OceanaGold completes first concentrate shipment
MANILA, Philippines - Australian mining company OceanaGold Corp. has sent out the first concentrate shipment from its Didipio copper-gold mine in Nueva Vizcaya.
The company, whose shipment was earlier blocked by local authorities due to a tax issue, said in a statement that 5,000 dry metric tons of concentrate from its mine have been delivered to smelters in Hibi, Japan. Proceeds are expected in mid-April.
"Commissioning activities continue to progress well at the Didipio mine. To date, we have produced over 15,000 dry tons of copper-gold concentrate and the first shipment of the Didipio concentrate is another significant milestone for the operations team," said Mick Wilkes, company managing director and CEO.
"Gold recoveries are also increasing and will be further boosted as the gold head grade increases. As we further optimize the transportation logistics combined with regular outbound shipments to smelters, we expect to be in a position to announce commercial operations during this quarter."
Last February 25, local authorities in Nueva Vizcaya barred OceanaGold trucks from transporting ore to a nearby port for failure of the company to pay taxes.
OceanaGold argued it was covered by a 5-year tax exemption provision under its Financial and Technical Assistance Agreement (FTAA) with government. The FTAA is a contract that allows foreigners to gain full ownership of a local mining venture.
The exemptions, which cover corporate income taxes, customs duties and fees on capital equipment and vat, among others, are effective from the approval of the Declaration of Mining Project Feasibility up to the end of the recovery period.
However, the Bureau of Internal Revenue said the company needs to pay excise taxes. In a circular released on February 15, the agency said a 2% excise tax needs to be imposed as soon as a mining company commences ore processing. OceanaGold started ore processing in December 2012.
Excise taxes on minerals are not covered under the exemptions.
"FTAA contractors are liable to pay the taxes due under the NIRC (National Internal Revenue Code) and existing rules and regulations during and after their 'recovery period,'" said BIR commissioner Kim Henares.
OceanaGold announced that it paid excise taxes "in protest" on March 13.
The Didipio mine is the country's first fully foreign-owned large-scale mine. It is also the first mining tenement in the Philippines to operate under the FTAA. - Rappler.com