* Indophil says talks ongoing on Glencore's divestment
* Indophil says committed to Tampakan project
* Glencore declines to comment
MELBOURNE/MANILA, Jan 30 Glencore Xstrata
plans to sell its majority stake in the $5.9 billion
Tampakan copper and gold project, its partner in the
long-delayed Philippines joint venture said on Thursday.
Glencore, with a 62.5 percent stake in the project, has made
clear it has little appetite for spending billions on building
new mines, and previously flagged it was reviewing its Tampakan
holding along with a range of other big-ticket projects.
"Glencore Xstrata has advised Indophil of its preference to
pursue divestment of its interest in Tampakan," Indophil
Resources Chief Executive Richard Laufmann said in the group's
Glencore declined to comment on Indophil's statement.
Laufmann said no formal sale process has begun but
discussions are going on, including informal talks with
Indophil, which has a pre-emptive right over Glencore's interest
in the project.
Indophil, which owns the remaining 27.5 percent stake in
Tampakan, did not rule out divesting it, potentially clearing
the way for a full takeover of the challenging project in a
troubled region of the southern Philippines.
"Indophil remains committed to maximising value either by
development of Tampakan, 100 percent ownership of SMI or
divestment," it said, referring to the project's operating arm,
Sagittarius Mines Inc.
Exiting Tampakan would help Glencore meet a requirement to
sell down copper stakes, imposed by China as a condition for
approving Glencore's takeover of Xstrata last year, as Beijing
feared the commodities firm would gain too much power in copper.
Glencore is in the process of trying to sell its $5.9
billion Las Bambas copper project in Peru and has agreed to sell
its majority stake in a copper project in Papua New Guinea for
If it were unable to sell Las Bambas, it would have to sell
Tampakan to meet Beijing's conditions.
Tampakan has been a challenging project for Sagittarius
Mines, hampered by a provincial ban on open-pit mining that has
been in place since 2010, although it runs counter to the
national mining policy.
The ban imposed by the South Cotabato provincial council has
made it difficult for Sagittarius to get necessary approvals for
the project, thus forcing it to revise its work plan and delay
by three years, to 2019, its target to start production.
The delay in what could be the biggest single foreign direct
investment in the Philippines has resulted in massive jobs and
spending cuts for Tampakan.
Discovered in 1992, the Tampakan mine is predicted to have a
17-year lifespan with estimated deposits of 15 million tonnes of
copper and 18 million ounces of gold.