December 04, 2008

TKC Steel and Rizal forge raw material deal

Mindanao based mining firms TKC Steel Corp announced that it has formed a JV with a mining cooperative in Rizal province in its bid to secure raw material supply for its operations. TKC Steel in a statement said that its board gave the green light for the accord with the Kooperatiba ng mga Katutubo Remontado at Dumagat ng Santa Ines in Rizal.

The cooperative owns the land that has several mining tenements and about 30 million metric tons of iron reserves. Under the agreement, TKC Steel would own 70% of the JV while the cooperative, represented by two indigenous tribes in the area, would control the remaining shares. The agreement also stipulates that the cooperative would receive social benefits provided by TKC Steel besides the financial rewards due them from the mining operations.

TKC Steel would then buy the iron ore output of the JV firm for its blast furnace facility that is set to operate by the last quarter of next year. Iron ore is the primary raw material for manufacturing steel billets, which is the main product of TKC Steel’s local unit, Treasure Steelworks Corp. The firm said similar arrangements are applicable to its joint venture with the Rizal-based cooperative.

Mr Anthony Dizon president of TKC Steel said “These initiatives are aimed at establishing an effective backward integration model to secure a steady supply of iron ore as a major component for the manufacture of high quality steel products.”