Korean consortium acquires 40% of Phl chromite miner

Manila, Philippines -  A South Korean consortium has signed an agreement for the acquisition of 40 percent of local miner Cambayas Mining Corp. to expand the production capacity of its chromite mine in Homonhon, Eastern Samar.

The partnership is expected to raise the output of the chromite project from the current 3,000 metric tons per month to 30,000 to 40,000 metric tons per month.

The definite agreement is expected to be signed on July 30 in South Korea.

The Korean consortium is composed of state-controlled Korea Resources Corp. (KORES), Korea Infrastructure Investments Asset Management (KIAMCO) and K&P Partners Investment.

Anthony Kang, the social and community development specialist of K&P Partners, said the consortium is investing an initial $58 million for the acquisition and the development of infrastructure in the mining site.

He said the consortium would like to acquire a greater portion of the company if it is not prohibited under the Mineral Production Sharing Agreement (MPSA).

Under the MPSA, foreign entities can only own 40 percent of a local mining company.

KIAMOCO, a subsidiary of the Korea Development Bank, would develop the appropriate infrastructure for the mine site such bridges and port facilities.

Cambayas has all the necessary mining documents such as the Environment Compliance Certificate (ECC) and the Environment Management Plan (EMP).

For the expansion of mining activities, however, an expansion permit still has to be secured. Cambayas currently has ECC and and EMP for 1,000 hectares. The expanded operations would require 3, 516 hectares.

Kang said the consortium would put in more investments when the expansion permit is secured.

He said representatives of the consortium recently met with Environment Secretary Ramon Paje regarding the expansion and that he expressed interest in having value-added activities to mining.

For the first five years of the joint-venture, the chromite concentrate to be produced in the Homonhon mine would be sent processed in China as ferro chrome and then exported to Korea.

Kang said that by the sixth year of the joint venture, the consortium may put up a chromite concentrate processing facility in the area of the mine.

The consortium would have a 50-year contract with Cambayas, with an extension provision of 25 years and a second extension provision of another 25 years.

In terms of employment, Kang said, more workers from the island would be hired to provide manpower for the mine.