Lower metal prices weigh on Philex profit

MANILA, Philippines – The country’s largest mining firm, Manuel Pangilinan-led Philex Mining Corporation, posted a lower net income in the first 9 months and blamed it on weak metal prices.

In a disclosure to the Philippine Stock Exchange on Wednesday, November 6, Philex said its January-September earnings fell 29% from a year ago to P1.446 billion.

Excluding extraordinary gains and charges and other items, core net income dropped 35% to P1.479 billion.

Philex said its Padcal mine in Benguet province recorded higher output, but weak metal prices weighed on the value of shipments.

The mine milled 5.45 million tons, producing 23.78 million pounds of copper and 72,905 ounces of gold, up 7% and 2%, respectively, over last year.

But the downtrend in metal prices globally resulted in a 35% decline in income from operations to P2.32 billion. The company reported:

• Revenues from gold decreased by 16% at P4.179 billion due to an 18% reduction in the price of gold or $1,340 per ounce.
• Revenues from copper fell 15% to P3.329 billion with copper price 19% lower at $3.26 per pound.
• Revenues from silver was brought down 23% to P63 million.

Padcal was operational for 7 of the 9 months. The mine was shut down in August 2012, when one of its tailings ponds broke causing wastes to spill into nearby river systems. It resumed operations in March 2013.

Philex said it will continue to implement its Integrated Environmental Management Program (IEMP) created to address the impact of the accident.

Philex President Eulalio Austin Jr. said that even as the company focuses on IEMP, it will pursue the development of its Silangan project in Surigao del Norte through wholly-owned subsidiary Silangan Mindanao Mining Company Inc.

“Exploration and development work continues,” he concluded. – Rappler.com