30th March 2006
Even as the MAC website was publishing an update on the 10th anniversary of the Marcopper disaster on Marinduque, the Philippine government were still talking up the prospects for mining saving the Philippine economy, and no doubt even the faltering government of President Gloria Macapagal-Arroyo. Yet even Philip Romualdez, president of the Chamber of Mines of the Philippines, stated that in order to revitalize the local mining industry, the real test will still be in the communities. However, at the PDAC Convention in Canada, as well as the later Asia Mining Congress, Philippine prospects have been sold as if there is no opposition on the ground. Yet there continues to be both legitimate, legally endorsed community opposition in many projects, as well as the risk of violent confrontation - despite the continued deaths, threats and disappearances of those who would oppose large-scale mining. This is excellently illustrated in the two articles below on Climax Arimco's Dinkidi project. The opposition to TVI Pacific at Canatuan continues to manifest itself, this time in an inter-faith re-consecration of the minesite. Meanwhile at the sinking 'flag ship project' that is the Rapu Rapu mine, the government has to clarify that Lafayette have no permit to re-open the mine after the company announced via a press release that it was soon to re-open. So business as usual really through the looking glass of the new, 'responsible' Philippine mining industry.
Gov't Moves to Boost Mining Industry
The recently concluded Prospectors and Developers Association of Canada (PDAC) 2006 Mining Convention held at the Intercontinental Toronto Centre proved to be an occasion for the Philippine government to make its presence felt in the mining industry.
BY EDWIN C. MERCURIO, Bulatlat - Vol. VI, No. 7
19th - 25th March 2006
TORONTO, Canada Mining can boost the country's economy.
In an interview, Environment Secretary Angelo Reyes said that the Mining Act of 1995 whose constitutionality was upheld by the Supreme Court is a boon to the Philippine economy. He said that the country has "a strategic geographical location for those looking to sell in Asian markets of Japan, China, Korea and neighboring countries."
"Mineral reserves are present in the country and we have gold, copper and nickel," Reyes said. "We have the workforce with competent skills to support the mining industry, legal backing and framework with the Supreme Court legalizing the Mining Act and the Presidential Executive Order 270 which sets a clear road map for the development of the mining industry."
Reyes added that the RP "government has targeted 24 major and medium mineral projects for development in the next five years at a total investment of over $8 billion in 2013." As of December 31, 2005, the total number of mining rights issued by the national government was 762.
Indeed, the mining sales pitch is now massive. According to media observers and participants of the Prospectors and Developers Association of Canada (PDAC) 2006 Mining Convention held at the Intercontinental Toronto Centre from March 5 to 7, "the Philippines is all out campaigning and has lately made its presence felt in the mining industry."
Is the Philippines up for sale?
If the government and large-scale miners will have their way, the Philippines will be the "world's number 4 in gold, number 6 in copper and number 7 in nickel production," said Artemio Disini, chair of the Chamber of Mines of the Philippines and president of Natural Resources Mining Development Corporation. "It will also uplift the livelihood of lowland communities and highland indigenous communities who will be benefit from the one (1%) share of the profits from these foreign investors."
According to the March 2006 issue of the London-based Mining Journal, the Philippines is "well endowed with mineral resources, and its long history and experience in mining has demonstrated its very rich potential for copper, gold, nickel, chromite and other metallic minerals. It has also abundant industrial minerals, such as marble, limestone, clays, feldspar, rock aggregates and dolomite."
Among the major players in the Philippines are Crew Minerals AS operating a nickel project on Mindoro Island, Apex Mining Co (recently acquired by Crew Gold Corp and Mapula Creek Mining Corp), Benguet Corporation (which operates under Ampucao Copper Porphyry Project, Kingking Copper Gold Project, Kingking epithermal gold project, Santa Cruz nickel project, Pantingan Epithermal Gold Prospect), Climax Mining Ltd., Coral Bay Nickel Corp., Indophil Resources NL (Tampakan copper-gold project), Lafayette Mining Ltd. (Rapu-Rapu mining), Mindoro Resources Ltd and TVI Pacific Inc., a Canadian Mining Company operating at Canatuan and Balabag.
