Bilyonaryo Frank Lao has formed a 50-50 joint venture with publicly-listed firm Apollo Global Capital for a massive offshore mining project in Cagayan.
Lao, a nickel miner and owner of the biggest Chinese restaurant group in the country, will provide the boats for extracting magnetite (iron ore used in steel production) to unlock the value of the Mineral Production Sharing Agreement (MPSA) owned by Apollo, through its subsidiary JDVC Resources.
By January next year, Lao will bring in two vessels – worth over $20 million each and equipped with powerful siphons, magnetic separators and onboard processing facilities – that could churn out up to 10,000 tons per day.
JDVC said: “This system has no hazard at all and no social complication as the siphon vessel is stationed at the ocean far from the shore. There is no explosive use. Hence, there is no blasting activity. There is no permanent structure buried to the sea bottom.”
JDVC said it has obtained the necessary mining, environmental and export permits for the project which covers 1,903 hectares and is located 14 kilometers off Gonzaga, Cagayan.
The project is expected to ride on the crest of a recent surge in prices of iron ore and other industrial metals due to strong appetite from China and other Asian countries.
The Department of Environment and Natural Resources reported that JDVC’s imning area has a potential 512 million metric tons of mineral deposits with a lifespan of 47 years. At the current market price of $112 per ton, JDVC’s iron ore deposit has a potential value of $57 billion.
Last October, JDVC obtained an $8 million (P416 million) credit line from Development Bank of the Philippines to bankroll its exports of iron ore. Go pledged 10.5 billion APL shares (worth $10.1 million) as collateral for the DBP loan.
The major owners of Apollo are Hyung Rae Doo (38.91 percent), Lloyd Reagan Taboso (16.58 percent), Napoleon de Leon (16.49 percent), and Daniel Chua Go (16.28 percent).