MANILA, APRIL 21, 2007 (STAR) By Des Ferriols - The peso stayed yesterday at six-year highs against the dollar as monetary officials said they are taking moves to mop up liquidity while keeping key interest rates steady.

At yesterday’s trading at the Philippine Dealing System (PDS), the peso traded between 47.510 and 47.650 against the dollar. By the end of the day, the peso closed at its intra-day high of 47.51 to the dollar with total turnover hitting $689.50 million.

Dealers said the strength of the peso was due in part to the steady surge of remittances from overseas Filipino workers (OFWs).

On the other hand, the market was also mildly relieved that it could at least glean some direction from the moves of the BSP when it decided to mop up liquidity to curb possible inflationary pressures from the rapid growth in domestic money supply.

As a result, the impact of market reaction on the peso was muted since the BSP kept its policy settings unchanged.

For his part, BSP Deputy Governor Diwa Guinigundo said the central bank did not expect the Monetary Board (MB)’s decisions to have a prolonged impact on the foreign exchange rate.

"There will be some initial reaction but it really shouldn’t affect the exchange rate so much," Guinigundo said.

Over the horizon, however, the currency market was also looking at the coming elections which normally creates some uncertainty in the market. Only this time, dealers said the campaign process appeared to be proceeding in an orderly fashion.

Canadian mining firm to invest $3B in RP By Marianne V. Go The Philippine Star 04/21/2007

Canadian-based mining firm Chemical Vapour Metal Refining Inc. (CVMR) yesterday took a step closer to committing an investment package in excess of $3 billion following the approval by the Department of Environment and Natural Resources (DENR) of its exploration permit in Samar Island.

CVMR, it was learned, is close to concluding a deal with Philnico Industrial Corp. for the acquisition of PIC shares.

In a press conference, Environment and Natural Resources Secretary Angelo T. Reyes announced the approval of CVMR’s exploration permit for a 3,757.014-hectare area located in the municipalities of Balangiga, Giporlos and Quinapondan in Eastern Samar.

With its exploration permit, CVMR is making an initial investment of P9.37 million for a two-year exploration involving geological mapping, auger sampling and geochemical surveys intended to explore nickel laterite deposits in Eastern Samar.

Once the presence of adequate nickel deposit is confirmed, Reyes said, CVMR is expected to proceed with its earlier announced investment of $3 billion which will include a nickel refinery and various related infrastructure facilities.

CVMR president and chief executive officer Kamran M. Khozan committed to invest in the Philippines, adding that his firm "wants to be the first" in making a significant investment in the country.

According to Khozan, CVMR has signed an off-take agreement with Geograce Resources Philippines, Inc. for its estimated 30,000 metric ton nickel deposit. In addition, CVMR is close to concluding three other deals — with Philnico and two other parties — for two off-take agreements and a property acquisition, he added.

Khozan said the Philnico deal involves property acquisition.

CVMR and its Chinese partner, Jilin Nickel Industry, are negotiating with Philnico.

CVMR, Khozan said, has "made an offer which Philnico has accepted." He said is currently conducting a due diligence on Philnico’s books and to verify its nickel resources.

To be able to go ahead with its plans for a new nickel refinery, Khozan explained, the plant would need a minimum supply of 30,000 metric tons of purified nickel per annum.

Current negotiations with Geograce, Philnico and two other parties, involve a total supply of between 60,000 to 100,000 MT of purified nickel, Khozan said, adding he is optimistic that "in five years we will be able to commission a plant."

He said the $3-billion planned investment is a conservative estimate of its planned total investment in the Philippines. More likely, he said, the amount would be higher.

Plans include a power generating plant, a deep sea port and a nickel refinery using its proprietary vapour metallurgy process.

Khozan assured that CVMR does not use the hazardous acid leaching process in processing the nickel deposits, but instead uses a vapor process using gases.

Chief News Editor: Sol Jose Vanzi

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