Benguet seeks better revenue sharing formula with gov't

MANILA, Philippines - The country’s oldest mining firm, Benguet Corp. wants the government to come up with a formula for a fair sharing of mining revenues, saying the proposed 50-50 sharing of revenues between the state and the investors is unjust considering the large capital and time invested into a project.

“I think that all responsible mining firms understand that there is a need to help the government in terms of revenues. Such revenue measures must take into consideration the fundamentals of the industry,” said Benguet Corp. chief finance officer Renato Claravall.

“One is the very high capex (capital expenditure), the other is the long gestation period. There must be a formula that puts all of these into account. (Because) You’re shouldering all expenses and when there is already revenue, you give it to the government. What about your cost?” he added

The government, which is reviewing the country’s mining policy, wants a bigger share of revenues

The government also wants future mining projects to undergo a competitive bidding.

Foreign and local business groups have criticized the review, saying it sends a wrong signal to investors.

Claravall, meanwhile, reported Benguet Corp. (BC) hit its profit guidance of P1.3 billion last year after completing its quasi-reorganization and equity

For this year, the firm set a lower profit guidance of P1 billion amid economic slowdown in China.

Claravall said that this year, gold production is expected to rise 0.2 percent to 7,000 ounces, while nickel yield is likely to reach 1.2 million metric tons.

By 2013, its gold yield is expected to surge to 18,000 ounces because of the expected increase in the capacity of its Acupan mine to produce 10,000 ounces. Its Balatoc tailings project is also expected to have an annual capacity of 17,000 ounces.