The entry of diversifying San Miguel Cop. in the Tampakan copper-gold project in South Cotabato will fast-track the development of the $ 5.9 billion mining project, government officials said Wednesday.
The development of the Tampakan project was stalled due to opposition from the host local government unit citing environmental concerns.
"The entry of San Miguel (in Indophil), it changes the landscape in Tampakan. Since San Miguel is Filipino, this will probably address the issue about foreign participation... We have always advised foreign investors that the key to successful mining projects is having local partners," Leo Jasareno, Mines and Geosciences Bureau director told reporters.
San Miguel and Indophil Resources NL of Australia announced on Friday that the food and beverage giant will take in a 10 percent share in Indophil for $ 40 million.
Indophil entered into a binding exclusivity period with San Miguel until January 10, 2011 during which San Miguel will complete its due diligence.
San Miguel is reportedly contemplating additional stake in Indophil.
"It looks like yung 10 percent is an initial transaction. San Miguel is still doing due diligence. Indophil has reported that there is an indication that San Miguel will buy more of Indophil, there is speculation that eventually San Miguel will take the entire 37.5 percent of indophil in [Tampakan]," he added.
Jasareno said the San Miguel's entry is seen as an opportunity "to improve social acceptability" of the project.
Indophil owns 37.5 percent of the Tampakan copper-gold project. The remaining 62.5 percent is held by Xstrata Queensland Ltd., the copper unit of global miner Xstrata plc.
Ramon Paje, Environment Secretary said the Aquino administration is supportive of mining projects as it is a contributor to the country's economic growth.
"Local government units cannot issue orders that goes against national policy," he said.
Mining investments in the country hit $ 2.8 billion since 2003 and government is hoping to increase it to $ 13.5 billion by 2013.
Paje said the department has initiated talks with San Miguel how soon the project can be fast-tracked.
The Tampakan project has an Australian Joint Ore Reserves Committee mineral resource estimate of 2.4 billion tonnes at a grade of 0.6 percent copper and 0.2 grams per tonne gold.
The known deposit is one of the largest underdeveloped copper-gold deposits in the world. It is estimated to contain 13.5 million tons of copper and 15.8 million tons of gold.
The project management team for the Tampakan project is in the process if completing the Mine Environmental Impact Assessment and expects to submit it to the government in the first half of 2011.
Construction activities may start in 2012, subject to necessary community, government and shareholder approval. (PNA)
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