Xstrata says Philippine mine will need at least $5.2 bln
04.22.09, 04:12 AM EDT
forbes.com
MANILA, April 22 (Reuters) - Xstrata Copper, one of the world's top copper miners, said on Wednesday its copper-gold project in southern Philippines will require an initial outlay of $5.2 billion to develop, according to the results of its pre-feasibility study.
The unit of diversified Swiss global miner Xstrata ( XSRAF.PK - news - people ) has a controlling 62.5 percent interest in the Tampakan project, considered the largest undeveloped copper-gold deposit in Southeast Asia.
The mine is estimated to contain 12.8 million tonnes of copper and 15.2 million ounces of gold, according to Xstrata.
The Tampakan mine is projected to produce an average 340,000 tonnes of copper a year and 350,000 ounces of gold for a 20-year operation period, Xstrata Copper's Philippine affiliate Sagittarius Mines Inc said in a statement.
First production is targeted in early 2016.
Peter Forrestal, president at Sagittarius Mines, said in the statement that the project's shareholders, which include Australian miner Indophil Resources and Philippine firm Alsons Consolidated Resources, are currently evaluating the results of the pre-feasibility study.
He said the company is planning to start public consultations later this year, hoping to receive acceptance from surrounding communities for the project.
'The decision to invest will come at a later stage after the development and approvals processes,' Sagittarius spokesman John Arnaldo told Reuters when asked about the company's investment plan for Tampakan.
Discovered in 1991, the project has never left the drawing board due to environmental problems and communist insurgencies. In December a worker in the Tampakan mine was killed and two others wounded by a lone gunman believed to belong to the Maoist-led New People's Army rebels.
The Philippines is targeting to draw between $10 billion and $13 billion in investments into its mining sector by 2013. But only around $1.8 billion has flowed in since 2004, dogged by legal uncertainties, disputes with local partners, insurgencies and opposition from the Catholic Church.
(Reporting by Manolo Serapio Jr.; Editing by Michael Urquhart)
((manolo.serapio@thomsonreuters.com; +632 841 8936; Reuters Messaging: manolo.serapio.reuters.com@reuters.net)) Keywords: XSTRATA PHILIPPINES/
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