MVP, RSA holding on to Indophil shares

MANILA, Philippines -  Two of the nation’s top conglomerates with a storied rivalry will hold on to their minority shares in an Australian miner that owns a third of the $5.9-billion Tampakan project in South Cotabato.

The mining arm of First Pacific Co. Ltd. and diversified conglomerate San Miguel Corp. (SMC) will wait for resolutions in the already-delayed copper and gold project, company executives said.

“Hold muna,” SMC president and chief operating officer Ramon S. Ang told The STAR.

“Currently, no plans,” Manuel V. Pangilinan, CEO of Hong Kong-based First Pacific and chairman of Philex Mining Corp., also told The STAR. “No plans because they have many problems.”

To date, SMC subsidiary Coastal View Exploration Corp. holds 48.016 million shares or 3.99 percent of Indophil Resources NL, which owns 37.5 percent of Tampakan.

Philex, the country’s largest miner, owns 15.63 million shares or 1.3 percent of Indophil.

Xstrata Plc., the world’s fourth largest copper miner, controls 62.5 percent of Tampakan through project manager Sagittarius Mines Inc. (SMI).

Ang said the food-to-power conglomerate will keep its shares in the meantime while the problem in the copper and gold project has yet to be resolved.

Last week, SMI admitted that the start of commercial operations of Tampakan will be delayed from the earlier target of 2016 due to regulatory issues.

SMI has a pending appeal before Malacañang for the provision of an environmental compliance certificate (ECC), a key document that will enable it to start mine development and operations.

The Department of Environment and Natural Resources has repeatedly denied SMI an ECC because of a standing ordinance in South Cotabato banning the use of open-pit mining method.

But the $5.9-billion project, considered the largest undeveloped copper and gold deposit in the Southeast Asia and Western Pacific region, is still a good investment, Ang said.

“The investment is good if the project can push through,” he said.

“We are not rushing to sell out because that is good investment,” he added.

For Pangilinan, Philex will take look at its options when the issues are resolved.

The two conglomerates have been rivals in local businesses like toll roads, power distribution and telecommunications.

However, Ang said SMC is ready to exit the project if regulatory issues are not settled.

“Holding on to the Tampakan would entail higher risks, but would possibly yield higher once commercial operations start,” said Freya B. Natividad, investment analyst at brokerage firm 2Trade-Asia.com.

She said while Tampakan will support the mining businesses of the two conglomerates, Philex will likely benefit more as its mine resources are declining.

The Tampakan project likely contains 13.9 million metric tons of copper and 16.2 million ounces of gold.

If commercial operations start in 2016, the project is expected to add one percent to the country’s gross domestic product per year.