OceanaGold plans to battle Philippines move to suspend mine

Image: OceanaGold

Australia’s OceanaGold intends to take legal action if a proposed move in the Philippines to suspend or close a series of mines in the country, including its Didipio operation, for environmental reasons goes ahead.

Philippines’ environment and natural resources secretary Regina Lopez yesterday ordered the suspension of five mines, such as the Didipio gold mine, and the closure of 23 mines, including several nickel operations.

Lopez, who has been a vocal opponent of the impact mining has on the Philippines environment, explained the move was about putting the public’s welfare ahead of mining revenues.

“My issue here is not about mining, my issue here is social justice,” Lopez said.

In an ASX announcement, OceanaGold said it had not yet received any formal suspension order from the Philippines department of environment and natural resources (DENR), and that mining and processing activities were continuing at the Didipio mine.

The company added that there was no legal basis for the proposed suspension, as the mine did not violate any laws, rules or regulations, and was not posing any threat to public, security, health, safety or otherwise.

OceanaGold chief executive officer Mick Wilkes said the decision was unjustified nor had any basis in law.

“We have not received any show cause notice from the DENR nor have we received a suspension order. Should we ultimately receive a suspension order as suggested today (February 2) we have very strong legal grounds to have it overturned,” Wilkes said.

“Our Didipio mine is a partnership with the Government of the Philippines through the Office of the President and has a strong social license to operate. We are a large employer of Filipino nationals, and our operation delivers significant benefits to the local communities.

“As proof of this, Didipio was announced as the joint winner of the presidential mineral industry environmental award in recognition of our exemplary performance in safe and environmentally responsible mining.”

OceanaGold produced 147,150 ounces of gold at Didipio in 2016, it announced on Monday.

While the plan to close or suspend the mines is bad news for companies operating in the Philippines, like OceanaGold, it could be the opposite for nickel miners producing in Australia.

In 2015, the Philippines was the world’s leading nickel producer with 530,000 tonnes. By shutting down its nickel mines it could reduce the country’s output by as much as half.

The share price of Australian nickel miner Western Areas increased by 10.9 per cent on the ASX yesterday following announcement of the proposed move. The three-month nickel price on the London Metal Exchange (LME) also jumped to a three-week high of $US10,500 a tonne.