How should Philex’s P1-B fine be spent?

MANILA, Philippines – Philex Mining Corp has urged the government to allow it to offset the over P1-billion it is spending for clean up and rehabilitation costs following a mine tailings leak, against the the P1 billion fine the government has required it to pay.

The government, on the other hand, is still studying whether there is merit to Philex’s motion for reconsideration regarding the environment department’s November 22 decision to affirm the P1,034,358,971 fine.

This week — or before 2012 ends — the government will release its decision on the matter, according to Mines and Geosciences director Leo Jasareno during a briefing on Wednesday, December 26.

Philex’s stand

Philex has earlier announced that they are spending about P1 billion for the rehabilitation of its compromised copper-gold mine in Padcal, Benguet and the payment of claims of affected families.

Whether this spending is on top of the P1 billion fine it is supposed to pay within 45 days of the government’s November 22 decision, or must be counted part of payment for the fine, is at the heart of the pending issue.

In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday, December 26, Philex President and chief operating officer Eulalio Austin said the company is willing to pay the fine imposed by the bureau subject to this condition.

“Please allow us, at the outset, to clarify that Philex Mining Corporation is not unwilling to pay,” he wrote, quoting portions of the company’s motion for reconsideration dated December 3 submitted to Jasareno.

The issue stemmed from the August 1 accidental discharge of sediments from the tailings pond at the Padcal mine following heavy rainfall from typhoons Ferdie and Gener.

In November 24 statement, the company said around P870 million of the total would be used for the clean-up of the tailings spill in Balog Creek and Agno River until April 2013.

Government’s stand

Earlier, Jasareno said that under the prevailing rules, the fine imposed on an erring mining firm would be put in a trust fund and would be used in the event that the company loses the financial capacity to undertake the rehabilitation porgram for the affected mine.

This provision in the rules is implemented to make sure that the government is not caught flat-footed in case the company suddenly folds up.

Part of the penalty proceeds would also be used for the claims to be made by affected persons.

Otherwise, he said the company should be made to shoulder the expenses to be incurred in the clean up and rehabilitation of the affected mine.

Environment Secretary Ramon Paje earlier said the department may still consider the company’s request to reconsider the lowering of the fine but not its argument that it should not be made to pay the fine because of force majeur.

Philex is asking the DENR to use a lower density factor in computing the volume of sediments spilled to lower the amount of the fine.

“We are open to that but not to force majeur…We are sticking to our original position that they should pay the fine,” said Paje earlier.

The team that investigated the incident determined that the computed volume of the discharged tailings is 13,513, 507 cubic meters, equivalent to 20,689, 179.42 tons in weight using a density factor of 1.531 tons solid per cubic meter.

Paje said Philex is asking the DENR to use a density factor of 1.3 tons solid per cubic meter in the computation of the fines. – Rappler.com