Philex Mining profit plunges 69pct in 2012

Posted at 02/28/13 10:19 AM

MANILA, Philippines - Manuel V. Pangilinan-led Philex Mining Corp. saw its core net income plunge 69% to P1.705 billion in 2012, as operations at its Padcal mine were suspended for 5 months last year due to a tailings spill. 

In a statement, Philex Mining said profits were also affected by a P295 million net loss, due to the net loss reported by its subsidiary Philex Petroleum Corp. 

Philex Petroleum posted a net loss of P1.086 billion in 2012, from P538 billion income in 2011. This was attributed to its subsidiary Forum Energy Plc's write-down of P389 million in investments in the North Cebu oil field, and Brixton Energy & Mining's write-off of P578 million of its coal assets in Zamboanga Sibugay. 

Philex Mining's operations at Padcal mine have been suspended since August 1, after the tailings spill. The company recently paid the P1.034 billion fine imposed by the government for the spill. It also set aside P413 million for the remediation and rehabilitation of the areas affected by the spill. 

"We are at a situation where we can regard Philex’s lower core income for the year as not entirely negative, considering the prolonged suspension of our Padcal operations. Since that regrettable tailings accident last August 1 — where we immediately decided to shut down the mine — every effort has been made by Philex to remediate and rehabilitate the tailings pond and the affected areas, and restore operations and the environment to normalcy as quickly as we could," Manuel V. Pangilinan, Chairman and CEO of Philex Mining, said in a statement. 

Pangilinan expressed confidence Philex will recover as soon as Padcal resumes full operations.

Philex Mining reported its operating income dropped 57% to P3.447 billion in 2012, from P7.93 billion a year ago. 

Production at Padcal has been halted since August, resulting in lower ore mined that produced significantly less gold and copper. Padcal also incurred maintenance cost of P908 million during the 5-month period, as it continued to retain its workers and maintained work for the underground and the mill. 

The Mines and Geosciences Bureau earlier this week granted Philex Mining's request to temporarily open the mine for 4 months.

Philex expects the only remaining constraint on the resumption of Padcal operations to be resolved once it submits the surety bond and undertaking required by the Pollution Adjudication Board (PAB). PAB has ordered Philex Mining to pay P92.8 million for the tailings leak that polluted the Balog and Agno rivers.