MANILA — Philippine copper and gold producer Philex Mining Corp. on Friday said the start of output at its Silangan mine in the south of the country would be delayed by four years until 2022, hit by a national ban on new open-pit mining.
The Silangan copper and gold mine could be Philex’s biggest source of revenue after its 61-year-old Padcal mine in the north is expected to close in 2022.
Silangan was originally slated to begin production by 2018, but that has been set back by a ban on new open-pit mining introduced in 2017 as the government in one of the world’s top copper, gold and nickel producers tries to step up environmental protection.
Open-pit extraction has been used by many miners in the Philippines, but is blamed for massive environmental destruction in some areas.
Philex said in a statement on Friday that it was now looking at an infrastructure design that would allow it to use underground mining to extract ores.
“We are currently working on securing all requisite permits and approvals to operate Silangan,” said Philex Mining Chief Executive Officer Eulalio B. Austin. “We look forward to realizing the massive potential of a project of this magnitude.”
Philippine President Rodrigo R. Duterte has warned he might declare a total ban on open-pit mining as he ordered mining companies to reforest denuded sites. The existing ban also covers the $5.9 billion Tampakan copper-gold project in southern Mindanao island.
Silangan consists of three deposit areas — Boyongan, Bayugo and Kalayaan — with the latter a joint venture with Manila Mining Corp. Boyongan is expected to be the first to operate, by 2022.
Silangan’s development was previously estimated to cost $1.2 billion, based on open-pit extraction. Philex did not give any new estimate for the cost of the project.
Padcal accounted for 9 percent of gold output in the Philippines last year at 29,782 kilograms, and 20 percent of its copper concentrate production at 282,391 tonnes.
PROFIT DECLINE
Meanwhile, Philex Mining reported its net income stood at P608 million in 2018, down 63% from the P1.65 billion it recorded in the year prior.
Core net income likewise dropped 64% to P600 million last year, which the company attributed to “various headwinds particularly rising inflation, regulatory hurdles and depleting ore grades.”
“As it moves closer towards the end of mine life, Philex Mining will be focused on maximizing the remaining cash generation capabilities of Padcal,” the listed miner said in a statement.
Last year’s revenues declined by 16% to P7.6 billion from P9.1 billion in 2017, “primarily weighed down by lower tonnage across all products.”
Philex Mining milled a total of 8.517 million tonnes in 2018, 1.8% lower than the previous year’s output.
“Marginal ore grades, which are inherent within the fringes of the mineral body, contributed to weaker metal output… Mining operations were also hampered by the impact of typhoons causing power disruptions and manpower safety concerns leading to lesser operating days,” it added.
Philex Mining is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Metro Pacific Investments Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — Reuters with D.A.Valdez

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