Kinsteel gets sole mining right in Kuala Lipis

PETALING JAYA (July 24, 2013): Kinsteel Bhd has secured the exclusive right to mine iron ore and other types of minerals at Kuala Lipis, Pahang.

Covering 500 acres of mining area, the mining operation is expected to commence in three to six months.

Kinsteel CEO Datuk Henry Pheng Chin Guan said the group is currently working towards getting all the necessary approvals from the relevant authorities.

"The award of the mining rights is timely and in line with Kinsteel Group's business. We expect the mining operation to enhance future earnings of the group," he said in a statement yesterday.

The mining agreement was signed between Sultan Pahang, Sultan Ahmad Shah and Pheng.

In a filing with Bursa Malaysia yesterday, Kinsteel said the effect of the mining operation on the group's gearing can only be determined upon finalisation of the proportion of bank borrowings (if any) and internal funds to be used as source of fund for the mining operation.

"The utilisation of bank borrowings to finance the mining operation (if any) is expected to result in an immediate increase in interest expense," it added.

Kinsteel posted a net loss of RM8.42 million for the first quarter March 31, 2013, compared with a net profit of RM10.27 million a year ago, partly attributed to lower earnings from its rolling operations as well as losses in its 37%-owned Perwaja Holdings Bhd and 51%-owned Perfect Channel Sdn Bhd.