Glencore Xstrata wants out of Philippine copper-gold project

Resource giant Glencore Xstrata (LON:GLEN) wants out of a copper and gold project in the Philippines, Indophil Resources (ASX:IRN), Glencore's partner in the project, said on Thursday.

"All indications point to Glencore Xstrata seeking to divest its majority interest in the Tampakan Copper-Gold Project," Indophil wrote.

Last year Glencore's Ivan Glasenberg said his company wasn't interested in "greenfield" developments. Indeed, the company has been eager to drop several projects, most notably its Las Bambas mine in Peru which it must sell by September in order to comply with Chinese regulatory conditions set out when Glencore and Xstrata merged.

Glencore slashed funding for the $5.9 billion Tampakan project in August last year. Approximately 1,000 employees and contractors were made redundant by the move.

Australia's Indophile says there has been uncertainty over the future ownership of Tampakan since April 2013 and speculates that Glencore may be forced to divest its stake as part of the Chinese government's conditions.

Glencore has not commenced any formal divestment process, Indophil noted.

"Indophil has advised Glencore Xstrata that it is focused on restoring value to the Tampakan investment," the Australian miner wrote. "We will workwith Glencore Xstrata to assist in meeting objectives for the project, and Indophil remains focused on doing what it can to ensure the project license conditions are not compromised in this process."

Indophil holds a pre-emptive right over Glencore Xstrata’s 62.5% interest in the Project.

But the potential lack of a big partner is only one of Tampakan's problems as a provincial ban on open pit mining is still in effect.

Tha Tampakan deposit is one of the largest-known undeveloped copper-gold deposits in the world. It holds an estiamted 2.94 billion tonne mineral resources. The feasibility study completed in April 2010 outlines a proposed mining operation that involves annual production of 450,000 tonnes of copper and 435,000 ounces gold over the first five years of operation.