MAC: Mines and Communities

Philippines update

Published by MAC on 2007-02-28

Philippines update

28th February 2007

There is a distinct Australian theme to this week's Philippines update (leaving aside a statement from the JP Morgan investment bank that it's positive about investing in Philippines' mining). We highlight opposition from the Catholic Church to Indophil and Xstrata's Tampakan Project, alongside continued concerns over Lafayette's Rapu Rapu project.

The Philippine Government has been boasting about the supposed investment of BHP Billiton, and heavily-criticised Anvil Mining is making a foray into the Cordillera region. Mining is also cited as one of the key reasons for Australian aid for development in Mindanao.

South Cot Diocese: still no to mining


23rd January 2007

GENERAL SANTOS CITY -- Efforts to get the local Catholic Church to support the huge mining venture in Tampakan, South Cotabato have proved futile as calls to stop the project were repeatedly aired instead. Bishop Dinualdo Guttierez of the Diocese of Marbel repeatedly urged the public to oppose the copper and gold project of Sagittarius Mines, Inc. (SMI).

The Bishop's appeal has been a regular feature played minutes apart over the Diocesan-owned DXCP radio station here. The station's broadcast can be heard in neighboring South Cotabato, Sarangani and Sultan Kudarat provinces. Earlier, Rolando Doria, Sagittarius project coordinator, said they extended a conciliatory hand to the Catholic religious leaders in connection with the firm's planned exploitation of world class mineral deposits in the area.

Gutierrez warned of poisoning, livelihood displacement, food insecurity and environmental catastrophe when the firm goes into full blast operations. "If the firm will excavate the resources in Tampakan, they will cut the trees and it will cause floods. They will also use cyanide to process the resources and it will poison the fishes like tilapia," he added, referring to the water outflow from the project site ending towards Lake Buluan, where tilapia-raising is a multi-million industry.

He said food security depends on care for the environment. Gutierrez stressed that if the environment will be abused, she will later unleash her wrath at humans with "inconceivable damage." The bishop discussed the "ecology of peace," where man and nature are related to each other.

Despite the rejection of the Catholic religious leaders, Doria said they are still open to dialogues in the hope of convincing the Church to support the venture that SMI claims will boost the area's economy.

"Our doors are always open. We respect the position of any sector even [if] they are adversely against us," he said. The Tampakan project straddles the towns of Tampakan, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur.

Ownership changes swept the venture last month after major global firm Xstrata Queensland Limited or Xstrata Copper exercised its option.

Before the option was exercised, Indophil Resources NL owned 95% of the venture and 5% by local firm Alsons Corp.

Now, the beneficial ownership interest in the project is A class shareholders - Xstrata Copper 62.5%, Indophil 32.5% and Filipino partner Alsons Corporation 5% - with B class shareholders (limited voting and capped dividend rights) to the Tampakan Mining Corporation and Southcot Mining Corporation (the Tampakan Group of Companies).

Tony Robbins, Indophil managing director, appeared unfazed by the opposition from the Catholic Church, claiming in a recent press release that the affected communities are fully supporting the project.

Robbins also pointed out the support from the national and local governments that the venture generated. The mining industry is projected by the national government to rejuvenate the country's economy following Supreme Court rulings on the constitutionality of the 1995 Mining Act.

SMI is expected to conduct full blast operations in early 2011. Presently, the firm is on the stage of a definitive feasibility study with funding of US$ 30 million or about P1.5 billion.

Philippine govt says Australia's BHP to invest 1.5 bln usd in Davao nickel plant

AFX News Limited - Forbes

23rd February 2007

MANILA (XFN-ASIA) - Australian miner BHP Billiton Ltd will invest 800 mln-1.5 bln usd in a nickel processing plant in Davao Oriental, southern Philippines, Environment and Natural Resources Secretary Angelo Reyes said.

Reyes said BHP Billiton intends to start construction of the processing plant early next year, with commercial operations slated by 2010.

The plant will have annual capacity of 50,000 metric tons.

The Australian miner will also apply for the conversion of its mining rights from a mineral production sharing agreement (MPSA) to a financial and technical assistance agreement (FTAA), Reyes said.

Under the Philippine Mining Act, mining contractors with 60 pct Filipino ownership may operate a mining area for a period of 25 years and renew it for another 25 years if the mining status is for an MPSA. On the other hand, an FTAA status, which would suit large-scale mining operations better, allows 100 pct foreign ownership.

