MMC unable to profit from high metal prices

Gold and copper prices are making a rebound in the international market, but Manila Mining Corp. (MMC) can’t seem to take advantage of the situation after closing down a major minesite.

One of the country’s foremost copper and gold producers, MMC suffered a net loss of P128.45 million in the first half as against a net income of P6.88 million in the same period last year due to the limited mining operations.

Ore deliveries reached only 496,877 tons, compared with 1.196 million tons last year mainly due to the closure of the Heine Pit. As a result, copper concentrate production dropped to 2,738 metric tons from 5,812 MT a year ago while gold extraction reached 14,769 oz., down from 44,019 oz. in 2000.

In July, MMC was forced to suspend its operations and retrench about two-thirds of its employees at its minesite in Placer, Surigao del Norte due to accidental waste spillage problems. The company said the suspension of work at the minesite came about when more than two million metric tons of waste slipped over the ore zone at the height of Typhoon Toyang in Nov. 2000.

Likewise, the temporary authority to construct and operate tailings pond number 7 issued by the Department of Environment and Natural Resources last January had expired and was not renewed. The Heine Pit, from which gold bullion was produced, accounts for about half of total revenues from the mine’s operations.

MMC nonetheless continues to mine the remaining pits and produce gold-copper concentrate, earning just enough to cover operating costs and prevent the mine from shutting down and laying off more than 1,300 employees and contractors.

During the shutdown, MMC will be maintaining a reduced work force and temporarily lay off about two-thirds of its employees. The work during the shutdown will focus on extensive drilling, which will convert the large inventory of resource to ore reserves and prepare the mine for better operations. – Conrado Diaz Jr.