Lafayette Phils set to open base metals plant in Dec

Australian mining company Lafayette Mining Ltd.’s local unit Lafayette Philippines is confident it will be able to commission its base metals plant this December that will produce copper and zinc despite its troubles with the shutdown of its gold plant in the Rapu-Rapu polymetallic project site in Albay.

"We are bent on commissioning the base metals plant this December, but we will only do so if the government is confident of the measures that we’ve taken to ensure there won’t be a repeat of the disappointing incident with our gold plant," said Lafayette Philippine country manager Rod Watt.

He added that the base metals plant that is projected to process 10,000 metric tons (MT) of copper concentrates and 14,000 MT of zinc concentrates yearly, is being checked thoroughly to ensure its preparedness. On the other hand the gold plant is projected to produce 50,000 ounces of gold and 600,000 ounces of silver annually during the entire six-year mine life of Rapu-Rapu.

Watt is still optimistic that the mining firm will be able to resume normal operations shortly and that the incident will not affect its existing off-take agreements with LG International of Korea.

Under an off-take agreement, LG which partially financed the mine project, will have an equity and percentage of the project output when it is in full steam.

The gold plant which was due for a decommissioning to pave the way for the use of the shared crusher by the base metals plant that will produce copper and zinc, was ordered closed by the Mines and Geosciences Bureau ahead of the schedule last end October after about eight cubic meters of mine tailings containing cyanide spilled from the tailings dam into the creeks surrounding the Rapu-Rapu gold plant last Oct. 11. The incident was repeated last Oct. 31 due to heavy rains.

As part of more stringent safety measures being undertaken by Lafayette, Watt said the mining company has raised by four meters its tailings dam wall to ensure that mine tailings are contained even in cases of heavy rains. At the same time, the remediation of affected residents, especially the fisherfolks, dependent on the fishing area for their livelihood is also being prepared and a draft rehabilitation plan was already submitted to the Department of Environment and Natural Resources (DENR).

This week, the DENR is sending to the mine site an independent audit team to survey the area and subsequently, make its recommendations.

The team is composed of Engr. Mars Bolaños, a consultant of mining firm Benguet Corp.; Dr. Carlo Primo David of the University of the Philippines National Institute for Geological Sciences (UP-NIGS); Professional Regulation Commission’s Board of Examiners for Metallurgy chair Jake Foronda; and Engr. Jojo Bacani, chair of the Committee of Environment of the Chamber of Mines of the Philippines.

"We are cooperating fully with the government because the accidental mine spill is disappointing to us, it shouldn’t have happened," admitted Watt.

Lafayette is under heavy pressure to take corrective steps because the entire mining industry is looking at development at the Rapu-Rapu island.

The Chamber of Mines of the Philippines which has been active in enticing foreign investors to put their money into the resurgent local mining industry will be issuing its stand on the incident this week.

The gold plant started operating earlier this year and the production phase of the base metals plant was scheduled for the fourth quarter this year.

The Rapu-Rapu polymettalic project is the first foreign-funded mine to be commissioned in the Philippines in 30 years and the only one operating under the Philippine Mining Act of 1995.

Currently, only about 407 hectares of the approved mining rights of 4,663 hectares are being developed by the mining project.

The development of the Rapu-Rapu mining area is estimated to cost P1.4 billion while the projected taxes for the mine’s planned six-year operation would be about P1.458 billion with the municipal and barangay levels getting P380 million, the provincial government about P78 million while the National Government will rake in P1 billion.

The project was granted an environmental compliance certificate (ECC) last July 2001 with 29 major and 17 sub environmental and social conditionalities including the imposition of an Environmental Protection and Enhancement Program (EPEP) and a Social Development and Management Plan (SDMP).

Rod Watt said earlier this year, the company is also undertaking additional exploration activities at the Rapu Rapu site with preliminary results so far indicating the life of mine can be extended.

The project is financed through a syndicate of banks comprising NM Rothschild & Sons (Australia) Ltd., ANZ Investment Bank, ABN Amro Bank NV (Australian Branch), Korea First Bank and Investec Bank (Mauritius) Ltd. Lafayette made its first drawdown of funds under this facility in September 2004.

Being the first foreign-funded mining project in 30 years, the Rapu-Rapu projects boosts the government’s efforts to sustain the revived interest in the local mining industry.

The Philippine mining sector is getting its second wind after more than a decade of being in the doldrums.