Manila Bulletin

Philex Min­ing loses 12% of mar­ket value


Philex Min­ing Corp. said yes­ter­day it lost R6.4 bil­lion, or over 12%, of its mar­ket cap­i­tal­iza­tion yes­ter­day af­ter the en­vi­ron­men­tal agency threat­ened to can­cel its con­tract with the gov­ern­ment for the devel­op­ment and op­er­a­tion of five min­ing projects.

Philex, the Philip­pines’ largest cop­per and gold miner, said its share price fell sharply af­ter En­vi­ron­ment and Nat­u­ral Re­sources Sec­re­tary Regina Lopez warned that 75 min­eral pro­duc­tion shar­ing agree­ments, or MPSAs, in­clud­ing five held by Philex’s units, will be can­celled be­cause the min­ing claims are within water­shed ar­eas.

Philex de­nied in a state­ment that the min­ing claims en­croached water­shed ar­eas and said it is will­ing to sub­mit to DENR in­ves­ti­ga­tions to prove that claim. The com­pany pointed out that it al­ready went through a rig­or­ous screen­ing process be­fore the MPSAs were granted.

Among the en­dan­gered Philex projects is the Si­lan­gan claim, a $1 bil­lion un­der­tak­ing that is sup­posed to go into pro­duc­tion by 2020 and re­place Philex’s ex­ist­ing Pad­cal gold-cop­per mine. Philex said the Si­lan­gan project is ex­pected to gen­er­ate around 8,000 jobs and pay around 31 bil­lion pe­sos in taxes in the first 10 years of op­er­a­tion.

Philex said not only did Ms. Lopez’s warn­ing un­der­mine share­holder value, it also “en­dan­gered the Si­lan­gan project, which is near­ing its project im­ple­men­ta­tion, by erod­ing in­vestor con­fi­dence in the midst of a wor­ri­some reg­u­la­tory land­scape that ap­pears to dis­re­gard due process and in­ter­prets ap­pli­ca­ble laws as it wishes.”

Philex ex­pects fur­ther ero­sion of share­holder value. (Dow Jones)

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