• Oriental Peninsula: DENR suspension of mine unit ‘premature’

    0

    LISTED mining operator Oriental Peninsula Resources Group Inc. said the Department of Environment and Natural Resources (DENR) hastily suspended its subsidiary’s mine operations “without prior audit” which can have a “negative effect” on the company’s revenue streams moving forward.

    In a letter dated August 19 to the Securities and Exchange Commission (SEC), Oriental Peninsula alleged that the DENR’s suspension order on its unit, Citinickel Mines and Development Corp. (CMDC), was premature and improperly issued.

    “Please be informed that the suspension order dated July 22, 2016 from the Mines and Geosciences Bureau (MGB) of the DENR was prematurely and improperly issued as there was no prior audit conducted on the operations of Citinickel in violation of DENR Memorandum Circular 2016-01,” it said in the letter.

    .“Without prior audit therefore and any legal basis for a finding of any such violation of environmental and mining laws, the immediate imposition of the penalty of suspension was improper,” it added.

    The letter was in response to the SEC’s request for the company to reply within five days from August 10, detailing how the CMDC suspension would affect Oriental Peninsula’s financial flows and performance.

    Prior to the DENR suspension, Oriental Peninsula said CMDC had just received an ISO certification — ISO 14001:2004+ Cor. 1:2009 — from TUV Rheinland Philippines Inc. for nickel mining operations and post-mining activities that looked into and monitored the operations of CMDC, which proves that the mining firm was “compliant” with mining laws.

    “We are proud to say that at that time of validation and standard audit, no issues or irregularities were found or highlighted by the certifying body. Hence, we are very shocked and surprised that a suspension order was all of a sudden issued against us,” Oriental Peninsula said.

    The company also pointed out that prior to the DENR audit, CMDC had slowed down its operations and held its shipments because the price of nickel ore in the world market had steeply declined.

    “Therefore, there is no reason to suspend us at such time when we are not in active operations and after a
    favorable review and validation from TUV Rheinland,” it said.

    Early this month, the DENR Mine Audit Team audited CMDC again but raised no issues, irregularities, or violations of mining laws against its unit, Oriental Peninsula said.

    It said the suspension would stop CMDC from generating any revenue moving forward, “which ultimately will have a negative effect on the financial condition of the company on consolidation.”

    “Hence, the company and CMDC are exerting all administrative and legal efforts to have the suspension order lifted. The company is optimistic that the MGB shall reasonably appreciate the validity of the contentions of CMDC and that the suspension order shall be lifted at the soonest possible time,” Oriental Peninsula said.

    It added it will exhaust all means and actions to prove to DENR its claims and may even pursue legal action, if necessary, for the good of Oriental Peninsula and CMDC’s shareholders.

    Incorporated in 2007, Oriental Peninsula is the parent company of mining firm CMDC, which is primarily engaged in exploring, operating and exploiting mineral lands for chromite, copper, manganese, magnesite, silver, gold, and other mineral products.

    The company registered a net loss of P4.45 million in the January to June period, a reversal of the P321.92 million net income recorded a year ago due to low prices of nickel ore. Its revenues also declined 82 percent to P203.77 million from P1.218 billion in the year-earlier period.

    Share.
    loading...
    Loading...

    Please follow our commenting guidelines.

    Comments are closed.