Bauxite mining probe hits IPO-bound Spring Energy
F Saad | 16 Oct 2015 00:30
Spring Energy in Damansara Jaya. The company started mining bauxite in January last year, operating in Bukit Goh
Spring Energy Resources Bhd’s bauxite mining – and therefore its initial public offering (IPO) – may hit a snag after the Pahang government’s decision to revoke most bauxite-mining licences.
“A large portion of the company’s future income is meant to come from bauxite mining. In any case, the state is looking into all bauxite mining, legal and otherwise, which could interrupt the day-to-day processes of the business and slow income. This means the company must come up with alternatives and approach the Securities Commission to see if it can go ahead with the IPO,” says an investment banker.
Bukit Goh near Kuantan, occupied mainly by Felda settlers, was in the spotlight in July after it was found mining in the Felda settlement was not sanctioned.
Many settlers say they have been cheated by miners who had promised payment in return for mining on oil-palm plantations. Felda has since ceased all mining in the area.
That month, Pahang’s government revoked the mineral-ore licences of 34 contractors, as mining in the state grew rampant. Only 11 operators have been allowed to continue.
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