Mining out of DENR; now under President's office

By Michael Lim Ubac

Inquirer
Last updated 03:14am (Mla time) 07/27/2007

http://newsinfo.inquirer.net/inquirerheadlines/nation/view_article.php?article_id=78988

MANILA, Philippines -- Add the mining industry to President Gloria Macapagal-Arroyo's hands-on concerns.

Ms Arroyo has ordered supervision of the mining industry transferred from the Department of Environment and Natural Resources to the Office of the President, in a move, she said, "to closely monitor and oversee the efficient and effective implementation of the country's utilization and development of its mineral resources."

Her directive was contained in Executive Order No. 636 dated July 18, which was made public Thursday.

As with other new EOs, Ms Arroyo said, "all issuances, rules and regulations or parts thereof which are inconsistent with this EO are hereby revoked, amended, or modified accordingly."

The President's decision to take a direct hand in the supervision of Philippine Mining Development Corp. (PMDC) is seen as crucial in the development of the industry.

The Philippines ranks fifth among the countries rich in mineral resources.

Mining activities, already on the uptrend, are expected to further increase next year with more foreign investments coming in.

This year alone, some of the world's biggest mining players have invested a total of $500 million in mining in the Philippines.

These firms and their investments include: Atlas Consolidated Mining and Development Corp., $100 million, Oceana Gold Ltd. of New Zealand and Climax Arino Mining Co. of Australia, $100 million, and Coral Bay Nickel Corp., $100 million (to expand its Rio Tuba operations in Palawan).

Responsible mining stressed

The PMDC is a government-owned and -controlled corporation with the primary task of "exploring, developing, mining, smelting and producing, transporting, storing, distributing, exchanging, selling, disposing, importing, exporting, trading, and promoting gold, silver, copper, iron and all kinds of mineral deposits and substances."

The Arroyo administration has stressed that environmental laws would not be compromised in the development of the country's mineral resources, and that responsible mining was key to sustainable economic growth.

The local mining industry suffered a slump in the 1970s when metal prices in the world market dived.

But with the new surge in the price of metals, the Philippine mining industry is well-positioned to cash in on the price hikes, Malacañang said.

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Highlights of Lafayette Financial Updates:

On a mark-to-market basis, this total hedge position was out of the money in the amount of US$130.875 million as at 30 June 2007.

At 30 June 2007, the Lafayette group had outstanding senior and subordinated debt plus unsecured convertible notes totaling A$150.624 million. The Lafayette group also had undrawn lines of credit totaling A$26.199 million at the end of the quarter.

Tranche "C" Senior Debt

During the June quarter, US$11.460 million was drawn under Tranche "C" of the senior debt facility for the purpose of cash settling base metals forward sales contracts that matured on 29 March 2007 and were settled on 2 April 2007. Since the end of the quarter, a further US$15.525 million has been drawn under the senior debt Tranche "C" facility for application in the settlement of base metals hedges that matured on 29 June 2007 and were settled on 2 July 2007.

Production of metal at Lafayette's 74% owned Rapu Rapu mine increased by 31%during the quarter with 1,721 equivalent tonnes of copper being produced including 689 tonnes of copper, 1,775 tonnes of zinc, 1,442 ounces of gold and 31,045 ounces of silver.

Metal contained in 2,802 dry metric tonnes (DMT) of copper concentrate and 4,114 DMT of zinc concentrate, representing increases of 69% and 39% respectively, compared to production last quarter.

Two bulk shipments of concentrate with a total provisional value of US$8,759,839 were dispatched to customers during the quarter. Funds totalling US$8,901,303 were received under the terms of a stockpile financing facility provided by off-taker, LG International.

Four drill holes of a seven drill-hole exploration program have been completed with all four encountering mineralisation (including17 metres grading 1.0% Cu, 1.4% Zn and 2.6 g/t Au) increasing potential for a westward strike extension of the mineralisation currently being mined in the Ungay Pit.

Base and precious metals price hedge contracts maturing on 29 June 2007 were cash settled on 3 July 2007, and rescheduled respectively.

Share Purchase Plan successfully completed raising the sum of $4,727,963 for working capital purposes.