S'pore firm partners with Johor ruler in gold mining venture
A Singaporean company has entered into a joint-venture (JV) agreement with the Johor ruler to mine gold and other minerals in Tenggaroh, Johor.
According to Southern Alliance Mining Ltd's filing to the Singapore Stock Exchange, the exploration, mining, and processing of gold ore will take place on land either owned by the Johor ruler or land which the latter will be able to apply for exploration and/or mining approval.
The company has earmarked six plots of land totalling 17,767ha or 3.62 times the area of Putrajaya.
Five plots of land involved the Tenggaroh mukim (locality) in the Mersing district while 7,045.18ha involved the Gunung Arong forest in the Tenglu, Padang Endau, and Penyabong mukim of the same district.
According to the Draft Local Plan 2030 for Mersing, the Gunung Arong area is a permanent forest reserve.
The Mersing district has long been known as a potential gold belt.
Upon execution of a "mining operator agreement", the JV company has to pay the Johor ruler a one-off non-refundable fee of RM3 million as a "commitment fee".
30pct tribute
The Johor ruler's role in the company is to apply to the state government for all "approvals, consents, permits, and/or licences necessary for the JV company to undertake and carry out the exploration works" on the land.
Exploration works will be conducted over a period of 24 months.
In the event the Johor ruler applies for and obtains other lands within a 20km radius of the earmarked land, the JV company may request the Johor ruler to apply for further exploration and prospecting rights.
Should the JV company decide to mine the land, the Johor ruler will have to apply for a "proprietary mining licence" in his name for the sole and exclusive benefit of the JV company.
In exchange, the JV company commits to pay a "tribute" equal to 30 percent of the profits and own a 15 percent stake in the company.
Southern Alliance Mining Ltd is already an established player in Malaysia's iron-ore mining business. It told the Singapore Stock Exchange that it wants to diversify its business.
