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PHILIPPINES: Placer Dome Suit May Not Damp Philippine Mining, Secretary Says

by Ian C. Sayson and Chia-Peck Wong Bloomberg
October 11th, 2005

An environmental lawsuit filed by a Philippine province against Placer Dome Inc., Canada's second- largest gold producer, may not damp overseas investments in Philippines mining industry, a government official said.

Marinduque provincial Governor Carmencita Reyes last week asked a Las Vegas, Nevada court to order Placer Dome to compensate the province for economic and health damage to people living around a mine run by Marcopper Mining Corp., which was 39.9 percent owned by Placer Dome from 1964 to 1997. Placer Dome said it had helped plug the spill and lessen its impact and will contest the claim.

``We definitely want investors to come in,'' Mining Secretary Michael Defensor said today in an interview at the Sixth Asia Pacific Mining Conference in Manila.

``Mine operators who are responsible shouldn't be scared'' of investing in the Philippines.

The Philippines expects economic growth this year to miss the 5.3 percent target, and is counting on mining to help boost expansion to as much as 6.3 percent next year. The Supreme Court in December affirmed a law that helps overseas investors skirt constitutional restrictions on owning and operating local mines.
The lawsuit, filed Oct. 4 in Nevada state court, says Placer Dome ``dominated'' Marcopper mining, dumped 220 million tons of refuse from mining operations containing toxic chemicals on the island, and botched cleanup efforts.

The government supports the Marinduque province's actions, Defensor said. ``We are pushing for Marcopper to rectify the problem, we don't want this kind of incident to happen again.''

More Spending

Mining companies such as BHP Billiton are spending more as rising Chinese demand helped push prices of copper and iron ore to record levels this year. The Philippines expects mining to account for 15 percent of gross domestic product in fie years from 1.6 percent in 2003, Defensor said in March.

``This can happen anywhere in the world especially in the countries where there is a thriving mining industry,'' Philip Romualdez, president of Benguet Corp. and Philippines Chamber of Mines, said in an interview at the conference. ``This is a part of doing business. There is nothing unusual about this case.''

Placer Dome is the second North American mining company to face an environmental lawsuit this year in Southeast Asia, a region that includes some of the world's biggest deposits of copper and gold. Newmont Mining Corp, the world's biggest gold miner, is standing trial in Indonesia on criminal charges of polluting the sea with mine waste. Newmont denies any wrongdoing.

Foreign investment in Philippines' mining, including expansion at existing mines, has reached $700 million so far this year, Defensor said. ``We hope it will reach $1 billion by the end of the year,'' he said.

So far, it is hard to tell which country will emerge as the dominant investor in the Philippine mining industry, Romualdez said. ``The expression of interest has been pretty evenly distributed among the Japanese, Koreans, Canadians, Australians, Chinese and the British.''





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