Tip:
Highlight text to annotate it
X
Welcome to your Program Investment and Development with Luis Velasquez.
I am grateful with several people, particularly with Julio Maza and Mario
Antonio Sandoval, for believing in me and in the great project Investment and Development.
Every week in this program, we will address the importance
of Capital Investment.
Which contributes to the creation of more businesses in Guatemala,
to generate more employment, which will generate greater development
and greater opportunities for Guatemalans.
65% of the Guatemalan population is unemployed, just the 35% of the
population is employed and 60% are in the informal economy.
That means that there are still many opportunities for Guatemalans
and the state of Guatemala is not getting enough revenue
to make social investments in health, education and security.
It is important to have a clear approach to combat poverty
and the only way we have found is the creation of more companies
to generate further development.
The Guatemalan people are hardworking, honest, enterprising
willing to give their best, to succeed personally,
in our families and as a country.
Today we are presenting to you the project: "Phoenix"
with the Guatemalan Nickel Company.
A major project that means U.S.$1 billion of investment in Guatemala.
That means a Pole of Development in the Estor Izabal, Guatemala.
That surely in a few years will become what it means significant
the mining project
of the Cerro Matoso, in Cordova, Colombia.
To address this important issue is with us Regina Rivera
from the Board of Directors of the Guatemalan Nickel Company.
In order to enter in this important subject, we want you to explain to us,
what is nickel and what applications does it have for both, Guatemala and the world?
Nickel is a simple mineral, simple, which is in our life
every day, all the time.
Even though about a 100 years ago, the nickel was implemented in
the arm industry.
Currently the use of nickel changed to be applied as a metal composition and be used to
produce stainless steel.
80% of the nickel that is produced in the world goes to the manufacturing of stainless steel.
And stainless steel is something we have in our homes,
in our office, in our cell phones, in our cars.
It's really a mineral that is pointing to the Development and Technology.
It is important to emphasize, that the investment of the Phoenix Project
is good for Guatemala.
But let us know, why that investment is particularly good
in the area of the Estor, Izabal?
It's good to Guatemala and we believe it is good for the world too, Luis.
But particularly if we focus on what this will involve
for the country, I think the impact will be tremendous.
First, as we mentioned earlier, this is an investment of
U.S.$1 billion, never before done in Guatemala, is a
an investment without precedents.
This means you will have a very strong impact that will be seen in the economy,
will be seen in an economic growth.
In 2nd. place in employment, the generation of new jobs.
With the Phoenix Project, the Guatemalan Nickel Company will give a very important contribution
to the development of new jobs.
Only in the construction phase, the company will employ about 1,500 people,
so this will create direct employment
and as indirect employment is estimated from 4 to 1, so as 5 thousand
indirect jobs, without counting all the development that will be generated in
the Izabal area and the Polochic Basin.
And as 3rd. point, of course the Tax issue.
The GNC will greatly contribute to the government revenue.
It has been estimated that in the year of 2,009 when production begins,
the Guatemalan Nickel Company, will bring about a
U.S. $50 billion a year to the state treasury.
Not only contemplating royalties, but also in ISR, IUSI and the contribution
to the local municipality.
Then these three elements are very important for us
to visualize the impact of an investment as huge as the Phoenix Project.
Three very important elements.
U.S. $1 million is equivalent to Q. 7 million 6 hundred thousand.
We would like to have more investments as this one in Guatemala and are extremely necessary.
1,500 jobs in the construction process
and probably several hundred already in operation.
And more near the Q. 400 million in annual taxes
that this company is going to contribute to the state of Guatemala, so that we can invest
it in the social part, in health, in education and security.
How many investments of this magnitude we could say, are
happening right now in Guatemala?
Apart from the Phoenix Project, I also know that Cementos Progreso
is making a big investment.
There are several mines that have appeared in the scene, in the national spectrum
in recent years.
One of course is the Marlin mine in San Miguel Ixtahuacán.
I think that is a pretty important investment and there are also 2 other mines
that are coming into the country.
One is the Maya Nickel, which is a great subsidiary from the
BHP Billiton and we also have presence in Nichromet.
Which means that these projects are coming to Guatemala
with similar investments like the Phoenix Project.
What we think will have a positive impact in the country.
The Mining Industry is not new, we have a mountain called
Sierra de las Minas.
So this comes from many years ago and I think in the mining issue
will bring significant and positive surprises for the country, if all goes well,
and these investments are held.
So with this great project called “The Phoenix Project”, Guatemala enters the doorway of the 10
most important nickel producers in the world?
Thats it, in the topic of Nickel, what is called the Nickel Belt.
And Guatemala is really privileged to have first quality resources
and at a global level and we are located precisely in that part of the world,
where resources like nickel are abundant, not all countries have it.
And we believe that developing this project, we will actually contribute
globally with an equal contribution to Guatemala that will impact
on the benefit for all Guatemalans.
