Denr Allows Lafayette To Re-start Mine

Published by MAC on 2007-02-08
Source: ABS-CBN (Reuters)

DENR allows Lafayette to re-start mine

ABS-CBN (Reuters)

8th February 2007

The Philippines said on Thursday Australia's Lafayette Mining Ltd. could restart its copper and zinc mine south of Manila immediately, more than a year after it was shut due to cyanide spills.

"The mining operations can now proceed," Environment and Natural Resources Secretary Angelo Reyes told a news conference.

The reopening followed a visit by the government's mining and pollution experts to Lafayette's Rapu Rapu mine on Tuesday.

The Rapu Rapu polymetallic project was the first foreign-owned mine to open in the Philippines after the Supreme Court, in December 2004, upheld a law allowing full foreign ownership of local mining projects from 40 percent previously.

But the spills in Rapu Rapu, 350 km (222 miles) southeast of Manila, in October 2005 raised the ire of powerful Philippine Catholic bishops and environment groups, triggering a probe by a government anxious not to displease the Church. The mine started gold production in July 2005.

Before the suspension, the mine was forecast to generate revenues of $350 million a year from annual production of 10,000 tonnes of copper in concentrate, 14,000 tonnes of zinc in concentrate, 50,000 ounces of gold and 600,000 ounces of silver.

Lafayette says the mine has a life of eight years.

The accident last year at the mine occurred just as the government was rolling out the red carpet to lure foreign investors and help revive its once lucrative mining industry.

The mine incurred monthly operating expense losses of P150 million pesos after it was forced to close.

"We have met all the conditions imposed by the government designed among other things for optimal environmental protection," Carlos Dominguez, Lafayette Philippines chairman and president, said in a statement.

"The whole mining industry here and abroad has been watching and monitoring our progress and will definitely show heightened interest in the Philippines as an investment area," he said.

The Philippine government estimates the country has $1 trillion worth of unexplored copper, gold, nickel and zinc.

The Rapu Rapu project is one of 24 mining priority ventures of the government. These projects would require at least $6.5 billion, mainly to fund rehabilitation of old mines and bring into production newly identified lodes.

LG International Corp and state-run Korea Resources Corp. together hold a 26 percent stake in the Rapu Rapu mine while Australia's Lafayette owns the rest. Lafayette finished all the repairs needed on its mine site from damages it sustained due to the powerful typhoon Durian in late November.

Typhoon Durian toppled electricity poles and damaged housing facilities for the staff at the mine. But there was no critical damage to the base metals plant, a Lafayette spokesman had said.

The government allowed Lafayette to test its base metals facility starting July 10 till Dec. 8 last year.

The Rapu Rapu processing plant sold its output from last year's test run to Korea's LG, an official earlier said.

The first shipment of about 800 tonnes of copper concentrate worth $1.8 million was sold by LG to China.

A second shipment of 700 tonnes of copper concentrate worth $1.1 million was now being prepared for shipment to China while a third shipment of 1,600 tonnes of zinc concentrate would leave by the end of February, sold by LG to Korea Zinc.