Philex Mining may lose $60M due to leaks

Posted at 09/20/12 8:41 PM

MANILA - The operator of the Philippines' largest gold mine said the site is set to remain shut until the end of the year due to waste leaks, and the closure would likely wipe up to $60 million off its profits.

The leak of tailings -- rubble and other mining waste -- from a pond at the Padcal mine, near the northern resort city of Baguio, began on August 1 and took the company more than a month to plug.

Manuel Pangilinan, chairman and chief executive of Philex Mining Corp., told news website Rappler in an interview aired Thursday at a Manila mining conference that the mine would probably be "shut down until the end of the year".

"We don't want to take risks," he added, in the interview recorded several days earlier.

The financial impact would be "severe and substantial", he said.

"We had forecast profits for this year of four billion pesos ($95.76 million). It's (now) likely to drop to between 1.5 and 1.7 billion pesos ($35.91-40.70 million)."

Pangilinan said the pond which leaked the waste would be condemned and a new one built to prevent a repetition of the spill, which was caused by severe rains unleashed by Typhoon Saola.

The leak spilled mine waste into a creek that flowed down to the Agno, one of the country's largest rivers, he said, adding that the discharge was non-toxic.

The government ordered the mine to be closed until further notice and said it was assessing possible fines and other penalties.

Philex senior vice president for corporate affairs Michael Toledo told reporters on the sidelines of the mining conference Wednesday that the leaks have been stopped.

However, he said he could not give a timetable for the completion of the clean-up.

Toledo also denied local press speculation that the spill may have killed river fish or made them unsafe for human consumption.