Gavan Collery, Manager-Corporate Affairs of the Indophil Resources NL (Sagittarius Mines, Inc.) said that his company recognizes that its Tampakan Mining Project in South Cotabato is the "largest underdeveloped copper-gold resource in Southeast Asia with 8.9 million tons copper and 11.6 million ounces of gold (0.3% copper COG) with significant higher grade zones."
Indophil's North American Investor Briefing added, "There is excellent potential for increased resources, new exploration initiatives are in place and pre-feasibility study is in progress."
The Tampakan project is situated some 50 kms. north of General Santos City in South Cotabato province which is home to six tribal communities such as the T'boli, B'laan, Kalagan, Ubo, Manobo and Tasaday with the mining sites presently situated in tribal ancestral territory of the B'laans.
"At least five B'laan datus (tribal chieftains) have agreed to allow mining in their ancestral abode, namely, datus in Pula Bato, S'bangken, Tablue, Datal Biao and Danlag," Collery said. The Indophil project locations are in Tampakan, Cu-Au Deposit, Columbio FTAA, Hillcrest FTAA Aplication and Southcot EPA.
Columbio FTAA is a partnership agreement between Sagittarius Mines Inc. and the Philippine government. Sagittarius equity includes 60% of Tampakan Group of Companies and 40% of Indophil and Alsons Corporation.
Indophil has conducted 200 exploration holes from the surface and projects a development cost of $1 billion. The project, according to Collery, will last 40 to 50 years and will have a payback after seven years. "With the market value of gold at $450/ounce and copper at $2.50/pound, the Tampakan Project is a promising investment," he added. In October 2005, the company had five drill rigs on site and will start production in 2010.
Disini said that the danger of toxic spills and pollution caused by mining is minimal. He handles all government contracts with mining and his responsibility includes bidding out the mining sites and calls this "a joint venture between the government and the private sector for profit." His other responsibility, he said, is checking the records of companies for adherence to sound environmental practices, safeguards and commitment.
With regard to the toxic spill at the Rapu-Rapu mining site of La Fayette Mines, Ltd., Disini said, "There where only 10 kilos of fish that were affected in Rapu-Rapu mine spill and it was not a big health issue."
"Marcopper (Placerdome) paid $70 million to clean up the toxic spills in Calancan Bay and nature has a way of cleaning up the environment. When the rains came all the toxins and pollutants were washed away downstream and into the sea," Disini said. "The Department of Health came out with something but it really was not a big issue. Today, marine life has returned to Calancan Bay. Nature has a way of cleaning the environment."
Will mining ease the RP government budget woes?
Last September, President Gloria Macapagal-Arroyo, signed the national policy agenda to revitalize mining in the country as detailed in the Mineral Action Plan (MAP). According to Kalikasan People's Network for the Environment (K-PNE), this is the start of a "frenzied rush to mine all Philippine mineral resources."
K-PNE national coordinator Clemente Bautista scored government claims that MAP's implementation would lead to a more prosperous minerals industry that could help ease the government's budgetary and fiscal woes. "The liberalization of the mining industry, which MAP is all about, will worsen the fiscal crisis."
The MAP allows 100 percent repatriation of capital and profits, a 10-year tax holiday, capital tax exemptions, duty-free importation of equipment and machinery and other rights and privileges that tend to trample upon rights of host communities and the wanton disregard of the environment. It also shortens the processing time for mining applications by downgrading the participation of local government units in approving mining projects in their respective areas and harmonizing conflicting laws such as the Indigenous People's Rights Act (IPRA) with the Mining Act.
Bautista said that these erroneous economic policies are one of the major reasons in the government's low revenue collection and a ballooning budget deficit.
The Bureau of Treasury records as of September last year revealed that the Philippine has a budget deficit totaling P4.02 trillion ($78.76 billion, based on an exchange rate of P51.04 per US dollar).
In Siocon, Subanens Continue Struggle Vs Canadian Mining Firm
28th March 2006
SIOCON, Zamboanga del Norte For two years, timuay (tribal chief) Jose Anoy has not been able to set foot in his home. Home is Mt. Canatuan, the most sacred place for the 2,000 Subanen people, which has been encroached into by the mining firm Canadas Toronto Ventures Inc (TVI) since 1994.
