The country’s biggest miner on Wednesday said that it will cooperate with the Mines and Geosciences Bureau (MGB) over penalty the government imposed from a tailings spill at the company’s Padcal mine in Benguet province.

In a statement, Michael Toledo, Philex senior vice president for Corporate Affairs, said that they would work closely with the MGB for the payment of the P1.034-billion penalty, adding that they will immediately submit a work plan as the basis for which to use the fund.

“We welcome its decision that the amount to be paid would be used for remediation and rehabilitation of the affected areas,” Toledo said.

In a two-page letter to Philex President and Chief Operating Officer Eulalio Austin Jr., MGB Director Leo Jasareno reiterated the bureau’s earlier decision asking the company to pay government P1.034 billion over the August 1 accident.

Jasareno said that the money shall be made payable to the MGB, which will remit it toward the Mine Wastes and Tailings Reserve Fund. The fund will then be used to compensate for the damages caused by the accident, and for the rehabilitation of the affected areas as may be determined by MGB, pursuant to Section 189 and 190 of Department of Environment and Natural Resources Administrative Order 2010-21 and DENR Memorandum Order 99-32.

“In this regard, Philex Mining Corp. is also required to submit to this Office the pertinent Work Plan with Budget Estimate upon payment of the above amount, as basis for the withdrawal from the fund of the amount to be expended accordingly,” he said.

Pursuant to the law, Jasareno said that the fine would be remitted to the National Treasury and would be used for the payment of claims for compensation of affected persons and rehabilitation of “affected areas as determined by the MGB.”

“This will be the basis for the withdrawal from the fund for such expenditures,” Jasareno said, noting
that these “affected areas” can be farmlands cultivated by small farmers.

The MGB chief, meanwhile, said that Philex is now pushing for the inclusion of the polluted Agno and Balog rivers in the “affected areas.”

Upon payment of the fine to the MGB and the submission of the work plan and budget estimate, the MGB will assess the plan to determine if the expenses for the rehabilitation of the Agno and Balog River can be covered by the fine.

“In their motion for reconsideration, they said they are willing to pay the penalty provided that it would be used to rehabilitate affected areas. In their interpretation as per their motion for reconsideration, these include the polluted areas—the Balog and Agro Rivers . . . So the MGB will now have to determine which areas will be rehabilitated using funds from the penalty,” he said.

Jasareno said that the payment of claims by affected families in the area would be prioritized. Philex voluntarily suspended operations at its Padcal Mine in Benguet on August 1, when there was an accidental discharge of non-toxic sediment from its Tailings Pond 3 in Itogon, following heavy rains brought about by two successive typhoons.

Pangilinan’s views
For his part, Philex Chairman Manuel Pangilinan, said that the company is willing to pay the hefty fine “provided that the funds are in fact use for the rehabilitation program, which we have submitted to the government last year.”

“I think this is with respect to the aspect of negligence but as far as I am told, the penalty we’ll pay could be used to fund the rehabilitation cost of the Baloc Creek and the river, that’s my understanding,” he said.

On Tuesday, the MGB denied the motion for reconsideration by Philex to use the P1.034 billion penalty imposed by the government for the rehabilitation of the areas affected by the tailings spill at its Padcal mine in Benguet.

A previous disclosure to the Philippine Stock Exchange said that Philex was no longer contesting the payment of the amount imposed by the government.

Philex, however, said that the fine should be used to fund the rehabilitation of waterways affected by the tailings spill in its Padcal mine.

”Philex Mining Corp. is not unwilling to pay the P1.034 billion on account of the discharge of sediments from Philex’s Tailings Pond 3, considering that under your applicable rules and policies, the same shall be disbursed and utilized as compensation for damages of affected parties and for the rehabilitation and clean up of, monitoring and decommissioning strategies for, the areas affected by the spill to be undertaken by Philex pursuant to a rehabilitation and clean up plan that may be approved by the Mines and Geosciences Bureau,” Philex said in that particular disclosure.

Philex had earlier contested the imposition of the fine, saying that the spill incident was caused by force majeur as characterized by the incessant rains leading to August 1, when the leakage from the mine’s Tailings Pond 3 was first seen.

With report from Madelaine B. Miraflor