We have 4 very important elements.
Use of Our Resources, Capital Investment, Generation
of Labor Resource and Collection of Revenue for the State,
so you can make those much-needed social investments for the country
in health, education and security.
Very important issues that will continue after the advertising break.
We continue with Luis Velasquez Quiroa in the program “Investment and Development”.
Regina, in this second segment, I would like to address a Financial Topic.
What is the way of finance in this project, a very important element
to gather all those millions that you are investing
in this great project?
Well, maybe there it is necessary to give a concise explanation,
of what is Guatemalan Nickel Company and Sky Resources.
Sky Resources is our head office it is in Vancouver, is a new company
it is a company of the ones called Junior, is a monster company in
new mining.
Their first project is here in Guatemala.
Sky Resources, when the negotiation is done to keep the
Estor mining license of Izabal, created the Guatemalan
Nickel Company.
So the Guatemalan Nickel Company, responds to
Sky Resources and Sky Resources is a new company looking for capital,
to start this great project.
This means that the funding to build this project,
is not already in the company hands as many people think.
It goes to the stock market to seek shareholders and capital.
We are currently seeking a capital of U.S. $ 640 million
to launch the reconstruction phase of the process plant.
So far the company has invested about $ 160 million
during these 3 years.
This is a very important moment, because having the needed capital
it can be done the reconstruction phase and we are very close to start
to produce nickel made in Guatemala.
3 important elements you mentioned.
1st. this company Sky Resources is believing in Guatemala, sees
a significant potential and that's why we are taking these risks.
That means that we Guatemalans and the state of Guatemala
should give all the support.
2nd. they have already invested about $ 160 million, the equivalent
to Q. 1,350 million and are in the final stage of getting
these additional U.S $ 640 million to concrete this great investment, which is a
significant sum.
On the share issue, as you explained very well, this is a
public company.
That means that companies or persons can buy
shares on the stock market, no matter whether they are Canadian or Guatemalan.
We understand that the State of Guatemala has a participation.
I would like you to tell us.
What is the shareholding structure to gather all this great
capital needed in this investment?
Glad you ask me that question.
GNC as I said is a Guatemalan company, however GNC
has two large shareholders.
One is its head office Sky Resources and the other one is the State of Guatemala.
When this project began, the State of Guatemala had 30%
of the shares, which meant 90 thousand of shares.
At that time our head office Sky Resources, had
240 thousand shares, which meant 70% of the total shares.
To get the funding for this project, of course
Sky Resources needed capital and decided to go to the Stock market, to issue new shares
to get the capital and the funding.
The State of Guatemala for obvious reasons, didn't do it, felt that
was not prudent to do so, but Sky Resources issued new shares
and at this time the company has grown considerably.
Many shareholders have contributed and have believed in the project
and now the Government of Guatemala still has its same
90 thousand shares that now represent 2% of the Company, while there are
4 or 5 million shares issued by Sky Resources corresponding
to the rest of the company and that now represent 98%
of the capital of the company.
As you said many people are buying stocks,
are believing in the project although it is a difficult situation
in the global financial topic.
Do you mean the project is good, that's why people are buying the shares
and you are in the final stage of completing all this financing
of stocks that you explained to me?
Sure, I think the Phoenix Project is here to stay.
That Sky Resources, a Canadian group of visionaries, believed in the country,
saw the demand and the potential of the country and definitely
they will stay.
The financing is very close to its fulfillment, we are very close to
start and operate this huge facility and really
become a focus of development for Guatemala.
How long do you mean to stay 10, 30, 50, years of how many
years are we talking about?
Luis, we are talking about 30 years for the first phase of the project.
During this period the company will exploit more or less
about 2 square kilometers of the mine and that will give us a lapse of 30 years
of being operating.
If we see it in the long term, this may be a project that
can last 100 years and more.
Very interesting, that means there will be a development not only in the short,
but in the medium and long term.
In the Financial Issue is very important to hear that the project is
getting the funds you have invested, that there is confidence.
What other additional projects do you have in the search of markets,
for all the products that will come out from these investments?
Where will the material for exportation go?
Actually nickel is a mineral that is in the international markets,
whose prices are set by the International Market.
What will be made in Guatemala is a material called ferronickel,
it is 35% nickel and the rest is iron.
This is a final product that will be exported mainly to China
because China is now a latent buyer that is doing their
huge dam and is one of the major buyers of nickel, but also
the nickel will be exported to the United States, European countries.
So to say this is a fundamental mineral for many applications
not only for stainless steel, but also for technological issues.
This means that this production will generate foreign exchange because of the exports
that it will be making. It will generate additional revenue to the state as
we have explained
and Guatemala will become an element of development, not only at a national
level but globally. With the contribution of this finished product
that is very important for the different applications that nickel has
in our lives as you clearly explained.
We will go to an advertising break and then we will continue with the third and final segment of this program
of the Project Phoenix, and the Guatemalan Nickel Company.