Anoy said that the TVI has prevented him from returning home because he refused to give consent for the company to mine 508 hectares located in the Subanens sacred land.
The company offered me money before, and shares in their profits, he recalled. Accepting this could have been easy, but being a timuay, I remained firm for the sake of the Subanen.
His stand forced the company to lay it hard on Anoy driving him away from his own home. Since then, TVI has taken over Mt. Canatuan, barricading the area with three checkpoints.
Despair has not overcome him. Instead, he now finds various groups supporting the Subanens fight against TVI.
Anoys group, the Apo Manglan Glupa Pasaka, together with religious leaders from the Moro, Roman Catholic and Protestant churches, and local officials have coalesced to form the Peoples Response for the Protection of Environment and Natural Resources (Protect-Western Mindanao), a regional alliance opposing large-scale mining.
On March 23, the group made an interfaith pilgrimage to Canatuan. The pilgrimage, according to the group, is a re-consecration of the Subanen ancestral land in Canatuan, which the TVI has desecrated.
One of Protects convenor, Godofredo Galos of Save Siocon Paradise Movement, noted that TVIs operation has affected the Lituban River, a 25,000-hectare watershed area and a water source to a 750-hectare farmland in Siocon. The river is below the mountains where TVIs tailings pond are located. Galos said residents who have waded through the river have shown signs of skin rashes.
The pollution in Lituban River worries Anoy, who fears this will lead to the loss of rice production in Siocon, which provides rice supplies for four municipalities in Zamboanga del Norte.
TVI calls this development, but for whom? Can you call this development when a tribal chieftain is being driven out from his land? Anoy asked.
The pilgrimage gathered religious leaders from the local parishes in Zamboanga del Norte, UCCP Northern Zamboanga District, Sisters Association in Mindanao, Imams and Ustadz from Moro communities, and Subanen leaders from Zamboanga Sibugay and del Norte. It also gathered 500 people from the communities in Siocon, from the provinces of Zamboanga Sibugay, Zamboanga del Norte, and the cities of Pagadian, Dipolog, Ozamiz and Davao City.
Upon arriving at the TVI grounds, the leaders gathered around a circle, holding arms and said prayers in Subanen, Islam, Protestant faiths.
Bishop Jose Manguiran of the Diocese of Dipolog made a symbolic prayer by lying prostrate on the ground for a minute of silence, and then planted his Bishops staff on the ground. This prayer, Bishop Manguiran said, symbolizes a Prophetic plea for Gods intervention to help the people in Siocon.
The pilgrimage culminated with a torch parade and cultural program at Siocons plaza, the Tanghalan ng Paraiso.
The pilgrimage touched Timuay Anoy, who said during the program that the struggle (against mining) is not only the Subanens concern, or the Christian people, or the Moro people; it is the struggle of all people here in the region of Zamboanga.
The tribal chieftain is happy for now to see his home for a brief moment. He cannot stay on in Canatuan for concerns of his safety. Nevertheless, Anoy expressed his wish, that like the other people in Zamboanga, he would like to see TVI leave our lands, and compensate for whatever damages they wrought to the people and the land.
The pilgrimage comes at this time where the religious sector is now actively opposing large-scale foreign mining. Earlier in January, the Catholic Bishops Conference of the Philippines (CBCP) issued its statement calling for the repeal of Republic Act 7942, known as the Mining Act of 1995.
A Mindanao Interfaith conference on mining was held in Dipolog also last January leading to the formation of Panalipdan (Defend) Mindanao. The conference opposed the Arroyo governments promotion of Mindanao as a mining haven. Ten of the governments mining priority projects are located in Mindanao, including Siocon, four in Caraga region, four in Compostela Valley, and one in Socsksargen.
What lies behind the rise of foreign mining in this country, Bishop Manguiran siad, is the globalization pushed by G8 countries such as TVIs country Canada. Globalization scraps away nationalism, and patrimony, as patrimony is about who controls resources, he said. (Panalipdan Mindanao)
Climax aims high
29th March 2006
CLIMAX Mining has its eyes on being the latest Australian mining success story in Asia as it closes in on financing and development of its Dinkidi gold-copper project in the Philippines. Michael Quinn reports from Singapore
On the sidelines of the Asia Mining Congress in Singapore today, Climax chief executive Rob Thomson indicated to MiningNews.net that possible full debt financing of the project was very close to being finalised, with final capital costs one of the issues currently being clarified.
