Lafayette Has No Permit To Reopen

Lafayette has no permit to reopen

24th March 2006

The Age

The Philippines says it has not given a clearance to a subsidiary of Australia's Lafayette Mining Limited to restart its Rapu-rapu polymetallic project.

The Department of Environmental and Natural Resources issued the statement after Lafayette announced on Thursday it hoped to re-start the base metals production at the mine in mid-April.

"Lafayette has to fully comply with all the 18 conditionalities set by the Mines and Geosciences Bureau, Environmental Management Bureau and the Pollution Adjudication Board for various violations before it could resume operation," the department said in a statement.

The department said its experts have yet to review the 115-page pollution control plan submitted by Lafayette. "Mere submission of the plan does not automatically mean compliance," it said.

The Rapu-rapu mine, the first to be developed by foreigners in nearly four decades, is at the centre of controversy after two cyanide leaks there in October.

The incidents occurred just as the Philippine government was trying to woo foreign firms to revive the country's once lucrative mining industry despite opposition from church leaders and environmentalists.

The government suspended operations at the mine on Rapu-rapu island in Albay province, about 350km south-east of Manila, in January and fined the company 10.4 million pesos ($A284,353).

Manila said an additional fine of 200,000 pesos per day would be levied until the company complied with environmental standards and conditions.

Lafayette Mining, through its subsidiary, Lafayette Philippines Inc, runs the sprawling gold, copper and silver mine.

Lafayette late last year said the discharges of cyanide, used to segregate gold from ore, into local water systems had only "minimal environmental effects".

Before the suspension, the mine was forecast to yield predominately copper and zinc, although it will also account for 50,000 ounces of gold and half a million ounces of silver each year as a by-product from the base metals ore.

South Korea's LG Co International Ltd and the Korean government's resources investment arm, KORES, together hold 26 per cent of Lafayette's subsidiary company, Lafayette Philippines Inc.

At full production rates, the mine has been forecast to yield enough concentrate - ground ore - each year to enable partner LG International to glean 10,000 tonnes of copper and 14,000 tonnes of zinc from the material through the smelting process.