Vulcan to remain in mining amid entry of new investors

MANILA, Philippines — Vulcan Industrial and Mining Corp. (VIMC) will remain engaged in the mining industry despite the entry of a new group of investors.

East Coast Mineral Resources Co.’s majority stockholders Hilario Pagauitan and Sofia Paguitan are subscribing up to 5.18 billion shares of Vulcan’s unsubscribed capital, inclusive of its mineral production service agreements (MPSAs), assets and operations.

In line with this, Vulcan’s board also approved the increase in the company’s capital stock from P4 billion to P12 billion.

Vulcan said it “has always been studying and exploring strategies to generate the most value for its shareholders.”

“Recent changes in the mining climate have prompted VIMC to reconsider its previous decision to exit the mining industry,” the company said.

“On a global scale, metal commodity prices have surged, and its outlook continues to be positive. Locally, the moratorium on mining/mineral agreements has been lifted, opening the possibility for new mining projects,” it further said.

ECMRC is the owner of MPSA 078-97-XIII in Surigao del Norte which is operated by Cagdianao Mining Corp.

“The contemplated transaction will result in Vulcan owning a consistently profitable going concern and cashflow-generating mining business, which will allow Vulcan to immediately recognize income,” Vulcan said.

Upon disclosure of the transaction, the Philippine Stock Exchange suspended trading in   Vulcan shares as the deal is covered by its rules on backdoor listing.

“Said determination is anchored on the transaction involving a change in the controlling shareholder of Vulcan and the new business to be folded into the company upon completion of the transaction,” the PSE said.

Vulcan first expressed its interest to exit the mining industry in 2012.

It was the same year when the government, under the Aquino administration, issued Executive Order 79, which prohibits the grant of mineral agreements until a new legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect.

In April, President Duterte issued EO 130, allowing the government to enter into new mineral agreements, subject to compliance with the Philippine Mining Act of 1995 and other applicable laws, rules and regulations.