Philippines: Glencore sells share of Tampakan mine to Indophil Resources

By Edwin Espejo -
Date of publication: 
24 June, 2015

GENERAL SANTOS CITY – Commodities trader Glencore Plc has reportedly agreed to sell its entire stake at Sagittarius Mines Inc (SMI) to Indophil Resources NL, which was acquired by Alsons Prime Investment Corporation for a yet-to-be-disclosed amount and acquisition terms.

This breaking development followed the January completion of the sale of Indophil Resources NL to Alsons Prime.

The report means the complete exit of the Switzerland-based Glencore PLC from the US$5.6 billion copper and gold project of SMI in Tampakan, South Cotabato.

It also ended several months of uncertainty about Glencore plans for the controversial mining project that has been met with strong opposition from the Catholic Church here, environmental groups and the communist-led New People’s Army.

SMI exploration and operations ground to a halt several months after Glencore acquired the majority stake in the mining firm from erstwhile majority holder Xstrata PLC when the commodities firm openly expressed reluctance to finance ‘greenfield’ projects.

Xstrata reportedly spent over US$350 million while the project was still at the development and exploration stage.

The Tampakan project never went beyond exploration stage, however.

In 2013, SMI ‘downgraded’ its operations, largely confined to maintaining community presence and skeletal office manpower, after it failed to obtain the critical nod of the provincial government of South Cotabato for its Tampakan project.

It laid off more close to 1,000 workers and employees in the last quarter of 2013 following the decision of Glencore to downscale its operations in Tampakan.

Glencore said it has already informed the Australian Stock Exchange of the planned sale of its SMI shares.

Glencore owns 62.5 percent of SMI while Alson controls the remaining 37.5 percent by virtue of its acquisition of Indophil.

The share sale agreement (SSA) between Glencore and Indophil includes “a number of conditions” which must be completed before June 30.

No details of the sale were disclosed.

Exploration firm Indophil Resources NL of Australia became a wholly Filipino-owned company effective January 13 when it delisted from the Australian Stock Exchange following the approval of its sale to Alsons Prime Investment Corporation in a stockholders meeting in December.

Alsons then was backed by Henry Sy’s SM Prime Holdings which earlier appointed Frederic DyBuncio as member of the Board of Directors of Indophil.

Nicasio Alcantara represented the Alsons Group.

Also owning minority shares in SMI are San Miguel Corporation’s Ramon Ang and PLDT’s Manny Pangilinan.

The deal was valued at AU$361 million (P14.3 billion) which was paid in cash

With the Glencore’s reported sale of its stakes to Indophil, SMI becomes a wholly-owned Filipino mining company,. although Indophil continues to be a ‘foreign-listed’ company.

There was no immediate statement from Alsons Prime Investment.

Gavan Collery, vice president for corporate affairs of Indophil, however confirmed that Glencore is divesting all its shares in SMI.

“One hundred percent,” he said in a text message.


Glencore to exit Tampakan project

By Claire-Ann M. C. Feliciano, Senior Reporter –

24 June 2015

ANGLO-SWISS miner Glencore Xstrata plc has moved to divest from the long-delayed $5.9-billion Tampakan gold-copper project in central Mindanao, which has been touted as potentially the largest foreign direct investment in the country to date.

In a June 24 statement from Baar, Switzerland that was posted on its Web site, the company announced that “a subsidiary of Glencore today executed a share sale agreement (SSA) with an affiliate of Indophil for the sale of the entire remaining interest in the Tampakan project in the Philippines.”

Glencore and Australian miner Indophil Resources NL hold 62.5% and 37.5% respectively of the 40% controlling stake in Sagittarius Mines, Inc. (SMI), which in turn runs the Tampakan project.

Tampakan Mining Corp. and Southcot Mining Corp. own the remaining 60% interest in SMI.

In its statement, Glencore said the SSA with Indophil’s affiliate sets conditions required to be obtained by June 30, with any extension subject to a mutual agreement.

“Details of the sale will be made available following certain administrative steps after the completion date,” the statement read. “Glencore will provide a further update when the transaction outlined by the SSA is completed.”

SMI confirmed yesterday that it was advised by Glencore of its move to exit from the Tampakan project.

“Yes, SMI was advised today that its majority shareholder, Glencore has entered into a share sale agreement with existing shareholder Indophil for the sale of its entire ownership interest (62.5%) in the company,” SMI Spokesperson Manolo T. Labor said in an e-mail, declining to comment further since “SMI is not a party to the share sale agreement.”

“Our focus now is the board-approved 2015 SMI work plan, which we at SMI intend to achieve,” Mr. Labor said, adding that the plan basically involves “working with all key stakeholders to seek an approvals pathway for the Tampakan project.”

Mr. Labor did not elaborate further. Other concerned officials were not immediately available when sought for comment yesterday.

Sought for comment, Mines and Geosciences Bureau Director Leo L. Jasareno said this development should not affect the project itself.

“Glencore’s divestment is internal,” Mr. Jasareno noted.

“It should not affect the project in terms of SMI’s responsibility and commitment to Tampakan.”

The move of Glencore to exit the mining project followed the disposal of its subsidiary’s shares in Indophil last January to Alsons Prime Investments Corp. (APIC). Glencore Queensland Ltd. used to hold 13.1% in Indophil before this was acquired by APIC under a scheme implementation agreement. Besides Glencore, other Philippine companies that used to have direct stake in Indophil were Philex Mining Corp. (1.30%) and Matutum Consolidated Mining Corp. (0.54%).

The project has been on hold since South Cotabato banned open-pit mining in mid-2010, on the eve of the Aquino administration’s assumption of office.

The project site covers an area of around 10,000 hectares straddling Tampakan, South Cotabato; Columbio in Sultan Kudarat; Kiblawan in Davao del Sur; and Malungon in Sarangani. Value of the mine’s production has been estimated at $37 billion over 20 years.

With the open-pit mining ban, SMI had said in 2012 that it would defer start of commercial operations to 2019 from 2016, with construction to “potentially commence in 2015.” The government issued a conditional environmental permit for the project in February 2013.


Alcantaras acquire Tampakan project

Anglo-Swiss firm Glencore exits PH mining

Doris Dumlao-Abadilla, Philippine Daily Inquirer –

25 June 2015

Anglo–Swiss multinational commodity trading and mining firm Glencore Plc has completed its exit from the controversial Tampakan project, touted as Southeast Asia’s largest untapped gold-copper reserve, with the sale of its remaining shares to the Alcantara group.

The deal allowed the Alcantara group, which controls Indophil Resources NL, to consolidate its control of the Tampakan project.

In a statement from its headquarters in Baar, Switzerland, on Wednesday, Glencore said that following its disposal of shares in Indophil Resources NL (Indophil), a deal was executed by a subsidiary to sell its remaining interest in the Tampakan project.

Glencore owned 62.5 percent of Sagittarius Mines Inc., the owner of the Tampakan project, while the remaining 37.5 percent was owned by Indophil, which is controlled by the Alcantara group through Alsons Prime Investments Corp. (Apic).

Apic took over Indophil in January 2015.

The new deal thus completed the Alcantara group’s full takeover of the Tampakan project and brought it back to Filipino hands.

Glencore said the agreement included a number of conditions that were required to be obtained prior to the targeted closing on June 30, 2015, subject to mutual agreement to extend such date.

The Tampakan area is estimated to contain 15 million tons for copper and almost 18 million ounces of contained gold.

The Alcantara group exercised its right of first refusal over the shares of Glencore in Tampakan.