Mumbai: Swiss mining giant Xstrata has raised its bid for Philippine miner Indophil even as its major shareholder Lion Selection voted against two resolutions at its shareholders meeting to block the bid.

Lion Selection, which controls 25.4 per of Indophil, voted down a pre-bid agreement with Xstrata that could have seen Xstrata close in on a 17.7 per cent stake in Indophil.

The motion to proceed with the pre-bid agreement was voted down at a meeting in Melbourne with 55.6 per cent voting against and 44.4 per cent for.

However, Lion will still look to sell its Indophil stake, with 64.9 per cent of shareholders voting in favour of a resolution to offload the stake as part of a plan that will see $267 million in cash returned to shareholders.

Xstrata returned with a matching offer for the $540 million ($1.28 a share) offer made by Hong Kong-based buy-out firm Crosby Capital Partners for its junior partner in the Tampakan copper-gold project in the Philippines.

Xstrata said it would be holding Lion to the pre-bid agreement, which gave it the right to match any competing offers at least 24 hours before Lion's general meeting at 10am on 23 June.

Indophil has a 32.5 per cent stake in the $3 billionTampakan copper/gold project in the Philippines, which is one of the biggest such untapped deposits in Southeast Asia.

Xstrata had previously projected that Tampakan could annually produce about 194,000 tonnes of copper and 213,000 ounces of gold.

Xstrata is the managing partner in the project with a 62.5 per cent stake, which it largely acquired through its $4.9 billion takeover of Mount Isa Mining, and is pursuing a feasibility study for the operation.

Xstrata's London headquarters has now taken up the bidding war from its Queensland subsidiary and is in pursuit of full control of Indophil.

"Xstrata Queensland refers to the statement made by it on 20 June that it had chosen not to match the offer by a consortium comprising Crosby Capital, the Alsons Group and Indophil managing director Richard Lauffman to acquire 100 per cent of Indophil for $1.28 cash per share at this time," Xstrata said in a statement.

"Having now had time to further consider its options with regard to its offer for Indophil, Xstrata wishes to confirm that it now intends to match the offer made by the Crosby Capital Consortium by increasing its offer to $1.28," the statement added.

"In accordance with the pre-bid acceptance agreement between Xstrata and Lion Selection dated 14 May 2008, Lion Selection directors are required to recommend that Lion shareholders vote in favour of the resolution to approve the sale of that part of Lion's investment in Indophil to Xstrata," it added.

Analysts expect Xstrata to raise its offer for Philippines-based  Indophil further.