Glencore's Philippine copper unit plans $600m expansion

Posted at 09/20/2012 3:43 PM
The logo of Glencore is seen in front of the company's headquarters in the Swiss town of Baar September 7, 2012. / REUTERS

MANILA - Commodities trader Glencore International  is close to concluding technical and financial studies for its $600-million plan to double capacity at the Philippines' only copper smelter and refinery, a top official of the smelter said on Thursday.

Work on enlarging operations at the refinery in the central Philippine province of Leyte could start as soon as next May, once the plan has been approved and finalised by the end of this year or early in 2013, Angel Veloso Jr., chairman of the Philippine Associated Smelting and Refining Corp (PASAR), told Reuters.

"In June, we announced investment of up to about $600 million," Veloso told Reuters. "The expansion plan is to increase capacity to a maximum of 1.2 million tonnes of copper concentrate."

The plant now processes 720,000 tonnes of copper concentrates annually and refines 215,000 tonnes of cathodes.

Technical studies should be completed by October and financial studies by December, Veloso said, adding that the project would take two to three years to complete.

Regarding the investment plan, Trade Undersecretary Cristino Panlilio said: "They are committed to that."

PASAR, which is 78-percent owned by Glencore, the world's largest diversified commodities trader, also wants to build a 200-MW coal-fired power plant to lower its energy cost, and may sell extra power to users at an industrial estate it plans to build near its refinery, Panlilio added.

"They have already informed us of their intention to file for (tax) incentives for the project," he said.

PASAR resumed operations at the refinery last month after it was shut in January by a fire.

The company, which has been producing copper cathodes for export since 1976, was acquired from the Philippine government by Glencore in 1999.

PASAR buys and refines copper concentrates from mines in Australia, Canada, Southeast Asia, Papua New Guinea and South America.

PASAR is one of only a handful of companies involved in downstream metals processing in the Southeast Asian country.

Philippine President Benigno Aquino wants the mining industry to shift to more value-added output by setting up processing plants and moving away from direct shipments of ores, so as to help the country raise more revenue from its largely untapped mineral resources, estimated to be worth $850 billion.

(Reporting by Rosemarie Francisco and Erik dela Cruz; Editing by Clarence Fernandez)