While capital costs estimated around 12 months ago totalled $US80 million ($A114 million), Thomson pointed out that an increase shouldn't necessarily be anticipated given the calculation was made after rising costs of recent times in the sector had peaked.
The capital costs and a possible increased production profile are being looked at by Ausenco and Leightons.
Thomson also indicated that while some hedging would inevitably be required with debt financing, certain banks were cognisant of not "ripping the heart out of the project" with onerous commitments.
Climax, which has recently been trading around 36c, was valued by its broker Austock back in December at $A1.12 using an 8% discount and the-then metal prices of $US503 per ounce gold and $US1.99 per pound of copper (plus an exchange rate of 0.748).
Climax's base case is for a 2 million tonne per annum mining (opencut followed by underground) and processing operation yielding around 200,000oz (gold equivalent) at cash costs of around $190-200/oz.
Thomson said the company was keen to get into cash flow ahead of future expansions planned on the back of a resource of a gold equivalent resource of 5.79 million ounces.
Thomson also pointed out that the company had major exploration targets around Dinkidi that hadn't been touched since the 1990s when the-then Climax ran out of cash and market favour.
Aside from the depth potential of Dinkidi, Climax has some 17 targets in the near vicinity of the planned development, "and while I'm not a geo, I'm told there's a better than 70% chance of finding another commercial deposit", Thomson said.
Small miners take up arms to resist crackdown
By Melvin Gascon, Inquirer - http://news.inq7.net/regions/index.php?index=1&story_id=70754
27th March 2006
Editor's Note: Published on Page A13 of the March 28, 2006 issue of the Philippine Daily Inquirer
BAYOMBONG, NUEVA VIZCAYA-Small miners who are conducting gold panning operations in a remote village in upland Kasibu town have taken up arms, in apparent anticipation of a military crackdown against them, a mining official here confirmed on Monday. Jerrysal Mangaoang, regional director of the Mines and Geosciences Bureau in Cagayan Valley, said concerns over security prompted officials to defer the clearing operation which a multi-sectoral task force was set to launch last month against illegal miners in Didipio village.
"We were told of the presence of armed elements in the area. I suppose these are miners who can afford (to buy firearms)," he said.
The task force was formed last month to curb the rampant small mining in Dinkidi Hill in Didipio, site of the proposed large-scale mining project of Australasian Philippines Mining Inc. (APMI), an Australian company.
Since 1994, APMI, formerly Climax Arimco Mining Corp., has been intending to conduct a large-scale mining operation for gold and copper on Dinkidi Hill. However, it has failed to start operations due to the strong opposition of local communities.
Mangaoang said they had intended to bring in military and police personnel to drive out about 300 small miners from the area.
The miners were composed of Didipio villagers and residents from as far as Ifugao and Benguet.
"We'll have to stop them (small-scale miners), then we will secure the area so they can no longer go back," he said.
Local officials have expressed alarm over the haphazard mining being conducted by small miners, who have dug tunnels on Dinkidi Hill and have been openly using explosives for their operations.
The operation has already caused the death of an Ifugao miner due to a dynamite blast in late December 2005.
The gold rush has also attracted villagers as well as strangers, which they blamed for the increase in robbery cases there.
But antimining groups objected to the planned use of soldiers and policemen against the small-scale miners, fearing that the situation "might escalate into a bigger problem."
"Our findings revealed that many of the Didipio people are not aware of the small-scale mining act, which they can use as an option instead of engaging in something that is illegal," said Sr. Maria Eden Orlino, directress of the Church-based Diocesan Social Action Commission here.
Peter Duyapat, a village official, said small miners have trooped to the site following rumors that the APMI was set to start its operations this year.
"They believe that they-not a foreign company-should reap the wealth of their land," he said.
