Chinalco Considering US$2 Billion Stake in Philippines' Tampakan Copper-Gold Project

Aluminum Corporation of China (Chinalco) (SHA:601600) is exploring the acquisition of a sizable stake in Indophil Resources Phils., which owns the Tampakan copper-gold project in Mindanao, Philippines.

The Tampakan project, spanning approximately 10,000 hectares in South Cotabato, is estimated to contain 15 million metric tons of copper and 17.6 million ounces of gold. It has a projected mine life of over 40 years.

The asset is expected to become the largest mine in the Philippines upon its projected startup in 2026.

According to an August 16 Bloomberg article, the potential investment, valued at about US$2 billion, aligns with Chinalco’s strategy of expanding its global mining footprint. Chinalco, which is China’s largest state-owned producer of aluminum, has previously invested in various mining operations, including projects located in Guinea and Peru.

The Sy family, a prominent economic force in the Philippines, is the Tampakan project's majority shareholder.

The family controls a significant portion of mining assets through its conglomerate, SM Investments. It also holds a minority stake in Atlas Consolidated Mining & Development, which operates a copper mine in Cebu.

Chinalco's involvement could provide financial stability for Tampakan, which has faced multiple delays since its discovery three decades ago. Regulatory challenges, including a ban on open-pit mining in the Philippines, have impeded progress, with Glencore (LSE:GLEN,OTC Pink:GLCNF) exiting in 2015 due to these difficulties.

While the ban was lifted in 2021, the project’s development has still been slow. However, the Philippine government under President Ferdinand Marcos Jr. is now focusing on revitalizing the mining sector to support economic growth.

Still, ongoing discussions surrounding Chinalco's involvement in Tampakan are sensitive, and could be affected by geopolitical issues, notably tensions between China and the Philippines over the South China Sea.

At this point, neither Chinalco nor Indophil has confirmed the specifics of the deal. Sagittarius Mines, which is owned by Indophil and is the developer of Tampakan, has also not commented.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.