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June 11 (Bloomberg) -- Zijin Mining Group Co., buying Indophil Resources NL, said a ban on open-pit mining by a local government in the Philippines adds “uncertainties” to the Tampakan project owned by the Australian company and Xstrata Plc.

Zijin, China’s largest gold producer, in December agreed to buy Australia’s Indophil Resources to gain a stake in Southeast Asia’s largest untapped copper and gold deposit in the Philippines. The bid is awaiting Chinese regulatory approval.

“Since we are still awaiting approval for the bid, we can’t say what we will do,” Zhao Jugang, head of the board secretary office at Zijin, said by phone. “Certainly the ban would add uncertainties to the project.”

A unit of Xstrata, the majority owner of the deposit, said yesterday it will consider “available options” after the South Cotobato province’s legislative council approved the ban. Open-pit mining is the safest and only economic method for mining the deposit, the unit said.

Xstrata is “very concerned” by the proposed ban, spokeswoman Claire Divver said in an e-mailed response to questions today. “For the moment we are continuing to progress our community engagement activities and specialist studies for the Environmental and Social Impact Assessment (ESIA) which we expect to finalise by the end of the year. We’ll also continue to engage with all of the project’s stakeholders.”

The nation’s Mines and Geosciences Bureau plans to ask the officials at the province to reconsider, Edwin Domingo, a director at the bureau, said today by phone.

“We would still like to talk with officials of the province and convince them that their fears and concerns have been adequately addressed by the company,” said Domingo. A legal challenge may be the last resort though it’s too early to make such a decision, he said.

The province’s legislative council will send the resolution for approval to the governor.

Zijin, China’s largest gold producer, fell 0.2 percent to close at HK$5.62 in Hong Kong trading. Xstrata rose 1 percent to 1,013 pence at 11:18 a.m. in London trading.

To contact the Bloomberg News staff on this story: Helen Yuan in Shanghai at; Cecilia Yap in Manila at

To contact the editor responsible for this story: Andrew Hobbs at

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