Communities true test of mining, says exec
By Tonette Orejas, Inquirer
29th March 2006
Editor's Note: Published on Page A18 of the March 29, 2006 issue of the Philippine Daily Inquirer
CLARK SPECIAL ECONOMIC ZONE-While the national government has laid out a favorable legal and regulatory climate to revitalize the mining industry, the real test will still be in the communities, a top official of the Chamber of Mines of the Philippines said.
Benjamin Philip Romualdez, CMP president, said mining companies must "demonstrate" that they are also capable of environmental care and sustainable development.
The Catholic Bishops' Conference of the Philippines, on the other hand, wants to "give the mining industry a chance to prove itself" as mining firms start 23 projects and 37 explorations worth $8.5 billion, Romualdez said during a seminar here of the Economic Journalists Association of the Philippines last Friday.
The CBCP has assailed the Mining Act of 1995 (Republic Act No. 7942) for its alleged threats to the environment. It has decried the industry's records of accidents before the law got the nod of the Supreme Court.
The law, upheld with finality in February 2005, opens full ownership of local mining projects to foreign investors, renewing interests in the industry.
The industry contributed 2.14 percent to the country's gross domestic product in 1985, declining by 27 percent in the 1990s, trade data showed.
The CBCP statement, according to Romualdez, will have "very little effect on the government's policy."
Earlier, the government said it was going only for "responsible mining" and that firms would be required to put in 10 percent of their gross income to environmental protection.
Romualdez, who noted that the industry was adopting "best practices," said the CMP continued to take on capability-building measures such as training on technology, transparency and social responsibility programs.
The total mineral wealth in the country has been estimated at $840 billion, with a third of its 13 million hectares considered geologically prospective for mining.
"It's a total shame not to take advantage of the blessings," Romualdez said.
He suggested that the government "invest more" in the Department of Environment and Natural Resources so that the agency would be able to do its functions, mainly in the "proper implementation" of the mining law at the local level.
Romualdez said he hoped there would be no constant changes in the leadership of the DENR, which has seen four secretaries in five years.
Closed mining firm owes P260M in taxes, back wages
By Carla P. Gomez, Inquirer
24th March 2006
Editor's Note: Published on Page A15 of the March 25, 2006 issue of the Philippine Daily Inquirer
BACOLOD CITY - Maricalum Mining Corp. (MMC) in Sipalay City, Negros Occidental shut down in 2001. Yet until now it still owes local governments more than P90 million in real property taxes and its employees about P170 million in back wages and separation pay.
Sipalay City Mayor Oscar Montilla said that the copper mining company owes his city more than P50 million in back taxes.
He said Maricalum also owed almost P40 million in real property taxes to Sipalay's neighboring town of Cauayan, where the company also used to operate a copper mine.
A check with the Negros Occidental's treasury office, however, showed that as of 2005, Maricalum owed Cauayan P52.2 million and Sipalay P47.8 million. The unpaid land taxes for both local government units date back to 1998.
The Sipalay City government last year attempted to auction off MMC property but was stopped by a temporary restraining order issued by the Court of Appeals in Cebu.
Montilla said they were still appealing the CA ruling.
The Sipalay mines, which started operating in 1957 in Barangay San Jose, were closed on July 2, 2001 because of a labor dispute and complaints of environmental pollution. The closure left more than 5,000 workers jobless.
Montilla said after the city's experience with MMC, they remained open to mining operators but would only allow responsible mining companies.< class="macbody"P>He said he had asked the help of environment lawyer Antonio Oposa and a German consultant to ensure that future mining operations in the city would strictly comply with environment laws.
Records obtained from the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources showed that MMC continued to cause environmental problems despite it having ceased operation for almost five years.
An MGB report posted on its website said that even after the company shut down, its inactive Tailings Pond No. 3 in Barangay Gil Montilla in Sipalay continued to emit dust. It has an area of about 125 hectares.
The report said the dust emitted by the tailings pond has polluted the air in surrounding areas, causing increased respiratory related illnesses to residents.
The MGB report said the tailings pond contained over 111 metric tons of mine tailings (water waste) discharged over its 20 years of operation.
After the MMC ceased operation and without any new tailings discharge into the pond, a portion of the pond began to dry up. Dust accumulated starting in December 2001.
