Xstrata mine in Philippines set back to 2019

MANILA, Philippines—Swiss mining giant Xstrata has set back the commercial production of its $5.9-billion project in the Philippines to 2019 due to problems with security and the government, the company said Wednesday.

Sagittarius Mines Inc., Xstrata’s local unit, which is developing the Tampakan copper-gold project in the southern Philippines, cited “challenges” that arose since it originally scheduled operation to begin in 2016.

The obstacles include the local government’s 2010 ban on open pit mining and the national government’s failure to issue an environmental compliance certificate (ECC) that would overturn the ban, the company said.

A company statement also cited “security issues” in the project site, an apparent reference to armed groups that have attacked workers and contractors of the mine.

“If local government endorsement and final approvals from the national government are forthcoming… construction could potentially commence in 2015, enabling commercial production in 2019,” the statement said.

Sagittarius has described the Tampakan project as one of the world’s largest undeveloped copper-gold deposits.

The project would be the Philippines’ largest ever foreign investment but it has been opposed by leftist anti-mining activists, tribal groups and even church leaders.

The Philippines is believed to have some of the biggest mineral reserves in the world – the government estimates the country has at least $840 billion in gold, copper, nickel, chromite, manganese, silver and iron ore deposits.

However, the minerals have been largely untapped, partly because of a strong anti-mining movement led by the influential Catholic Church, while poor infrastructure and security concerns have also kept investors away.