The DOF said in a statement that the P277.6-million Pacific Nickel, a subsidiary of Philnico Industrial Corp., reportedly paid in the form of taxes, royalties and fees represent taxes and royalties from its continued mining operations. The said amount should be separated from the purchase of the state’s interest in Nonoc Minining Industrial Corp.

“Philnico’s own statement, in effect, was an admission that it only paid $1.25 million of the $263.8 million it owed to the government,” the DOF said in a statement.

The government is seeking the full payment of $263.8 million due to the Asset Privatization Trust—now called the Privatization Management Office—under an Amended and Restated Definitive Agreement signed in 1996.

Philnico earlier claimed it has already paid the government an additional $200 million.

The DOF, however, pointed out that the said amount pertains to the original book value of the old ammonia leach nickel refinery in 1970s, and which has now been essentially abandoned by Pacific Nickel. 

“By the company’s [Philnico] own admission the old refinery is obsolete and needs to be replaced by a more modern high-pressure acid leach refinery,” it said.

“The original refinery was supposed to be used by Marinduque Mining [Nonoc Mining’s predecessor] in order to refine the low-grade nickel ore from the mining site in Surigao,” DOF said.

As to the reported limited operations Philnico is conducting in Surigao, the DOF statement said documents from the Department of Environment and Natural Resources (DENR) showed that Hinatuan Mining Corp., a subsidiary of Nickel Asia, shipped at least 856,000 wet metric tons from 2003 to 2008.

Recently, Shuley Mine Inc., another subcontractor of Philnico, contracted to ship out 52,000 wet metric tons of nickel ore and 50,000 wet metric tons of irons sand fines for a total value of approximately $926,000

“The continuous mining and export of high grade nickel ore clearly belies Pacific Nickel’s claim of “limited operations,” DOF said, which also hailed DENR’s move to suspend Philnico from operating in Surigao.

Meanwhile, Nickel Asia Corp. remains optimistic it can sustain first quarter growth due to higher mineral prices and increased output.

“Our tonnage should be higher, we have 10 million tons of ore contracts which is higher than last year. Much also depends on nickel prices. It’s still at a healthy level and there is no slowdown in demand,” Gerard Brimo, president of Nickel Asia, said in a chance interview last week. 

(With Miguel R. Camus)