The volume of dust in the pond would peak during dry and windy months from December to April or May, according to the MGB report.
The dust fall-out in nearby areas reach five kilometers, south and southwest of the tailings pond, the report added.
The MGB in Western Visayas had recommended that MMC install a sprinkler system or flooding irrigation system to control the dust but MMC, instead, placed lines of "windbreaks" made of coconut fronds across the dry portion of the tailings pond and resorted to other methods.
The MGB quoted the MMC as saying that it was using cheap methods to control the dust because of financial difficulties and because of the loss of a sprinkler system that it was using before.
PDI Visayas Bureau
Rapu Rapu restarts, Mcllwain exits
By Michael Quinn, MiningNews.net
23rd March 2006
THE problems at Lafayette Mining's Rapu Rapu project have claimed another scalp, with managing director Andrew Mcllwain resigning and replaced by investment banker David Baker. McIlwain's exit followed the closure of the new Rapu Rapu gold and base metals operation late last year after unplanned "discharge events" at the operation, one of which was during sustained torrential rain.
While Lafayette steadfastly maintained the discharges were essentially harmless, the operation was shut down while remedial work was carried out.
In January, Carlos Dominguez, a former minister for natural resources under the administration of President Corazon Aquino, was appointed chief executive of Lafayette's operational arm Lafayette Philippines, and joined Lafayette's board.
Also joining the board at that time was Robin Widdup - head of Lafayette's major shareholder Lion Selection - with then-directors Kevin Robinson and Paul Taylor standing down.
Baker has spent the past four months working closely with Lafayette management in his role as the lead member of the Gryphon Partners' advisory mandate.
As commissioning of the operation restarts, Lafayette has been backed by $A42 million worth of debt and equity, with ABN Amro placing $16.5 million worth of shares and AuSelect subscribing for another $3 million.
In addition, Robin Widdup and Lion Manager have taken a placement of $2 million.
Shares in all equity issues were priced at 11c.
Lafayette's 26% joint venture partner is providing $6.7 million of subordinated debt, while credit approval has been sought from the Rapu Rapu banking syndicate in respect of $US10 million.
At full capacity, Rapu Rapu is expected to annually produce around 10,000 tonnes of copper and 14,000t of zinc - in concentrate - as well as 50,000 ounces of gold and 300,000oz of silver.
Shares in Rapu Rapu were up 1.5c (13.6%) at 12.5c in morning trade.
Australia's Lafayette Unveils A$42M Funding, New MD
By James Attwood, Dow Jones Newswires
23rd March 2006
SYDNEY - Australia's Lafayette Mining Ltd. (LAF.AU) Thursday announced a A$41.8 million funding package, a new managing director and base metal commissioning at Rapu Rapu mine in the Philippines.
The funding package includes ABN AMRO Morgans placing A$11 million in shares to domestic and overseas investors and institutions, with a further A$5.5 million earmarked for placement with an unnamed overseas institution subject to shareholder approval.
In addition the company said AuSelect Ltd has agreed to take a A$3 million placement, while Lion Manager Ltd has agreed to A$2 million.
At the same time Lafayette's 26% joint venture partners in Rapu Rapu, LGI and KORES, will kick in A$6.7 million in subordinated debt, while the company seeks a US$10 million standby project facility from its Rapu Rapu banking syndicate.
In the same statement, which effectively lifts a trading halt on Lafayette shares, the company said the coordinator of the funding initiatives, investment banker David Baker, will take over from Andrew McIlwain as managing director.
It said McIlwain resigned Thursday both as managing director and as a director.
Meanwhile Lafayette said commissioning of Rapu Rapu's base metal component has started, with first production slated for mid April, after satisfying "technical remedial requirements" imposed by the Philippine authorities.
In November Lafayette stopped processing gold at Rapu Rapu due to two separate discharge incidents, one of which contained cyanide, killing marine life.
The stoppage effectively brought forward a scheduled gold plant halt to transfer to a base metals circuit ahead of copper and zinc processing at the polymetallic project.
Rapu Rapu was ramping up to 50,000 ounces a year of gold and had planned to start processing base metals late November, adding 10,000 tons of copper concentrate, 14,000 tons of zinc and 600,000 ounces of silver over six years.
