KUALA LUMPUR: Astral Asia Bhd
's (AAB) wholly-owned subsidiary, Astral Chem Sdn Bhd (AC) has been granted iron ore mining rights from AAB's 65 per cent subsidiary, Astral Asia Plantation Sdn Bhd (AAP).
In a filing with Bursa Malaysia today, AAB said AC has been granted the exclusive rights to explore and mine iron ore on AAP’s land, spanning 40.47 hectares, in Ladang Bukit Kuin, Kuantan, Pahang.
"The rights are granted commencing from the date of the agreement and may be terminated by mutual consent.
"AC shall compensate AAP through a royalty payment rate to be agreed upon by both parties, and AC shall be fully responsible for all costs related to mining operations, including regulatory approvals and environmental compliance," AAB said.
The group added that the intra-group arrangement facilitated the monetisation of its land assets while leveraging AC’s operational capabilities.
"It is part of the group's strategy to diversify income sources and enhance value through sustainable resource development," it said, adding that the requisite mining license, including the proprietary mining license, will be applied for and held by AAP as the registered landowner.
"This approach aligns with the regulatory requirements set forth by the Pahang state government, ensuring that all mining activities are conducted in compliance with state laws and regulations," it added.
AAB said the transaction is anticipated to contribute positively to the group’s earnings and net assets.
"While mining operations carry inherent regulatory and market risks, these risks will be managed by AC.
"As this is an intra-group transaction, operational and financial oversight will remain within the AAB Group structure," it added. - Bernama
