Philippines boosts Mindanao troops after mine attack
24-JUL-2008 Intellasia | Bloomberg
Jul 24, 2008 - 7:00:00 AM
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The Philippines has increased troop levels in the southern island of Mindanao to counter a surge in attacks by Communist insurgents, including a weekend assault against a US$3 billion copper mine being developed by Xstrata Plc.
The rebel attacks "affected the economy and sowed terror among investors here,'' military spokesman Armand Rico said today in a phone interview. About 500 extra soldiers armed with grenade launchers and backed by tanks have been sent, he said.
The Philippines wants to develop the mining industry, including Xstrata's Tampakan site, which may be Southeast Asia's biggest untapped copper deposit. Rebels, suspected by the army to be from the New People's Army, burned a drill rig at the planned mine on July 20, forcing Xstrata to suspend work.
"Military offensives can help deter future attacks,'' Nelia Halcon, vice president of the Chamber of Mines of the Philippines, said from Manila. "Now that the New People's Army are already burning drill rigs, we really need to have soldiers deployed.''
Xstrata rose 1.7% to 3,530 pence on the London Stock Exchange yesterday. Shares in Indophil Resources NL, Xstrata's partner in Tampakan, rose 1 Australian cent, or 0.8%, to A$1.33 on the Australian stock exchange at 1:36 p.m. local time.
'Plunder'
The New People's Army, the armed wing of the local Communist Party, has been fighting the government for nearly four decades to try and transform the country into a communist state. The rebel group said last August it's targeting mines owned by overseas companies because of the "plunder of Philippine mineral resources.'' It also attacked Tampakan in January.
Security in the eastern Mindanao provinces of Compostela Valley and Davao del Sur will be boosted as "guerilla fronts are here,'' Rico said. The New People's Army has staged about 100 attacks on businesses in eastern Mindanao this year, he said, adding that the new troops will used for "offensive operations.''
Tampakan has 2.2 billion metric tonnes of mineral resources containing 12.8 million tonnes of copper and 15.2 million ounces of gold, Xstrata said in June. Xstrata has made a takeover offer for Indophil Resources, competing with a bid from a management group.
The rebels probably "tried to extort money'' from the owners of Tampakan, Rico said yesterday. John B. Arnaldo, corporate communications manager at Sagittarius Mines Inc., the joint venture between Xstrata and Indophil, did not answer calls today to his mobile phone and didn't reply to text messages.
The project, located 65 kilometres (41 miles) north of general Santos City at the boundaries of the provinces of South Cotabato, Sultan Kudarat and Davao del Sur on Mindanao, may produce 194,000 tonnes of copper and 213,000 ounces of gold annually over 25 years.
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