The A$41.8 million funding package "provides a substantial financial buffer through the commissioning and ramp up phases," the statement read.
Rapu Rapu is the Philippines' first new foreign-owned mine in three and a half decades and, despite its relatively small size, is regarded by authorities as key to attracting global mining investment back into the country.
Behind Rapu Rapu is a wave of potential new foreign-owned projects, including redevelopment of the Tampakan copper mine by joint venture partners Indophil Resources NL (IRN.AU) and Xstrata PLC (XTA.LN).
At 0012 GMT Lafayette shares were trading at 12 cents up one cent.
Lafayette has no permit to reopen
24th March 2006
The Philippines says it has not given a clearance to a subsidiary of Australia's Lafayette Mining Limited to restart its Rapu-rapu polymetallic project.
The Department of Environmental and Natural Resources issued the statement after Lafayette announced on Thursday it hoped to re-start the base metals production at the mine in mid-April.
"Lafayette has to fully comply with all the 18 conditionalities set by the Mines and Geosciences Bureau, Environmental Management Bureau and the Pollution Adjudication Board for various violations before it could resume operation," the department said in a statement.
The department said its experts have yet to review the 115-page pollution control plan submitted by Lafayette. "Mere submission of the plan does not automatically mean compliance," it said.
The Rapu-rapu mine, the first to be developed by foreigners in nearly four decades, is at the centre of controversy after two cyanide leaks there in October.
The incidents occurred just as the Philippine government was trying to woo foreign firms to revive the country's once lucrative mining industry despite opposition from church leaders and environmentalists.
The government suspended operations at the mine on Rapu-rapu island in Albay province, about 350km south-east of Manila, in January and fined the company 10.4 million pesos ($A284,353).
Manila said an additional fine of 200,000 pesos per day would be levied until the company complied with environmental standards and conditions.
Lafayette Mining, through its subsidiary, Lafayette Philippines Inc, runs the sprawling gold, copper and silver mine.
Lafayette late last year said the discharges of cyanide, used to segregate gold from ore, into local water systems had only "minimal environmental effects".
Before the suspension, the mine was forecast to yield predominately copper and zinc, although it will also account for 50,000 ounces of gold and half a million ounces of silver each year as a by-product from the base metals ore.
South Korea's LG Co International Ltd and the Korean government's resources investment arm, KORES, together hold 26 per cent of Lafayette's subsidiary company, Lafayette Philippines Inc.
At full production rates, the mine has been forecast to yield enough concentrate - ground ore - each year to enable partner LG International to glean 10,000 tonnes of copper and 14,000 tonnes of zinc from the material through the smelting process.
Xstrata takes another step towards Tampakan
By Ben Sharples, MiningNews.net
23rd March 2006
XSTRATA Copper's chief financial officer Louis Irvine has joined the board of Indophil Resources in a move described by one analyst as a "step on the path" to the major exercising its option to acquire a 62.5% interest in the large Tampakan copper-gold deposit in the Philippines. "I would see this as part of the progression of Xstrata to exercise its option," ABN AMRO Morgan senior analyst Chris Brown told MiningNews.net. "I think when you look at the size and quality of the Tampakan project, it is almost inconceivable that they wouldn't."
Located on the southernmost island of the Philippines, Mindanao, the Tampakan deposit has a measured, indicated and inferred resource of 1.34 billion tonnes containing 8.9Mt of copper and 11.6Moz of gold.
The Anglo-Swiss company has an option till September 2006 to acquire a 62.5% interest in Tampakan.
What will subsequently happen to Indophil should the option be exercised remains a key question.
"There are benefits for Xstrata in acquiring the whole asset, they would get 100% of the product, but there are negatives in that Indophil has demonstrated it can work very efficiently in the Philippine socio-political environment," Brown said.
"Xstrata can't acquire Indophil cheaply because of the relationships the group has developed and they will be absolutely critical in taking the project forward, so I don't think they [Indophil] are going to get legged over."
Shares in Indophil hit a 52-week low of 31c in June before gaining ground to hit a 52-week high of 75c in January. The stock gained 5.5c (8.8%) during Thursday to close at 68c.