Positive Environment News

Manila Fines Lafayette over Cyanide Spills at Mine

Date: 10-Jan-06

An additional fine of 200,000 pesos per day will be levied until Lafayette Philippines Inc. complies with environmental standards and conditions set by the government, environment officials said.

Lafayette's operations at its gold, copper and zinc mine in the central Philippines have been suspended since Oct. 31 after a second cyanide spill into the water system on Rapu-Rapu island.

The mine, about 400 km (250 miles) south of Manila, is the first in the Philippines to be developed by a foreign company in almost four decades.

The Philippines is banking on foreign investments to revive its dormant mining industry and boost economic growth.

"The preservation of the environment should not be bargained away for the sake of economics. It is, after all, in the interest of the people that sustainable development, such as responsible mining, is being promoted," Environment Secretary Michael Defensor told reporters.

Lafayette said in November it had incurred about $5.5 million in foregone revenues and operational losses following the suspension of its mining operations.

It had said the October cyanide leaks were accidents caused by heavy rain. Cyanide, a toxic chemical, is used to segregate gold from ore.

The initial fine covers the period from Oct. 11, the date of the first mine spill, to Dec. 14.

Additional penalties were likely to be imposed on Lafayette, with monitoring by the environment department over the weekend showing continued high levels of cyanide content in local waters on the island, said Environmental Management Bureau Director Lolibeth Medrano.

Defensor said Lafayette has yet to meet all six conditions, including obtaining an ISO certification, set by the environment department for the lifting of the suspension of Rapu-Rapu mine project.

In October, the government of Marinduque province filed a lawsuit in the United States seeking compensation for damage caused when mine waste from a copper mill owned by the Marcopper Mining Corp. spilled into the Boac River in 1996.

Canada's Placer Dome held a 40 percent interest in Marcopper at the time, but sold its stake in 1997.

© Thomson Reuters 2006 All rights reserved

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