MVP, San Miguel in wait and see mode on Tampakan

MANILA, Philippines – Two of the country’s biggest conglomerates are in a wait-and-see mode on their minority stakes in the $5.9 billion Tampakan copper-gold project in Mindanao following the ownership changes at the stalled gold and copper mine project.

Both Manuel V. Pangilinan and Ramon Ang, respectively speaking in behalf of Philex Mines Corp and San Miguel Corp., said they will hold on to the stakes in Sagittarius Mines Inc., the mining operator.

“Our indirect ownership of SMI is very small, but there are no plans to sell it or expand the ownership at the moment kasi impression namin nakabinbin pa ang project (our impression is the project is still hanging in the balance),” Pangilinan told reporters after the annual stockholders meeting of giant PLDT, which he chairs, on Friday, June 14.

“Hold lang muna (we’ll hold on to it),” Ang told reporters after San Miguel’s stockholders meeting on Tuesday, June 11. Ang is the president and COO of the country’s biggest business group.

Philex has a 1.3% stake in Indophil, while San Miguel subsidiary Coastal View Exploration Corp. has about 3.99%. The Alsons group holds 20% of Indophil, while SM group also has minority stake.

Australian-controlled Indophil Resources Philippines holds 37.5% of SMI while its Swiss global partner Xstrata controls 67.5% of Sagittarius Mines Inc.

Ownership changes

Questions about how the top local conglomerates will proceed with their stakes in the world class mining project arose after global commodities giant Glencore International acquired and took over Swiss miner Xstrata Plc in May.

The Glencore acquisition of Xstrata created a US$75 billion merged company, the world’s 4th largest diversified mining company.

A management shake-up has started at Sagittarius Mines, and further delays are seen as merger issues emerge.

“We do not know what Glencore’s plans are and we don’t know what the stakes are involved,” Pangilinan also added in a press conference following his speech at the annual stockholders meeting of the Philippine Long Distance Telephone Friday.

Possible sale of Sagittarius as a result of the takeover was averted after Glencore agreed to sell its stakes at the Las Bambas copper project in Peru. It was one of the conditions laid down by China as the latter feared the growing influence of the merged companies in the world copper production and trading.

Glencore and Xstrata are publicly listed and investors are eagerly watching developments in the merger-takeover.

Pangilinan said his group is now pre-occupied with its ongoing mining operations in Baguio and in Surigao del Norte. 

Local permit

Pangilinan said it would be a waste if Sagittarius cannot operate the gold and copper mine because of problems in obtaining permits for open pit mining from the local government of South Cotabato.

“Sayang. It is a world class project,” Pangilinan said.

Although Sagittarius was already issued environmental compliance certificate (ECC), it still needs to obtain approval from the provincial government.

Governor-elect Daisy Avance-Fuentes has repeatedly indicated that the provincial environment code will stay.

In 2010, the South Cotabato provincial board passed an ordinance banning open pit mining in the province.

Fuentes signed the ordinance just weeks before she stepped down to take her oath as member of the House of Representative.

Fuentes reclaimed her post as governor in a tightly 3-cornered contested race against defeated Gov. Arthur Pingoy and former Koronadal mayor Fernando Miguel.

The $5.9-billion Tampakan project is considered the largest undeveloped copper and gold deposit in this part of the world.

The Tampakan copper and gold mine is said to contain 13.9 million metric tons of copper and 16.2 million ounces of gold. The mine is expected to add 1% to the country’s gross domestic product per year once it starts operating. – with reports from Edwin Espejo/Rappler.com