SM diversifies to mining; Sy holding company invests $142.2M in Atlas

SM INVESTMENTS Corp., the flagship holding firm of tycoon Henry Sy, is diversifying into the mining business by buying into Atlas Consolidated Mining & Development Corp.

The board of SM Investments approved yesterday an investment of $142.2 million in Atlas, equivalent to 17.9 percent of the mining firm’s enlarged capital upon the closing of the transaction.

Proceeds of the investment will be used 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 deal 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 added.

SMIC president Harley Sy said that the group was pleased with the investment, 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.

Atlas is led by businessman Alfredo Ramos who is part of the family that owns retailer National Bookstore, which has a strong presence in SM shopping malls.

“We are also extremely pleased to be able to further cement the long-standing relationship between SM and the Ramos family, a major shareholder of Atlas.  Our families have long been collaborating in the country’s retail sector, and this new joint involvement presents an avenue for both groups to further enhance this collaboration,” Sy said.

SMIC is the country’s largest player in retailing, shopping mall and banking businesses and is a fast-growing player in residential property development and tourism/convention business.