Reyes met here with Chris Campbell, BHP's chief development official for stainless steel materials, and Philip Hopkins, group manager for regional development.

The Filipino official said BHP will tap its nickel reserves at the Pujada Peninsula in Davao Oriental.

The mine area, covering close to 12,000 hectares, is estimated to have 150 mln metric tons of nickel grade ore.

'They (BHP Billiton) were upbeat on the developments of their project and they brought up the possibility of building their own nickel processing plant here in the Philippines, should the volume of the deposit and other sources so warrant,' said Reyes.

Reyes added BHP Billiton was also in talks with local mining firm Benguet Corp for a possible joint venture project in Benguet's nickel mining claim in Zambales Province, north of Manila.

Philippine nickel production surged to 50,637 metric tons in 2006 from only 16,972 metric tons in 2004. (1 usd = 48.24 pesos)

Billiton investing $1.5bn

By Othel V. Campos, Manila Standard

24th February 2007

BHP Billiton Ltd. of Australia and the United Kingdom, the world's biggest mining company, plans to invest $1.5 billion in a nickel processing plant in the Philippines, the Department of Environment and Natural Resources said yesterday.

BHP Billiton executives paid a courtesy visit to the environment and natural resources department yesterday to make known their plans to invest heavily in the mining sector.

The mining giant, along with Philippine partners Hallmark Mining Corp. and AustralAsia Link Mining Corp., plans to start construction of a nickel processing plant by 2010.

The company also plans to conduct a pre-feasibility study on an 11,799-hectare area in Pujada Peninsula, Davao Oriental. The area has an estimated nickel reserve capacity of 150 million metric tons at 1.3 percent nickel concentration.

"They were upbeat on the developments of their Hallmark [mining] project and they brought up the possibility of building their own nickel processing plant here in the Philippines, should the volume of the deposit and other sources so warrant," said Environment Secretary Angelo Reyes.

Chris Campbell, Billiton's chief development official for stainless steel materials, and Philip Hopkins, group manager for regional development, said the nickel processing plant would have an annual capacity of 50,000 tons.

Billiton also said the company was in talks with Benguet Corp. for a possible joint-venture project in a nickel mining claim in Zambales.

Four other players-Canada's CVMR, Japan's Sumitomo Metal Mining Co. and China's CITIC and Jinchuan Group--are also interested in investing in nickel projects in the country, Reyes said.

CVMR earlier expressed interest in building its own nickel processing plant, with investments reaching as much as $3 billion.

Sumitomo is interested in building another nickel processing plant in Surigao del Norte, which will have an annual capacity of 30,000 tons. The project may require an investment of around P386 million.

It is expanding its Coral Bay nickel processing plant in southern Palawan in partnership with Rio Tuba Nickel Mining Corp. The expansion program seeks to double the plant's current annual production capacity of 10,000 tons of nickel and 750 tons of cobalt by 2008.

Mindanao still gets largest share from Australian aid


26th February 2007

The Australian government retains hope and trust in Mindanao as it pours 60 percent of its total aid for the Philippines to the cities and municipalities in Mindanao.

Australia's Ambassador to the Philippines Tony Hely bared this as the Philippines-Australia Community Assistance Program (PACAP)celebrated its 20th anniversary in developing communities in the country.

"Philippines remains as Australia's priority for partnership. The Australian aid has significantly increased," Hely said.

The government of Australia recently poured in P750 million in the Philippines for the next five years especially intended for the Southern portion of the country.

National Economic Development Authority (NEDA) Secretary Romulo Neri stressed the very reason of the Australian government in funding development programs in Mindanao.

"The whole world recognizes the growth of Mindanao is vital for the growth of the whole Philippines. We acknowledge the fact that only development is the main tool for peace and harmony in Mindanao," Neri explained.

"We see a very big potential on energy and mining. In fact, there are already 14 Australian companies that are now engaged and operating in this country," Hely said. (PNA)

Anvil to Proceed with Detailed Evaluation of Itogon Mineral Properties in the Philippines


19th February 2006

MONTREAL - Anvil Mining Limited ("Anvil" or "the Company") is pleased to announce that following completion of due diligence in December 2006, it has elected to proceed with a detailed evaluation of the Itogon Suyoc Resources Inc. ("Itogon") mineral properties in the Philippines. The Company made a cash payment of $2.0 million to Itogon on February 16, 2007 and will provide funding to a minimum of $2.0 million in exploration expenditures and use its best efforts to complete the detailed evaluation within a two-year period.

