Big miners seek moratorium lifting
To aid recovery
(MANILA BULLETIN FILE PHOTO)
It’s going to be a long shot, but some of the country’s biggest mining companies had sought President Rodrigo Duterte’s approval for certain policy changes in the mining sector, including the lifting of moratorium on new mining projects as well as the ban on open-pit mine stressing this should help the domestic economy recover faster.
Based on their estimates, the pending big-ticket mining projects could help the sector bring in additional government revenues by P13 billion a year.
These projects include the King-King Copper Gold Project of the Villar Group and the infamous Tampakan Copper-Gold Project in South Cotabato.
Rocky Dimaculangan, vice president for corporate communications at Chamber of Mines of the Philippines (COMP), an organization of some of the country’s largest mining operations, said that his group made a recommendation to President Duterte for the “removal of roadblocks” that prevent their sector from contributing more to the Philippine economy.
“Our country is one of the most highly mineralized in the world. Yet the Philippine mining industry cannot reach its potential to be a major contributor to economic growth because of two major mining policy roadblocks,” Dimaculangan told Business Bulletin.
“First [roadblock is the] EO [Executive Order] 79, in place since 2012, which imposes a moratorium on new mineral agreements until higher mining taxes are legislated, and second, the ban on open pit mining. We highly recommend the removal of these roadblocks,” he added.
COMP’s recommendations are the main contents of the mining sector program that the Mines and Geosciences Bureau (MGB) recently submitted to its parent agency, Department of Environment and Natural Resources (DENR), and the Office of the President.
MGB Director Wilfredo Moncano earlier told Business Bulletin that this program gives details on how extractive industries could help the Philippine economy recover from the pandemic-triggered recession.
The Philippines is one of the highly mineralized countries in the world, having mineral resources estimated at $1.4 trillion.
But because of some regulatory issues and environmental concerns, its contribution to the Philippine economy remains dismal at 0.85 percent.
Dimaculangan said these roadblocks should be lifted because first, excise tax on mining already doubled to 4 percent under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, while open-pit mining is allowed by the Philippine Mining Act of 1995 and is “a safe and necessary form of mining where underground mining cannot be employed.”
He then mentioned three large-scale metallic projects in Mindanao that may benefit from the removal of these roadblocks, include the Silangan Copper-Gold Project of Pangilinan-led Philex Mining Corp., the Tampakan Copper-Gold Project of Sagittarius Mines Inc., and the King-King Copper Gold Project of the family of Senator Cynthia Villar.
According to him, these projects will “bring in approximately P250 billion worth of investments, generate exports of P90 billion annually, see government revenues rise yearly by P13 billion, boost annual social development funding and indigenous peoples royalties by over P1 billion, and increase the mining industry’s GDP [gross domestic product] contribution by 1.5 percent.”
He said this project will take up “a very small footprint — less than 3 percent of the country’s total land area — but will provide huge socio-economic benefits.”
“There are adequate social and environmental laws, rules, and regulations in place that would mitigate the impact of mining on communities and the environment,” he further said.
Because of the pandemic, as many as 138,000 jobs in the mining sector were temporarily lost, excluding those from the small-scale miners.
Philex profit rises on high gold prices
PHILEX MINING CORP. posted an attributable first-half income of P424.55 million, up 8.5% from a year ago due favorable gold prices and sustained momentum in its business operations since the third quarter of last year.
In the second quarter alone, it reported to the stock exchange a core net income of P299.51 million, without disclosing the comparative figure a year ago. But it said core income in the first quarter was at P102.72 million.
“Given prevailing high gold prices and poor economic prospects for balance year, it looks like Philex is headed towards a better full year performance in 2020 compared with 2019 — provided we are able to maintain our production volume and improve mining efficiencies,” Philex Chairman Manuel V Pangilinan was quoted as saying in the disclosure.
Revenues for the company during the first half of the year reached P3.68 billion, higher by 19% compared with P3.09 billion a year ago. Of the semester’s top-line figure, P1.97 billion was posted in the second quarter.
