Under a 25-year management contract with the Baguio Water District, Benguet will deliver 50,000 cubic meters of potable water daily to Baguio City at a rate of P39.99 per cubic meter. This is estimated to bring in annual revenues of P729.82 million, Benguet said.
Benguet president Philip Romualdez said the company has tapped Deutsche Bank as ifinancial advisor to raise financing for the project.
The company said the water project requires an initial capital requirement of a little over P3 billion.
Benguet, which is primarily engaged in mining, said it will convert its mined-out open pit in Antamok, about seven kilometers from the city, into a reservoir. It said it will construct a water treatment plant near the reservoir.
Romualdez said the company is in talks with Korean and Danish firms for possible participation in the project.
Benguet earlier said about 12 foreign and local mining firms have expressed interest in its Kingking copper-gold mine in Compostela Valley.
Romualdez said Benguet expects to select a joint partner for its Kingking project by the third quarter of the year. He declined to name the prospective investors pending completion of negotiations.
The Kingking project requires an estimated $500 million to $850 million in funds to begin mineral extraction.
Citigroup Global Markets has been tapped as financial adviser in raising funds for the development of the Kingking mine.
Based on records of the Chamber of Mines of the Philippines, the Kingking project has a total mineral deposit of 353 million metric tons of gold, copper and silver with a gross value of $3.9 billion. It has an estimated daily production rate of 70,000 metric tons, which could last for around 13 years.
While the same records show that potential gross sales would reach $285 million yearly, potential income taxes generated for the government would be worth $20.60 million annually. Besides employing 1,000 workers during construction and 500 during mining operations, it is expected to indirectly employ around 2,500 workers.
Apart from the Kingking mine, other projects of the company are the Surigao coal project and the Acupan gold mine.