Philippines reopens Lafayette copper, zinc mine

The Philippines said on Thursday Australia’s Lafayette Mining Ltd. could restart its copper and zinc mine south of Manila immediately, more than a year after it was shut due to cyanide spills.

“The mining operations can now proceed,” Environment and Natural Resources Secretary Angelo Reyes told a news conference.

Lafayette’s stock jumped 13 percent to A$0.13 on the Australian Stock Exchange following the announcement.

The reopening followed a visit by the Philippine government’s mining and pollution experts to Lafayette’s Rapu Rapu mine on Tuesday.

The Rapu Rapu polymetallic project was the first foreign-owned mine to open in the Philippines after the Supreme Court, in December 2004, upheld a law allowing full foreign ownership of local mining projects from 40 percent previously.

But the spills in Rapu Rapu, 350 km (222 miles) southeast of Manila, in October 2005 raised the ire of powerful Philippine Catholic bishops and environment groups, triggering a probe by a government anxious not to displease the Church.
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The mine started gold production in July 2005.

Before the suspension, the mine was forecast to generate revenues of $350 million a year from annual production of 10,000 tonnes of copper in concentrate, 14,000 tonnes of zinc in concentrate, 50,000 ounces of gold and 600,000 ounces of silver.

Lafayette says the mine has a life of eight years.

RIGID TEST

Reyes said Lafayette had complied with 36 conditions set by the government to prevent spills at its Rapu Rapu mine before it was allowed to reopen.

He said the mine and its base metals plant had undergone a rigid test-run supervised by government and private sector experts for 120 days last year.

“This particular case of Rapu Rapu had gone through the proverbial eye of the needle,” Reyes said.

Reyes said the Pollution Adjudication Board had imposed an additional 6 million pesos (about $124,000) pollution fine on Lafayette.

The firm previously paid 10.7 million pesos for violating the Clean Water Act and its environmental compliance licence.

Horacio Ramos, head of the Mines and Geosciences Bureau, said Lafayette had spent $90 million on Rapu Rapu, against a budgeted $45 million, because of the spills.

The spills in Lafayette occurred just as the government was rolling out the red carpet to lure foreign investors and help revive its once lucrative mining industry.

“We have met all the conditions imposed by the government designed, among other things, for optimal environmental protection,” Carlos Dominguez, Lafayette Philippines chairman and president, said in a statement.

“The whole mining industry here and abroad has been watching and monitoring our progress and will definitely show heightened interest in the Philippines as an investment area,” he said.

The Philippine government estimates the country has $1 trillion worth of unexplored copper, gold, nickel and zinc.

LG International Corp and state-run Korea Resources Corp. (KORES) together hold a 26 percent stake in the Rapu Rapu mine while Australia’s Lafayette owns the rest.

Source: Reuters