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May 28, 2017

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Philippines puts Xstrata's mine on hold citing environmental clearance

MANILA -- A US$5.9 billion mining project by Swiss giant Xstrata in the Philippines may not begin operations in 2016 as scheduled owing to delays in getting environmental clearance, the government said Wednesday.

Environment Secretary Ramon Paje said the clearance permit for the project would only be considered after a planned new mining reform law took effect, but there was no guarantee that parliament would pass the legislation in time.

"We can not commit, of course, because we do not have control over Congress," Paje told reporters when asked if the government could ensure the law was passed in time for the Tampakan project to go ahead.

Paje said the government did want to the planned enormous gold and copper mine in the southern Philippines, which would be the country's largest ever foreign investment, to go ahead.

"We remain committed to the project but we have to start right," he said.

All new mining permits have been frozen in the Philippines while the government seeks to push through the mining reform law, which would increase royalties firms have to pay as well as improve environment safeguards.

President Benigno Aquino said Wednesday the government was prepared to risk losing "temporary gains" rather than allow fresh mining projects to proceed before the new law was put into place.

"I don't have that confidence at this point in time that the existing laws do adequately protect our environment or do adequately share the resources that belongs to the people of this country," he told a press forum.

"So that's the name of the game. Do I risk the environment, the health of our people, the loss of our resources for some temporary gain at this point in time?"

Sagittarius Mines Inc., Xstrata's local unit that is developing the Tampakan project, had set a timetable of 2016 to begin operations.

It has already invested hundreds of millions of dollars in the project, but further work has been stymied by a ban from local authorities on a planned giant open pit.

It needs the national government to grant an environmental compliance certificate to overturn the ban.

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