The Philippines plans to build more copper mines, smelters and refineries as part of its post-COVID-19 roadmap for the mineral sector and targets developing the $5.9 billion Tampakan copper-gold project by 2022, according to the Mines and Geosciences Bureau, or MGB.
Tampakan, owned by Indophil Resources NL and operated by Sagittarius Mines Inc., has almost half of the country's total copper reserves and resources at 15.2 million tonnes, with the remainder mostly located at Kingking, a project in the feasibility stage, and Atlas Toledo, a producing mine. If the project is developed, it would be the largest copper mine in the Philippines and one of the largest in the world.
"The MGB has a program in its mineral industry post-COVID roadmap, [which includes] the establishment of additional one or two smelters and refineries based on the projected production of our copper mines in the Philippines," MGB executive director Wilfredo Moncano told S&P Global Market Intelligence.
Moncano said the Tampakan copper mine is one of the big-ticket mining projects included in the roadmap and is also a part of the Priority Projects Phase 2 mining projects, meaning it is targeted to proceed to development by 2022.
The Philippine government lifted its nine-year moratorium on new mining agreements April 14 through Executive Order 130 as it aims to fast-track the recovery of the pandemic-hit economy through a ramp-up in supply from the underutilized mining sector.
The projects will be divided into two phases, with development lasting five years, at most, and a minimum mine life of 10 years for metallic projects.
According to Moncano, Phase 1 consists of 36 mining projects slated to start operations in 2021. These are mostly nonmetallic mines that can provide construction materials for the Build, Build, Build program, the current national infrastructure framework. Phase 2 consists of mostly metallic mines and will begin development next year.
The MGB estimates that about 100 mining projects in the domestic pipeline can generate annual tax revenues equivalent to $438 million, along with creating 42,000 new jobs — mostly in remote rural areas.
While no specific company has committed to building the smelters and refineries, it could be done through a consortium of four or more mining companies, according to the executive director.
Moncano said it would be good if the government could join in funding the projects through private-public partnerships, as the cost is "enormous and therefore not easy to come up with."
"The economy of scale to make the smelter project feasible [requires] the production of several copper mines to feed this plant," Moncano added.
According to MGB data published May 28, the Philippines has three operating copper mines with gold and silver and only one copper smelter. In 2020, the Philippines produced 60,856 tonnes of copper.
Due to the lack of smelters and refineries, the Philippines has been exporting its copper output for processing, with China as its top destination.
Aline Soares, a commodity analyst with S&P Global Market Intelligence, said the Philippines currently plays no significant role in the global copper industry.
"The exploration budget spent in the country is small, with a global budget share smaller than 1% in 2020," Soares said. According to Market Intelligence data, the annual exploration budget by target for copper in the Philippines totaled $4.5 million in 2020.
Developing the Tampakan mine would lift the Philippines into the top 15 copper mining countries, accounting for around 1.8% of global production, according to Wood Mackenzie senior analyst Hun Hao Chuah.
The analyst added that the planned additional smelters would help the country produce more refined copper, but "without the investment into more copper mine projects, smelters' feed of copper concentrate will have to be sourced internationally in competition with existing smelters."