SINGAPORE (June 3): GKE Corporation is paying $1 million for mining rights to a limestone quarry in China.
Under terms of the rights given by the Canwu County, GKE can produce up to 500,000 tonnes of limestone per year for the next 9.5 years, or 4.75 million tonnes in total.
GKE’s mining rights will then be contributed into a three-way mining joint venture, for the actual mining and production of limestone.
The other two parties are Cangwu County Wanfu Trading Co, a local government authority, which holds 25%; and Wuzhou Xing Zhan Investment Co, which holds 57%.
GKE’s subsidiary, Wuzhou Xing Jian Readymix Co, holds the remaining 18%.
In a separate agreement with Wuzhou Xing Zhan, the joint venture partner, Wuzhou Xing Jian, GKE's subsidiary, shall be entitled to receive a fixed income of RMB3 per tonne of output produced and sold with a 15% increase every three years.
The limestone from the mining JV might be sold as raw material to nearby ready-mix concrete production plants, including one owned by GKE 30km away from the mine.
“We believe that this joint venture will be an added booster to our net earnings once mining commences,” says GKE CEO Neo Cheow Hui.