Biz Buzz: Those valuable MPSAs

While the mining industry, in general, is lobbying hard in order to get a better deal out of the Aquino administration’s ongoing effort to lay down its definitive mining policy, not everyone in the mining business is worried.

In fact, our sources say that some of the bigger (but quiet) players are pleased with how the much-awaited Palace executive order on mining is shaping up.

In particular, at least one businessman with a substantial interest in a publicly listed mining firm is excited about that EO coming out despite the tighter provisions it is rumored to contain—or perhaps precisely because of these provisions.

We hear that, under the new mining EO, a whole range of tough requirements will be imposed on mining firms before they can progress from possessing a simple exploration permit (the first stage in a long and expensive process when starting a new mine) to a full-fledged mineral production sharing agreement (MPSA).

“It will be next to impossible to get an MPSA under the proposed framework,” says one source familiar with the discussions in the administration. He explains that, to progress from an exploration permit to an MPSA, a mining firm will have to quantify in detail the total economic value of his mining operations, including assessing how much (in peso terms) mining is impacting on the local population and the environment.

This—and other seemingly massive roadblocks—will have one clear result: the sudden decline in the issuance by regulators of new MPSAs … and the sudden rise in the value of existing ones.

“Suddenly, mining firms with existing MPSAs will become very valuable,” the source points out.

This early, this particular businessman—with known ties to one faction of the Palace—is already excited with the new EO. You see, he has five MPSAs. Not bad. Not bad at all.—Daxim L. Lucas

No dough for Lepanto

Monday (March 20) was the deadline of South African mining giant Gold Fields to pay mining tycoon Felipe Yap’s Lepanto Consolidated $110 million to complete its acquisition of a 40-percent stake in Far Southeast Gold Resources, but no money was laid on the table. A portion of the deal (20 percent) payable offshore to private holding firm Liberty Express Assets is pushing but not the portion of the payment going to Lepanto.

Industry sources said that while Gold Fields would have wanted to complete payment to finally consummate its 60-percent takeover of the undeveloped gold-copper Far Southeast deposit, it did not want to lay down more money pending the issuance of an executive order on mining. This was because under an agreement with Lepanto 18 months ago, the local mining firm must get an FTAA [Financial or Technical Assistance Agreement], a contract between the Philippine government and mining companies on large-scale exploration, development and utilization of mineral resources that a foreign company needs to have economic control of a mining project.

But the market expects this to be only a hiccup, given Gold Fields’ optimism on the Far Southeast project.—Doris C. Dumlao

Next up: All-news channel wars

Tycoon Manny Pangilinan seems hellbent on making a splash in the television industry, and is apparently not afraid to go up against local behemoth ABS-CBN Broadcasting Corp.

Proof? A ranking executive of the MVP group has confirmed to Biz Buzz that Pangilinan’s TV5 will soon launch an all-news television channel that will go head-on with the Lopez family’s ABS-CBN News Channel (ANC), which is currently the gold standard—at least locally—when it comes to the news channel business.

The executive tells us that they are targeting the third quarter of this year to commence operations, although it remains unclear whether the as yet unnamed channel will be aired on TV5’s existing UHF frequency or on cable (something guaranteed to create more tension with the Lopez-owned Sky Cable, the country’s dominant cable TV provider at present).

Of course, going up against ABS-CBN will be a lot easier for TV5 if it does finally seal that elusive deal to acquire GMA 7, which is something that may or may not happen at this point, our sources say.

In any case, we hear MVP’s “frenemy” is not far behind in this field, either.—Daxim L. Lucas

HK’s Jardine in talks with Sky Logistics

Jardine Airport Services Ltd., which has operations at the Hong Kong International Airport, is in “serious talks “ to acquire a minority equity position in Sky Logistics, which took over the airport service operations of Philippine Airlines in October last year.

Just last month, four of the top managers of Sky Logistics, chaired by Cebu-based businessman Manny “Manny O.” Osmeña, went to Jardine’s office in Hong Kong for a four-day training session on airport operations. Jardine is a certified expert in airport operations considering that the Chep Lak Kok airport is one of the world’s busiest terminals and it has offered software and training for free to Sky Logistics people.

Perhaps one reason for the close relationship is the love of Jardine managing director and CEO Enoch Lam for the award-winning “Manny O.” wines.

Sky Logistics took over PAL’s airport service operations late last year as part of PAL’s outsourcing program. Sky Logistics’ sister firm Sky Kitchen took over PAL’s in-flight catering, while SPi Global Holdings took over the airline’s call centers.—Tina Arceo-Dumlao

Boutique publisher

When stockbroker Isagani “Toto” Cruz is not trading stocks, he’s probably thinking of the next book to publish. His mother, Carmen Guerrero Nakpil—herself an author and journalist—had warned him about going into a business he didn’t know, but Cruz said publishing was just like doing an initial public offering. “You do a book launch just like you do a listing and then take a risk when you sell the books. It’s just like stocks, you take the risk and I’m used to that kind of risk,” he told Biz Buzz.

His boutique publishing firm Cruz Publishing has now done two books, and both of them achieved a return on investment after three months. The first book “Heroes and Villains,” authored by his mother, came out in 2010, and the latest one is his ancestor Jose Rizal’s third book, “Sibylla Cumana,” a book of oracles originally written in Spanish and which was translated to Filipino by national artist Virgilio Almario and to English by Cruz’ sister Gemma Cruz-Araneta.

A limited edition of Sybilla Cumana has been launched in partnership with the Paciano Rizal Heritage Inc. in a three-in-one package containing the original Spanish version plus the English and Filipino translations. Each package is selling for P950. The next plan is to publish a less expensive version for wider circulation, containing only the English or Filipino translation.—Doris C. Dumlao

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