Thursday April 17, 2008
KUALA LUMPUR: Malaysia Smelting Corporation Bhd (MSC) has proposed to acquire a 30% stake in the Rapu Rapu project, which is involved in mining copper, zinc, gold and silver, in the Philippines for US$18.90mil (RM59.7mil).
MSC said on Thursday that it had signed a framework agreement with Philco Resources Ltd, LG International Corporation and Korea Resources Corporation.
Philco is undertaking the restructuring of Lafayette (Philippines) Inc -- the holding company of three entities which have the mining and production sharing agreements for the metal deposits and base metal processing plant on Rapu Rapu Island, about 350 km south of Manila.
MSC said the project started operations in 2004 and was suspended early this year due to “unsustainable high level of debts and inter-company loans” of about US$270mil in bank debts and A$65.6mil (RM194mil) in inter-company loans respectively due to losses on forward metal contracts and operational difficulties caused by lack of funds.
"The project can be turned around into a profitable operation if the debts can be restructured and sufficient funds are made available for its recommencement,” it said.
Lafayette is LPI is the ultimate holding company of three companies involved in the mining project at Rapu Rapu -- Rapu Rapu Holdings Inc, Rapu Rapu Minerals Inc and Ungay-Malobago Inc.