In a disclosure to the Philippine Stock Exchange, APC said it has formed a new subsidiary, APC Mining Corp., to engage in the mining of zinc, lead, gold, silver, copper, brass, iron, coal and all kinds of ores, metals and minerals.
APC Mining is the third company set up by APC as part of measures to return to profitability. The two other companies formed were Aragorn Coal Resources Inc., which will engage in coal exploration, and Aragorn Power & Energy Corp. which will undertake oil and gas exploration.
With these new ventures, APC hopes to improve its financial standing and strengthen operations.
To allow it to focus on these new businesses, APC has put its cash-strapped telecommunications unit Philippine Global Communications Inc. (Philcom) on the auction block. Philcom is 73.84 percent owned by APC.
Philcom has been incurring losses which have accumulated to P6.85 billion since 1999. These losses have resulted in negative stockholders’ equity for APC.
As of Sept. 30 last year, APC had a capital deficiency of P7.4 billion, seven percent higher than the end-2003 level of P6.9 billion. The increase in capital deficiency was due to the losses suffered by Philcom for the first three quarters of 2004 amounting to P488.2 million.
In the first nine months of 2004, APC incurred losses of P483.34 million or a decline of 12.55 percent from the previous level of P552.7 million. The decline was due to the increase in transmission revenues and lower cost of transmission, interest expense and forex losses of Philcom.
Revenues, however, fell to P668.5 million from P1.15 billion in 2003.
After a decline in the past 20 years, the Philippine mining industry is slowly regaining its old glory with some $3.1 billion in foreign direct investments expected to be poured into different mining projects.
These investments will mainly come from five mining companies based in Canada, United States, Australia and China which noted the Philippines’ potential to become a leading producer of minerals, particularly, gold, copper, nickel and chromite.
The Philippines is considered a highly mineralized area with mineral resources estimated to cover nine million hectares or about 30 percent of the country’s total land area. Currently, however, less than half a million hectares are being explored or developed.
The government estimates that the country’s mineral wealth range between $800 billion to $1 trillion.