OceanaGold suspends Didipio mine operations in Philippines amid dispute
Australia's OceanGold Corp warned of lower output this year after it suspended production at its Didipio gold and copper mine in the Philippines citing a dispute with local government.
OceanaGold cut its full-year output guidance to 460,000-480,000 ounces of gold and 10,000-11,000 tonnes of copper, assuming no further production or sales for the remainder of the year at Didipio.
That was down from previous guidance of 500,000-550,000 ounces of gold and 14,000-15,000 tonnes of copper for the year from its four mines - Didipio, Haile in the United States, and Macraes and Waihi in New Zealand.
The company also revised its guidance for all-in sustaining costs to $1,040-$1,090 per ounce sold, from $850-900 previously.
The mid-tier miner had sought renewal of its 25-year operating licence for Didipio in Nueva Vizcaya province last year, ahead of its expiry earlier this year, but the local government wants the mine shut due to environmental concerns.
OceanaGold had initially stopped trucking while operations at Didipio continued, despite a move by the Nueva Vizcaya government to impede access to and from the mine site.
Last month, the miner said it had sought a court injunction as part of its appeal against the Nueva Vizcaya provincial court ruling denying its request to end what it called an "unlawful restraint of operations".
"With the timing of the Court of Appeals injunction decision uncertain, and efforts to finalise a renewal of the FTAA (Financial or Technical Assistance Agreement) ongoing, we have no other choice but to temporarily suspend production at Didipio," OceanaGold President and CEO Mick Wilkes said in a statement.
"This is a very disappointing outcome for the company, our shareholders and our truly valued Filipino workforce," he added.
The Didipio mine, when operational, directly employs 1,500 workers, of whom about 97% are Filipinos, according to the company.
The company, however, remains actively engaged with the Philippine government and regulators to finalise the FTAA renewal, Wilkes said.
The Philippines' Mines and Geosciences Bureau, the industry watchdog, and the Department of Environment and Natural Resources had endorsed OceanaGold's application for FTAA renewal to President Rodrigo Duterte's office.
But Duterte's office had found the application incomplete and sent it back.
Mining is a contentious issue in the Philippines after past environmental mismanagement by miners, and Duterte himself has repeatedly warned miners to follow tighter environmental rules or shut down.
OceanaGold shares closed up 0.3% on Tuesday.