Benguet sues estranged partner Nadecor over Kingking
Miner Benguet Corp. has asked a local court to stop erstwhile partner Nationwide Development Corp. (Nadecor) from ending their operating partnership involving the Kingking gold and copper mine in Compostela Valley. The country's oldest minder told the Philippine Stock Exchange (PSE) on Wednesday it had sought an injunction against Nadecor. "Benguet contends that the issue of cancellation of the operating agreement between them is a judicial question that should be brought to the regulator court instead of [through] arbitration," the company said. But Nadecor financial consultant Raymond Ricafort said their operating agreement provides that in case of a dispute, the parties would undergo arbitration instead of resolving it through the courts, which takes time. "Our contract is clear that we will have an arbitration and we will not go to court," he said, referring to the operating deal signed by the parties in 1981 and the amended one 11 years later. "Under our contract, to divorce each other, we need to go through arbitration rather than [file] a court case since it is faster and there are specific timetables in arbitration. So we followed the process agreed upon in our ‘prenuptial’ deal," Ricafort pointed out. He also criticized Benjamin Philip Romualdez, president of Benguet Corp. and the Chamber of Mines of the Philippines, for allegedly trying to prolong the dispute. "Why is the Chamber of Mines president insisting on a long process when in fact, he’s supposed to be promoting mining investments?" he said. GMANews.TV tried to contact both Romualdez and the company's corporate secretary, but they were not available for comment. Ricafort said Nadecor submitted to the government on Wednesday their work program for the Kingking mine, under which they expect to spend $30-$43.5 million on the feasibility study, which Benguet had failed to undertake for the last decade. Nadecor and its partner are expected to spend $1.3 billion in total investments on the mining venture. Nadecor earlier asked Benguet to settle their dispute over the Kingking gold and copper via an arbitration process. Under the scheme, a panel of independent arbitrators nominated by the parties will resolve the disagreement under a strict structure, avoiding delays and potentially preventing a protracted battle in court. Nadecor earlier said it wanted cut its ties with Benguet since there is clear evidence that the listed miner was no longer qualified especially after the Environment department said it had failed to fulfill its obligations under the work program for the past 12 years. Falling short The government ordered Benguet last January 15 to give up its rights over the Kingking copper-gold mine, saying it had fallen short of its commitment to develop the property. The Environment department ordered the country's oldest miner to turn over the rights to Nadecor, saying it was dissatisfied with Benguet's efforts to complete the mineral exploration activities in the contract area. Ricafort said Benguet had stopped being financially capable as a mining contractor given its negative equity. Benguet and Nadecor, which both claim rights to the Kingking mine, resumed their quarrel late last year, with each having signed a deal with separate third parties to finance the operations of the mine. Nadecor has signed an operating deal with Rusell Mining and Minerals, Inc. for the Kingking mine, while Benguet has partnered with Chinese miner MinMetals International (HK), Ltd. to finance the project. Last month, the PSE and Securities and Exchange Commission suspended the trading of Benguet shares after the miner failed to disclose default notices from creditors. The company has about P1.5 billion in debts. Benguet has offered various creditors to pay a fifth of its P1.56-billion principal debt in cash, saying a settlement would benefit all parties. The creditors have yet to agree to the offer, while trustee Philippine National Bank has issued the company a default notice on its debt. Benguet shares closed 25 centavos lower at P12.25 apiece on Wednesday. — Norman P. Aquino, GMANews.TV