Mar 13, 2012

Philex signals interest as Myanmar opens up to outsiders

PHILEX MINING Corp., the country’s largest gold and copper producer, is preparing to venture into resource-rich Myanmar, which has began to emerge from military-ruled isolation.

“Senior officials of the company have already been talking with some people in Burma,” Michael T. Toledo, Philex Mining senior vice-president for corporate affairs, told reporters yesterday.

“[Philex Mining] is talking with them to find out what’s there, what’s available, how do we go about [doing business], what are the legal requirements, and who we need to talk to just like in any other investment,” he said.

“If we’re going to invest there, we need to know about the country’s political and regulatory landscape and its legal framework, among others,” Mr. Toledo said.

The official declined to name the parties involved in the talks.

He also mentioned that other Pangilinan-led affiliates may also look into expanding into the former British colony.

In 2010, after years of being ruled by a military junta, Myanmar or Burma held its first general elections in 20 years. A nominally-civilian government led by President Thein Sein was formally installed in March last year.

Since the new government was established, the military state has opened its doors to the world. Its government said last January that it plans to offer an eight-year tax holiday to foreign investors planning to bring their businesses into the country.

“Burma is a highly mineralized place. There is also a lack of public infrastructure there,” Mr. Toledo explained.

According to a Washington profile on Myanmar available on the state’s official Web site, the Southeast Asian country is believed to have reserves of natural gas, hydropower, petroleum, copper, tungsten, lead, coal, limestone and precious stones.

“[There] are many international companies looking to invest and expand into the country. In terms of financial muscle, we’re certain that we can compete,” Mr. Toledo said.

The local miner had earlier said that it also plans to expand into Indonesia and other countries within and outside of Asia.

“The mandate right now is really to expand, both locally and internationally,” said Mr. Toledo.

Last month, Philex Mining announced that it posted a record net income of P5.8 billion for 2011 which was up 47% from the firm’s 2010 earnings. The increase was attributed to better production and higher metal prices.

The firm has earmarked around P1.4 billion this year for its Padcal mine and an additional P1 billion for further explorations in its Silangan project.

First Pacific Co. Ltd., a majority owner of Philippine Long Distance Telephone Co. (PLDT), is the single largest shareholder in Philex Mining. Mediaquest Holdings, Inc., a unit of the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld.

Source: Business World Online