Environment and Natural Resources Secretary Jose L. Atienza said over the weekend that Australian mi-ning giant BHP Billiton Ltd. is not pulling out from the Philippines.
Atienza said BHP Billiton is only scaling down its operations because of some legal problems.
“They are not changing plans, (nor) shifting direction. They’re merely scaling down, meaning they’re going slow while issues are being resolved,” Atienza said.
BHP Billiton has laid off its Manila staff for its joint venture mining firm Amkor and has suspended operations in its mining exploration site in Mati, Davao, following its protracted dispute with businessman Peter Tan.
Atienza said the group of Tan finally submitted last week a proposal to help resolve the two firms’ dispute over the development plans of the Pujada nickel deposit.
Atienza has assured the responsibility of handing overTan’scom-promiseproposal to BHP’s chief development officer Chris Campbell.
“I’m really optimistic of the compromise solution. This is acceptable toall sides, to the two firms and us, the government…(and this will) address problem of local partners which is financial flow,” Atienza said, adding that the proposal is “reasonable.”
Atienza declined to disclose the details of the proposal until he has talked to all parties as it might cause premature disagreements.
BHP Billiton last month decided to lay off its direct hire Manila staff and is now relying on a contracting agency. It has also reportedly suspended exploration activities in its Mati, Davao site.
BHP Billiton’s action, sources said, indicates its increasing frustration in pursuing its investment in the Philippines. Such action also sends a strong negative signal to other potential foreign investors especially since the Australian mining firm is considered a global market mover.
Atienza last May had mediated a meeting in Singapore between Tan and Campbell. In that meeting Atienza said it was acknowledged that there is a need to provide some immediate cash flow for the Filipino partners while at the same time preserving the long-term investment outlook of BHP.
The deal would supposedly involve the operation of some mining areas which would be determined by both parties.
The compromise deal would allow BHP Billiton to continue its investments in the country, while at the same time addressing the need to provide immediate cash flow for the group of Tan.
BHP Billiton is the world’s largest resource company and its continued presence and investment in the Philippines would attest to the attractiveness of the country as an investment site.
BHP Billiton Ltd. is a diversified resources group. It is a producer of energy-related products, such as energy coal, oil, gas, liquefied natural gas and uranium.
Its customer sector groups (CGS) are organized into nine business units: petroleum, aluminium, base metals, diamonds and specialty products, stainless steel materials, iron ore, manganese, metallurgical coal and energy coal.
Tan holds seven mineral production sharing agreements (MPSAs) in various parts of the country.
Tan had been complaining about the slow pace of the joint venture with BHP which continues to remain at the exploratory stage at a time when world mineral prices are peaking.
Tan wants BHP Billiton to fast-track the joint venture and start production.
Out of frustration, Tan decided to rescind his joint venture contract with BHP and the dispute has now landed in court.