Media
Publication: Canadian Mining
Pacific
Mining Conference: Philippines Open
For Business
By
Richard Mills, Chairman
Chalre
Associates
Held
recently in Manila, the 7th ASIA PACIFIC MINING CONFERENCE was possibly the
largest such event in the region. Organized by the ASEAN Federation of
Mining Associations (AFMA), it attracted many of Asia’s most prominent
miners and mining organizations.
Charlie Sartain, CEO of XSTRATA
COPPER, provided an interesting speech on his company’s recent progress
toward world domination. Sartain’s most recent acquisition was the
world-class Tampakan project in Philippines. With pre-feasibility estimates
of 2 billion t of copper-gold ore, the project is the largest copper
development in Xstrata’s portfolio and some say it will be the most
significant in Asia. Copper, he explained, is arguably his company’s most
important mineral since it alone accounts for 53% of Xstrata’s entire cash
flow. (www.Xstrata.com)
The story of the development of
the Tampakan project is one of great achievement in the face of extreme
adversity. The original ownership entity called Indophil Resources was
founded in 1996 by a fanatical Australian named Tony Robbins. It almost
ceased to exist during the lean years, but Robbins endured personal hardship
and plodded on. From an original market capitalization of just A$500,000 it
has grown to A$300 million today. Indophil and its hard-driving boss’s
success would not have been possible without dedicated government support.
Most importantly, Tampakan will provide a 50-year economic benefit for the
people of Philippines and will open the gates for investment by other
world-class companies.
Owen Hegarty, the high-flying
CEO of OXIANA, gave what many considered the most enthusiastic performance
of the three-day conference. He provided a riveting account of his company’s
early beginnings in the late 1990s and its recent rise to stardom. With
operations almost exclusively in Asia, Oxiana recently reported a profit of
A$500 million. Over the past 10 years, Owen’s company has grown its market
capitalization from A$20 million to A$5 billion. (www.Oxiana.com.au)
Mitch Hooke, CEO of the MINERALS
COUNCIL OF AUSTRALIA, spoke about his strong
beliefs in the mining “super-cycle.” This theory says that demand for
minerals will be strong for many years to come since countries in Asia with
roughly half the world’s population are industrializing quickly. The
super-cycle concept is treated with suspicion by many experienced industry
watchers who have “seen it all before.” But, to people
in Asia who witness relentless economic growth taking place before their
eyes, it is considered more like a force of nature. (www.Minerals.org.au)
Patrick Waters of ANGLO AMERICAN
gave a persuasive presentation to document his belief that field exploration
is the best path to value creation. His numerous examples in places such as
Indonesia and Philippines showed investment returns that were beyond those
obtainable through the high-priced acquisition route that seems more
fashionable these days. (www.AngloAmerican.co.uk)
Lastly, Benjamin Romualdez, the
extroverted president of the ASEAN FEDERATION OF MINING ASSOCIATIONS and the
CHAMBER OF MINES OF THE PHILIPPINES, expressed strong opinions on continuing
growth of the mining sector in Asia. Using his country (Philippines) as an
example, he cited billion dollar investment intentions of such celebrity
companies as BHP BILLITON, SUMITOMO METAL MINING and Xstrata. He predicted
that mining industry dollar earnings could reach as high as $10 billion by
2012, up from just $2 billion today. Other countries in southeast Asia have
similar growth opportunities ahead, according to Romualdez. (www.AfmaAsean.org
and www.ChamberOfMines.com.ph)
While not everyone believes that
such growth is possible, it is clear that most people in Asia feel strong
development in the mining sector is inevitable for years to come.
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