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MANILA, Philippines – Philex Mining Corp, the country’s largest listed mining firm, stands to miss its 2012 income target of P4 billion to P5 billion due to the suspension of of commercial operations at its only operating mine.
In an interview on September 7, Philex Vice President Mike Toledo told reporters that the suspension of its flagship Padcal mine operations in Benguet province will hit its yearend profits.
“Bottomline is, we will miss our target for the year which is about P4 [billion] to P5 billion, but as of August we were at P2.2 billion so we already made some profit,” Toledo said.
The country’s biggest gold producer reported an all-time high net income of P5.77 billion in 2011, up 46% and driven by higher metal prices and production output at its Padcal mine in Benguet province.
In January-to-June this 2012, however, Philex’s core income fell 26% to P2.11 billion as gold production volume at Padcal fell 19%, not enough to offset the 16% increase in gold prices.
Philex is banking on its Silangan mines to sustain operations and profitability since the Padcal mine in Benguet is nearing the end of its mine life. The gold-copper reserves in Padcal are likely to be exhausted by 2020.
The mining firm is losing about P30 million to P40 million in actual and opportunity costs for each day that Padcal mine is suspended.
These losses are on top of the P200 million-worth clean up operations that Philex is undertaking on the tailings pond facility, which holds tailings from the processing of gold and copper extracted from the mine. The facility has leaked at least 4 times amid torrential rain that battered the area in August.
The mining agency has suspended the Padcal operations last August 1.
Clean-up period
Toledo said it is possible that the clean up and the evaluation of the tailings pond facility could last another 4 to 6 months, depending on what their consultants will recommend.
He said that it is difficult to come up with deadlines when it comes to clean up operations and determining the integrity of the tailings pond.
What is clear at this point, Toledo said, is that the company does not intend to operate until such time when the integrity of the tailings pond will be ensured.
He said the experts they are consulting have already come up with recommendations, which they are presently working on. Toledo said that right now, Philex is determined to focus on rehabilitation and remediation efforts.
“We cannot come up with deadlines because it’s up to the consultants and the experts,” Toledo said. “Definitely no stone will be left unturned to ensure that we rehabilitate, remediate the mine and clean up operations.”
Waste from the tailings pond was flowing into 2 rivers, including the chief water source of 3 major hydroelectric plants that power the main Luzon island. Philex had said what has leaked are not toxic. – Rappler.com
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