PMEA Blog

MELBOURNE: Xstrata, the world’s fourth-largest copper producer, said Thursday it would take over the biggest untapped copper and gold deposit in the Philippines, increasing the country’s chances of benefiting from its raw materials wealth.

Xstrata will exercise an option to acquire 62.5 percent of Indophil Resources’s Tampakan deposit and take over management of the project on March 30, Xstrata, which is based in Zug, Switzerland, said Thursday in an e-mailed statement. The project will likely cost $1.4 billion to develop, Indophil of Melbourne said Nov. 1.

Copper prices have quadrupled in the past five years, spurring more than $170 billion of mining industry takeovers. the chief executive of Xstrata, Mick Davis, who bought Falconbridge this year for $17 billion, wants to operate on five continents to rival BHP Billiton, Rio Tinto Group and Anglo American.

Xstrata’s takeover of Tampakan “reduces the level of risk that the project might not be developed,” said Chris Brown, an analyst at ABN AMRO Morgans in Brisbane, Australia. “This gives credibility to the project from a world class mining company.”

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