MANILA, MARCH 30, 2007 (STAR) By Marianne V. Go - Indophil Resources NL and partner Xstrata Plc, the world’s fifth-largest miner, may spend about $2 billion (P96 billion) by 2010 to develop Southeast Asia’s biggest untapped copper deposit, Indophil managing director Tony Robbins said.

The investment in Tampakan includes a port and a mill, Robbins said. Xstrata, based in Zug, Switzerland, is set to take over management control of the South Cotabato mine with its 62.5-percent stake. Indophil holds the balance.

Overseas miners such as Xstrata are developing mines in the Philippines to gain access to metals and feed rising global demand, led by China. The country may have $1 trillion in mineral wealth, according to government estimates.

Tampakan "should prove profitable," Chris Brown, an analyst at ABN Amro Morgans Ltd. in Brisbane, said. "The capital costs are high, but so are commodity prices."

Three-month copper futures on the London Metal Exchange, the world’s largest such bourse, soared to a record $8,800 a ton in May. The contract gained as much as $65, or one percent, to $6,725 yesterday.

"At today’s copper prices, we expect to recover our investments in five years after opening the mine,’’ Robbins said in an interview in Singapore. "We’re still firming up plans with Xstrata."

Shares in Melbourne-based Indophil rose as much as 2.5 Australian cents, or 3.5 percent, to 74.5 Australian cents yesterday. Stock in Xstrata, which has gained 57 percent in the past year, settled at 2,528 pence in London Wednesday.

Developing the mine site and building a mill to make copper concentrate would cost about $1.4 billion and the construction of a port would be at least $500 million, Robbins said.

At least 10 smelters, including those in Japan, Korea, India, Poland, Germany and the Philippines have expressed interest in buying concentrate from Tampakan, Robbins said.

Among the would-be buyers is Philippine Associated Smelting and Refining Corp., a unit of Glencore International AG, Robbins said, without naming the other smelters.

Glencore, a Swiss commodity trader that made a $5.3 billion profit last year, owns 35 percent of Xstrata’s shares, according to data compiled by Bloomberg.

Xstrata gained control of the Tampakan mine by exercising its option to acquire 62.5 percent of Sagittarius the common stocks of Sagittarius Mine which Corp. is developing the minesite.

In line with this, Paul G. Dominguez is stepping down as president of Sagittarius Mines effective today. Dominguez was instrumental in developing policies and strategies that created strong community support for the SMI project which enabled the company to undertake its exploration activities and to complete its pre-feasibility study on schedule. Under his watch, SMI embarked on innovative community and environmental projects that went well beyond what was mandated by the government regulations

Tampakan will produce an average of 540,000 tons of copper concentrate, containing 40 percent copper, and 10 grams of gold a ton, a year from 2011, Robbins said. It is worth $1.4 billion at today’s prices, he added.

Chief News Editor: Sol Jose Vanzi

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