Atienza orders Lafayette to allot funds for Rapu Rapu operation

Environment and Natural Resources Secretary Jose L. Atienza ordered yesterday Lafayette Philippines, Inc., proponent of the  Rapu-Rapu polymetallic project in Albay,  to set aside at least P137 million to ensure the implementation of all environmental, social development and rehabilitation commitments of the company under its contract with the government.

Atienza said this is to ensure the continued operation of the project and not allow it to become an abandoned mine.

The Rapu Rapu project has been plagued by a series of problems and delays stemming from a  2005 mine tailings spill that forced a 15-month halt to its operations. It was finally granted permission by the DENR to resume operations last year.

The mine’s closure has led to significant losses for Lafayette, forcing the Australian firm to seek additional capital from its partner the Kores Group of South Korea.

The DENR wants Lafayette to continue operating and rehabilitate the mine instead of opting to sell and possibly abandon the mine.

The DENR is also mediating a dispute between Lafayette and its contractor Leighton.

According to Atienza, “I am aware that the proponents of the Rapu-Rapu mine have filed a petition for rehabilitation with the court, but let me emphasize that this does not excuse them from any financial, environmental, social, legal, and fiscal obligations under their mineral production sharing agreement (MPSA) and mineral processing permit (MPP).”

Atienza explained that “the Mining Act of 1995 and its implementing rules and regulations have provided such environmental and social safeguards that hold mining companies responsible even in most challenging cases like what Rapu-Rapu faces now.  Our laws were designed to ensure that no mine leaves unwanted legacy to the government, the community and the environment, and this I will make sure under my watch.”

Rapu-Rapu Minerals Inc. (RRMI), Rapu-Rapu Processing Inc. (RRPI) and Lafayette (Philippines) Inc., proponents of the polymetallic project and mineral processing plant, filed a petition for corporate rehabilitation before the Pasig Regional Trial Court last Feb. 6 in a bid to conserve assets in the face of outstanding debts.

The companies said the project incurred debts after it ceased operations in November 2005, when cyanide spills shut down the copper and zinc mine for more than a year.

The Rapu Rapu mine has estimated reserves of 5.9 million metric tons. Lafayette has supposedly invested $39 million on the project.