Tampakan project could be single largest investment for Mindanao

The Tampakan project is being pursued by SMI in the towns of Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur.

The project has estimated deposits of 12.8 million metric tons of copper and 15.2 million ounces of gold.

“Bringing a large-scale copper deposit like Tampakan into production will help the world meet a demand-supply need for copper to use in electricity generation and distribution,” Laufmann said.

Laufmann said that as the world emerges from the current global financial crisis, it will need electricity to drive domestic infrastructure development.

“The Philippines, through Tampakan, will be seen as a major contributor to the future supply of global copper,” he said, adding the amount of $5.2 billion is more than three times the country’s foreign direct investment of $1.52 billion last year and bigger than the country’s entire Public Sector Infrastructure Budget for 2009 of P229 billion.

Swiss miner Xstrata Copper exercises management control at Sagittarius with 62.5% interest. Indophil holds 34.23%; Filipino conglomerate Alsons Corp. owns the rest but earlier agreed with Indophil for a buy-out. 

Xstrata last year tried but failed to wrest Indophil’s Tampakan interest in a hostile takeover bid that eventually placed Alsons in the “priority seat.” 

Indophil shareholders  had voted for the board to sell its Tampakan asset to Alsons, which is backed by Crosby Capital Ltd. of Hong Kong, through the forging of a memorandum of intent by both parties (Indophil and Alsons).

Laufman said the corporate war with Xstrata is “over and both companies are maintaining a professional relationship” and that Indophil is committed to push forward the Tampakan project. 

“The final feasibility study stage is expected to be completed in April next year at a cost of $50 million, and Indophil will be funding 37% of it,” he said.

Recently, Xstrata announced it has completed the extended pre-feasibility study (XPFS) of the Tampakan project and that deposits will be extracted through open-pit mining, a method opposed by the Koronadal diocese  and environmental groups. 

The South Cotabato provincial government is still deliberating on a proposed environment code that prohibits open pit mining in the area, as pressures mount from mining critics and national government officials.

Laufmann said financing for the project will be sourced through international banks or governments but he declined to identify them pending the completion of the final feasibility study.

Under the XPFS, initial production stage is set by 2016 in a 20-year operation that stands to earn the firm $2 billion estimated annual income. (MindaNews)