Officials declined to disclosed the details but Finance Secretary Margarito B. Teves said the government has reached a settlement with Philnico which allowed it to present a formal proposal to Jinchuan which, if accepted, would facilitate some $1-billion worth of direct investments from the Chinese company.
"The ball is now in their court," Teves said, saying that the government was waiting for Jinchuan to get back to them after reviewing the proposal on the table.
Teves said Philnico and the government have worked out a settlement of the company’s $300 million obligation stemming from its purchase of the Nonoc nickel mine from the government.
Teves said this settlement allowed the government to get down to specific details of Jinchuan’s expressed interest to take over the mine and put in direct investments.
Nearly two years after signing a memorandum of understanding with the Philippine government for a $1-billion investment in the country’s mining industry, Jinchuan met with privatization officials last week to thresh out the terms of the investment.
Jinchuan has been interested in Philnico for years and had agreed to wait at least six months from the MOU signing for the government to decide on how to facilitate its investment.
However, Jinchuan’s take-over bid was stalled by the unresolved legal tangle between the Philippine government which used to own the nickel mine in Surigao and Philnico which bought the mine but never settled its obligations.
There were discussions of an out-of-court settlement between the government and Teves said this was the agreement reached by the government and Philnico.
"We told them how much we will need as payment," Teves said, but he did not explain whether this meant that the government would not be retaining equity in the business or not.
Jinchuan’s entry into Philnico hinges on the re-appraisal of the company’s mining assets, financial restructuring and how the company intended to settle its obligations to the national government.
Philnico owed the National Government at least $300 million when it bought Nonoc nickel mines in Nonoc Island, Surigao. Singson said the company made some small payment when the transaction was completed but it has not made any other payment since.
The Jinchuan-led consortium had been promised a quick resolution of the Philnico case but the re-appraisal of the mine pushed the Chinese investment back longer than originally expected.