The Department of Environment and Natural Resources has stopped the nickel mining operations of Philnico Industrial Corporation in Surigao because of its failure to pay the government USD 263.8 million in debts.
Environment secretary Mr Ramon Paje, following a request from the Department of Finance to check Philnico's operations, also froze the issuance of ore transport permits to the miner and suspended all negotiations for the sale of the company.
In a letter dated May 16th 2011, finance secretary Mr Cesar Purisima told Paje that Philnico has paid only USD 1.25 million, less than 1% of the USD 263.8 million it owes the state since 1996, for the purchase of the latter’s interest in Nonoc Mining Industrial Corporation, the original holder of mining rights in the area.
The purchase was covered by an Amended and Restated Definitive Agreement signed in 1996 by Philnico, Nonoc, and the government through the Asset Privatization Trust (now Privatization Management Office).
The ARDA was executed after Philnico defaulted on its previous agreement with government, prompting the government to revoke the original Mineral Production Sharing Agreement. Philnico was allowed to negotiate for a new agreement after it had told the government that it had entered into a deal with a financially able partner.
Mr Purisima said that "With Philnico’s failure to meet amortization payments, PMO demanded that Philnico comply with its obligations under the ARDA or it will be constrained to exercise its remedies under the ARDA."
Philnico then filed a complaint against the PMO to prevent it from exercising its available remedies in the ARDA. The case was filed in February 2003.
Mr Purisima said that "Despite the lapse of eight years, there is no indication as to when the case will be decided by the courts. In the meantime, PMO is deprived of its remedies under the ARDA while Philnico is able to continue mining the project area through subcontractors."
Mr Purisima said there are reports that Hinatuan Mining Corp., a Philnico subcontractor, and other entities have been continuously conducting mining operations and shipping nickel ore from the Surigao mineral reservation.
Mr Purisima said that "The PMO has been forced to expend considerable resources in order to defend and vindicate the rights and interest of the Republic. These efforts will, however, all go to naught if Philnico or its subcontractors are allowed to continuously deplete the mineral resources while at the same time tying up the matter in court."
(Sourced from www.malaya.com.ph)
