Asian Mining Exploration News, Swiss miner Xstrata Copper has failed to increase its stake in the Tampakan copper and gold project in Mindanao after shareholders of Lion Selection Ltd. voted not to accept its purchase offer.

Lion Selection owns a quarter of listed Australian miner Indophil Resources Ltd., which in turn owns a third of the copper and gold project in Southern Philippines.

Xstrata owns 62.5% of Tam-pakan, which holds 11.6 million tons of copper and 14.6 million ounces of gold. If in production today, it would rank as one of the world’s richest.

Documents showed more than half of Lion Selection’s stockholders rejected Xstrata’s bid for 17.7% of the company’s 25% stake in Indophil.

“Should the Xstrata pre-bid agreement lapse on June 28 as anticipated, Lion will be free to deal with its Indophil holding as the directors consider to be in the best interest of Lion shareholders,” Lion said in a disclosure to the Australian Stock Exchange yesterday.

Xstrata’s initial A$398-million ($380-million) offer for Indophil, with which it co-owns the Tam-pakan lode in Mindanao, was trumped last week by a A$488-million offer from a consortium of investment groups — Crosby Capital Ltd. and Alsons Group and Indophil Chief Executive Richard Laufmann. Xstrata has said it would now match that bid of A$1.28 per share.

After the heated shareholders’ meeting on Monday, Mr. Laufmann reportedly said the consortium could raise more capital with ease to increase the takeover bid.

“It took us two-and-a-half weeks [to raise $540 million] and we didn’t even get out of our backyard,’’ he was quoted by Australian press as saying. Xstrata had yet to disclose its next move.

Xstrata and Indophil’s Tam-pakan project is being carried out through local miner Sagittarius Mines, Inc. The project, which covers the towns of Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur, is still at the exploration stage.

Sagittarius has a financial and technical assistance agreement with the Philippine government to explore copper and gold deposits at a site covering more than 20,000 hectares.

Discovered in 1991, the mine has never left the drawing board, dogged by environmental and economic problems, political instability, and laws restricting foreign ownership.

The project is being opposed by the Catholic Church, environmental groups and the communist New People’s Army.

Xstrata has been buying copper, zinc and coal mines in Australia and nickel deposits in Canada and Africa as it builds up a diversified commodities operation in the face of surging global demand, especially from the growing economies of China and India.

Xstrata said the mine is unlikely to start production before 2014, a date disputed by Indophil, which has said 2012 was the agreed first production schedule.

Local government officials hope that the mining venture will bring economic development to the area. The Tampakan project has been identified as one of the 24 priority projects expected to revitalize the local mining industry.

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