BENGUET Corp., the country’s oldest mining firm, said on Friday it incurred a net loss of P18.6 million in the first quarter of 2017, reversing the P55 million net income booked in the same period last year, due to a decline in nickel revenues.
In a financial report, Benguet Corp. said the decline in nickel revenues was mainly due to the Department of Environment and Natural Resources’ (DENR) suspension order on its wholly owned subsidiary Benguetcorp Nickel Mines Inc. (BNMI).
The DENR suspended BNMI—along with another mining firm, Zambales Diversified Metals Corp. (ZDMC)—due to “various alleged environmental crimes, violations of the mining and environmental laws, and complaints of various groups against the alleged environmental impacts” of their mining operations.
On February 13, BNMI received a cancellation order from the DENR, cancelling its Mineral Production Sharing Agreement subject to compliance with the provisions of the law on mine rehabilitation of disturbed areas as a result of the mine audit conducted by the DENR in August 2016.
As a result, Benguet Corp. said consolidated revenues dropped 58 percent to P266 million from last year’s P636.2 million.
Cost and operating expenses fell by 50 percent to P270.2 million this quarter due to a decrease in cost of mine products sold and selling general expenses.
For this quarter, BNMI shipped only one boatload nickel ore weighing 53,500 tons with an average price of $25 per ton, compared to eight boatloads with an aggregate volume of 405,185 tons at an average price of $24.82 per ton for the same period last year, causing revenues to decrease by 91 percent or P784.4 million.
BNMI incurred a P16.7 million net loss against the P310.1 million net income recorded for the first quarter of 2016.
Meanwhile, its Acupan Gold Project (AGP) also registered a net loss of P2.57 million in first quarter, narrower than the P5.1 million net loss recorded last year, as higher operating costs offset increased gold output this quarter.
Its Irisan Lime Project’s (ILP) net profit declined by 11 percent to P2.93 million from P3.29 million a year ago due to higher costs as a result of the increase in oil prices, diesel being the major input in Irisan’s production process.
Benguet Corp.’s wholly owned subsidiary Benguet Management Corp. (BMC) and its subsidiaries, reported a consolidated net loss of P3.9 million from a net income of P19.4 million last year, due to the suspension of BNMI.