Xstrata Philippine mine project 'may go to court'

The fate of Xstrata's $5.9 billion copper-gold project in the southern Philippines, which has been delayed by a ban on open-pit mining, may be decided in court, a provincial governor said Saturday.

Arthur Pingoy, governor of South Cotabato province where the project is located, said his government maintained its ban on open-pit mining which effectively bars the Swiss giant's project.

President Benigno Aquino recently issued a mining order saying the national government overruled local ordinances but Pingoy said his ban remained in effect until a court ruled otherwise.

"Probably, this will be taken to the proper court, so we will see if (the company) or the national government will raise it," he told AFP.

The Tampakan project of an Xstrata-led joint venture on the troubled southern island of Mindanao has been delayed for months by South Cotabato's ban on open cast mining.

Pingoy said he was aware of the massive economic benefits of the project but said people in his province were still wary of its environmental impact.

He said both the natural resources and local government ministers were due to meet with him soon and he expected them to bring up the Xstrata project, which was originally due to go into commercial operation in 2016.

Meanwhile, the head of the government Mines and Geosciences Board Leo Jasareno expressed optimism that legal action could be avoided and that South Cotabato officials could be persuaded to lift the ban.

"There are many ways this can be addressed. The national government can talk to the local government, discuss the matter... it can be done through consultation, persuasion," he told AFP.

He said Aquino's new order would provide a guide in settling the dispute.

Jasareno said the Aquino government still considered the mining project, one of the biggest foreign investments in the country's history, to be a "priority".

In a statement, Sagittarius Mines, Inc., the local subsidiary of the Xstrata-led joint venture, said it would study Aquino's new mining order to see how it relates to its mining project.

"We are encouraged that the implementation of this policy should assist in the resolution of the South Cotabato Environment Code which bans open-pit mining in the province contrary to national law," the statement added.

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