KUALA LUMPUR: Borneo Oil and Gas Corp Sdn Bhd, a subsidiary of Borneo Oil Bhd, has entered into sublease and marble quarry operation agreements to acquire seven parcels of quarry land in Lahad Datu, Sabah.
In a filing with Bursa Malaysia, the company said the agreements were in line with the groups expansion plan into limestone mining and related activities.
Borneo Oil said the sublease, dated Jan 24, 2017 and valued at RM80mil, was for six parcels of quarry land measuring 32.57 ha.
The company had, in July last year, also acquired another parcel measuring 5.49 ha for RM20.58mil, which did not require an announcement to Bursa Malaysia, it said.
The sublease agreements entitled the company for a 30-year lease, with an additional 30 years, said Borneo Oil.
“Legal limestone reserves are scarce resources in Sabah, as most of the reserves are situated in Class 1 Forest Reserve, Bird Nests Sanctuaries, and Heritage Parks,” said the company.
It said the new acquisitions, along with its existing land bank of limestone reserves held for long-term investment, would make it a major player in the supply of high grade limestone resources.
Moreover, it said, Sabah imported over 1.5 million tonnes of clinker and cement yearly, as it is the only state in Malaysia without clinker production.
As such, the setting up of a clinker plant in Sabah is imminent, and the main source of feedstock for clinker production is limestone, it said.
Over the years, the Borneo marble brand has also established a brand and is well known in China. Thereby, the acquisition price represented a substantial discount compared with the value of the resources available with valid quarry operating conditions endorsed on the titles, it added. — Bernama