One time, big time: Philex to pay P1-B in full

Rappler.com

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(UPDATED) Philex agrees to pay the P1.034 billion government fine in full on February 18, a day before the deadline

MINE SPILL. A Philex Mining staff checks the penstock at the tailings pond of the Padcal mine in Benguet province. Photo provided by Philex

MANILA, Philippines (UPDATED) – Gold producer Philex Mining Corp. said it will pay on Monday, February 18, the over P1-billion government fine it was slapped with following the Padcal mine leak incident over 6 months ago.  

Philex senior vice president for corporate affairs Mike Toledo said in a statement on mid-day Friday, February 15, that they will settle the over P1.034 billion fine in full. 

Philex is set to receive an insurance claim of US$25 million or P1 billion a few days after the February 19 deadline for the settlement of the fine.

The mining firm maintains it is not at fault, but will pay the fee, which Philex contested for months.  

“We believe it was a result of the elements of nature—an event of force majeure…But even as we are not at fault, we share the concern of government for the environment, thus we are paying the fee, as set by regulators, to cover the costs of remediation and rehabilitation activities,” Toledo said. 

Full payment, not installment

The company’s position came after the morning radio interview of Mines and Geosciences Bureau (MGB) chief Leo Jasareno, saying the government is denying Philex’s request that the fine be paid on installment basis.

Environment Secretary Ramon Paje reiterated this in a February 15 statement. “This means that Philex has to settle the full amount at one time.”

Paje said that, in their February 13 letter to Philex addressed to the firm’s president Eulalio Austin Jr., the agency would only lift the suspension order upon full payment of the penalty. 

Philex is currently asking the government to allow it to partially operate the tailings pond as part of the rehabilitation efforts. The pond needs 3.5 million tons of fresh tailings in 3 to 4 months to fill up its conical void and create a beach in the pond. The beach would push the accumulated water in the pond away from its embankment and into a spillway.

The concentrate produced from the temporary resumption of operations, however, would not be sold until the mine is allowed to resume full operations. It would instead be made part of the stockpile.

Jasareno said the company’s other requests would be processed after the full payment of the fine has been made.

Reserve Fund

Paje said the penalty Philex will pay would be remitted to the National Treasury and placed in a reserve fund that would be used to finance the claims of persons affected by the spill.

“The payment will accrue to the Mine Wastes and Tailings Reserve Fund, as compensation for claims of those affected by the spill,” Paje said.

Philex has contested the fine, saying the incident — considered one of the industry’s worst in terms of volume of sediments discharged to the adjoining water system — was a result of record high rainfall.

The leak occurred following days of torrential rain in the area. Philex has stopped mining operations since the incident on August 1, 2012.

Philex had previously urged the government to allow it to offset the over P1-billion it is spending for clean up and rehabilitation costs against the the P1 billion government fine

The P1-billion fine is based on Mining Act violations. Philex has been slapped with another P92.8 million fine over pollution issues.

Revise clean up plans

The government affirmed its earlier decision to impose the fine, which it said will be spent on the rehabilitation of the affected water river systems and various communities.

Philex is also petitioning the MGB to allow a portion of the fine to be used to defray the cost of rehabilitation of the Agno River and Balog Creek, the major waterways affected by a series of tailings spill that began in August 1, 2012.

Philex has since then implemented rehabilitation and cleanup measures within the tenement.

Paje, however, said the MGB has ordered Philex to revise its cleanup plans for areas adversely affected by the tailings spill.

The revisions recommended by the MGB in the cleanup plan are: the inclusion of detailed discussion, including cost and timeframe, environmental and societal plans; details on measures to ensure safety and integrity of the tailings storage facility; and baseline studies on the water quality of water bodies affected by the cleanup plan. – Rappler.com

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