Sagittarius Mines Inc. (SMI) on Monday said the majority shareholder of the $5.9-billion Tampakan copper-gold project remains committed to developing what may be the biggest mining project in the Philippines to date.
Contrary to earlier reports, Glencore-Xstrata has assured SMI that it would not divest its majority interest in the controversial mining project, SMI spokesperson Manolo Labor said.
“SMI is always in touch with Glencore. Its last statement [to SMI this month]is that Glencore’s approval of the [SMI] 2014 Work Program and Budget illustrates that Glencore continues to fully support the Tampakan project,” Labor told reporters in a briefing.
SMI is the Philippine government’s contractor for the Tampakan project. Glencore-Xstrata holds 62.5 percent of SMI while Indophil Resources NL owns the remaining 37.5 percent.
Since April 2013, there has been considerable uncertainty over the future ownership of Tampakan due to the possibility that Glencore-Xstrata may be forced to divest of its stake in the project to comply with conditions set by the Chinese government for approving Glencore’s merger with Xstrata last year.
One of those conditions is the sale of its copper assets, such as Tampakan.
For the same reason, Glencore is also considering selling its Las Bambas copper mine project in Peru. Las Bambas is in an advanced phase of construction and is due to start production in 2015.
In January 2014, Indophil confirmed speculations that the world’s biggest miner was pulling out of the Tampakan project because it was no longer keen to pursue development of greenfield projects.
SMI’s Labor, however, said that Glencore in August 2013 decided that it would sell Las Bambas and keep Tampakan.
“That sale, I believe, will be finalized by September 2014,” the SMI official said.
Labor also noted that recent developments in the Philippine government’s position—particularly the establishment of an interagency working group (IAWG) tasked to address issues concerning the project—were enough to compel Glencore-Xstrata to drop its divestment plans.
Among the issues that the IAWG will address is a recommendation on how to deal with indigenous peoples and other stakeholders who stand to be affected by the mining project and resolving the open-pit ban issued by the local government of South Cotabato.
Mines and Geosciences Bureau (MGB) director Leo Jasareno, in a separate interview, said an initial draft of the Tampakan work plan has been submitted by the IAWG to the Mining Industry Coordinating Council (MICC) last month.
Jasareno said that the MICC returned the work plan to the IAWG for revision, adding that they expect to discuss the recommendations on Wednesday, February 26.
“SMI was invited to join this meeting,” the MGB chief said.
Meanwhile, Labor said they hope to obtain the MICC’s approval of the inter-agency working group’s final recommendations within this quarter, noting the it will serve as a “go signal” for SMI to start with the process of acquiring a declaration of mine project feasibility (DMPF).
Such declaration—which includes a proponent’s final rehabilitation plan for the venture and an environmental protection and enhancement program, among others—is the final requirement for a mining company to commence development of a project.
Discovered in 1992, the Tampakan project is a 2.9-billion metric ton deposit containing an estimated 15 million tons of copper and 18 million ounces of gold at a 0.2 percent copper cut-off .