Sagittarius taps Bechtel for Tampakan study

MANILA, Philippines - Sagittarius Mines Inc. (SMI) has engaged the services of Bechtel, a global leader in engineering and construction, to conduct a $74-million feasibility study for its Tampakan copper-gold project in Southern Mindanao.

The $74-million feasibility study, which will entail a detailed engineering study, will help determine whether the project will advance to development stage.

The feasibility study is expected to be completed and submitted to the Philippine government by the second quarter of 2010.

The feasibility study is being undertaken even as SMI’s major shareholder, Xstrata engages in possible merger talks with another major mining firm, Anglo American.

According to SMI president Peter Forrestal, “this phase we are embarking on is very significant for SMI and for the future of the Tampakan project.”

He said that the decision to develop a major copper mine at Tampakan will depend on the outcome of the feasibility study which will examine the economic, social and environmental viability of the project.

Forrestal assured that “through all its development stages, the Tampakan project will continue to be run in line with leading environmental and social practices, based on partnership with its stakeholders, to create mutual benefits for shareholders, the communities associated with the project and the Philippines.”

Partners in the Tampakan project include Xstrata Copper (62.5 percent), Indophil Resources NL (34.23 percent) and Alsons Corp. (3.27 percent).

In a related development, Mines and Geosciences Bureau director Horacio Ramos noted that a possible merger between Swiss mining firm Xstrata and British Anglo American will enhance Philippine mining projects in which the two foreign firms have investments in.

Xstrata is a major shareholder in SMI which is developing the potentially rich Tampakan mine.

Anglo American, on the other hand, continues to explore in Surigao.

The two global mining giants had recently announced that they are in possible merger talks.

Xstrata had made the proposal to the board of Anglo American regarding a possible merger.

London-based Anglo American confirmed the talks but hastened to qualify that the talks are very preliminary.

A merger between Xstrata and Anglo American could make the resulting company a world leader in base metals (second in copper, first in zinc and fourth in nickel), the world’s largest producer of platinum, thermal export coal and ferrochrome, and a top-five producer of iron ore and coking coal.

With the global economic slump also adversely affecting the mining sector, mining firms are opting for mergers and consolidation to cut costs.