Mining firm: We’re still major driver of growth

Enrico Nera, president of Toledo City-based Carmen Copper Corp. (CCC), shares that after three decades, the firm continues to contribute to the local economy during a mine tour of the firm’s facilities.
CDN PHOTO/Christian Maningo

CARMEN COPPER CORP.

Despite challenges brought about by the decline of copper prices in the world market in recent years, a mining company executive still believes the industry continues to play a major role in the growth of the local economy.

Enrico Nera, president of Toledo City-based Carmen Copper Corp. (CCC), said the excise tax the firm gives back to the government is always to the benefit of the communities affected by their operations.

“Whether we are positive or negative in revenues, the excise tax is computed on the gross revenues. Whether we are red on the bottom line, blue or black, we still pay taxes,” Nera told reporters during a mine tour organized by the Department of Environment and Natural Resources (DENR) last week.

CCC has paid P1.47 billion in excise taxes from 2011 to 2016, of which 40 percent goes to impact barangays, 30 percent to the local government, and 30 percent to the provincial government.

Aside from taxes, the company also spurs the economy by providing employment to locals, with 80 percent of its 2,500 workers coming from Toledo City.

The mining firm’s operations directly affect four barangays or host communities as well as 13 other villages indirectly, where P497 million has been spent in its first five years of operation for social development and management.

Atlas Mining

Formerly known as Atlas Consolidated Mining and Development Corp., the company changed the economic landscape in the midwestern part of the province when it began operations in 1953, eventually triggering industrial development on that side of Cebu.

“If not for the mining industry, there would not have been the Tsuneishi Shipyard (in Balamban) and Toledo Power Co.,” said Nera.

At one point in the 1980s, it was the third biggest copper mine in the world and at its peak, the facility in Toledo could process 110,000 tons of copper ore in one day.

In 1985, production began to taper due to falling copper prices and operational downsizing. Further metal price fluctuations over the years resulted to successive yearly negative cash flow performances.

CCC

By 1994, Atlas’ operations were suspended indefinitely and on Sept. 16, 2004, CCC was incorporated as a subsidiary company to operate the 1,674-hectare Toledo copper mine located at Barangay Don Andres Soriano.

CCC started a full-scale rehabilitation of the Toledo copper mine in 2007 and resumed production in September 2008 with a start-up milling rate of 20,000 metric tons of copper ore per day, completing its first shipment of copper concentrate to China in December of the same year.

The company was challenged when copper prices hit rock bottom last year, coming at a time when they were still reeling off the cost of their 60,000 tons per day (TPD) expansion.

Optimistic

Nera said they had to cut costs and right-size the organization, a move which affected more than 500 employees.

Nonetheless, he said he is optimistic copper prices in the world market will pick up in the next two years, with plans already in place to increase production from the current 40,000 TPD to about 50,000 TPD in 2019.

“We are positive the prices are set to recover beginning 2018. The secret here is keeping down costs while keeping up efficiencies to maximize profitability,” said Nera.

Today, it costs the company $1.70 (cost-to-concentrate ratio) to produce one pound of copper concentrate while the material is sold at $2 per pound on the market. The cost-to-concentrate ratio was even higher than $2 per pound from 2015 to 2016.

Copper prices declined from $3.11 per pound in 2014 to $2.49 per pound in 2015 and eventually $2.11 per pound during the first quarter of last year.

Mining’s poster bpu

On a more upbeat note, Nera said CCC also aspires to become the “poster boy” of the mining industry after it passed the DENR’s audit last year.

CCC was among the 13 mining companies in the Philippines found to have complied with the government agencies standards, at the time when former DENR secretary Gina Lopez was bent on cracking down on mining firms all over the country.

Nera said they plan to achieve their goal by intensifying their mine rehabilitation program, which they will spend P73.020 billion in the next three years.

He said they will also implement stricter monitoring of mine effluence as well as continue to conduct campaigns to increase the awareness of communities on the benefits of mining.