Gulf cornerstone investor pulls out over mining moratorium risk
PERTH (miningweekly.com) – Manganese ore and alloy developer Gulf Manganese has lost a cornerstone investor in the midst of uncertainty around a moratorium on all mining activities in East Nusa Tenggara, Indonesia.
Gulf Manganese in August this year announced a A$10.8-million investment from Indonesian businessman Bapak Dato Dr Low Tuck Kwong in exchange for a 19.8% equity holding in Gulf.
However, Gulf said on Wednesday that recent statements by the new governor of the province in relation to a moratorium on all mining activities in the region had caused uncertainty, prompting the cornerstone investor to notify Gulf that he would not be proceeding with the transaction at the time.
However, he has advised the company that he was open to revisiting the investment proposal in the future.
Meanwhile, Gulf has pushed back the commissioning date of its smelters in Kupang until March 2019, saying that the company has created a strategy to facilitate cost reductions in order to control expenditure and preserve funds, while the mining moratorium and future investment remains uncertain.
This strategy will result in a reduction in construction activities in Kupang in the short term.
In the meantime, Gulf is also investigating opportunities to source manganese ore from outside the East Nusa Tenggara province.
In addition, Gulf told shareholders that the company’s share trading on the ASX would remain suspended as it continued to finalise discussions with Indonesia’s PT Jayatama Global Investindo around the maturity date of a A$15-million convertible note.
The funds were used for the construction and commissioning of the first two smelters at Kupang, in West Timor.
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