Thursday, 14 October 2010

SMC lifts Tampakan

by Alena Mae S. Flores
Manila Standard

San Miguel Corp.’s investment in the Tampakan copper-gold project in South Cotabato province will speed up the development of the $5.2-billion mining project, government officials said Monday.

South Cotabato banned the open-pit mining method, stalling the development of the largest untapped copper and gold deposit in Southeast Asia.

“The entry of San Miguel [in Indophil Resources NL] changes the landscape in Tampakan. Since San Miguel is Filipino, this will probably address the issue about foreign participation...,” Leo Jasareno, Mines and Geosciences Bureau director, told reporters Wednesday.

“We have always advised foreign investors that the key to successful mining projects is having local partners,” he said.

Indophil of Australia said on Friday that San Miguel would buy a 10-percent stake in Indophil for $40 million. Indophil agreed to a binding exclusivity period with San Miguel until Jan. 10, 2011 in which the food and beverage conglomerate will complete a due diligence.

San Miguel has the option to buy out the rest of Indophil’s shares.

“There is an indication that San Miguel will buy more of Indophil, there is speculation that eventually San Miguel will take the entire 37.5 percent of Indophil in [Tampakan],” Jasareno said.

He said San Miguel’s entry was an opportunity “to improve social acceptability” of the project. Indophil owns 37.5 percent of the Tampakan copper-gold project, with Xstrata Queensland Ltd., the copper unit of global miner Xstrata Plc holding the balance of 62.5 percent.

Environment Secretary Ramon Paje said President Benigno Aquino III was supportive of mining projects because of their contribution to the country’s economic growth.

“Local government units cannot issue orders that go against national policy,” he said.

Mining investments in the Philippines hit $2.8 billion since 2003 and the government hopes to increase the level to $13.5 billion by 2013.

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