Philex said its total tonnage milled for the second quarter rose 1% to 2.002 million tons against 1.973 million tons during the same period last year.
The company said its gold output for the second quarter rose 7.5% year on year to 14,173 ounces while copper output increased 8% to 6.80 million pounds.
Philex said its earnings before interest, taxes, depreciation, and amortization (EBITDA) during the second quarter amounted to P708.46 million while its operating costs and expenses were at P1.55 billion for the period.
Meanwhile, the mining company said that since April, the flow of its critical materials and supplies has returned to normal, with a boost from its new suppliers base.
Philex said it was confident that it had developed reliable supply sources of its critical materials, supplies, and equipment replacements.
Philex President and Chief Executive Officer Eulalio B. Austin, Jr. said the company had adjusted its supply chain model based on the “new normal” in order to lessen the risk of possible disruptions amid the coronavirus disease 2019 (COVID-19) pandemic.
“We also have put in place adequate health protocols to protect our employees, both in Padcal mine and at the Head Office, as they continue to perform their day to day work in the office, underground mining and mill operations,” Mr. Austin said.
On Monday, shares of Philex Mining rose 1.57% or P0.05 to close at P3.24 per share.
Philex Mining is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Metro Pacific Investments Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave
PHILEX MINING CORPORATION
Notice of 2020 Annual General Stockholders’ Meeting
TO OUR STOCKHOLDERS:
Please be informed that the Annual General Stockholders’ Meeting (“AGM” or the “Meeting”) of PHILEX MINING CORPORATION (the “Company”) will be held on Wednesday, 15 July 2020 at 4:00 p.m., and will be presided at TV 5 Media Center, Reliance St. Mandaluyong City. The meeting will be conducted virtually, and attendance at the meeting will be via remote communication only.
The order of business at the Meeting will be as follows:
- Call to Order;
- Proof of required notice of the meeting;
- Certification of quorum;
- Reading and approval of the Minutes of the 26 June 2019 annual stockholders’ meeting and action thereon;
- Presentation of annual report and audited financial statements for the year ended 31 December 2019 and action thereon;
- Ratification and approval of the acts of the Board of Directors and Executive Officers during the year 2019;
- Appointment of independent auditors;
- Election of directors, including independent directors;
- Other matters;
For purposes of the Meeting, only stockholders of record as of the close of business on 8 April 2020 are entitled to notice of, and to vote at, the Meeting.
The Definitive Information Statement for the Meeting is posted on the Company’s website. To access the Definitive Information Statement, with the attached Management Report, Audited Financial Statements for the period ended 31 December 2019 and Proxy Form, please go to (http://www.philexmining.com.ph/).
Attendance via remote communication. Stockholders who will attend the Meeting should email the Corporate Secretary at firstname.lastname@example.org not later than 5 July 2020. Certificated shareholders must indicate in the email their Stockholder ID number and submit a scanned copy of a valid current government ID. Uncertificated shareholders (shareholders who hold their shares through a PCD Nominee account), should submit a certification from their broker attesting that the stockholder is the beneficial owner of shares of stock of the Company (the number of shares must be indicated) and a valid government ID.
Clarificatory questions regarding attendance via remote communication maybe sent via email to email@example.com.
Stockholders can be represented and vote at the Meeting by submitting the said proxy by email to firstname.lastname@example.org or by sending a physical copy to the Office of the Corporate Secretary at the Company’s principal office at 2/F LaunchPad, Reliance corner Sheridan Streets, Mandaluyong City, Metro Manila. The deadline for submission of proxies is 5 July 2020. Proxy validation will be on 8 July 2020 at 10:30 a.m. at the Company’s office address indicated above.
On-line voting. Secured on-line or electronic voting will be available for stockholders. Stockholders who have pre-registered attendance via remote communication may vote online by logging on to http://www.philexmining.com.ph/investor-relations/vote-online to cast their votes. On-line voting instruction are attached to the Notice as Annex “B”. On-line voting will close at 12:00 noon on 13 July 2020.
