SURIGAO CITY, Philippines – The Department of Finance has urged the Department of Environment and Natural Resources (DENR) to look at the operations of Philnico Industrial Corp. (PIC), which has been conducting mining activities in a mineral reservation in Surigao City.

In a letter to Environment Secretary Ramon Paje, Finance Secretary Cesar Purisima said PIC has paid only US$1.25 million of the US$263.8 million it owed to the government since 1996.

The amount is for the purchase of state’s interest in Nonoc Mining Industrial Corp. (Nonoc), which had the mining rights in the Surigao Mineral Reservation.

The purchase was made under the terms of an Amended and Restated Definitive Agreement (ARDA) executed in 1996 by the PIC, Nonoc, and the government through the Asset Privatization Trust (now Privatization Management Office).

The ARDA was executed after the PIC defaulted in its previous agreement with government and the original mineral production sharing agreement was revoked by the government. The company, having said it had entered into a deal with a “financially able partner,” then sought and was allowed re-negotiation through an amended agreement.

Under the amended deal however, Purisima said PIC still had not settled its obligations to the government, stressing that its $1.25 million payment was only "less than one percent" of the total amount it had to pay.

“With PIC’s failure to meet amortization payments, PMO demanded that PIC comply with its obligations under the ARDA or it will be constrained to exercise its remedies under the ARDA,” the letter stated.

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