US investors seen keen on mining

United States-based private banking firm Murdock Capital Partners Corp. (Murdock Capital) said American investors were interested in investing in the Philippines, particularly in the mining sector.

However, investors would likely wait for a legislation on a new mining revenue-sharing scheme before making investment decisions, Murdock Capital managing director Charles Nelson said in an interview on the sidelines of the Mining Philippines 2012 Conference.

Nelson said the Philippines was a promising area. “As soon as the uncertainty is ironed out, no matter how royalties are structured, we can make a matrix and certainly put it down,” he said.

Nelson also said investors, which were in touch with Murdock Capital, were also interested in the retail and construction sectors. Murdock Capital will organize seminars on these, he said.

Earlier, during his speech at the conference, Nelson said the most common risks inherent in financing mining projects were legal in nature, which varies from country to country. The US uses English common law while in the Philippines, it is a mix of common and civil law, he noted.

“A major legal risk would be the nature of the right of the mining company to develop the deposits. The ideal scenario would be that where the mining company obtains full legal right to both surface and subsurfaces assets without restriction to the right to exploit those assets, with ownership normally belonging to the central government. What can be obtained is a license to mine,” he said.

Other factors to consider are the taxes imposed on mining projects such as profit tax, value-added tax on services, royalties, local taxes and withholding taxes on interest and dividend payments, Nelson said.

“One of the funds that we deal is with DMCI but it’s not mining, it’s in construction area. We haven’t done anything on mining equity investment, but we are looking to that,” he said.