Open Forum. There will be an Open Forum during the Meeting. Stockholders who will attend via remote communication should send their questions via email to email@example.com on or before 12:00 noon of 13 July 2020.
Digging for survival in time of pandemic
The Philex spillway around its improved tailings dam
TUBA, BENGUET—The country was just starting to address the coronavirus pandemic on March 16 when Eulalio Austin Jr. decided to lock down the Padcal gold operation of Philex Mining Corp.
Austin, president and chief executive officer of the 63-year-old firm, was at Philex’s oldest Padcal operation when the Luzon quarantine was imposed.
“Adhering to established guidelines … I had to lock down the community also. We set up checkpoints so nobody got in and out,” Austin told the Inquirer during a visit to the Padcal mine camp on June 17.
He said employees who were outside to see to their families at that time had to undergo a 14-day quarantine before returning to the mine camp.
According to Austin, Philex has a system for dealing with emergencies—in this case a health security matter—that was immediately activated at the onset of the pandemic.
The quick isolation of the mine site and its workers was the primary reason Philex alone, among key Benguet mines, had continued operating even with the quarantine.
Benguet is home to the country’s oldest mines and the shutdown has cost the industry up to P300 million in losses and unprogrammed expenses, according to the Mines and Geosciences Bureau (MGB).
Philex was the exemption but it had to deal with numerous issues during the enhanced community quarantine, Austin said.
The Padcal operation has 2,100 regular employees, 400 to 500 outsourced workers at the mine site, and 80 employees at the corporate office.
The company grappled with the fact that “a lockdown meant no work,” Austin said.
“But we are an export-oriented company and shutting down was a terrible option so we worked it out with the government so we could get an exemption. We acquired the exemption but with guidelines that we had to follow,” he said.
He said the mine camp was required to conduct constant disinfection, including vehicles entering and exiting the Padcal site, which straddles the towns of Tuba and Itogon.
Workers needed to be ferried from the community to the mine site but the shuttle vehicle could carry only half of its load capacity of 45 passengers.
Social distancing protocols affected every aspect of work.
UNDERGROUND Workers haul ore at an underground rock-breaking site of the Padcal operation of Philex Mining Corp. —PHOTOS BY EV ESPIRITU
Austin said the company consulted the community about setting up restrictions at three of its main access gates and made sure food flowed in from nearby Baguio City.
Underground operations required shifts—from 8 a.m. to 4 p.m., 4 p.m. to midnight, and 12 a.m. to 8 a.m.—but the crisis sometimes required the managers to be more flexible, he said.
Bringing workers to the tunnels had to be adjusted, because—much like the new rules for Philex shuttles—each mine elevator may no longer carry a full load.
It took the lifts several times to bring down workers, which affected man-hours, Austin said.
The workers’ lunches were also spoiled by the quarantine. Instead of huddling together like they normally did, workers had to be separated when they ate their meals, Austin said.
Employees, who were not required to work as prescribed by the quarantine rules, were paid vacation leave benefits, he said.
Supply chain slowdown
Philex also dealt with the breakup or slowdown of the supply chain during the lockdown because the needed cement and steel bars had to come from southern Luzon and Metro Manila where virus infection was high.
Philex improvised and the “operational maneuvering … did the trick for us so we could continue,” Austin said.
“The underlying factor [of our ability to cope with the quarantine] is really the cooperation of the entire community and the entire work force. We learned to appreciate the value of the mine site and that’s the best way to summarize how we survived the past months,” he said.
He added: “Our primary concern was where to store our concentrates should regulators prevent our truck drivers from traveling from Poro Point in La Union. We had a backup plan to use our old motor pool building.”
Padcal, which was started in the 1950s, was supposed to have ended its mine life at the start of 21st century, but the company found a way to extend its operation until 2022.
Philex isolated its Padcal mine in Benguet, allowing it to operate unhampered when all businesses were shuttered during the Luzon lockdown.
For many workers, the effort to keep the operation running during the lockdown meant it may have some more years left, Austin said.
“The revenue at the start of 2019 for the first and second quarters [had not been] good but profits picked up on the third and fourth quarters which we managed to sustain [by continuing work during the lockdown],” he said.
