Lafayette May Start Philippine Copper Exports After Mine Spills
By Luzi Ann R. Javier
Sept. 7 (Bloomberg) -- Lafayette Mining Ltd., the first overseas company to open a Philippine mine under relaxed investment rules, may begin copper concentrate exports in November as it ramps up production after two accidents.
The Rapu Rapu mine was ordered by the government to suspend operations last November after two cyanide spills. It has since restarted work under government supervision, pending clearance from the authorities its practices are safe.
``We're already in full commercial production,'' Bayani Agabin, a spokesman for the Melbourne-based company's Philippine unit, said Sept. 5. ``The only difference is that we're being monitored.''
The fate of the $60 million mine is a test case for the government of President Gloria Arroyo, which wants to boost an industry that could provide jobs and investment as metals prices surge. Environmentalists demanded Rapu Rapu's closure, as did religious groups and a state panel that probed the leakages.
``This is a test of government's resolve to support the local mining industry,'' Peter Wallace, director of the Australian-New Zealand Chamber of Commerce (Philippines) Inc., said on Sept. 5.
The Southeast Asian nation's mineral wealth may be worth up to $1 trillion, the government has said. Still, mining accounted for only 1 percent of the $98 billion economy last year.
Copper Record
Agabin didn't say what volume of copper the company expects to export in November. Concentrate usually contains about a third of the metal that's used to make pipes and wires. Copper futures in London rose to a record $8,800 a ton in May.
Lafayette's shares, which have halved over the past year, dropped 1.2 percent today to trade at 8.2 Australian cents.
``This mine should never be allowed to reopen,'' Father Ino Bugaoisan of the Catholic Bishops' Conference of the Philippines said Sept. 4, arguing it's damaged the environment. ``We will go to the Supreme Court to stop it,'' Father Bugaoisan added. The conference represents the country's Catholic's hierarchy, an influential body in the largely Catholic nation.
Lafayette's Agabin said: ``We've done all that's required by the government to ensure that last year's spills will not be repeated.''
Rapu Rapu, located 350 kilometers (218 miles) southwest of Manila, the capital, in Albay province can produce 10,000 tons of copper concentrate and 14,000 tons of zinc a year, according to the company. It also produces gold and silver.
Overseas Investor
The venture was the first overseas-owned mine to operate in the country after the Supreme Court in 2004 upheld a law allowing overseas investors to own large-scale mines. Lafayette developed the mine from 1999, opened it in July 2005, and suspended production four months later after the leakages.
The Department of Environment and Natural Resources ordered from July 10 a three-stage test run to see whether the mine complies with safety rules set to avoid a repeat of the spills.
The government will allow the mine to fully reopen only after passing the tests. In mining, cyanide solution is poured over low-grade ore to extract the targeted metal. After the spills, the chemical leaked into local watercourses and the sea.
Lafayette paid a fine of 10.4 million pesos ($206,718) for the two spills, the company said in July. The closure was costing $50,000 a day in lost production, it said Nov. 29.
`Mine Wasn't Running'
Still, Greenpeace International, an environmental group, said Lafayette's mine work had been killing fish during the period of testing. The company rejected that charge.
``They haven't even been allowed to officially reopen the mine and they're already causing another fish kill,'' said Beau Baconguis, a campaigner at Greenpeace International in Manila.
Lafayette said the fish died in July, between the test's first and second stages. ``There was no way that could have been caused by us because the mine wasn't even running,'' said Joey Cubias, another spokesman for Lafayette's Philippine unit. The fish were killed by pesticides, not cyanide, Cubias added.
To contact the reporter on this story: Luzi Ann Javier in Manila at [email protected]
Last Updated: September 6, 2006 20:49 EDT
By Luzi Ann R. Javier
Sept. 7 (Bloomberg) -- Lafayette Mining Ltd., the first overseas company to open a Philippine mine under relaxed investment rules, may begin copper concentrate exports in November as it ramps up production after two accidents.
The Rapu Rapu mine was ordered by the government to suspend operations last November after two cyanide spills. It has since restarted work under government supervision, pending clearance from the authorities its practices are safe.
``We're already in full commercial production,'' Bayani Agabin, a spokesman for the Melbourne-based company's Philippine unit, said Sept. 5. ``The only difference is that we're being monitored.''
The fate of the $60 million mine is a test case for the government of President Gloria Arroyo, which wants to boost an industry that could provide jobs and investment as metals prices surge. Environmentalists demanded Rapu Rapu's closure, as did religious groups and a state panel that probed the leakages.
``This is a test of government's resolve to support the local mining industry,'' Peter Wallace, director of the Australian-New Zealand Chamber of Commerce (Philippines) Inc., said on Sept. 5.
The Southeast Asian nation's mineral wealth may be worth up to $1 trillion, the government has said. Still, mining accounted for only 1 percent of the $98 billion economy last year.
Copper Record
Agabin didn't say what volume of copper the company expects to export in November. Concentrate usually contains about a third of the metal that's used to make pipes and wires. Copper futures in London rose to a record $8,800 a ton in May.
Lafayette's shares, which have halved over the past year, dropped 1.2 percent today to trade at 8.2 Australian cents.
``This mine should never be allowed to reopen,'' Father Ino Bugaoisan of the Catholic Bishops' Conference of the Philippines said Sept. 4, arguing it's damaged the environment. ``We will go to the Supreme Court to stop it,'' Father Bugaoisan added. The conference represents the country's Catholic's hierarchy, an influential body in the largely Catholic nation.
Lafayette's Agabin said: ``We've done all that's required by the government to ensure that last year's spills will not be repeated.''
Rapu Rapu, located 350 kilometers (218 miles) southwest of Manila, the capital, in Albay province can produce 10,000 tons of copper concentrate and 14,000 tons of zinc a year, according to the company. It also produces gold and silver.
Overseas Investor
The venture was the first overseas-owned mine to operate in the country after the Supreme Court in 2004 upheld a law allowing overseas investors to own large-scale mines. Lafayette developed the mine from 1999, opened it in July 2005, and suspended production four months later after the leakages.
The Department of Environment and Natural Resources ordered from July 10 a three-stage test run to see whether the mine complies with safety rules set to avoid a repeat of the spills.
The government will allow the mine to fully reopen only after passing the tests. In mining, cyanide solution is poured over low-grade ore to extract the targeted metal. After the spills, the chemical leaked into local watercourses and the sea.
Lafayette paid a fine of 10.4 million pesos ($206,718) for the two spills, the company said in July. The closure was costing $50,000 a day in lost production, it said Nov. 29.
`Mine Wasn't Running'
Still, Greenpeace International, an environmental group, said Lafayette's mine work had been killing fish during the period of testing. The company rejected that charge.
``They haven't even been allowed to officially reopen the mine and they're already causing another fish kill,'' said Beau Baconguis, a campaigner at Greenpeace International in Manila.
Lafayette said the fish died in July, between the test's first and second stages. ``There was no way that could have been caused by us because the mine wasn't even running,'' said Joey Cubias, another spokesman for Lafayette's Philippine unit. The fish were killed by pesticides, not cyanide, Cubias added.
To contact the reporter on this story: Luzi Ann Javier in Manila at [email protected]
Last Updated: September 6, 2006 20:49 EDT
