Indophil Resources has been advised by Glencore Xstrata that it intends to divest its majority interest in the US$5.9 billion Tampakan Gold-Copper Project in southern Mindanao. Melbourne-based Indophil advised of the mining giant’s intention in its quarterly report released last week.
The report stated: “All indications point to Glencore Xstrata seeking to divest its majority interest in the Tampakan Copper-Gold Project.” It said that a possible divestment of the project had been under consideration since April 2013 and was seen as necessary in order to fulfil conditions set by the Chinese government to approve the merger of commodities giant Glencore and the mining company Xstrata.
Glencore Xstrata also announced in September that it was no longer focusing on ‘greenfield’ mines, such as the Tampakan site, preferring to work on existing mines, or ‘brownfield’ sites.
The Indophil report conceded that the Tampakan project, located in a troubled section of Mindanao, had run into problems, chiefly the provincial government's ban on open-pit mining which delayed the start of development.
The mine would be the Philippines’ largest ever foreign investment but it has faced opposition from church, community and environmental groups and would require numerous other government and community permits to be obtained.
In August, 2013, Glencore Xstrata said it was laying off nearly all workers at the Tampakan project amid continued delays.
Indophil said in its quarterly report that the company and its local partners “remain optimistic that the pathways for the development of Tampakan will be cleared.”
Glencore Xstrata owns 62.5% and Indophil owns 37.5% of a joint venture that holds a 40% controlling stake in Sagittarius Mines, which operates the Tampakan project.
Glencore Xstrata was providing the “technical, financial and managerial resources for the development of the Tampakan project,” Sagittarius Mines’ website states.
The Indophil statement did not say how the divestment would be carried out but it stressed that “with Indophil holding a strategic pre-emptive right over Glencore Xstrata’s interest, Indophil has a considerable ‘say’ in any Tampakan divestment process.”
“We will work with Glencore Xstrata to assist in meeting objectives for the project,” the report adds.