ATN Holdings, Inc. has partnered with AlphaRock Mining Corp. to double the volume of rock aggregates it produces, potentially generating P12 billion in revenues in the future.
In a disclosure to the stock exchange on Tuesday, the listed firm said its board of directors has issued the notice to proceed for a five-year contract with AlphaRock Mining worth P760 million. The contract involves the land development of ATN’s 256-hectare property in Montalban.
Under the contract, AlphaRock should deliver 2.4 million tons of rock aggregates per year in the next five years.
The partnership with AlphaRock Mining forms part of ATN’s plans to take advantage of the demand for rock aggregates due to the government’s infrastructure program.
“With the monstrous demand dwarfing Mega Manila rock aggregate supply chain, the company shall sign a 5-year contract in the amount of P760 million with AlphaRock Mining as the second development contractor, with contractual commitment for 12 million tons and double ATN production for the Build, Build, Build program,” the company said.
ATN cited the need for high-quality infra rock aggregates for two Japan official development assistance-funded infrastructure projects, namely the P356-billion Metro Manila subway project and the P149-billion North Rail project. If 10% of the allocated capital spending for these projects will be used for rock supply, ATN noted that they create a P50-billion demand for rock aggregate requirements.
“ATN received strong buyers’ interest for 10,000 truckloads of 3/4” & 3/8” aggregates urgently needed every month to construct Mega Manila tollways, subways, railways, flood control projects, elevated highways, power plants, sea ports, bridges, airports, 1,000 high-rise buildings, factories and land reclamation,” the company said.
The company currently has P240 billion worth of high quality rock reserves in its Montalban property. It also noted that its rock reserves offer the shortest distance to the ODA-funded projects at only 15 kilometers.
ATN’s target of P12 billion in revenues from the contract is based on an annual volume of 2.4 million tons per year priced at P1,000 per ton. It however noted that the production volume estimates may be affected by adverse weather conditions, a change in political climate, or the slowdown of the budget rollout for infrastructure projects.
The company booked a net loss of P645,699 in the nine months ending December 2018, even as gross revenues surged 71% to P16.83 billion in the same period.
Shares in ATN jumped 5% or seven centavos to close at P1.47 each at the stock exchange on Tuesday. — Arra B. Francia