Australian miner Indophil Resources NL on Thursday has confirmed that Glencore-Xstrata is preparing to divest its majority interest in the $5.9-billion Tampakan copper-gold project in Mindanao.
In a report to the Australian Stock Exchange, Richard Lauff–man, Indophil chief operating officer and managing director, said that Glencore-Xstrata has informed them of its preference to pursue divestment its stakes in the controversial project.
“This is consistent with Glencore’s preference to not develop greenfield projects, and its publicly announced plan to sell its interests in the Las Bambas copper project in Peru and the Frieda River copper-gold project in PNG [Papua New Guinea],” Lauffman said.
To date, no formal divestment process has commenced with respect to Glencore-Xstrata’s interest in Tampakan, although discussions have been ongoing, he added.
“These include informal discussions with Indophil, which holds a pre-emptive right over Glencore Xstrata’s interest in the Tampakan Project,” Lauffman said.
“Indophil has a considerable ‘say’ in any Tampakan divestment process,” the mining executive added.
Glecore-Xstrata holds majority and controlling shares of Sagittarius Mines Inc. with 62.5 percent, while Indophil owns the remaining 37.5 percent.
Since April 2013, there has been considerable uncertainty over the future ownership of Tampakan, fueled by the possibility that Glencore Xstrata may be forced to divest its stake in Tampakan as part of the Chinese government’s Ministry of Commerce conditions in order to secure the approval of Glencore’s merger with Xstrata.
Following the latest development, Lauffman said that Indophil has advised Glencore-Xstrata that it is focused on restoring value to the Tampakan investment, either by 100-percent ownership of SMI or divestment.
In line with this, Lauffman said that they are sole funding work programs at Tampakan—including progressing the Environmental Impact Study for the offsite infrastructure (pipeline, power line, filter plant and port).