Open pit ban a ‘hanging sword’ over investors’ decision for ‘commitment to proceed’

KORONADAL CITY (MindaNews/15 October) — The declaration of a “commitment to proceed” by investors of the Tampakan copper-gold project “will hinge on the lifting of the open pit mining ban imposed by South Cotabato,” one of the foreign backers said.

In its third quarter report released late this week, Australian firm Indophil Resources NL, which owns 37.5 percent of the controlling equity at Sagittarius Mines, Inc., appeared confident the open pit ban will be resolved in their favor.

“Indophil looks to [the] resolution of a provincial ban on open pit mining, leading to the formal ‘commitment to proceed’ decision in 2012,” Richard Laufmann, Indophil chief executive officer and managing director, said.

“The Tampakan project remains on track to proceed to the formal approvals process and the subsequent “commitment to proceed,” he added.

Laufmann said  Indophil remains confident that the provincial open pit ban, which the Philippine Government says is contrary to national law and must be rescinded, will be resolved amicably and in a timely manner.

He claimed that based on the current schedule, the project partners, which include the Philippine Government, are poised to consider a “commitment to proceed” during 2012, with construction also expected in late 2012.

SMI is the holder of a Financial or Technical Assistance Agreement (FTAA). Under the 1995 Mining Act, an FTAA may be  entered into between a Contractor and the Government for the large-scale exploration, development and utilization of gold, copper, nickel, chromite, lead, zinc and other minerals except for cement raw materials, marble, granite, sand and gravel and construction aggregates.

 

SMI is one of two FTAA holders in the country. The scope of its FTAA covers 23,571 hectares straddling Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur.

John Arnaldo, Sagittarius Mines corporate communications manager, earlier told MindaNews  they are hoping to acquire the environmental compliance certificate (ECC) for the mining project before the end of the year.

The ECC would allow the firm to go into the production phase slated to start in 2016. Notwithstanding the open pit ban, the Tampakan project is hounded by security threats from the communist New People’s Army and social opposition led by the local Catholic Church.

Laufmann said they expect Xstrata Copper to release a revised mineral resource estimate in the coming weeks.

Xstrata Copper, the world’s fourth largest copper producer, is the majority equity owner of Sagittarius Mines through its 62.5 percent interest and also the project manager.

The last mineral resource estimate for the Tampakan project, touted as the largest known undeveloped copper-gold deposit in Southeast Asia, was issued in October 2009.

Discovered in 1992, the Tampakan copper-gold deposit is a 2.4 billion ton mineral resource when measured at a 0.3% copper cut-off grade. It is estimated to contain 13.9 million tons of copper and 16.2 million ounces of gold, with potential for growth.

While 689 exploration, metallurgical and geotechnical holes have been drilled in the Tampakan project area since its discovery, the drilling program was suspended throughout the reporting period (third quarter) and no new assay results were received.

The Environmental Impact Assessment (EIA) for the power station, port and filter plant was finalized in August 2011. Completion of the requisite draft Environmental Impact Statement (EIS) and Environmental and Social Impact Assessment (ESIA) followed in September.

The focus of the work program remains on completing the resettlement study program and the EIA for the off-lease linear infrastructure and associated draft EIS and ESIA, Laufmann said.

The Tampakan Mine Project Feasibility Study (MPFS) was submitted to the Philippine Government in April 2010.

Investments for the commercial development of the Tampakan project was earlier pegged at $5.9 billion, including the provision of $900 million for a power station.

It is potentially the largest single foreign direct investment in the Philippines should the company proceed to commercial phase. (Bong Sarmiento/MindaNews)

Comments

comments