mine operation in Benguet province because of an overflowing waste pond, Philex Mining Corp. on Friday estimated its losses in potential revenues at P400 million.

 

On top of that, the miner said it would incur P220 million a month in maintenance cost while its gold, copper and silver operations stays shut.

 

The mine produces about P40 million worth metallic ore daily, Eduardo Aratas, Padcal Mines’s legal chief, said in an interview with GMA News Online.

 

“While the rehabilitation plan is being arranged and implemented, maintaining the suspension of mining operations is expected to cost P220 million per month,” the 57-year-old mining firm said in a disclosure to the Philippine Stock Exchange on Thursday. 2012 financial targets

 

The Pangilinan-led mining company decided to shut its Padcal mine on Aug. 1 after more than a week of almost unceasing rains caused one of its tailings ponds to overflow.

 

Philex Mining chair Manuel V. Pangilinan said the mining firm might not realize 2012 financial targets because of the situation in Padcal.

 

“The Board of Directors has taken the prudential but painful step of maintaining the suspension of the company’s operations… Shareholders should be aware that the full-year earnings of Philex will be materially impacted,” Pangilinan said in the same statement.

 

“The Company has insurance that would mitigate the loss of revenues resulting from the suspension of operations and the cost of addressing any environmental impact, which may have been brought about by the incident,” Philex said. Before the tailings pond incident, Pangilinan said the Philex expected 2012 revenues to P4 billion. The company posted P2.109 billion in core net income in the first half of the year.

 

Rain slows rehabilitation work

 

Despite the dent on its revenues, Aratas noted that the company heaved a sigh of relief that one was injured in the incident.

 

He said water and sediment from the tailings pond was discharged in Talog Creek that flows to Agno River. The water from the tailings pond was non-toxic, the lawyer claimed.

 

Rain continued to hamper the rehabilitation efforts in the mine site, Aratas said.

 

“Sa ten stations na kailangan naming itayo, tatlong station pa lang yung na-i-establish. Ulan ng ulan, kaya ‘yung transport ng materials at containers pati manpower ay bumabagal,” he added.

 

Philex said has engaged Filipino and foreign consultants to come up with a rehabilitation plan that ensures the safety of its tailings pond as well as the overoverflow’s impact on the environmental. — VS, GMA News