First Pacific considering gold, coal assets in Indonesia

BUSINESS MIRROR
TUESDAY, 30 AUGUST 2011 17:42  
MIGUEL R. CAMUS / REPORTER   
CONGLOMERATE First Pacific Co. Ltd. is looking to acquire gold and coal assets in Indonesia, managing director and chief executive officer Manuel V. Pangilinan said last week.


The move comes more than a year after First Pacific effectively gained control of Philex Mining Corp., the Philippines’ biggest gold producer. If successful, it could also be First Pacific’s next major acquisition outside the Philippines.


The company, controlled by Indonesian billionaire Anthoni Salim, is already the single-biggest shareholder of telecommunications giant Philippine Long Distance Telephone Co. (PLDT).


First Pacific also owns a near-majority stake in the country’s largest electricity retailer Manila Electric Co., which is putting up a 1,500-megawatt power generation portfolio that will include coal-powered facilities through 2016.


“We are looking [at mining acquisitions] in Indonesia,” Pangilinan told reporters in a chance interview last week. He said his group is looking at “both” coal and gold prospects, without providing additional details.


Indonesia is ranked the seventh-largest gold producer in the world in a list led by China, Bloomberg data last year showed. In terms of coal, that country is the world’s second-biggest exporter, second to Australia.


Market watchers noted that Pangilinan is diversifying his options in terms of mining acquisitions. While the Philippine mining sector remains largely underdeveloped and offers vast potential, particularly for gold, his group has been unsuccessful in making any large acquisition after Philex, market watchers said.


Since Pangilinan took the helm at Philex, investments through that company have included a 5-percent stake in Lepanto Consolidated Mining Co. and a joint-venture agreement to develop and operate a mining property owned by Manila Mining Corp. Both Lepanto and Manila Mining are controlled by businessman Felipe Yap.


Pangilinan has indicated that he is “ready” to increase Philex’s stake in Lepanto should an opportunity present itself.


Market watchers are also wary on how First Pacific’s plans could clash with those of perceived corporate rival San Miguel Corp. (SMC), which is also eyeing “bigger” acquisitions in Indonesia and Australia, its president Ramon S. Ang said earlier this month.


SMC, a food and drinks company diversifying into power and other infrastructure-related businesses, acquired three companies comprising Exxon Mobil Corp.’s downstream oil business in Malaysia for $610 million two weeks ago.


This would not be time First Pacific has looked toward Indonesia, considered Southeast Asia’s biggest economy, for investments. It already owns PT Indofood Sukses Makmur, a company listed on the Indonesia Stock Exchange.


Apart from PLDT and Philex, the Hong Kong-based conglomerate also owns Philippine-listed Metro Pacific Investments Corp. which has interests in water infrastructure, toll roads, power generation and hospitals.