Philippines delays decision on Xstrata mine

Posted at 09/20/12 6:22 PM

MANILA - Swiss mining giant Xstrata is unlikely to get quick approval for its $5.9-billion copper-gold project in the Philippines as the company had hoped, President Benigno Aquino's spokesman said Thursday.

Xstrata's local operating unit sought direct intervention by Aquino and the interior ministry in July after what would be the country's largest ever foreign investment was blocked by the local government overseeing the project.

Mark Williams, general manager for external affairs of Sagittarius Mines Inc, Xstrata's local unit, told reporters Thursday that it expected Aquino to meet a government-imposed deadline for giving the project's go-ahead.

But presidential spokesman Ricky Carandang said the timetable would likely not be met because the person overseeing the government's review, Interior Secretary Jesse Robredo, died in a plane crash last month.

The review was now being overseen by Robredo's replacement, Mar Roxas ,and the government could not commit to delivering its ruling by September 30, Carandang said.

"I can confirm that we were committed to a September deadline. We understand the importance of this project," Carandang told AFP.

"(But) we have to give Secretary Roxas time to study it," he said.

Williams said earlier at a mining conference that Sagittarius was confident of getting Aquino's approval for an environmental compliance certificate (ECC) that would overturn a local government ban on open pit mining.

"We have conducted the most extensive environmental impact study and assessment ever here in the Philippines... and if logic will prevail then the ECC should be granted immediately," Williams said.

He added the company was confident of beginning operations on the Tampakan project by 2016, as per its original timetable.

Tampakan's application had been rejected partly due to a 2010 ordinance by South Cotabato province, the project site, banning open-pit mining.

Without an ECC, which certifies that a project will not significantly harm the environment, Williams said no mine construction or production could proceed.

Sagittarius has ploughed $350 million on the $5.9 billion Tampakan project, which it describes as one of the world's largest undeveloped copper-gold deposits.

If allowed to proceed, Williams said it would generate $7.2 billion in tax revenues for the Philippine government over 20 years.

The total project cost would top Royal Dutch Shell's $4.5 billion Malampaya offshore natural gas field, completed in 2001.

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