Plans of global mining firm Xstrata Plc to create a $5.9 billion copper-gold project in the Philippines' southern region has been relegated to the sidelines as the country's chief executive ordered the execution and implementation of a mining reform bill, effectively halting further new projects of other mining firms as well.
Plans of global mining firm Xstrata Plc to create a $5.9 billion copper-gold project in the Philippines' southern region has been relegated to the sidelines as the country's Chief Executive ordered the execution and implementation of a mining reform bill, effectively halting further new projects of other mining firms as well.
"That seems to be the more prudent way," Philippine President Benigno Aquino told journalists at a forum in Manila on Wednesday in response to queries if Xstrata's plans would be affected by his order.
"I don't have confidence that the existing laws do adequately protect the environment or do adequately share the resource that belongs to the people of this country," Mr Aquino added. "The safest position would be to await these new amendments."
Mr Aquino's pronouncements could possibly affect recent developments concerning the country's southern Mindanao area, as it would take a year before the mining bill is passed into law due to time constraints.
The federal government wants a royalty of 7 per cent on all mining projects, on top of the 2 per cent excise tax being charged on the operating 33 mines in the country.
Southern Mindanao is hoping for a surge of investment boom after the government and the country's largest Muslim separatist group reached a peace deal this week. Foreign businesses are interested in developing power, manufacturing, agriculture and mining interests in the region since the deal effectively ended more than four decades of conflict in the region.
The $5.9 billion copper-gold Tampakan project of Sagittarius Mines, a unit of Xstrata and part-owned by Australian miner Indophil Resources NL, is one of the many projects that will be greatly affected by the Philippine president's order. The company had planned to commence production on 2016, albeit still having to secure the necessary environmental clearance for the project.
In January, the Philippines denied Xstrata an environmental clearance due to a ban in open-pit mining.
The Tampakan project is forecast to churn out some 340,000 metric tonnes and 350,000 ounces of copper and gold annually, respectively, for two decades upon start of operations.
"Any decision to construct the proposed mining operation would depend on obtaining these required approvals as well as an investment decision by shareholders," Sagittarius Mines said in a statement. "If approved, the total tax and royalty revenues provided by the mine over its 20-year life are estimated at around $7.2 billion."
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