The Mines and Geosciences Bureau (MGB) expects no major changes in the development plan timetable for the $5.9-billion Tampakan copper-gold project, despite earlier announcement by Sagittarius Mines Inc. (SMI) that it would scale down operations amid regulatory impasse.
“We are still evaluating the revised work program submitted to us. It looks like the timetable, as I recall, have no major changes,” MGB Director Leo Jasareno said in a telephone interview.
SMI, the private contractor of what could be the Philippines’ biggest mining project to date, announced in December last year that it has put off the start of production given its failure to secure regulatory permits.
The construction could potentially commence in 2015, enabling commercial production in 2019, the company added.
SMI has been working for more than 10 years with the communities affected by the project.
On Monday, SMI announced a revised work plan, aiming to focus efforts and reallocate resources to “appropriate regulatory pathway” that would help the company secure government and community support on key bottleneck issues.
The company said the new work plan calls for a 7- percent cut in expenditures to $1 million a month from the existing $4 million. In terms of personnel, the reduction would involve an 85-percent cut.
The project currently faces substantial development challenges, which include the current ban on the open-cut mining method within the South Cotabato Environment Code, clarification of the free and prior informed consent process, and an “extremely complex and uncertain” pathway to ultimate project approval.
“Until these challenges are resolved, it is not possible to determine when commercial production could commence,” said John Arnaldo, SMI corporate communications manager.
Jasareno, on the other hand, said that the agency sees no changes in the timetable for the start of the project operations. He added that MGB expects to approve the company’s revised work program by next week.
“As of now, they are still in the process of obtaining all the regulatory requirements as stated under the Financial or Technical Assistance Agreement,” he said.
The MBG chief said that SMI has no legal obligation in reducing the current activity levels and expenditure on the project.
“They just have to meet the minimum work requirement as they wait for the approval of the declaration of mining project feasibility study,” he said.
Meanwhile, Jasareno revealed that SMI has signed the environmental compliance certificate (ECC), accepting all conditions set by the government.
“They informed me last week that they have signed the ECC,” he said.
The ECC, which must be signed by both parties before it is considered enforced, would ultimately allow the company to start with the development phase.
Jasareno, however, clarified that SMI could only proceed with after submitting all other necessary government permits and clearances to the EMB – particularly those involving indigenous peoples, the agriculture and agrarian reform departments, and local government units.
Discovered in 1992, the Tampakan project has 2.9 billion metric tons of deposit, containing 15 million tons of copper and 18 million ounces of gold at a 0.2 percent cut-off grade.
The project is expected to contribute P134 billion to the Philippine economy each year, translating to an annual 1-percent increase to the economy’s output over a 20-year period.