A local mining corporation has filed a million-peso damage suit against the Department of Energy and two of its officials, including an undersecretary, for alleged non-renewal of its contract and awarding part of its mining site to another mining company.
DOE Undersecretary Guillermo Balce, director Ranilo Abando of the Energy Resource Development Bureau, MG Mining and Energy Corporation and three other small mining permitees were named respondents of the injunction case and damages that Luvimin Cebu Mining Corporation has filed before the Regional Trial Court.
Luvimin, through counsel Lelany Reso-or, claimed to be one of the pioneers in the mining industry in Cebu having started its operation in the 1940s.
Luvimin claimed that in 1978, it is among the original recipients of a Coal Operating Contract. Pursuant to the said contract, Luvimin was authorized to extract coal over 13 blocks for a period of 20 years, renewable for a series of three years but not exceeding 12 years.
The complainant claimed that based on the said contract they are still allowed to renew until 2010. However, Luvimin claimed that their contract has not been renewed since 2004 for not having paid the government’s accumulated shares amounting to P18 million.
Luvimin said that their not having able to pay the government shares was not done in bad faith but due to the circumstances beyond their control. According to Luvimin, the financial crisis and the influx of imported and much cheaper coal products have caused them to incur heavy losses.
Luvimin said that this prompted them to ask DOE officials to defer their payment of shares. Luvimin added they also offered to pay the principal amount representing government shares amounting to P7 million and asked that the interest, penalties and surcharges be waived.
However, Balce and Abando allegedly denied their requests and awarded two of the 13 blocks covered by their original COC to MG Mining and Energy Corporation instead. Aside from MG Mining and Energy Corporation there were also three small-scale mining permitees granted authority by DOE officials to operate within the mining site of the complainant.
Luvimin said that the awarding of the two blocks of their mining site to another mining firm is unjust because they have invested millions of pesos to develop the site. In fact, Luvimin said, one of the major stockholders of the mining firm Antonio Garcia-Escaño invested a total amount of P70 million for the mining operation.
Luvimin also cried of giving undue favor to Semirara Coal Corporation, which was allegedly granted renewal of its permit even if it has also failed to settle its obligation to the government.
In fact, Luvimin claimed that Semirara owed the government several times greater than their obligation. Based on Luvimin’s allegations Semirara owed the government P305 million but still was granted renewal of their permit.
Because of the alleged unfair and arbitrary acts of the respondents, they were forced to engage the services of a lawyer for which the mining firm asked to be compensated. The mining firm likewise claims for exemplary damages for a total amount of P1 million. — Fred P. Languido/MEEV