SM goes into mining
MANILA—SM Investment Corp., the flagship holding company of tycoon Henry Sy, is diversifying into the mining business by buying into Atlas Consolidated Mining & Development Corp.
The board of SM Investments approved Friday an investment of $142.2 million in Atlas that will be equivalent to 17.9 percent of the mining company’s enlarged capital upon the closing of this transaction.
Proceeds of the investment will be utilized by Atlas to partially finance the acquisition of the balance of 45.54 percent of its subsidiary Carmen Copper Corp.
SMIC executive vice president and chief finance officer Jose Sio explained that the buy-in was a “portfolio” investment meant to take advantage of opportunities in the base metal sector.
“The price of copper, a base metal, has recovered very strongly in recent years and is expected to remain buoyant in the near future owing to the very strong demand from major Asian economies,” Sio said.
“The mine site of Atlas is only 16 kilometers away from its own port, passing through roads owned by Atlas. From this operational advantage, Atlas is able to ship its output to its major customers. This proximity to major markets translates to substantial transport cost advantages for Atlas,” he said.
SMIC president Harley Sy added that the group was pleased with this investment at this time, noting that Atlas was one of the top 20 copper mining companies in the world.
“It is very well-positioned to take full advantage of its mine site’s significant resources to serve its major markets like China and Korea which have a close proximity to the Philippines. China alone consumes about 40 percent of total world copper production,” he said. /INQUIRER
