Azmar gets conditional OK

Azmar International may receive a two-year permit to mine pozzolan on Pagan, if the company manages to comply with the requirements set by the Marianas Public Lands Authority within the next 60 days.

The MPLA board of directors yesterday junked its staff’s recommendation to suspend all negotiations on pozzolan mining on Pagan and to put out a request for proposals from interested investors. Instead, the board unanimously decided to grant Azmar a conditional approval, giving the company 60 days to prove its financial capability.

Some of the requirements that MPLA ordered Azmar to submit are:

* its most recent articles of incorporation;

* the names of its incorporators, officers and shareholders, and how much shares each of them holds;

* an audited financial statement;

* personal financial statements of the shareholders;

* initial capital for Pagan mining;

* names of investors;

* names of prospective buyers; and

* a letter of credit from a bank covered by the Federal Deposit Insurance Corp.

At the same time, the MPLA directors deferred action on the question of whether J.G. Sablan Rock Quarry Inc. continues to possess mining rights to Pagan despite its failure to generate and report any revenue to the government from its activities on the island.

If the board finds that J.G. Sablan still has the rights, Azmar’s mining activities would be limited to a small area on Pagan.

Yesterday’s board meeting was a continuation of the meeting held Friday afternoon, when the board called it a day after the MPLA staff presented its recommendations on Azmar’s proposal.

MPLA chair Ana Demapan-Castro started the discussion with some brief remarks about proposals to mine pozzolan on Pagan.

“This matter is being over exaggerated in terms of value and potential as a great monetary source for the islands. In fact, major construction work—[such as] building high-rise buildings, bridges, superhighways, and other structures—have never relied on [pozzolan] due to the availability of technological advancements,” Demapan-Castro said. “In any event, let’s give those who want the pozzolan mined in Pagan the benefit of the doubt.”

She noted that pozzolan mining “in the remote island of Pagan” would require an enormous amount of money and resources. The development of a safe and permanent dock, quarry operation facility, heavy machinery, housing, power plant, and shipping facilities—which are all needed to conduct mining activities—could cost millions of dollars, she added.

“Yes, the risks are very high. But if they can show the money and the real investor—we don’t want words only—then let’s go for the mining of the Pagan pozzolan,” Demapan-Castro said.

She stressed that MPLA was greatly concerned about Azmar’s move to substantially reduce its initial $46 million projected revenue for the first year of operation.

She also enumerated other reasons why Azmar failed to satisfy MPLA’s standards. Azmar, she noted, does not have a local attorney retained on island and has failed to prove any financial records.

Nevertheless, she said the investor should be given a conditional approval and allowed to submit the necessary requirements. “We want investors to come. We should lure them, instead of denying them,” said Demapan-Castro.

Board member Nicolas Nekai then read the proposed requirements, which included a $1.5 million deposit from Azmar.

A debate ensued, with board member Benita Manglona raising concern over Azmar’s financial standing. “I’m not sure about making a decision, even to give a conditional permit. I want to make a decision, but I don’t want to be pressured. I’m not convinced that [Azmar’s] financial backing is there,” Manglona said.

Demapan-Castro then called a 10-minute recess.

When the board reconvened, Manglona—in a complete turnaround—moved to grant Azmar a conditional permit.

MPLA vice chair Manny Villagomez, who is in the Philippines and was participating in the proceedings via teleconference, seconded. The board approved the motion unanimously.

Azmar local spokesman Don Farrell said he found the board’s decision and requirements reasonable. “I’m quite sure we can [submit the requirements] much sooner than 60 days.”

He added that Azmar will “wait and see” what will happen in the next few days, until MPLA puts its decision in writing. “[Azmar president Kenneth] Moore will want to see the questions in writing so we can answer them appropriately,” said Farrell.

For her part, Pagan Watch member Cinta Kaipat said she did not expect the change in the tone of the board’s discussion after the officials came back from the recess.

“[Board member Benita] Manglona was asking the right question at the start of the meeting. I was very surprised when they came back from recess and voted to give the conditional permit,” Kaipat said. Pagan Watch was pushing for the adoption of the MPLA staff’s recommendations.