Govt signs $3-b mining deal

Published by rudy Date posted on March 24, 2009

Intex Resources Philippines Inc., a unit of Intex Resources ASA of Norway, yesterday signed a $2.95-billion agreement with the Philippines to develop a nickel reserve on an area straddling Occidental and Oriental Mindoro provinces.

Erlend Grimstad, chief executive of the local Intex unit, said Environment Secretary Lito Atienza signed the production and sharing agreement, which will pave the way for start of commercial production as early as 2012.

Intex’s local partner in the Mindoro mining project is Aglubang Mining Corp., the holder of the minerals production and sharing agreement with the Philippine government.

“We hope to finish the definitive feasibility study by November this year and commence with the construction by late 2010 once we have the financing in place by early 2010,” Grimstad said in a phone interview.

An initial feasibility report predicted more deposits than initially estimated on the area.

An estimated annual output of 40,000 metric tons “appears to have been conservative” based on “extensive” testing, the Oslo-based metals explorer said on Jan. 21, citing a feasibility study. Intex had deferred completing the study to the fourth quarter of this year from the first because of the global credit crunch.

A high-pressure acid leach facility will be included in the mine and will be able to produce 80,000 tons of nickel and 3,700 tons of cobalt annually. Construction and development is scheduled until 2011, with commercial operations starting the next year.

Intex plans to spend $2.05 billion for the first stage of the project and $900 million for the second phase. The company, however, appeared to have reduced its estimate for capital expenditures due to low metal prices.

“From they submitted, Intex will now be spending $2.5 billion,” said Mines and Geosciences Bureau chief Horacio Ramos.

He said the investments would include expenses for the processing, fertilizer and power plants.

Intex plans to tap the capital market to partly fund the project.

“We’re hoping to have on board a strategic partner after we finish the definitive feasibility study and secure an environmental compliance certificate by the second quarter of next year,” Grimstad said.

He said the parent company was finalizing a mixed financing package that included the sale of shares, entry of a strategic partner and borrowings from international banks.

A pre-feasibility study completed by Aker Solutions Australia in December 2007 confirmed the viability of building a nickel processing plant that could produce 40,000 tons a year.–Othel V. Campos, Manila Standard Today

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