Asia Pacific Mining Conference
Richard Mills, Chairman
recently in Manila, the 7th Asia
Pacific Mining Conference was possibly the largest such event
in the region. Organized by the Asean Federation of Mining Associations (AFMA),
it attracted many of
Asia’s most prominent miners and mining organizations.
CEO of Xstrata Copper, provided an interesting speech on his company’s
recent progress at world
domination. Mr. Sartain’s most recent acquisition was the world-class
Tampakan project in Philippines.
With pre-feasibility estimates of 2B tons of copper/gold, the site is
the largest copper development project in Xstrata’s portfolio and some say
it will be the most significant
in Asia. Copper, he explained, is arguably his company’s most important
mineral since it alone
accounts for 53% of Xstrata’s entire cash flow (EBITDA).
The story of the
development of the Tampakan project is one of great achievement in the face
of extreme adversity. The
original ownership entity called Indophil Resources began in 1996 under
the direction of a fanatical
Australian named Tony Robbins. It almost ceased to exist during the lean
years but Mr. Robbins endured personal hardship and plodded on. From an
original market capitalization
of just $500K AUS it has grown to $300M AUS today. Indophil and its
succeeded beyond expectations and it would not have been possible without
support. Most importantly, Tampakan will provide a 50-year economic benefit
for the people of
Philippines and will open the gates for investment by other world-class
the high-flying CEO of Oxiana, gave what many considered the most
of the 3-day conference. He provided a riveting account of his company’s
early beginnings in the
late 1990’s and its recent progress to stardom. With operations almost
exclusively in Asia, Oxiana
recently reported a profit of $500M AUS. Over the past 10 years, Owen’s
company has grown its market capitalization from $20M AUS to $5B AUS.
Mitch Hooke, CEO
of the Minerals Council of Australia, spoke about his strong beliefs in the
mining “Super-Cycle.” This
theory says that demand for minerals will be strong for many years to
come since countries in Asia
with roughly half the world’s population are industrializing quickly.
The super-cycle concept is
treated with suspicion by many experienced industry watchers who have
“seen it all before.” But, to people in Asia who witness relentless
economic growth taking place
before their eyes, it is considered more like a fact of nature.
of Anglo American gave a persuasive presentation to document his belief that
field exploration is the
best path to value creation. His numerous examples in places such as Indonesia
and Philippines showed investment returns that were beyond those obtainable
through the high-priced
acquisition route that seems more fashionable these days.
Romualdez, the extroverted president of the Asean Federation of Mining
Associations (AFMA) and the
Chamber of Mines of the Philippines, expressed strong opinions on continuing
growth of the mining sector in Asia. Using his country of Philippines as an
example, he cited billion
dollar investment intentions of such celebrity companies as BHP Billiton,
Sumitomo Metal Mining and
Xstrata. He predicted that mining industry dollar earnings could reach
as high as $10 billion by 2012 -- up from just $2B today. Other countries in
south-east Asia have
similar growth opportunities ahead, according to Mr. Romualdez.
everyone believes that such growth is possible, it is clear that most people
in Asia feel strong
development in the mining sector is inevitable for years to come.
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