Pacific Nickel exports $1B worth of non-renewable minerals

MANILA, Philippines - Pacific Nickel Philippines Inc. (PNPI) has exported about $1 billion worth of non-renewable minerals to China despite the fact that the company has not paid its obligations to the Department of Finance (DOF), the department claimed as it cited documents from the Department of Environment and Natural Resources (DENR).

The DOF said that obligations stemmed from an earlier agreement signed in 1996 between the mining company and the Asset Privatization Trust (now Privatization Management Office).

Under the Amended and Restated Definitive Agreement (ARDA) signed in 1996, PNPI has only paid the government $1.25 million or less than one percent of the total $263.8 million it owes through an installment basis.

However, in a statement issued by Pacific Nickel last week, the company claims to have already paid $200 million owed to the government, pertaining to the original book value of the old ammonia leach nickel refinery back in the 1970’s which the company itself has essentially abandoned.

By the company’s own admission the old refinery is obsolete and needs to be replaced by a more modern high pressure acid leach (HPAL) refinery. The original refinery was supposed to be used by Marinduque Mining (Nonoc Mining’s predecessor) in order to refine the low-grade nickel ore from the mining site in Surigao.

PNPI also reportedly paid P277.6 million in form of taxes, royalties and fees to the government from 2005-2008, which is completely a separate value from the state’s interest in Nonoc Mining Co. under the ARDA. But this is a natural corporate obligation of companies operating in the Philippines, particularly companies extracting depletable resources.

PNPI’s assertion that it has already paid its balance to the government is a fabrication. The DOF is duty-bound to collect what is specified in the ARDA.