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http://www.bworldonline.com/content.php?title=Indophil%20scores%20national%20gov%E2%80%99t%20for%20impasse%20over%20mining%20ban&id=31986
Posted on May 25, 2011 10:05:07 PM
BY ROMER S. SARMIENTO
Indophil scores national govt for impasse over mining ban
GENERAL SANTOS CITY -- An executive of the Australian miner behind the massive Tampakan copper deposit expressed frustration yesterday over the national government's "reluctance" to resolve the open-pit mining ban imposed by officials in South Cotabato, saying this has hurt their share prices and foiled attempts at a stake sale.
Brian Philips, Indophil Resources NL chairman, also warned that the impasse was dimming sentiments of investors towards the Philippine mining prospects in general.
While the national Philippine government assures us that the proposal is contrary to national law, and local eminent authorities view it as nothing more than local politics that will be resolved, the reality is that it has been a frustrating period for Indophil's board, management and shareholders, Mr. Philips said in a copy of his speech at the annual stockholders meeting.
The document dated May 25 was posted on the company's Web site.
A perceived slowness or reluctance to take national action in the Philippines on this and related matters has seen other provinces move to introduce similar ordinances. This apparent defiance at a provincial government level has taken on a form of domino effect, he continued.
South Cotabato approved an environment code that prohibits open-pit mining method in June last year. Zamboanga del Norte's local government then went on to say it is planning a similar ban.
Department of Environment and Natural Resources officials could not be immediately reached for comment.
President Benigno S. C. Aquino III had said back in April that he will only support mining projects for as long as the local community supports these as well.
Indophil Resources owns 37.5% of the controlling equity in the Tampakan project, which is pursued by Sagittarius Mines, Inc.
Xstrata Copper, the world's fourth-largest copper producer, exercises management supervision over Sagittarius through its 62.5% majority stake.
Mr. Philips went on to blame the mining ban for the firm's declining share price and still unsuccessful bid to sell off its stake in the Tampakan project.
The open-pit ban issue has, in many ways, been the driving force behind constant share price pressure, he said.
Share prices have been roughly halved to about 55 Australian cents apiece from year-ago levels after steeply dropping in July 2010, data from the Australian securities exchange show.
The executive conceded that Zijin Mining, a Chinese company that abandoned its earlier proposal to buy Indophil Resources stake in Tampakan, had cited reasons other than the mining ban.
Rather, Zijin faced an impasse in securing bid approval from its home province in China, Mr. Philips said, noting however that the firm had earlier secured approval in principle on the national level.
What is perhaps surprising is that despite the unquestionable quality of the Tampakan asset and positive fundamentals for copper, no offer has been made to Indophil since the Zijin bid lapsed, he added.
Still, Mr. Philips said they are thankful that the Philippine government understands just how serious this matter has become and how it is viewed by those contemplating foreign investment in the Philippines minerals industry.
Moving forward, the firm will pursue continued talks with San Miguel Corp. to take up Zijin's abandoned offer, he said. Other options include opening discussions with other parties or maintaining its direct interest in Tampakan.
Sought for comment, South Cotabato Governor Arthur Y. Pingoy said he had only inherited the mining ban from the previous administration.
The local government, he said, is also waiting for a submission from the miner before it will review the ban.
We cannot proceed because we don't have that study yet. After we get the study, that is when we can proceed. We will ask experts too, Mr. Pingoy said in a telephone interview yesterday. -- with input from Louella D. Desiderio
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