Oceana Gold rejects Oxfam allegations

from Yahoo News

International AID agency Oxfam and New Zealand gold miner Oceana Gold have renewed hostilities over the $A174 million ($NZ206 million) Didipio gold project in the Philippines.

Oxfam claims five years of investigative work show Oceana and its predecessor company Climax Mining used strongarm tactics to pressure local communities to accept the mine, now under development.

Oceana's corporate and investor relations vice-president Darren Klinck said in a statement that the report was "factually incorrect, inaccurate and misleading".

Mr Klinck said the company had complied with all development conditions and requirements.

"The company will make no further comment on this misleading material and we are currently reviewing our options as to legal redress," he said.

But Oxfam said Oceana "refuses to accept that many of the people of Didipio do not want a mine in their front yard".

Oceana is best known for its ownership of New Zealand's biggest gold mine, the Macraes operation in Otago, and also owns the new mine in the Reefton goldfield in the South Island. By the time the Philippines operation starts producing in 2009 it expects to be an annual producer of over 500,000 ounces of gold equivalent (it gives copper an equivalent gold value) from its NZ operation and Didipio.

Gold is reaching record international prices of $NZ1000/ounce.

Didipio is in the north of the island of Luzon and about 270km north-east of Manila, 20km south of the nearest significant town Cabarroguis.

Oceana has estimated a "direct impact zone" of about 3.25sq km within its 9.75sq km landholding for the project.

Oceana became involved with the project in November on acquiring the minesite's previous owner, Climax Mining.

The initial capital cost of the project has been estimated by Oceana at $US154 million ($NZ205 million). Production is due to start in the first half of 2009.

Annual output from the 2.5 million tonne-a-year processing plant is expected to average 120,000 ounces of gold and 15,000 tonnes of copper concentrate in the first 10 years of operation. The mine starts out as an open-cut but is expected to switch to underground mining after about four years.

Climax and now Oceana hold development rights under a Financial or Technical Assistance Agreement (FTAA) that was issued by the Philippines Government in 1994.

An Environmental Compliance Certificate was secured in August 2004 and in October 2005 a permit allowing Didipio to be developed and operated was issued by the Department of Environment and Natural Resources.

Under the FTAA the company is required to pay the Government 60 per cent of the operation's net revenue after recovering its pre-operating expenses or after five years of the start to commercial production.

Oxfam, which wants a just world without poverty, has had Didipio on its radar since at least 2001, and the Philippine Star newspaper has previously reported that anti-mining villagers -- already stirred up over having Oceana's operation in the area -- recently blockaded an Australian-owned company, Oxiana Philippines, which is moving in equipment for prospecting another site.

In nearby Papaya village, residents also protested the entry of equipment to be used by Oceana Gold for its exploration, fearing possible destruction of the watershed forest there. Water from the area irrigates the vegetable gardens and citrus plantations in the area.

In Didipio village, eight farmers were charged by environment officials with illegal occupancy of forest lands after they rejected Oceana Gold's offer to pay for their occupational rights.