Ex-official’s claim stalls mine operations

REPORT FROM BUSINESSWORLD A claim on the mineral production sharing agreement (MPSA) laid by a former official on Dizon Copper-Silver Mines, Inc.’s San Marcelino, Zambales project is halting Dizon Copper-Silver Mines, Inc.’s operations even as at least three foreign mining firms showed interest in the company. On the sidelines of Dizon Copper’s annual stockholders’ meeting the other day, Company Director Rafael P. Dizon III said the claim of former President and Chairman Luis D. Dizon over 200 hectares of land has been delaying operations. On December 2005 the Department of Environment and Natural Resources (DENR) issued a decision that voided the MPSA application of the company for the Zambales project. The mining firm then sought reconsideration, but this was likewise denied on February 2006. The matter was elevated to the Office of the President and on December 2006, Executive Secretary Eduardo R. Ermita signed the order favoring the mining firm and mandating the reversal of DENR’s earlier decisions. The issuance of another MPSA to Luis Dizon prior to the Palace order was also set aside. However, the elder Dizon pursued the case to the Court of Appeals. In a phone interview, Luis Ramon T. Dizon, son of Luis Dizon said that it was his family’s position that his father still owned the MPSA for the mining site. "Once it (MPSA) has been issued and approved it must be respected." A letter he issued explained the MPSA filling, "At the time my father filed his MPSA application on February 28, 2005, the area it covered was already open for application. The mining contracts that were basis for [Dizon Copper’s] own MPSA application had already expired on January 31, 2005." The letter also clarified at the time of the MPSA application, Luis Dizon was no longer an officer or director of the mining firm. Rafael Dizon said operations could only resume after the legal aspect has been resolved. "At this point everything is fluid until we determine the status of the case or if we can come to terms with the other party." He added that at least three foreign mining firms have been keen on the mining project and were willing to take the risk given the firm’s legal battle, but that the company has chosen to resolve the MPSA issue before signing any contract. "If not in the judicial system maybe we can resolve it between both parties. We’re still willing to come to terms and compromise," Rafael Dizon said. He added that the company wanted to discuss the matter next month with Luis Dizon, who is his second-degree uncle. He declined to specify the terms of the negotiation. Luis Dizon told BusinessWorld of his reservation in settling the matter outside the court. "At the moment I have my own reservation but it’s not entirely impossible," he said. The mine has gold reserves. About 1,000 to 2,000 hectares are yet to be explored. The 5,000-hectare property in San Marcelino, Zambales was operated by Benguet Corp. from Sept. 1975 until the company turned over the rights to Dizon Copper through a memorandum of agreement in 1997 following the landslide that closed the mine operations. Dizon Copper stands to earn a gross of P40 billion from the tailings and P60 to P80 billion in reserves in the resumption of mining operations, Rafael Dizon said. Currently, the company’s operation is primarily focused on maintaining the mine wherein about P30 million to P50 million was already spent since it was closed. In the months from January to June, Dizon decreased its net loss by 35.54% or P2.13 million to P3.86 million in 2007 from P5.99 million in 2006. The company attributed the net loss to the absence of revenue from mining operations and meager income. — Marian Grace S. Ramos/BusinessWorld