Diatomite company's ownership uncertain

Quite where the future ownership of would-be Middlemarch diatomite miner Plaman Resources lies appears uncertain.

Plaman Resources says it has both the option, and funds set aside, to buy the majority 50.9% stake of Malaysian giant Iris Corp, but the latter has said more recently there would be no immediate ''fire sale'' of mining assets, such as Plaman.

Plaman's plans to develop a multimillion-dollar diatomite mine near Middlemarch have split the community, while the lack of information is raising questions on how the mining operation would work and its effects.

It has been confirmed an investment and operational update by Plaman Resources at the forthcoming Minerals Forum in Dunedin next week has been cancelled.

Plaman's New Zealand manager has not responded to requests for comment.

Plaman Resources is 50.9% owned by Iris Corp, which is closely linked to palm oil production, and 49% owned by a pair of Australian businessmen.

A ''private and confidential report'' last December by investment bankers Goldman Sachs, which has a $US20million ($NZ30.3million) loan to Plaman, was leaked to the ODT recently.

One aspect outlined how removing Iris Corp as a Plaman shareholder was a ''key part'' of corporate reorganisation and which would be ''viewed positively'' by decision-making ministers of the coalition Government.

''Since it removes any link between the Foulden Hills project and the potential use of Black Pearl [diatomite] as a fertiliser for palm oil plantations, which has been identified as a sensitivity for the local community''.

In a section of the leaked December report on ''shareholder structure overview'', Goldman Sachs said Plaman Resources had exercised an option to buy back Iris' ordinary shares.

The transaction was expected to close upon receiving approval from the Overseas Investment Office (OIO), a reference to Plaman potentially buying neighbouring Foulden Hill farm, beside its diatomite mine, in Moonlight Rd.

''Plaman has the full funding required for the call option in its lawyers' trust account [in Canada],'' Goldman Sachs said.

Pending receipt of the OIO consent, Goldman Sachs said ''the buy-back of Iris shares will be completed''.

However, statements by Iris before the Goldman Sachs' report, and after its release, appear at odds with the banker's plans.

It was reported in Malaysia last October that Iris Corp planned to divest the remaining 20% of its non-core assets within the financial year ending March 2019.

Iris president and group managing director Datuk Paul Poh Yang Hong was quoted: ''If you look at our non-core assets, we have divested 80% of them in the past year and we do not foresee ourselves holding on to the remaining assets for another year.''

In the same report, Iris Group chief Shaiful Subhan said among the firm's non-core assets that would be divested was its 51% stake in a New Zealand company, Plaman Resources Ltd, which was focusing on the mining industry.

''After our major divestment exercises which cleared some of the assets that had weighed us down, there are still a few left such as our overseas mining businesses,'' he said.

However, in March this year Mr Subhan was quoted in another report as saying the divestment of Iris' non-core assets was 80% completed.

There were a few non-core assets to dispose of, ''which we should be able to complete in the next couple of years'', he said.

simon.hartley@odt.co.nz

Comments

Does the ODT intend to release the leaked Goldman Sachs report to provide readers with a fuller understanding of what Plaman intend?

 

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