“You will always hear about the projected closure of the mine … If metal prices continue to rise like the level of gold right now, we could mine some of our low grade [ore levels],” he said, adding the projected mine life is based on the grade of the ore, “because that dictates what the revenues you will get.” The pandemic will not lead to retrenchments in 2021 because the Padcal manpower is computed against the life of the mine, Austin said.
He said Philex has deposited P59 million of the P100-million expenses required to undertake a mine closure plan that had been approved by MGB.
But the company has been exploring outlying areas of Padcal, so as not to waste the infrastructure already set up at the mine site.
“To put up a mill plant, we spent $200 million. If we discover new resources nearby we could use the plant rather than sell it for a much lower price,” Austin said. —WITH A REPORT FROM EV ESPIRITU
Philex community remains COVID-19 free
TUBA, Benguet– The Philex Mining Corporation disclosed that its host and neighboring communities remain to be free from the wrath of the Coronavirus Disease 2019 (COVID-19) because of the adherence of the populace to the stringent health and safety protocols being implemented to date during the community quarantine.
Philex president and chief executive officer Engr. Eulalio B. Austin, Jr. pointed out that the utmost cooperation of the residents in the different host and neighboring communities, coupled with the strict implementation of the established health protocols, played a key role in sustaining the COVID-19 free status of the villages within the mining community.
He claimed the prohibition of mass gatherings and the strict enforcement of the liquor ban also contributed in the ongoing efforts of the mining company to prevent the deadly virus from being transmitted to the people living in the host and neighboring communities that can have a serious negative impact in the employment and livelihoods of the people.
“We continue to be vigilant in the enforcement of our own stringent health and safety protocols because we do not want our operations to be unduly interrupted. We are grateful to the people living in our host and neighboring communities for their adherence to the implementation of our protocols that is why we are spared from the wrath of the deadly virus,” Engr. Austin stressed.
The Philex official explained that because of the liquor ban in the municipality, workers are compelled to report only for work in the mine site that resulted to minimized unnecessary absences among them paving the way for the company to exceed its projected production target for the first quarter this year and possibly for the second quarter following the stable high metal prices.
Earlier, the Cordillera office of the Mines and Geosciences Bureau (MGB-CAR) reported that Philex disburse more than P12.9 million from its realigned appropriations for Social Development Management Program (SDMP) projects in its aggressive anti COVID-19 operations in the different communities in Baguio and Benguet with most of the funds being used by the host and neighboring communities for relief operations, distribution of personal protective equipment (PPE), among other assistance for the said areas.
Austin claimed the mining company previously limited the visitations being done in the mining community, especially those coming from areas with high COVID-19 cases, as one of the precautionary measures to prevent incidents that would taint Philex’s gains achieved during the period of the community quarantine so as not to unduly interrupt its operations.
Based on the community quarantine rules and regulations, export-oriented businesses like large-scale mining operations have been allowed to continue operations during the enforcement of the community quarantine.
Philex is one of the country’s largest gold and copper producers which has a projected mine life until 2022 depending on the results of ongoing explorations within its tenement area for the possibility of extending its operations for the benefit of its host and neighboring communities.
High metal prices to extend Philex’s mine life
PHOTO CAPTION: SAFETY FIRST-Underground workers of Philex Mining Corporation comply with health protocols against Corona virus. The lockdown and strict implementation of health protocols shielded the mining community from COVID-19 until now. JoMan
TUBA, Benguet June 17 – The Philex Mining Corporation admitted that there is a big possibility that its projected mine life by 2022 might be extended for a reasonable time once the world metal prices will remain at a high level beyond the implementation of the community quarantine.
Philex president and chief executive officer Engr. Eulalio B. Austin, Jr. said that the high meal prices right at the start of the implementation of the community quarantine last March 17, 2020, played a key role in allowing the company to gain amidst the wrath of the global pandemic that caused the forced closure of businesses, except export-oriented operations like mining.
