Philex gets $25-M bond to pay fine-A A +A
Wednesday, February 13, 2013
PHILEX Mining Corporation announced it will soon receive $25 million bond cover from its interrupted operations due to the mine tailings spill in Padcal last August.
The amount would cover most of the over P1-billion penalty slapped on the mining company by government.
Chartis Philippines Insurance Inc. will pay it $25 million to cover financial losses incurred by its suspended tailing storage facility 3 after heavy rains from Tropical Depression Ferdie and Typhoon Gener caused a breach in the pond.
Michael Toledo, Philex spokesperson, said the $25 million provided by Chartis is part of business interruption insurance. “This is the first time that Philex was able to file claim from Chartis.”
Chartis will pay Philex $25 million in full settlement of the corporation’s claims within 15 days from February 11, 2013, the effective date of the agreement.
Philex is covered by environmental insurance of $50 million and $30 million for business interruption.
Company officials said that pending the collective decision on the use of the settlement funds, it would be diverted to the company’s general fund for general corporate use.
The suspension is expected to result in over P200 million of losses per month, with losses per day estimated to reach P30 million to P40 million.
Philex earlier faced an additional penalty of P92.8 million for violation of the Philippine Clean Water Act of 2004 and the terms of its environmental compliance certificate.
The order was issued by the Pollution Adjudication Board, a unit under the Environmental Management Bureau of the Department of Environment and Natural Resources.
Meanwhile, Officials in Itogon town are asking for the resumption of work at Philex mines, saying adverse effects on economy will ensue if the mines remain closed.
Published in the Sun.Star Baguio newspaper on February 13, 2013.