SMC may acquire up to 100% of Indophil; plans $2-billion investment in Tampakan mine

MANILA, Philippines – San Miguel Corp. is looking to acquire up to 100 percent of Australian miner Indophil Resources NL and invest as much as $2 billion in the Tampakan copper-gold mine project in South Cotabato, the company’s top executive said.

San Miguel president and chief operating officer Ramon S. Ang said the diversifying conglomerate would have to make a tender offer to other shareholders of Indophil should it decide to acquire full control of the Australian miner. 

San Miguel, which already paid $40 million for a 10-percent stake in Indophil, was given until January next year to decide on a possible takeover of Indophil. The Australian mining firm owns 37.5 percent of the $5.2-billion Tampakan mine while Anglo-Swiss miner Xstrata Plc. holds a controlling 62.5 percent.

“We would have to make a tender offer to the rest of the shareholders as provided under the rules of the Australian Stock Exchange. We need to strictly follow the rules there. We need to offer everybody equal share,” Ang said.

San Miguel is currently conducting due diligence on Indophil to decide whether to submit a takeover proposal.

Discovered in 1992, the Tampakan mine is considered the largest untapped gold and copper deposit in Southeast Asia and now ranks as the fifth largest known undeveloped copper-gold deposit. It contains an estimated 2.4 billion metric tons of ore deposits with a grade of 0.6 percent copper and 0.2 percent grams per ton of gold.

Analysts said San Miguel’s entry into the Tampakan mine would put the diversifying conglomerate in the same league as Philex Mining Corp. and Atlas Consolidated Mining Corp.

China’s Zijin Mining Co. earlier tried but failed to buy out Indophil with $500-million offer, but terminated talks after it failed to convince the Chinese government to approve the deal.

Meanwhile, Ang said the company expects to get at least 20 percent return on equity from new businesses such as power, and mining.

He said the conglomerate’s planned preferred share offering will likely take place in the first quarter of next year, ahead of the planned sale of its hard liquor unit to San Miguel Brewery Inc.

 “San Miguel Brewery is looking to buy Ginebra San Miguel. Talks are currently ongoing between the two parties and a decision is expected to be made in three to six months,” Ang said.