Tampakan project budget for 2014 down to $9M

KORONADAL CITY (MindaNews / 8 May) – Foreign-backed Sagittarius Mines Inc. (SMI) has cut its expenditure this year for the controversial Tampakan copper-gold project to around a third of its budget in 2013.

Australian firm Indophil Resources NL revealed in its first quarter report that funding for the Tampakan project’s work plan for 2014 is less than $9 million or at least P396 million at the current exchange rate.

“The work plan continued to reduce expenditure, initiated last August, from a planned US$54 million 2013 budget down to an actual 2013 spend of US$33 million,” Indophil said in a disclosure to the Australian bourse.

The work plan will focus on getting the approvals of the Philippine government for the Tampakan project to proceed to commercial stage, the report said.

Indophil owns 37.5 percent of the 40-percent controlling equity at SMI, with the 62.5 percent held by Glencore Xstrata plc.

The Tampakan project, touted as the largest known undeveloped copper-gold minefield in Southeast Asia, has been hampered by the open-pit mining ban imposed by the provincial government of South Cotabato since 2010.

South Cotabato hosts the bulk of the minerals SMI plans to extract using open pit mining. The mines development site also straddles the provinces of Sultan Kudarat and Davao del Sur.

SMI has been granted a conditional environmental compliance certificate (ECC) in February 2013 by the Department of Environment and Natural Resources, after the agency twice rejected the application the previous year.

The Tampakan project was initially set for commercial operation in 2016 but in late 2012, SMI announced it was moving the target to 2019, a year before the project’s Financial and Technical Assistance Agreement (FTAA) ends.

The national government granted the FTAA for the Tampakan project in 1995. It has a lifespan of 25 years and can be renewed for another 25 years.

In August 2013, SMI announced an operational downsizing that led to the phased retrenchment of close to 1,000 workers, retaining only at least 100 employees.

The company eventually sold a number of vehicles and office equipment as a result of the downsizing.

The feasibility study for the Tampakan project, which is staunchly opposed by the local Catholic Church and environmental groups primarily on concerns over the environment and food security, has been completed in April 2010.

Based on a company study, the Tampakan project has a 17 year-life-of mine that can annually produce 375,000 metric tons and 360,000 ounces of copper and gold, respectively.

It requires an estimated $5.9 billion, including a provision for a $900-million dedicated power station, to fully develop the Tampakan project, the company said.

URL: http://www.mindanews.com/top-stories/2014/05/08/tampakan-project-budget-for-2014-down-to-9m/

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