Bloomberg: Philippines Expects $7 Billion in Mining Investment

Philippines Expects $7 Billion in Mining Investment (Update3)

March 23 (Bloomberg) -- Anglo American Plc and China's Shanghai Baosteel Group are among overseas companies that may spend $7 billion on mines in the Philippines after a Supreme Court ruling eased investment rules, Mining Secretary Michael Defensor said.

``There has been tremendous interest from investors,'' Defensor said today in an interview in Singapore. ``We will be able to get $7 billion in foreign direct investment,'' he said, without giving a timeframe.

The Philippines is reviewing regulations on the ownership of mines in an effort to boost investment in the industry, which accounted for 1.6 percent of gross domestic product in 2003. Mining may account for as much as 15 percent of GDP in five years, Defensor said, after the Supreme Court in December ruled foreign companies could invest in the ``large-scale exploration, development and utilization'' of mining and energy resources.

Mining companies are holding talks about investing in 60 projects, and a further 30 projects are at an ``exploratory stage,'' Defensor said. Overseas mining companies in talks include London-based Anglo American, the world's second-largest mining company, Shanghai-based Baosteel, China's largest steelmaker by output, and Canada's Ivanhoe Mines Ltd., he said.

``Many private companies in Manila were able to negotiate and have some commitments from companies from Australia, Canada and all over the world,'' Defensor said.

Nickel Project

Shanghai Baosteel is considering building a $1 billion nickel project in the Philippines with China's Jinchuan Group, Yu Zhonghai, director of the international business development department at Shanghai Baosteel, said in an interview this month. The company hasn't completed a feasibility study on the Philippine project, Yu said.

Shanghai Baosteel and Jinchuan plan to buy a nickel mine in the Philippines that halted operations in 1986, China Business News reported in February. The mine halted output because of technical problems and high energy costs, and would need production upgrades costing as much as $1 billion before resuming operations, the report said.

Ivanhoe Mines may invest in projects operated by Lepanto Consolidated Mining Co., the Philippines' biggest mining company, the Philippine Daily Inquirer reported in December.