Korean group completes acquisition of Rapu-Rapu

The LG Group of Korea and Kores (the investment arm of the Korean Government) have completed their  acquisition of the Rapu-Rapu Polymetallic Project from Australia’s Lafayette Mining Limited.

They are expected to start operating the Rapu-Rapu project either at the end of this month or in July.

LG and Kores, through their joint venture company Philco Resources Limited (Philco), reached an agreement with Lafayette Mining Limited last March 25 this year to purchase Lafayette’s 74-percent stake in Lafayette Philippines Inc. (LPI).

LG and Kores reportedly paid an initial $18 million to Lafayette.

Philco already controls 26 percent of LPI and its acquisition of Lafayette’s 74 percent  consolidates its full ownership of LPI.

LPI  owns 99.9 percent of the Rapu-Rapu Processing, Inc.(RRPI) which holds a Mineral Processing Permit (MPP) from the Department of Environment and Natural Resources.

At the same time, LPI also controls 40 percent of Rapu-Rapu Minerals, Inc. (RRMI) which holds the Mineral Production Sharing Agreement (MPSA) for the Rapu-Rapu mine.

LPI also holds a 40 percent stake in Rapu-Rapu Holdings, Inc. (RRHI) which, in turn, controls 60 percent of of RRMI.

LPI’s partner in RRHI is F & N Holdings, Inc. which owns 60%.

F & N Holdings, Inc. is represented by lawyers whose principals are unknown.

The purchase was finalized on April 21 this year.

Officials of LG and Kores, as well as of Lafayette, are set to pay a courtesy call to Environment and Natural Resources Secretary Jose L. Atienza to formally inform him of their takeover of the Rapu-Rapu Polymetallic Project.

LG and Kores had earlier informed the Mines and Geosciences Bureau (MGB) of the takeover and assured the DENR that Philco would provide the necessary working capital  to protect the environment and employes of RRPI and RRMI until the takeover was completed.

The MGB had previously ordered Lafayette to pay P134 million to ensure that the environment around the mine site is restored and rehabilitated in the event that the project in abandoned.

Lafayette was forced to give up the Rapu-Rapu project following a mine tailings spill that forced the Australian mining firm to shut down operations of the copper and zinc mine in Rapu-Rapu Island in Albay.

The shutdown resulted in heavy financial losses to Lafayette which eventually opted to sell its stake in the Rapu-Rapu project to the Koreans.