Department of Environment and Natural Resources (DENR) Secretary Angelo T. Reyes expressed confidence the minerals industry sector is now on the verge of takeoff for its long-anticipated boom, which he foresees setting in in 2008.

Reyes said the mining industry’s takeoff this year has become apparent with the presence of the world’s biggest players, Anglo-American Plc and Xstrata Copper, each pouring multi-million dollar investments in the development of two of the most promising mining projects in the country.

“The major players are now here, and their investments indicate increased confidence of global mining investors in the Philippines.” Reyes said. “This marks a significant takeoff for the industry and, if sustained we can well anticipate a mining boom starting next year.”

More importantly, Reyes added, such improved confidence confirms the rich mineral endowment of the Philippines and is a testimony to the competitiveness of the government’s mining policies and overall stability of the country.

The DENR chief’s approval of several mining permits last year was also considered by investors as an affirmation of the government’s resolve to promote mining.

Just last week, Reyes said that he has approved the Exploration Permit of Manila Mining Corp. (MMC) after being informed that Anglo-American Plc, through its local subsidiary Anglo-American Philippines Exploration Inc., is finalizing the joint venture (JV) agreement with MMC for the exploration of the Bayugo Copper Gold Project in Anislagan, Placer in Surigao del Norte. Anglo-American is a London-based global mining player with mining operations in different parts of the world.
Anglo-American has committed to spend an initial US$10 million for exploration works in the next two years in the project. The Bayugo copper-gold prospect is similar in nature and occurrence with the well-known and adjacent Boyungan Copper-Gold Porphyry Deposit that Anglo is exploring under a JV with Philex Mining Corp.

“Together, Bayugo and Boyungan would make another world-class gold-copper project that should further firm up the Philippines’ place in the world mining map” Reyes said.

In December 2006, Swiss mining giant Xstrata Copper exercised its option to acquire 62.5% of the Tampakan copper-gold deposit in South Cotabato from Indophil Resources NL. The management handover of the project is expected to occur on 30 March 2007.

This move of Xstrata is seen to be a significant development as confidence and interest are building up in the industry. This decision came after the encouraging results of the pre-feasibility study commissioned by Indophil on its Tampakan property. The Tampakan deposit is one of the largest undeveloped copper deposit in southeast Asia and the western Pacific estimated to contain 11.6 Million metric tons of copper and 14.6 Million ounces of gold at 0.3% Cu cutoff. The project will require US$2 billion to put into commercial operation.

More major players
Aside from Anglo-American and Xstrata, the DENR chief also cited three more multinational mining firms, Chemical Vapor Metal Refinery Co. (CVMR), Phelps Dodge, BHP-Billiton, which will firm up their position in the mining industry.

“CVMR has plans to invest in nickel processing and refinery project, while Phelps Dodge has firmed up its interest to bid for the development of the Batong Buhay Copper-Gold Project in Kalinga,” Reyes said.

On the other hand, he said, BHP-Billiton in partnership with local mining companies are now exploring the vast nickel deposits in Pujada, Davao Oriental.

Reyes also cited the progress of the Didipio Copper-Gold Project of Australasian Philippines Mining Inc. and of the Masbate Gold Project of Filminera Resources Corp.

The Didipio Copper-Gold Project, which is now owned by Oceana Gold Ltd of New Zealand, has commenced civil works last year to prepare for plant construction which will begin in the middle of this year. Commercial operations are anticipated to commence by the end of 2008 at a total project cost of US$79 million.

The Masbate Gold Project has submitted its feasibility study to the DENR and is expected to start construction work by the first quarter of 2007 at a cost of US$100 million. Commercial production is projected to commence by 2008.

The government is revitalizing the minerals industry to serve as catalyst for economic growth in the country particularly in the countryside. The revitalization program is projected to bring in about US$6.5 billion in investments in the medium term, and create over 200,000 additional jobs.

January 25, 2007