Xstrata Plc to proceed with Tampakan gold project

The local unit of Swiss mining giant Xstrata Plc has submitted the results of its feasibility study to the government, moving forward a $5.2-billion copper and gold project in Southern Mindanao. “This is the most expensive and the most exhaustive feasibility study in any mining project here in the Philippines," Edwin G. Domingo, director of the Environment department’s Mines and Geosciences Bureau, told reporters late on Wednesday. “The [cost] is still $5.2 billion," he added. Last June, Sagittarius Mines, Inc. contracted engineering and construction giant Bechtel Corp. to start the $74-million feasibility study, which will determine the financial viability of the project. The Tampakan project in South Cotabato, which is said to be one of the largest undeveloped copper and gold deposits in Southeast Asia, needs $5.2 billion to be developed. The copper and gold mine is estimated to contain 12.8 million metric tons (MT) of copper and 15.2 million ounces of gold, Sagittarius Mines earlier said. The mine is projected to produce an average 340,000 MT of copper and 350,000 ounces of gold per year within the 20-year operating period. Moving forward, the miner needs to secure clearances from the Environment department, Domingo said. The miner expects capital spending to start in 2012 or 2013, he said. Commercial operation will begin in 2016. In December last year, Zijin Mining Corp. Co., China’s largest gold and third-largest copper producer, offered A$545 million to acquire a 37.5-percent stake in the project from Indophil Resources NL of Australia. Indophil’s board of directors, which decided to sell the stake in the mine in November, unanimously supported the takeover bid. The majority stakeholder in the Tampakan project is Xstrata Copper, with a 62.5 percent share. The Tampakan mine is listed as one of the priority projects of the government, which expects to secure $13.496 billion in investments in the capital-intensive mining industry by 2013. As of January, mining investments have totaled $2.8 billion since 2004, when the Supreme Court allowed complete foreign ownership of mining ventures, data from the Mines bureau showed. — Neil Jerome C. Morales, BusinessWorld