The Philippine Associated Smelting and Refining Corp., or PASAR, will raise copper capacity by 25 percent through a $53-million cash injection from its major shareholder, Switzerland-based commodity trader Glencore International AG.
"The expansion is really to take advantage of the planned opening of new sources of concentrates locally and, or course, economies of scale," Bruce Anderson told Reuters on board a plane to his company’s 80-ha (200 acre) refinery and smelter facilities on Leyte island, 530 km (330) southeast of Manila.
Copper, used in everything from electronics to power stations to air conditioners, traded at its highest ever price on the benchmark London Metal Exchange in mid-April, though has since lost almost 10 percent in value.
PASAR imports nearly all its copper concentrate, the raw materials from which the metal is produced, from Australia, Argentina, Canada, Chile, Indonesia and Papua New Guinea.
But the Philippine government claims the country is sitting on an estimated $1 trillion in unexplored mineral wealth and is wooing foreign firms to develop or re-open old mines.
Twenty-five years ago, the country was the world’s ninth-largest copper producer before inefficiency, a lack of investment and environmental disasters left it trailing emerging mining powers such as Indonesia and Chile.
It is also expanding smelting capacity – the production stage before refining – by 20 percent to process 720,000 tons of copper concentrate a year by next February.
Anderson said PASAR bought an average of 20,000 to 30,000 tons of concentrate a year from Philex Mining, the Philippines’ only operating copper mining firm.
He said the company expected to buy more concentrate from local firms this year, with the start of operations at the Rapu-Rapu mine in the central Philippines, the first foreign-funded new mine in the country since 1968.
Rapu-Rapu, owned by Australia’s Lafayette Mining Ltd., is expected to produce 4,000 tons of copper this year and 10,500 tons in 2006, the Mines and Goesciences Bureau said.
Several foreign funds have this year started talks with local firms on possible joint ventures, after the Supreme Court ruled last December they can own 100 percent of local mining projects.
Australian firms Indophil Resources Ltd. and Climax Mining Ltd. have said the ruling would enable them to raise funds to bring their mining projects in the Philippines into commercial production.
Atlas Consolidated Mining Corp. said early this year it was in talks with Chinese mining groups about re-opening its Toledo copper mine on central Cebu island – the country’s largest copper mine before a 1994 typhoon forced it to close.
"If these mines come on stream, we are ready. If not, we hope to import more concentrate," Anderson said.
PASAR exports 95 percent of its copper cathode and aims to produce 180,000 tons this year, up 2.3 percent from last year.
Glencore and a group of local investors acquired 90 percent of the government’s stake in PASAR in 1999 and had invested about $50 million before the latest funding.