MAC: Mines and Communities

Lafayette update

Published by MAC on 2006-01-10

Lafayette update

10th January 2006

Lafayette hit with fine

LAFAYETTE Mining says local Philippine media are reporting it has been fined $A267,000 for two unscheduled wastewater discharges last October from its new Rapu Rapu operation.

The company is now seeking clarification and confirmation of the fine, as well as a meeting with relevant government authorities so as to allow it to secure approvals to resume operations. The operation was suspended following the discharges, and also as mining and processing changed focus from the gold ore to base metal mineralisation.

Lafayette said in December it expected to start commissioning early in 2006 following its addressing of six conditions identified by the Philippine authorities.

At full capacity, Rapu Rapu will annually produce around 10,000t of copper and 14,000t of zinc - in concentrate - as well as 50,000oz of gold and 300,000oz of silver.

In mid-December it moved to patch up the working capital shortfall that arose following the closure by raising $A10 million from institutional and professional investors, including $A2 million from AuSelect. Shares in the raising were priced at 11c.

The stock closed off 0.5c at 14c.

DENR's 10.7 million peso fine is not enough!

by Kalikasan-PNE - Press Release

11th January 2006

"The DENR's 10.7 million pesos fine to the La Fayette Mining Inc. (LFMI) is insufficient to cover the environmental and social damages of the series of tailings spills that the company has brought about. The measly fine appears to be DENR's way of muffling the local people's demands to stop the large-scale mining project in Rapu-rapu Island for good", said Clemente Bautista Jr. DENR estimated that La Fayette will earn an astonishing $41 million per year from the polymetallic mining project in Rapu-rapu.

Mr. Bautista cited that in other countries the cost of clean-up and rehabilitation in similar cases of mining cyanide spill runs up to tens to hundreds of millions of dollars. The environmental impact of the cyanide leaching in the open-pit Summitville Gold Mine in Colorado and Gilt Edge Mine in Alaska amounted to $170 million and $15 million, respectively. The Romanian government once demanded $100 million compensation from cyanide spills of the Baia Mare Gold Mine which was also operated by an Australian transnational mining company.

"Basically, the fine that the DENR is charging is based only on the violation of LFMI of the provision of the Clean Water Act not on the actual assessment of the impacts of the tailings spill, as well as other irregularities in the mining operations. Secondly, the fine fails to incorporate the health and environmental effects of other heavy metals integrated in the mine waste and tailings spilled by LFMI," says Januar Ong, Environmental Research Coordinator of Centre for Environmental Concerns (CEC) which headed the independent fact finding mission to investigate the mine spill held last November 2005.

"Contrary to the claim of DENR Sec. Defensor, the Arroyo government equally shares the responsibility for the Rapurapu disaster since it has adamantly pursued its "mining revitalization program" in spite of the obviously weak control and safety measures instituted by the government. Still, the people's experiences in Rapu-rapu Island, Marinduque, and Zamboanga del Norte, to cite a few cases, tell us that its mining liberalization has not benefited the local people. It has clearly resulted to massive displacement of communities, environmental destruction and violations of human rights," added by Mr. Bautista.

Since 2002 the Arroyo government aggressively promotes large-scale mining and makes it one of its priority economic programs. There are 23 large-scale mining projects that the government is now prioritizing which according to them will generate billion pesos for the government.

Reference: Clemente Bautista 09283448756
Januar Ong 09106545063, 9209099

Aussie firm slapped P10.7M in fines for mine spills

by Blanche S. Rivera, Philippine Daily Inquirer

10th January 2006

THE GOVERNMENT has slapped an Australian firm operating what had been touted as the country's flagship mining project fines of at least P10.7 million for two mine spills in the island-municipality of Rapu-Rapu in Albay province last year.

The Pollution Adjudication Board (PAB) has ruled that Rapu-Rapu Processing Inc. (RRPI), owned by Australian Lafayette Mining Inc., violated the Clean Water Act when it discharged waste water with a high cyanide content into creeks on Oct. 11 and 31.

The toxic waste found its way to the open sea, allegedly resulting in fish kills.

The PAB fined RRPI a total of P10.4 million because effluents from the Rapu-Rapu Polymetallic Project site exceeded the acceptable cyanide level.

It was the biggest fine imposed on any violator since the Clean Water Act took effect in 2003. The P10.4-million fine was on top of the P300,000 paid by Lafayette for violating the provisions of its environmental compliance certificate.

The Inquirer tried to contact Rod Watt, country manager of Lafayette Philippines Inc. (LPI), but his phone was unattended.

Rogelio Corpus, general manager for operations of LPI, refused to comment on the matter, saying the company had yet to be notified about it.

"We want revitalized mining to be the flagship of the economy, but we are for responsible mining. If they can't do it, then we don't need them here. There are many responsible mining operators out there," Environment Secretary Michael T. Defensor said at a press conference yesterday.

Defensor, who had branded the Rapu-Rapu Polymetallic Project as the "make-or-break case" for the Philippines' revitalized mining industry, said the maximum fine imposed on Lafayette was meant to prevent similar occurrences at other mining projects.

"[It] is well within the capability of the respondent (RRPI) to prevent (mine spills) should it only exercise prudence in the conduct of its business affairs," he said.

The project is said to be worth P10.4 billion.

The Department of Environment and Natural Resources also upheld the suspension of Lafayette's gold mining operation.


