Oriental set to make 1st shipment of iron ore

MANILA, Philippines - Listed mining and energy holding firm Oriental Peninsula Resources Group is ready to soar as it aims to make its first shipment of iron ore in the fourth quarter this year with the impending resolution of legal issues that have clobbered its mining unit for years.

During the company’s annual stockholders meeting yesterday, Oriental Peninsula chairman and president Caroline Tanchay said the firm is a step closer to putting an end to a long-drawn out legal battle, paving the way for commercial mining operations to begin. 

Citinickel Mines and Development, which is 94 percent owned by Oriental Peninsula, has been locked in a fierce battle with the Platinum Metals Group Corp. over the right to mine the metal-rich Pulot and Toronto properties in Palawan. PGMC’s operating contract was cancelled by Citinickel’s predecessor, Olympic Mines and Development Corp., due to alleged environmental violations. 

“Barring any last minute hitches, we are close to settling the Citinickel row which will allow us to finally start operating our world-class nickel mines in Pulot and Toronto as early as July. If this finally pushes through, we forecast that we can make our first ore shipment by the fourth quarter of this year,” Tanchay said.

Oriental Peninsula originally planned to start mining operations in 2008 but the legal cases with PGMC dragged on, derailing Citinickel’s plans.

In a presentation to Oriental Peninsula’s shareholders, Carl Nicholas Ng said the company is expected to produce a combined 1.2 million metric tons of ore from both the Pulot and Toronto mines next year, yielding an income of P1.01 billion based on its estimates. This figure is forecast to grow further to P1.54 billion by 2012 on the production of one million MT for each site.

Tanchay said the resolution of the legal issues should propel Oriental to greater heights as it pursues with greater vigor its vision of becoming a driving force in the Philippine mining industry.

To ensure a greater platform for growth, Oriental is poised to acquire 40 percent of Oriental Energy and Power Generation Corp. which shall serve as the group’s vehicle for its power generation business, particularly clean energy.

“With the world reeling from climate change and global warming the mindset of business and industry is currently undergoing a radical paradigm shift. There is a growing bias for environmentally sound business ventures. Even governments around the world are giving great importance and priority to clean, socially responsible and sustainable sources of energy,” Tanchay pointed out.

Oriental Energy recently secured the Department of Environment and Natural Resources’ nod to go ahead with its P2.5 billion, 18-megawatt hydropower project in Madalag, Aklan – the first of five mini-hydro facilities set for development.

With a combined generation capacity of 55 MW, these projects include the P2.2 billion 15-MW Culaman runoff river hydro-electric power project in Manolo Fortich, Bukidnon; and three service contracts for the upper, middle and lower cascades of the Odiongan River in Odiongan, Misamis Oriental, with a total expected output of 22 MW.

Tanchay said the mini hydropower projects were being pursued to help ease the acute power shortage in the Visayas and Mindanao without depending on expensive and pollutive fossil fuels.

In December 2009, shareholders of Oriental Peninsula approved the change in  the listed firm’s primary purpose to include power generation and natural resources development.

At the same time, the company approved an increase in its capitalization and a stock rights offering to raise as much as P600 million to fund the purchase of a 40 percent equity in Oriental Energy.