We continue with Investment and Development and topic the Phoenix Project
from the Guatemalan Nickel Company.
To summarize our previous block we talked about the
financial scheme.
That leaves us clearly evident that the State of Guatemala or a person
individual or a legal entity that wishes to acquire shares can do so.
This means that if the state of Guatemala would like to regain its previous percentage
can do it freely.
Entering in the final stage we would like to talk about the topic of
Sustainable Development.
Capital Investments are very important for the generation of
jobs, but the question is,
how these investments contribute to the community development
where the Phoenix Project is?
How the project contributes to the surrounding communities, where
these people in addition to a job are waiting for development?
We would like to talk about the projects in health, in education, and also
of a Foundation, tell us Regina.
Thank you very much Luis.
This issue is not just very important but is also fundamental for the
Guatemalan Nickel Company.
Since the project began in the year 2,005, precisely in May.
The Company determined that one of its priorities was to care for the
communities.
There the Sky Resources executives and Guatemalan Nickel Company
realized that there was poverty in El Estor.
The municipality of El Estor is the 119 on poverty issues, among the 333 municipalities in the country.
It has high rates of infant mortality.
In fact the situation is devastating, there are no means for production,
there is an subsistence economy.
Then, the company thought about creating a Foundation.
That's where the Raxché Foundation was born and we named it Raxche a
Keck'chí name, which means "Green Tree of Hope"
and that is the message that we wanted to give with the Foundation.
The Foundation has worked so far in several areas,
there is a priority for Sustainable Development,Productive Projects,
helping people to help themselves, that was the main focus.
Currently we have 56 active projects in Raxche, these among
training, health, education, and productive projects.
In fact there has been a close approach to the needs of
the communities, we have approached and we have listened to them.
One of the company policies is to listen to the communities,
if we do not listen we will not know how to help.
And I think the Foundation at this time has a very strong approach
for the development and is gaining credibility in the area.
Very important that projection.
When we talk about Sustainable Development, we must also
include environmental issues, technology, etc.
Let us know a little more.
What are the advantages and benefits in order for this project to be innovative
even when this plant was operating 20 years ago?
One of the important things Luis, is what I said earlier.
What we are going to produce in a few years is a mixture of nickel and iron,
it is a finished product, it is a new technology.
30 years ago there was a powder called Mat, it is different,
that was not a finished project.
The technology today is cleaner, so we are making
a reconstruction of the processing plant currently in El Estor
because we are applying new technology with a view of protection of
the environment.
Even the technique to be used is different and if the project is
not only focusing on the social part, but also in the environment of
these communities that are near the project.
That is how one of the purposes of the mine is to make a minimal damage to the environment.
The impact of these large industries, are strong on environmental issues.
So we're working very hard, we have developed four environmental studies
for the process plant that are already approved by the Ministry of
Environment and a very large study for the mine.
So we hope to comply with all the measurments of the law
and apply new and clean technologies in order not to have a strong impact
in the environment.
This means that you have complied with all the regulations and legislation related
to the environment, also to do eco-tourism and
community tourism.
Surely within the different projects for sustainable development that
you are implementing, you are going to have a good impact.
How do the people of the different areas
perceive this great benefit that you are taking to these development pole?
Mainly, the Raxche Foundation is doing a great work
to outreach the community.
With this message about the development we are promoting and
we want to work in order to grow so I think that's very important.
Of course, at first there were problems, people dont trust easily.
This is an industry that for many years was asleep and then
there must be a real strategy to wait, inform and listen.
And this has paid off thanks God.
At this moment there are many beneficiaries of what the Foundation Raxche
has done in El Estor.
At least over 10 thousand of estoreños have participated in medical campaigns,
we have made more than 10 medical campaigns in the last years.
In education projects, to teach adults to read and write, adult schools.
We have two adult schools, and we are promoting 3 secondary schools.
There are no secondary schools in El Estor, these communities are
too far from the city center.
And that does not allow them access to education, then this has been a
ant work during these three years, on one hand we are making
studies, because we are working hard with communities
for them to see the contribution from today in this project and be
part of it and to work with us side by side of course.
Very important that concept of Social Responsibility that you
are implementing and will surely bring many benefits.
Regina, thank you very much for joining us on this program,
to make known to all the people of Guatemala and also to
our international audience that is watching us in the internet and in the cable channels.
And we would like to leave you as a summary of this program.
It's a great investment in Guatemala, we really need it,
it is around Q 7 million 600 thousand, is generating
1 thousand jobs, at some point will be 1,500 at the construction phase,
is generating around Q. 400 million in revenue for
the State of Guatemala, which will help to invest in health, safety
and education.
Remember dear Guatemalans, that any investment that comes
to Guatemala must be supported, because that means more progress,
more opportunities and higher development for all Guatemalans.
See you next week with an interesting topic as the one of today,
in relation to the Capital Investment and Sustainable Development.