In August 2006, the Company signed an Evaluation and Development Agreement with Itogon, a private Philippines minerals company, for their gold properties in the Baguio District on Luzon Island in the Philippines. The Itogon properties cover an area of 2,896 hectares and are located 12 km to the southeast of Baguio City and approximately 200 km north of Manila, the capital of the Philippines. A map of the properties can be accessed at The properties also include the Itogon underground gold mine which, up until it was put on care and maintenance in 1996, produced approximately one million ounces of gold and 400,000 ounces of silver from ore with an average gold grade of 6.9 g/t.

The Baguio District has been the most significant gold producing district in the Philippines with historical production of 28 million ounces of gold and 2.3 million tonnes of copper. It is located within a dilation zone at a change of direction of the Philippine Fault Zone, a major geological feature which transgresses the Philippine archipelago for a distance of more than 1,200 km.

A great number of the epithermal gold and porphyry copper deposits in the Philippines appear to be spatially related to this major fault zone. The Philex Mine located 10 km to the southwest of the Itogon properties has historical production of 5 million ounces of gold, 5 million ounces of silver and almost 2 million tonnes of copper.

The agreement provides for the Company to acquire 100% of the Itogon mineral properties by completing a staged evaluation process, which, in addition to the cash payment of $2.0 million to Itogon, and funding to a minimum of $2.0 million in exploration expenditures includes the following terms and conditions:

- Subsequent to the detailed evaluation, completion of a feasibility study on a 'best efforts' basis within a period of two years;

- A cash payment of $500,000 upon transfer of Itogon's rights to the mineral properties to the Company;

- Payment of a Net Smelter Return (NSR) Royalty to Itogon on all mineral production derived from the Itogon mineral properties by the Company. For silver and copper production, the NSR Royalty will be calculated at a rate of 2.5% and 3% respectively, while for gold, it will be calculated according to a sliding scale, at a rate from 1.5% to 5%, directly dependent upon the selling price of gold; and

- A one-off production bonus payment to Itogon of $1.25 million, once 200,000 ounces of gold has been recovered from the Itogon mineral properties by Anvil.

Following the cash payment of $2 million in February 2007, the Company will now progress with the detailed evaluation of the properties which will include geological mapping and sampling and other evaluation work leading to a drilling program expected to commence in early 2008.

Anvil Mining Limited is an unhedged copper and silver producer whose shares are listed for trading on the Toronto Stock Exchange (as common shares) and the Australian Stock Exchange (as CDIs) under the symbol AVM. It owns and operates the Dikulushi copper-silver mine and the Kulu copper tailings operation in the Katanga Province of the DRC. In addition, the Company is currently developing the Kinsevere project as the Company's third mine in the DRC.

Common shares outstanding 56.7 million All amounts are expressed in US dollars, unless otherwise stated.

For further information:
Craig Munro,
Vice President Corporate & Finance and CFO,
Tel: +61 (8) 9481 4700,
Email: (Perth);
Robert La Vallière,
Vice President Investor Relations,
Tel: (Office) (514) 448-6664,
(Cell) (514) 944-9036,
Email: (Montréal);

JP Morgan to invest in RP mining


28th February 2007

JP Morgan, one of the biggest investment bank in the United States, said Wednesday it will finance major international mining companies that are investing in the Philippines.

Senior JP Morgan officials called on Department of Environment and Natural Resources (DENR) Secretary Angelo Reyes this afternoon and informed him the bank is negotiating with a number of "mining majors" who signified intentions of putting investments in the country's mining industry.

In a press conference, Hong Kong-based JP Morgan Securities (Asia-Pacific) Ltd. Ivor Orchard said due to worldwide demand for metal, it is interested in investing in gold, copper and nickel projects.

"The legal framework is in place. And we see that the Philippine government is very supportive to the industry," he added.

The Supreme Court earlier upheld the constitutionality of the 1997 Mining Act which opened up the sector to foreign investments.

Reyes said the arrival of major mining investors in the country, including JP Morgan, "is a clear manifestation that the Philippine mining industry is back in business."

The Philippine government is promoting investment in mining to foreign investors as estimates reveal there are about US$ 1 trillion worth of copper, gold, nickel and zinc deposits still unexplored. (PNA)


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