Ruling on Lepanto permit

By Maria Elena Catajan -
Date of publication: 
24 May, 2015

THE government cannot shut down Lepanto Consolidated Mining Corporation’s gold mining operations in Benguet while a court case is pending, a mining official has admitted.

The Department of Environment and Natural Resources’ Mines and Geosciences Bureau is insisting that Lepanto cannot operate because its mining contract in Benguet expired in March.

But the mining firm contested the MGB order before a Makati City court and the court ruled that Lepanto can continue its operations until dispute over the renewal of its contract is resolved by an arbitration council.

“We cannot do anything. The courts have directed us to allow them to operate,” MGB regional head Faye Apil said.

Lepanto has mines in Victoria and Teresa in Benguet, but its 25-year Mineral Production Sharing Agreement (MPSA) for the Victoria mine has expired.

Apil said there is an impasse over whether Lepanto needs to acquire a Free Prior and Informed Consent from the community to be able to renew its contract.

“The MGB said yes, they need another FPIC,” Apil said.

But Lepanto is arguing that the law, which requires an FPIC under the Indigenous Peoples’ Rights Act (IPRA), does not apply to it because the company obtained its contract seven years before the law was enacted in 1997.

“We are waiting for the decision of the arbitration council. We hope it will be out by the end of the month,” Apil said.

Being disputed is the Far Southeast Project, which Lepanto is developing with its South African partner Far South East Gold Resources Inc.

While seeking arbitration, Lepanto plans to convert portions of the MPSA into a Financial or Technical Assistance Agreement (FTAA), allowing Gold Fields to acquire majority stake in the copper-gold project.

Lepanto owns 60 percent of FSP, with the remaining 40 percent owned by Gold Fields.

MPSAs are granted to mining firms which have at least 60-percent local ownership, while Financial or Technical Assistance Agreement allows 100-percent foreign ownership.

FSGRI Site Manager Peter Dunkley had asked the provincial board to endorse the project, after getting the nod of the National Commission on Indigenous Peoples (NCIP) through a Free Prior and Informed Consent from the Mankayan community.