Philippines' $600 Million Copper Smelter and Refinery Expansion Set to Ride the Wave

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Copper prospects are seen as indicating economic directions as the metal is used broadly across industrial processes. Industry observers say that copper is picking up and should continue to do so over the coming months.

In the Philippines, Glencore International (Baar, Switzerland) is concluding technical and financial studies for a $600 million plan to double capacity at the country's sole copper smelter and refinery. Angel Veloso Jr., the chairman of the Philippine Associated Smelting and Refining Corporation (PASAR), said that work on enlarging operations at the refinery in the central province of Leyte could start as soon as next May, once the plan has been approved and finalized by the end of the year or in early 2013.

"In June, we announced investment of up to about $600 million. The expansion plan is to increase capacity to a maximum of 1.2 million tons of copper concentrate," Veloso said.

Currently, the plant processes 720,000 tons of copper concentrates annually and refines 215,000 tons of cathodes. Technical studies should be completed by October and financial studies by December. The project will take two to three years to complete.

Cristino Panlilio, trade undersecretary, said that PASAR (Glencore owns 78%) was committed to the expansion plan. Panlilio also said that the company was planning to build a 200-megawatt, coal-fired power plant to lower energy costs. The company also might sell surplus power to an industrial downstream estate it plans to build near the refinery.

Glencore said it will file for tax incentives for the project. PASAR resumed operations at the refinery in August 2012 after it was closed down by a fire in January. The company, which has been producing copper cathodes for export since 1976, was acquired from the government by Glencore in 1976.

Philippine's manufacturing sector is expected to grow stronger in the third and fourth quarter of this year after it grew 5% in the first half of the year, making it second to China's manufacturing sector in the regional growth stakes. Strong foreign investor interest has been higher than it was in 2010 and 2011.

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