No legal basis to cancel mining contracts – Philex

By Louise Maureen Simeon (The Philippine Star) | Updated March 1, 2017 - 12:00am

http://www.philstar.com/business/2017/03/01/1676669/no-legal-basis-cancel-mining-contracts-philex

MANILA, Philippines -  Pangilinan-led Philex Mining Corp. maintained that the Department of Environment and Natural Resources acted in bad faith when the agency ordered the cancellation of its subsidiary’s mining contracts.

Last week, Environment Secretary Gina Lopez announced the rescission of 75 Mineral Production Sharing Agreements, including those of subsidiaries Silangan Mindanao Mining Co. Inc. and Philex Gold Philippines Inc. on the ground these MPSAs are located in watershed areas.

Philex argued that its wholly-owned subsidiaries were subjected to the rigorous process prescribed by applicable law and regulations which included obtaining the requisite regulatory clearances that the areas covered by the MPSAs are open to mining and are valid and legal.

The mining company likewise said it was “reserving its civil and criminal rights and remedies against all responsible parties, including rights for enforcement and compensation under applicable investment treaties.”

“The DENR acted with apparent bad faith because all of the relevant documents and the facts and the law confirming the validity and legality of the MPSAs are on file with and are known to the DENR and the DENR acted in complete disregard of the MPSAs’ mandatory dispute resolution mechanisms which preclude precipitate unilateral action,” the company said.

The company noted that under the law, only watersheds that are proclaimed, designated or set aside as watershed forest reserves or as critical watersheds are closed to mining operations.

 “None of the MPSAs’ contract areas are situated inside proclaimed watersheds forest reserves and critical watersheds where mining is prohibited,” Philex said.

Philex emphasized that the cancellation of the MPSAs had no legal and factual basis.

“This resulted in not just actual losses but in significant damage to the reputation of both companies and the erosion of investor confidence without affording them their due process rights and any opportunity to be heard,” Philex said.

“The DENR’s precipitate action disregarded the mandatory dispute resolution provisions that the DENR itself had written into the MPSAs, which entitle the companies to a one-year cure period within which to amicably settle their disputes with the DENR, failing which the parties must submit and resolve the disputes in good faith through mandatory arbitration,” the mining firm added.

Philex earlier expressed concern over the cancellation of Silangan’s copper and gold project in Surigao del Norte, which it expected to be its next big prospective mine after the Padcal copper-gold mine in Benguet whose mine life is seen to end by December 2022.

The company has invested over P13 billion for the initial exploration and related works on the site as of the end of 2014, on top of the estimated commercial-operations project cost of about $1.2 billion.

By 2020, the Silangan project is seen to generate P170 billion in revenues, P31 billion in national and local taxes and at least 8,000 employment opportunities for the first 10 years of operation.

Silangan Mining is also expected to spend P6 billion over the same period for social development and infrastructure programs that will benefit Mindanao.