Nihao inks pact with Swiss firm, AGP for mining venture in Phl

MANILA, Philippines - Nihao Mineral Resources International Inc. has forged an agreement with Switzerland-based mining and commodities trading firm Glencore International AG and AGP Industrial Corp. to jointly acquire and develop mining assets in the Philippines, Indonesia, and other Asian countries.

In its disclosure to the Philippine Stock Exchange yesterday, Nihao said all three of them agreed to utilize their respective expertise in the mining industry with the aim of identifying, developing and operating mining claims of economically feasible nickel deposits in the Philippines for purposes of direct shipping/selling ore and other related nickel mining business.

Under the agreement signed in Hong Kong, the three firms resolved to establish a joint venture corporation with an initial capitalization of $2 million, with Glencore contributing half and Nihao and AGP each pitching in $500,000. The JVC will be formed within a period of two months from the signing of the agreement.

“The JVC shall be governed by the laws of Hong Kong while the proprietary rights of the JVC over its prospective mining interests and operations in the Philippines shall be governed by Philippine or Hong Kong laws and regulations, whichever is applicable,” Nihao said.

Glencore is expected to provide its expertise in marketing nickel ores in the world markets as well as its network of various institutions internationally.

The parties also agreed to execute any and all contracts/agreements that will give effect to their undertaking in the agreement which may be necessary to facilitate the implementation and operation of the JVC.

Headquartered in Baar, Switzerland, Glencore is the world’s largest commodities trading company, with a 2010 global market share of 60 percent in the zinc market, 50 percent in the copper market, nine percent in the grain market and three percent in the oil market.

Glencore is a diversified natural resources conglomerate with interests in companies involved in mining, smelting and refining. It has production facilities around the world and supplies metals, minerals, crude oil, oil products, coal, natural gas and agricultural products to international customers in the automotive, power generation, steel production and food processing industries

Glencore’s ownership stakes include a 35 percent share in Xstrata, a 44 percent interest in Century Aluminum, three quarters ownership of Australian nickel miner Minara Resources and a 32 percent share in French base metals refiner Recylex.

Nihao, on the other hand, had four mining claims located in the provinces of Zambales, Misamis Oriental, North Cotabato and Antique as of Dec. 31, 2010. Its mining claims and small-scale mining claims cover a total area of approximately 20,841 hectares.

AGP, meanwhile is a diversified engineering and general construction company in the Philippines.