Lafayette to resume mining in Rapu Rapu

LAFAYETTE Philippines Inc., considered an environmental test case amid resurgent foreign investor interest in Philippine mining, is expected to resume commercial operation of its Rapu Rapu poly-metal mine this month, having so far passed environmental standards set by the Department of Environment and Natural Resources, an official said.

An independent team of experts led by Dr. Carlos Primo David of the University of the Philippines and Marcelo Bolanos of the Chamber of Mines inspected the mine in Albay province, southeast of Manila, and so far has found the integrity and design of Lafayette’s facility “acceptable,” said Horace Ramos, director of the Mines and Geosciences Bureau.

The independent team has made additional recommendations to improve further the critical mine facilities, including the acid mine drainage dam, Ramos said.

The Lafayette operation on Rapu Rapu Island, one of 24 projects promoted by the government to revive the once-mighty mining sector, was suspended after cyanide spills were traced to its acid drainage dam. The company paid a fine of P10.4 million ($206,000) in June to compensate for the spills.

After doing repairs, Lafayette was allowed to test run its facilities for 30 days in September. It sought and was granted a 60-day extension until Nov. 8. It subsequently asked for a last extension of 30 days to make up for time lost because of “Milenyo,” a super typhoon that struck in late September.

Environment and Natural Resources Secretary Angelo Reyes said in a statement that the second extension ending Dec. 8 would enable Lafayette to present more proof that it had complied with his department’s standards on safe and sustainable mining.

“We will not allow Lafayette to operate until it has shown that it has complied with all the requirements … particularly the environment, social and technical responsibilities,” Reyes said.

Rapu Rapu is the first foreign-owned project to open in the Philippines after the Supreme Court upheld in December 2004 a law that allows full foreign ownership of mining projects.

Previously, foreign ownership was limited to 40 percent.

Lafayette Mining Ltd., of Australia, owns 74 percent of Lafayette Philippines. South Korea’s LG Co. International Ltd. and the South Korean government’s resources investment arm, KORES, together hold 26 percent.

Before the suspension of its operations, the Rapu Rapu mine was forecast to generate revenues of $350 million a year on production of 10,000 tons of copper concentrate, 14,000 tons of zinc, 50,000 ounces of gold and 600,000 ounces of silver.