At present, the prevailing price of gold in the world market is $1,700 per ounce while copper started to also increase to $2.16 to $2.50 per pound.
We might be considering a possible extension of Philex’s mine life if the high metal prices will continue to prevail as China has started to open its market. However, we will still keep our fingers crossed until the end of this year,” Engr. Austin stressed.
The Philex official disclosed that based on the company’s earlier projections, copper should remain at over $2.50 per pound while gold prices should stay or even exceed $1,700 per ounce to ensure profitability aside from the company being able to further improve its projected production of more than 23,000 tons of ore per day.
Earlier, Philex was projected to end mine life by 2022 unless it will be able to discover a new ore body within its existing tenement area that will contribute in ongoing efforts to extend its mine life despite having submitted to the Mines and Geosciences Bureau (MGB) its mine decommissioning and rehabilitation plan.
According to him, mining has bright prospects in the coming months because of the prevailing high metal prices due to the opening up of numerous economies, especially by developed countries, that is why Philex remains to be aggressive in further improving its production target to offset its previous losses during the previous years when metal prices were low and production was in a similar situation.
Austin personally supervised the overall operations of Philex during the implementation of the community quarantine as he was in the mine site when the lockdown was enforced that served as inspiration and motivation to both the surface and underground workers to exert extra effort in ensuring that the company will be able to overshoots its production target at the start of the year.
The Philex president commended the company’s work force for their utmost dedication in making sure that the company will be able to continue operating during the community quarantine that resulted to the significantly improved performance that allowed the same to recover from its huge backlog in production last year to over production during the first quarter.
Austin rallied mine workers to sustain the momentum that the company was able to achieve this year so that prospects in possibly extending mine life will be realized with the prevailing high metal prices in the world market as economies of countries start to recover from the slump created by the global pandemic. By Hent
Philex grateful to supportive local governments
TUBA, Benguet– The Philex Mining Corporation expressed its gratitude to local governments that supported the unhampered mining operations during the implementation of the extended Luzonwide enhanced community quarantine (ECQ), through the period of general community quarantine (GCQ), and eventually modified GCQ (MGCQ).
Philex president and chief executive officer Eng. Eulalio B. Austin, Jr. said the trade and industry department issued to the company a certification stating, among others, that mining is an export-oriented business, thus, it was covered by the exemption given to similarly situated companies that allowed the same to continue their uninterrupted operations during the community quarantine period.
“We are grateful to the local officials and stakeholders of Itogon and Tuba for allowing the unhampered mining operations that made Philex meet is projected target production even during the nearly three months of community quarantine,” Engr. Austin stressed.
The Philex official disclosed that for the first quarter, the company exceeded its production target of over 23,000 tons of ore per day, while for the second quarter, the largest gold and copper producer is likely to exceed its production target which contributed in regularizing the ongoing operations.
Austin claimed it was not difficult for them to deal with the host and neighboring communities on their uninterrupted operations during the community quarantine that allowed its over 1,500 work force to be guaranteed of their employment and decent income amidst the serious negative effect of the global pandemic to the jobs and livelihood o0f people.
According to him, Philex values its harmonious working relationship with its host and neighboring communities thus the company sees to it that situations, like the community quarantine, are properly coordinated with the local officials for their information and guidance.
Engr. Austin explained the company understands the predicament of local officials on the need to strictly implement quarantine protocols to prevent the spread of the dreaded Coronavirus Disease 2019 (COVID-19) in their areas of jurisdiction, but, they were also realistic in balancing the directive given by the national inter-agency task force on the management of emerging and re-emerging infectious diseases that exempted mining from the coverage of the businesses that are prohibited to operate during the quarantine primarily because the same is export-oriented and the need for continued operations.
He emphasized what is important at this point is Philex was able to solve its huge production backlog at the end of last year and even exceed its production target for the first quarter which means that mining is still in the right track amidst the heavy impact of the community quarantine to most of the businesses in the different parts of the country.
Itogon and Tuba towns play host to the operation of Philex Mining Corporation, one of the country’s largest gold and copper producer which is projected to end its mine life by 2022.