Citinickel mulls legal action vs DENR

MANILA, Philippines - Citinickel Mines and Development Corp., a subsidiary of listed Oriental Peninsula Resources Group Inc., may file legal action against the Department of Environment and Natural Resources (DENR) following the agency’s suspension order prior to the actual mining audit.

“We will pursue all actions necessary to prove to the DENR that the suspension order issued was unwarranted and even pursue legal action should this be necessary to protect the interest of the shareholders of ORE and Citinickel,” Citinickel president Caroline Tanchay said.

“ORE and Citinickel are exerting all administrative and legal efforts to have the suspension order lifted. We are optimistic the MGB (Mines and Geosciences Bureau) shall reasonably appreciate the validity of the contentions of Citinickel and that the suspension order shall be lifted at the soonest possible time,” she said.

In a statement, Citinickel said the suspension order from the MGB last month “was prematurely and improperly issued as there was no prior audit conducted on the operations of Citinickel.”

Citinickel is the sole claim owner of Pulot Mine and Toronto Mine in Sofronio Española and Narra in Palawan.

Last month, Environment Secretary Gina Lopez ordered the audit of all mining firms in the country as part of the government’s thrust of implementing responsible mining in the country.

“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,” Tanchay said.

The mining company said that if nickel ore prices in the world market become competitively attractive again, Citinickel would not be able to make its shipments should the suspension order remain in effect.

“This will prevent Citinickel from generating any revenue, which ultimately has a negative effect on the financial condition of the company on consolidation,” she said.

The company said the government has no reason to issue the suspension as it slowed down operations and held shipments due to low prices of nickel ore in the world market.

Citinickel said that as of now, the order has no direct effect on the financial condition of the company and that a possible decline in sales would be attributed to low price of nickel ore and not because of the suspension order.

Citinickel said their mines are compliant with the rules, regulations and mandate of the Philippine Mining Act 1995 and other environmental laws, as well as the obligations and restrictions imposed under the Mineral Production Sharing Agreement (MPSA).

The company said DENR finished its audit on Citinickel last week and no issues, irregularities or violations on mining and environmental laws were highlighted against the company during the exit meeting.

“We are confident the findings will enlighten the DENR that Citinickel is compliant with the rules, regulations and mandate of the Mining Act and other environmental laws as well as the obligations and restrictions imposed on us under the MPSA,” it said.