Miner 'misrepresented' damning reportGreg Roberts September 26,...

Miner 'misrepresented' damning report
Greg Roberts
September 26, 2006

THE Australian Stock Exchange is examining claims that Lafayette Mining, a Melbourne-based company, misrepresented a Philippines government inquiry that was highly critical of its operations.
Operations were suspended following two mine tailings spills last October at the Rapu-Rapu gold and copper mine in the Philippines, which is operated by Lafayette.

The Arroyo Government has claimed that high levels of cyanide were released into waterways, resulting in the destruction of marine life.

An ASX spokesman said the exchange's surveillance unit was examining a complaint alleging that Lafayette's disclosures regarding an inquiry commissioned by President Gloria Arroyo were misleading.

The inquiry described the spills as "a disaster". It also said the 10.4 million Philippines pesos ($258,000) fine it imposed was "nominal" in the circumstances.

The inquiry found the company's corporate structure and production reports were "questionable and tainted with irregularities".

It also found Lafayette had been "guilty of irresponsibility" for starting operations before the completion of the mine's tailings and polishing ponds. "It is time we open our eyes to the fact that we are often fried in our own grease," the inquiry report said.

The report noted that Rapu-Rapu, in Albay Province, was the first foreign-owned mine to be opened in the Philippines in 35 years, and that it was planning to boost production to up to 55,000 ounces of gold and 10,000 tons of copper concentrate a year.

A separate report by the Philippines Environment and Natural Resources Department said Lafayette personnel continued to operate the mine when they were aware of equipment malfunctions and deficiencies in its environmental infrastructure.

The report said both spills resulted from "serious lapses" by Lafayette personnel and management.

In a complaint to the ASX, an Australian non-government organisation, the Minerals Policy Institute, said that in its corporate disclosures, Lafayette had said the spills involved relatively minor amounts of low-level contaminants, and that the Filipino authorities had not identified any credible health risks.

"The disclosure paints an overly favourable picture of the circumstances that omits key information and does not reflect the situation surrounding the mining operations," the MPI complaint said.

Lafayette spokesman Gavan Collery said yesterday the company had met its disclosure requirements, and hoped to obtain approval soon from Manila to resume full operations at Rapu-Rapu.

"Lafayette has gone to great lengths to ensure that the ASX, investors and the public have been well aware of events at Rapu-Rapu," Mr Collery said.

Mr Collery said the spills were minor, and the presidential inquiry had acted outside its charter. But the company said that any accident was unacceptable.

"It is working hard to do what it can to ensure that any loss of reputation it may have suffered is restored," he said.

http://www.theaustralian.news.com.au/story/0,20867,20475490-643,00.html