Philex, Anglo to invest $1b on Boyongan copper mine

PHILIPPINE NEWS SERVICE — Philex Mining Corp. and its joint venture partner Anglo American Exploration (Philippines) B.V., a wholly owned subsidiary of Anglo American Plc., may invest up to $1 billion to develop the 25,184-hectare Boyongan copper mine in Surigao.

But Philex president Walter Brown said the investment would depend on the results of feasibility studies made by Anglo American Plc.

Anglo has an option to raise its stake to 80 percent from 50 percent if the project is found feasible, Brown told reporters following the company’s stockholders’ meeting yesterday.

Anglo American has joined global rivals such as Xstrata Plc in building mines in the Philippines, which may have $1 trillion in mineral wealth, according to government estimates. The company’s drive comes as surging demand for copper, used to make pipes and wires fueled a five-year rally, touching a record $8,800 a ton on the London Metal Exchange on May 11, 2006.

The Boyongan mine, located at the border between Surigao del Norte and Agusan del Norte provinces in Mindanao, holds 219 million tons of resources containing 0.51-percent copper and 0.74 gram of gold per ton, according to Philex’s annual report.

Anglo has four projects in the Philippines, including the ventures with Philex and Manila Mining Corp., Anglo American Exploration Philippines Inc. president Patrick Waters said on June 5. A call to Anglo American spokesman Natasha Hill in London was routed to an answering machine. Waters couldn’t be reached at his office in Baguio city, north of Manila.

“If metal prices remain as strong as they are today, even with moderately lower levels, it is reasonable to expect that the pre-feasibility study will graduate into a full blown study,” Philex said.

The feasibility study, which will be undertaken solely by Anglo American, will be completed in one year period.

Brown said that it would take at least 3 three years before the joint venture company starts mining the area.

Brown said the company was conducting exploratory works in the vicinity of Padcal and in Surigao under joint venture with FEC Resources and Negros. The company is also evaluating the Buluwan gold project in Negros.

Brown said Philex would also proceed with project in Zamboanga.

“There is a good possibility we may enter into joint ventures with a major international company in the vicinity of Padcal as well as Zamboanga within this year,” Brown said.