Monday, April 02, 2007 Foreign firm abandons coal prospect
KORONADAL, South Cotabato -- Staunch opposition to coal projects in Barangay Ned in Lake Sebu, South Cotabato has taken its toll on a foreign firm interested in investing in a venture of a Philippine company.
The United Kingdom-based Crew Gold Corp has abandoned its interest at Daguma Agro Minerals, Inc., Levitico C. Toquero, Daguma Agro's consulting geologist, confirmed last week.
He said Crew Gold, which had conducted a due diligence study at a 2,000- hectare area of Daguma Agro, pulled out its equipment late last year due to mounting opposition by residents backed by the local Catholic Church.
"Crew (Gold) was dismayed by the (continuing) opposition in the area," Toquero said.
The foreign company signed an agreement with Daguma last year and paid the latter a non-refundable option fee of $150,000.
Had Crew Gold decided to exercise the option, the firm must pay a total of US$10 million in cash and equity of Crew to Daguma Agro.
Crew and associated Philippine qualified partners will acquire 50 percent of Daguma Agro and entitle the company to purchase the remaining equity, Jan Vestrum, Crew Gold Corp. president and chief executive, said in a statement last year.
A final payment amounting to US$13.75 million (some P710 million) in cash and equity is to be later on to acquire the remaining 45 percent of Daguma Agro, he added.
The Daguma coal project holds a 2000-hectare license area under Coal Operation Contract 126 and consists of Coal Blocks 380 and 381.
The operation contract was awarded a conversion from exploration phase to a development/production phase by the Department of Energy in February last year.
Toquero said Daguma Agro is now talking to various foreign investors, which he did not identify, for possible partnership.
He said they are from London and Russia.
Aside from Daguma Agro, its sister company Bonanza Energy Resources Inc. is eyeing 8,000 hectares of land straddling Barangay Ned and parts of Sultan Kudarat and Sarangani.
Another firm, MG Mining and Energy Corp. was granted a coal operating contract by the Department of Energy to explore 7,000 hectares of land in Barangay Ned in 2004. The 4-year exploration stage will cost the company at least P34 million.
Toquero said Daguma Agro finished its drilling activities two months ago and would likely go into production stage next year., while Bonanza is still on the exploration stage.
Religious leaders criticizing Daguma Agro claimed that the firm allegedly employed deceit in getting the consent of the residents some years back.
