Aussie mine firm halts N. Vizcaya operations
BAYOMBONG, Nueva Vizcaya–Australian mining firm OceanaGold Philippines, Inc. on Tuesday announced it was stopping work at its US$117-million gold-copper project in upland Kasibu town, amid a series of controversies that has hounded its operations in the past six months.
A statement, Darren Clinck, vice president for corporate and investor relations, said OceanaGold was suspending a number of construction contracts as it tries to cut down on company expenses while looking for additional funding.
“As a result, the project completion date is expected to extend beyond mid-year 2009,” he said.
A statement on its website also quoted Steve Orr, OceanaGold chief executive officer, as saying that the company needs about US$185 million in additional cash, and is considering a number of options to meet this need, including acquiring loans and entering into mergers with other companies.
“There has been significant interest in these options from various financial institutions and other gold companies,” Orr said.
OceanaGold’s announcement came in the wake of a number of controversies that had caused delay in the firm’s operations, the latest of which was the injunction order issued last week by the Regional Trial Court here on the ongoing demolition of houses within its project site.
Since December, it has been clearing the 425-hectare land in Didipio for its mineral production site, in an attempt to meet its earlier target to start gold and copper production by February 2009.
Its activities have also been put under investigation by the committee on cultural communities in the House of Representatives, following complaints of alleged violations it has committed against villagers in the area.
Earth-moving work have likewise been hampered by a cease-and-desist order issued by Gov. Luisa Cuaresma for the company’s supposed failure to pay the province over P28 million in quarry taxes and business licenses.
OceanaGold, however, clarified that it will continue to maintain around 200 employees presently assigned in “other project-related activities, community relations, health and safety, and environmental programs”.
Ramoncito Gozar, OceanaGold vice president for communications and external affairs, said the temporary stoppage does not mean the company was about to give up on the project, since it has already spent about US$45 million since pre-development work began.
“While the company currently has approximately US$95 million in its treasury, we need to put in place supplemental financing for the project,” he said.
News on OceanaGold’s two-month stoppage of operations drew varying reactions here from officials and residents.
Vice Gov. Jose Gambito said it was “prudent” for the company to suspend its activities in order to “cool down escalating tension”, referring to the ongoing dispute with the provincial government.
“(The decision of suspension) must have been a reaction of stockholders of the company over unsettled issues,” he said.
Village officials of Didipio confirmed the scaling down of construction activities in the area, mostly involving projects that were being carried out by private contractors.
“After a long while, company representatives have consulted members of the (Didipio) council explaining some modifications to the project plan. We’ll see what happens next,” said village council member Carmen Ananayo.
Peter Duyapat, president of the Didipio Earth-Savers’ Multi-purpose Association (Desama), a people’s organization that has led opposition to the Didipio gold-copper project, said that while they welcomed the suspension, they remain wary about its possible re-opening.
“This may be the beginning of victory, but the fight is not over yet. We will remain to be vigilant as we have been in the past,” he said in