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GENERAL SANTOS, Philippines – Despite reports mining giant Glencore-Xstrata International will cut by half its worldwide operations, its minority partner in the Philippines said the much delayed and controversial Tampakan Copper and Gold project will go ahead even at a revised timetable.
“I note Glencore Xstrata’s extensive public statements out of London last night (Sept 10, Manila time). Tampakan is and will remain a world class asset,” said Gavan Collery, Indophil Resources NL vice president for corporate affairs.
In an email, Collery said the Tampakan project has only been revised and not suspended.
Collery issued the statement after Glencore-Xstrata said it will suspend half of inherited Xstrata projects.
Among the Xstrata projects before the former was taken over by Glencore is Sagittarius Mines Inc. (SMI), holder of the Tampakan Copper and Gold Project.
“Indophil is committed to the revised work plan and will support SMI in its implementation,” Collery added. Collery was in Manila where he delivered a speech at the Philippine Mining Conference in Sofitel in Manila last Wednesday, Sept 11.
Indophil owns 37.5% of SMI.
Glencore-Xstrata holds the controlling shares of SMI at 62.5%.
In May, Glencore International took over Xstrata Plc to form the world’s fourth largest diversified mining company. The takeover, valued at $76 billion, is one of the largest corporate mergers in the world over the last decade.
Last month, however, SMI announced it is downsizing its operations and drastically cutting its annual budget following uncertainties over government mining policies.
It also laid-off close to 1,000 employees and consultants leaving the company with only 140 employees.
Glencore-Xstrata cited difficulties in obtaining the consent of the provincial government of South Cotabato which passed an ordinance banning open pit mining in the province in 2010.
A source, however. also said Glencore is lukewarm to ‘greenfield’ mining ventures and will focus more on ongoing and operating mining projects following the merger of two global mining corporations.
Global mining reports last Tuesday, Sept 10, did not indicate Glencore-Xstrata will also suspend activities in the already downgraded operations of SMI.
Last month, SMI executive vice president Justin Hillier said it will focus on “enhancing collaboration with National Government partners and other stakeholders, to resolve the challenges facing the project.”
Also last week, Glencore-Xstrata announced it was writing of some $2 billion worth of assets acquired from Xstrata.
Glencore is already selling its copper project in Peru, one of the conditions set by China’s mining regulatory body before the latter approved the former’s merger with Xstrata.
In 2009, Chinese company Zijin Mining Group expressed interests in acquiring the Indophil stakes in SMI. The Chinese mining company however backed off from the takeover talks after it failed to get the approval from its government.
Philippine food giant San Miguel Corporation also did due diligence on SMI for possible acquisition of Indophil stakes at SMI but decided against it.
Should Glencore-Xstrata decide to sell its controlling stakes in SMI, Indophil will have the right of first refusal being its minority partner.
Glencore-Xstrata’s decision to downgrade SMI’s operation has dampened any possibility the mining company will be able to meet its announced 2019 commercial production schedule. – Rappler.com