US-BASED company PHI Group has signed a joint venture agreement with Manila-based Spartan Mining and Development Corporation (SMDC), to form PHI Spartan Resources, a new Philippines entity equally owned by both companies. The new company will initially focus on dredging lahar sand deposits from Santo Tomas, Maloma and Bucao rivers in Zambales Province.
The primary initial reason for this work is to restore navigability of these rivers and the extracted sand will then be processed and exported for Asian construction and reclamation projects. The sand was created in 1991 by the Mount Pinatubo volcanic eruption and also hosts mineral deposits which the JV aims to process.
PHI Group is committed to providing an initial US$10 million, with up to $50 million in total, to the JV company to implement the dredging activities and to set up and operate the mineral processing plants.
The mineral areas cover approximately 47,000 hectares and the total volume to be dredged is estimated at 1.4 billion tonnes. The projected economic value of the extracted sand, which contains black sand, washed sand and other minerals, could be more than $14 billion.
Both companies also intend to cooperate to further develop affordable housing, engineering and construction, steel and power generation projects in Zambales after the dredging has begun. One of SMDC’s social priorities is to provide affordable housing, economic infrastructure and employment opportunities to help relocate more than half a million families of informal settlers from Metro Manila.
SMDC’s chairman and CEO Luis Ramos said, “We are very pleased to sign the joint venture agreement to formalize our relationship with PHI Group. We look forward to a long-term mutually rewarding association that can potentially benefit both companies as well as the general welfare of our Filipino people in ways not previously possible.”
PHI Group’s chairman and CEO Henry Fahman said, “We are very excited to share a common philosophy and vision with SMDC’s leadership and jointly embark on this historic endeavour. We strongly believe this will bring enormous economic value for shareholders of both companies and enduring social benefits for the local Filipino communities.”
PHI Group’s activities include wood pellet projects in North America, reclamation and construction sand from Vietnam and the Philippines for land extensions and building in Asian countries, coal asset development in Indonesia, oleochemicals in Malaysia, an LPG terminal project in Vietnam, titanium business in Vietnam and a nickel project in Laos.