UPDATE 1-Manila's Sagittarius committed to Tampakan mine-official

Thu Sep 15, 2011 4:36am EDT

* Says hopeful open-pit mining ban will be lifted soon

* Says public consultations on Tampakan encouraging

* Eyes 500 MW coal-fired power plant for mine (Adds official's comments, background)

By Erik dela Cruz

MANILA, Sept 15 (Reuters) - Shareholders of the $5.9 billion Tampakan copper-gold prospect in southern Philippines are committed to the project despite a local ban that puts the mine at risk, and are hopeful the ban will be lifted soon, an official of Sagittarius Mines Inc said on Thursday.

But Sagittarius, the local affiliate of Xstrata Plc and Indophil Resources NL , was concerned about the "potential impact" of the open-pit mining ban on the project that is considered as Southeast Asia's largest undeveloped copper and gold prospect, said Mark Williams, the company's general manager.

"We're encouraged by the significant stakeholder support," Williams told reporters. "We are hopeful of a timely resolution."

Sagittarius hopes to start construction of the mine and other infrastructure, including a 500-megawatt coal-fired power plant, in the last quarter of 2012 once the local ban is lifted.

The Tampakan mine is estimated to contain 13.5 million tonnes of copper and 15.8 million ounces of gold, at a grade of 0.6 percent copper and 0.2 grams per tonne of gold. Sagittarius is looking to begin producing copper and gold at Tampakan by 2016.

Sagittarius has started in June a series of public consultations set to end this month, part of the process to convince the provincial legislative council of South Cotabato to lift the ban and obtain regulatory approval.

"It's a complicated process, but the feedback from stakeholder consultations has been very positive," Williams said, adding the feedback would be considered in the firm's Environmental Impact Statement to be submitted to the national government for its environmental compliance certificate (ECC).

Sagittarius needs the ECC before it could begin construction. It has so far spent about $300 million for the project, which it said was an example of the public-private partnership which the Aquino government has been promoting.

"We need to get three permits, one for the mine, one for the power plant, and one for the transmission corridor," Williams said.

HOPEFUL OVER BAN

On Wednesday, Environment Secretary Ramon Paje said he was hopeful the nearly one-year old ban would be lifted this year.

The ban illustrates the policy tug-of-war between the national and local governments on mining, worrying prospective investors who are waiting to get a share of the $1 trillion mineral deposits of the Southeast Asian country.

Of the $5.9 billion cost to develop Tampakan, Sagittarius will spend $900 million to put up the power plant.

Williams said any excess supply from the power plant would be sold and made available to the Mindanao grid. (Editing by Rosemarie Francisco and Ramthan Hussain)

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