Geneva-based commodity trader Trafigura has signed a contract to buy all the copper and gold concentrate output from OceanaGold’s $350 million Didipio mine in the Philippines. The deal is for a minimum of five years from start of production, which is scheduled by the end of this year.
Didipio is on the country’s main island of Luzon, in Nueva Vizcaya province. It is scheduled to have a 16-year mine life with its open-pit operation producing an annual average of 100,000 ounces of gold and 14,000 tonnes of copper. The contract will see Trafigura take delivery of copper and gold from Didipio and manage all land and sea transport to smelters in Asia.
OceanaGold’s managing director Mick Wilkes says, “The copper/gold concentrate produced from Didipio will be high quality and we are very pleased with the commercially competitive terms that we have agreed with Trafigura.”
In February, the company announced it would spend up to $10 million for exploration projects near Didipio to boost the mine’s output and extend mine life. The mine is estimated to have 1.68 million ounces of gold and 229,000 tonnes of copper.
The deal comes as the Philippines seeks to lift revenue from its estimated $1 trillion mining sector. The new executive order clarifies the nation’s mining policy in a bid to attract more investments while ensuring protection for the environment. Optimism that an 18-month moratorium on new mining projects would be lifted has been countered by Manila’s plan to raise royalty rates.
The executive order means the moratorium is lifted on the processing of exploration permits in place since January 2011, the government will not grant new mining contracts until Congress approves a proposal to impose royalties on industry operators.