PASAR said the funding from Glencore, its major shareholder, would raise the capacity of cathode to 215,000 tons per year from 172,500 tons at the plant in the central province of Leyte.
PASAR, the country’s lone copper producer, also said it would expand the capacity of its smelter by 20 percent to 720,000 tons per year of copper concentrate.
It said the smelter expansion was expected to be completed by next February and the refinery by November 2006.
Glencore’s funding for PASAR is the second biggest since the Supreme Court ruled in December that foreign firms can own up to 100 percent of mining projects, removing a key obstacle to foreign investment in the near-dormant sector.
Top executives of Glencore led by its Chairman Willy Strothotte and Chief Executive Officer (CEO) Ivan Glasenberg paid a courtesy call to President Arroyo yesterday to reaffirm the company’s long-term commitment to the Philippines and its vigorous support for the development of the domestic mining sector.
Last month, China’s Baosteel group and Jinchaun Nonferrous Metals Corp. said they would invest $950 million to rehabilitate a nickel plant in the southern Philippines.
"The expansion project will not only improve the performance of the plants, but will also allow greater protection for the environment," said PASAR president Bruce Anderson.
"The existing 22-year-old dore plant, for example, will be replaced with a tilting, rotating, oxygen furnace which is environmentally friendly while further improving PASAR’s operations. Thus, it enhances our drive to become world class from an operations and environmental standpoint," Anderson said.
Copper, which closed at $3,050 per ton at the London Metals Exchange on Wednesday traded at record highs in mid-April before retreating about nine percent in value.
Glencore and a group of local investors acquired 90 percent of the government’s stake in PASAR in 1990 and had invested about $50 million before the latest funding.
PASAR imports nearly all its copper concentrate – the raw material from which the metal is produced – from Indonesia, Canada, Papua New Guinea, Australia, Chile and Argentina.
The firm exports 95 percent of its copper, which is used in everything from computer chips and air conditioners to plumbing equipment and power plants. It sells the other five percent locally.
PASAR ships copper mostly to China, whose fast-growing economy sucks up about one-fifth of the world’s output.