Sagittarius Mines, owned by the Anglo-Swiss mining firm Glencore Xstrata, is planning to slash hundreds of jobs at its $5.9bn Tampakan copper-gold mine in the Philippines.
It plans to axe 920 jobs, almost 85 per cent of the workforce, as the delayed project continues to face significant development challenges.
The firm also intends to reduce the expenditure for the project as there is no guarantee that the production would commence by 2019.
Monthly budget will be reduced from $4m to $1m. So far, Sagittarius has invested over $500m in the mine.
Justin Hillier, executive vice president for SMI, said the company did not see any immediate solution to the challenges it faced, mainly due to the failure to secure approval from the Government of South Cotabato, the southern province that has restricted open-pit mining operations.
Hiller, however, maintained: “The Tampakan deposit is a world-class resource, and SMI remains committed to working with our key stakeholders to resolving the current challenges facing the Project, and realizing its full potential.”
This move reflects the tough environment that mining investors face in the country, which has an estimated untapped mineral resources close to $900bn.
The Tampakan copper-gold mine is considered to be one of the largest foreign direct investments in the Philippines.
Other issues that need to be resolved include the resettlement of impacted communities.
However, the Australian mining firm Indophil Resources, which owns 37.5 per cent stake, is positive about Tampakan mine’s future operations. Indophil ruled out complete closure of the project.
The Tampakan copper-gold mine project, discovered in 1992, has an estimated ore reserve of approximately 1.1 billion tonnes and a life span of 17 years.