OceanaGold resumes Didipio mine shipments

Australian mining firm OceanaGold Corporation has resumed the shipment of copper-gold concentrate from its mine in Didipio, Nueva Vizcaya after paying excise taxes "under protest" to the Bureau of Internal Revenue. “Transportation of copper-gold concentrate from the Didipio Mine site to port has resumed. Approximately 9,000 tons of copper-gold concentrate [have] been produced to date with one-third of this delivered to the port thus far,” the company said in a statement on Wednesday. Last month, OceanaGold suspended shipments from the mine as it sought clarification from the government about the tax exemption rules of the Financial Technical Assistance Agreement (FTAA) between them. The FTAA allows 100-percent foreign ownership of a mining venture but requires it to share 50 percent of its revenues with the government.   Under the FTAA, contractors may recover their pre-operating expenses, either for a period of five years or until the date of actual recovery. From the approval of the Declaration of Mining Project Feasibility up to the end of the recovery period, the contractor shall be exempt from corporate income tax, customs duties and fees on imported capital equipment, value-added tax on imported goods and services, withholding tax on interest payments on foreign loans and on dividends to foreign stockholders, and other national taxes, except excise tax on minerals. The contractor is only required to start paying all applicable taxes, fees, royalties and other related payments to the national and local governments after the recovery period. However, the Bureau of Internal Revenue on Feb. 15 issued memorandum circular No. 17-2013, which stated that FTAA holders must pay taxes even within the recovery period. “FTAA contractors are liable to pay the taxes due under the NIRC (National Internal Revenue Code) and existing rules and regulations during and after their recovery period,” it said. OceanaGold Philippines Inc. chairman Jose Leviste said that the company settled the excise taxes in order to be able to resume shipments. “We paid the excise taxes under protest to the BIR,” he said in a text message Wednesday. Leviste said the company protested the imposition of the fine within the recovery period. “We have a 2007 BIR ruling which says we are exempted during the recovery period,” he said. Mines and Geosciences Bureau (MGB) director Leo Jasareno said the bureau has formed a team to discuss the matter with OceanaGold. He added that the MGB has not yet discussed the memorandum circular with the BIR. OceanaGold's Didipio Project I is expected to produce 100,000 ounces of gold and 14,000 tons of copper per year on average over an estimated 16-year mine life. The miner expects to produce 285,000 to 325,000 ounces of gold and 15,000 to 18,000 tons of copper in fiscal year 2013 from its New Zealand and Philippine operations. — BM, GMA News