MAC/20: Mines and Communities

Lafayette To Appeal Fine For Mine Spill In The Philippines

Published by MAC on 2006-01-25
Source: The Age

Lafayette to appeal fine for mine spill

by The Age (Australia)

25th January 2006

Junior miner Lafayette Mining Ltd is lodging an appeal against the fine handed down by the Philippines government for two water spills from its Rapu Rapu mine last year. Operations at the polymetallic mine on the island of Rapu Rapu have been suspended until Lafayette meets conditions imposed by the regulator in the wake of the spills, alleged to have released cyanide into local waters.

Lafayette chief executive Andrew McIlwain told shareholders at a meeting in Melbourne that the miner had already worked through the two spills with the regulator when the government issued a 10.4 million peso ($A263,000) fine earlier this month.

The company is lodging an appeal against the fine on the advice of its newly-appointed local management team.

"There are some factual errors in what's been put to us in that assessment and it is about whether or not we correct the record," Mr McIlwain said after the meeting.

"But it is not our focus - our focus is to get on with what we need to do to ensure that all the stakeholders are satisfied and we can operate on a sustainable basis."

Mr McIlwain said the levels of cyanide found by initial testing by the regulator were of a much higher level than could have been caused by the spills and a new testing method had now been agreed.

He said the environmental impact of the spills had been blown out of proportion and the matter had become a political football.

Lafayette is working to expand its tailings storage facility to prevent further spills and to meet a list of conditions to reassure its financiers ahead of reopening the mine.

Mr McIlwain said the timing of the restart would be dependent on the weather, but could be as soon as mid February.

The Rapu Rapu mine holds gold, silver, copper and zinc with a resource of about 589,245 ounces of gold at the key Ungay deposit and another estimated 129,000 ounces at the adjacent Hixbar deposit.

Lafayette is the first foreign miner to begin work in the Philippines for decades and its project has been promoted by the government as heralding a new era of investment and mining development.

Lafayette shares closed down 0.5 of a cent at 14.5 cents on Wednesday.

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