OceanaGold Corp (OTCMKTS:OCANF) continues to edge lower in the market amidst concerns its operations in the Philippines could be suspended over outstanding social issues. While the company is yet to receive an official communication, it is emerging that the Philippines government is considering closing its Didipio mine operations.
Outstanding Issues
The mining and exploration company has been the subject complaints from locals most of whom argue that its operations are a threat to their farmlands. The management has already refuted the claims, reiterating that it has written to the government to seek further clarification on the issue.
In late June, the New Department of Environment and Natural Resources commenced an audit of all mines across the country. The audit sought to determine the environmental and social impact of the mines to neighboring local communities. Ten mines mostly on Nickel have so far been suspended as the crackdown continues. While the Didipio mine was initially not under threat given that it was the first ISO certified mine in the country, things seem to have taken an unexpected turn.
OceanGold Defense
“There have been no environmental violations by OceanGold,” said CEO Mick Wilkes in a statement to Reuters.
Wilkes has also insisted that the mine has a strong social license to operate having achieved a lot since operations started in 2011.
Closure of the Didipio mine would be disastrous for OceanaGold given that operations from the site account for 40% of the company’s total gold production. The mine also accounts for 35% of the company’s overall copper production. In the first half of the year, the mine produced 90,000 ounces of gold and 12,000 tons of copper.
Closure of the mine would also be disastrous for the local economy given that the mine alone employs an estimated 1,764 Filipino Nationals. Over the past, three had half years, OceanaGold Corp (OTCMKTS:OCANF) has injected $70 million in taxes and royalties to the country’s economy through its operations at the mine.
