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MANILA – (UPDATED 7:03 p.m.) The Philippines’ largest gold and copper producer on Thursday said full-year earnings will take a hit from the continued suspension of its Padcal mine.
In a disclosure to the Philippines Stock Exchange, Philex Mining Corp. said its mining operations in Benguet Province remains suspended “until such time that the safety and integrity of its tailings pond are assured.”
"We reported in the first half a core income of a little over P2 billion so we would have expected to realize approximately P4 billion of core for 2012. Obviously with the stoppage of operations starting in August, it will not be P4 billion," Manuel Pangilinan, Philex chairman, said during the first half briefing of Metro Pacific Investments Corp.
The company expects the suspension of its Padcal operations to cost it P220 million a month.
“The final impact on this year’s earnings will be appreciated after a program to rehabilitate Padcal's tailings disposal system is developed and implemented, a process which could take some time. A similar restoration plan needs to be established to consider any possible effect on the environment,” Philex said.
In the first half of this year, the company recorded a core net income of P2.109 billion on operating revenues of P7.472 billion, its second best after the record high in 2011.
Despite the suspension of its Padcal operations, Philex said “it has the financial resources to assess and repair the tailings pond,” which broke at the height of heavy rains last week.
The company said it has tapped “domestic and foreign consultants to develop a rehabilitation plan to ensure the safety and integrity of the tailings pond facility, and an environmental program that will address any environmental impact which may have been brought about by the incident.”
"I think we will have a better visibility of the current status of the tailings pond in two to three weeks time and we will better estimate how long it will take to rehabilitate the tailings pond and how much it could cost. At the moment we can't give you a fair view of the extent and the amount of time that's needed to rehabilitate the pond," Pangilinan said.
Defer acquisition of mines
Philex voluntarily stopped mining operations at Padcal on August 1 after discovering a leak from one of two underground tunnels that drain water from the penstock in the tailings pond.
The Mines and Geosciences Bureau has since ordered a suspension of operations at the mine.
Philex said it managed “to stop the discharge in less than 48 hours.”
The company maintains that the discharged water and sediment from the damaged tailings pond were “non-toxic and biodegradable.”
It further reported no injuries or fatalities resulting from the incident.
With a report from Krista Angela M. Montealegre
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