Mine firm loses P30M a day due to leak

PHILEX Mining Corporation is now losing millions as it scrambles to address two mine tailings leaks plaguing the Padcal site.

Vice president for Communications Mike Toledo said suspension of operations may take several months until all safety requirements are met. “We are looking at different scenarios at this point.”

The suspension is expected to result to over P200 million in losses per month with losses per day estimated to reach P30 million to P40 million.

“These are projected losses. With minerals there but left unmined because of suspended operations, theoretically we are losing this amount,” Toledo said.

Toledo said he is hoping the mines will resume operations sooner than the seven-month initial peg by the company as well as experts.

Earlier, Philex admitted the closure might result to up to P40 million losses per day which is equivalent to P1.2 billion a month

Toledo said losses of the mines have no exact figure as of the moment. “We can only estimate as of this time.”

However, Toledo said the regular employees receive their salaries as well as other overhead expenses despite the halt in operations, adding the work for project-based deals have to be set aside at this point.

“Our employees are all involved in the cleanup operations; this is a massive effort done with our experts,” he said.

Toledo said the company will abide by the labor code and ensure the livelihood of employees.

Philex suffered a second leak in its tailings pond last week in the same area at the firm’s tailings pond number 3 (TP3).

The second leak was spotted by workers and was plugged immediately. The leak, although not as big as the first one, was again caused by heavy rains.

The company is confident it has the financial resources to assess and repair the tailings pond despite mining revenues being suspended.

Philex reported a core net income of P2.109 billion in the first half of 2012.

The company has insurance to mitigate the loss of revenues resulting from the suspension of operations and the cost of addressing any environmental impact which may have been brought about by the leaks.

Philex has taken out $30 million in business interruption insurance and $50 million in environment insurance due to the incident.

Philex will also setup a fund for the rehabilitation of the facility and the cleanup of affected rivers and hillsides.