Lafayette will be allowed to resume operations only after it had met the following conditions:

An approved environmental management system or ISO 14001 certification. . A comprehensive pollution control program, including plans and specifications of the antipollution facility. . Budget and chart of activities. . A surety bond of 25 percent of the total cost of the pollution control program. . A detailed description of the interim remedial measures to mitigate pollution pending the completion of the pollution control program. . Employment of a pollution control officer duly accredited by the DENR. . A notarized undertaking from the company showing proof of compliance with all the conditions.

Lafayette was also required to rehabilitate its settling, polishing and event ponds to ensure that they could hold mine wastes and effluents from the project before resuming operations.

"No temporary lifting order shall be considered until the company has fulfilled all the requirements," Defensor said.

Gold milling stopped

Lafayette was ordered to stop gold milling operations on Nov. 14 after a defective valve and heavy rains forced the company to discharge waste water into the creeks last October.

Lolibeth Medrano, director of the Environmental Management Bureau, said the P10.4-million fine was the accumulated maximum penalty of P200,000 a day for companies that violate the Clean Water Act.

The amount represented the fines from Oct. 11, the first mine spill, to Dec. 14, the latest sampling date before the PAB issued its decision against RRPI.

The latest sampling done by the EMB was on Jan. 6, and the team found one sampling point in Rapu-Rapu that had high cyanide levels.

"The P10.4 million is just the initial fine. We will continue to fine them until they have complied with the EMB standards," Medrano said.

The EMB, however, is still computing the additional fines from Dec. 15 to Jan. 6.

The DENR is one of the lead agencies tasked with promoting mining as the backbone of the Arroyo administration's economic program.

Environmentalists and the European Commission have noted the conflicting mandate of the agency, which is also supposed to ensure resources conservation.

With a report from Gil Francis G. Arevalo, PDI Southern Luzon Bureau

Mining operations set back, says DENR

by Gil Francis Arevalo, Philippine Daily Inquirer

11th January 2006

LEGAZPI CITY - THE P10.7 million fine, among other fines, and the strict conditions imposed on Lafayette Philippines Inc. by the Pollution and Adjudication Board (PAB) will adversely affect the company's operations in Rapu-Rapu, Albay, according to Rey Juan, Mines and Geosciences Bureau regional director.

With Lafayette's operations already suspended after the mining spills late last year, Juan stressed that the ruling would further set back the company's timetable.

"Well, there's no one to blame here except Lafayette, which had admittedly overlooked putting up the necessary technologies needed in the continuous gold milling operations," he said.

Tough decision

Rod Watt, Lafayettte country manager, said in a phone interview that the firm would study the penalties and fines imposed on it as well as all the other conditions and requirements that his company was asked to comply with.

"It's kind of hard for us but we humbly submit to the dictates of Philippine laws. That's what the law says and we are going to abide by it," he said.

Watt added that he could not further comment on the fines imposed on Lafayette since the company has yet to receive the copies of the PAB ruling.

"The thing is, we are always cooperative with the Philippine government. Right now, our initial plan is to schedule a dialogue with the PAB to discuss all the mentioned conditions. Other than that I cannot make any statement," Watt said.

The P10.7 million total amount of fines and other penalties that have yet to be paid in connection with the Oct. 11 and Oct. 31 mine spills in the island-municipality of Rapu-Rapu in Albay are considered to be the biggest fine ever imposed by the government on a company in violation of the Clean Water Act.

Juan said Lafayette is still determined to continue its operations despite the ruling, but it may take some time before the company gains its momentum since it will have to take into consideration all the new conditions.


"Just imagine that amount of money, the pressure to comply with all the conditions in the soonest possible time, and the clamor of the local folk. This is indeed a make or break case. It only shows that our government means business here, especially with regard to the Mining Act of 1995," Juan said.

Lafayette is strictly required to rehabilitate its settling, polishing and event ponds to ensure that these can hold mine wastes and effluents from the project before it can resume operations.

Albay fishermen demand shutdown of mining firm

by Ronnie E. Calumpita, Reporter Manila Times

11th January 2006

A MILITANT group of fishermen on Tuesday urged the Department of Environment and Natural Resources to permanently cancel the permit of a mining firm in Rapu Rapu, Albay, that was fined P10.7 million for two mine spills in October.

The Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas said the fines slapped by the DENR Pollution Adjudication Board against Lafayette Philippines Inc. should be adequate compensation for the fishermen who lost their livelihood because of the spills.

"The demand of Bicol fishermen and other affected residents to get Lafayette out of their lives is nonnegotiable. The message is clear and it should go beyond the financial aspect of the issue, nothing more, nothing less," Fernando Hicap, Pamalakaya national chairman, said in a statement.

The board found that the Rapu-Rapu Minerals Inc., owned by Australian Lafayette Mining Inc., violated Republic Act 9275, the Clean Water Act of 2004, when it discharged on October 11 and 31 untreated wastewater with high cyanide content into creeks that emptied into the Albay Gulf.

Hicap said that fishermen in Rapu-Rapu, Albay and Gubat, Prieto Diaz and Barcelona, Sorsogon, had small catch since then, while the marine life had been harmed by the two spills.

On the other hand, the lawyer Roderick Salazar, president of Rapu-Rapu Minerals, said he was confident that Lafayette would resume operations since they were 'correcting the issues.'

"In adherence to our company policy, we will continue to work with government and the local community to complete the process by which we can safely and confidently return to commissioning the base metals plant in the near term," he added.

Environment Secretary Michael Defensor said the department will lift the suspension only when it complies with environmental laws, including proper water treatment at the mining site.

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