PUERTO RICO Saipan — Buyers from Asia and the Middle East have lined up for Pagan Island’s rich pozzolan deposits according to the owner of a local quarrying company that has teamed up with a California-based firm to begin exporting the volcanic ash this year.
John T. Sablan president and owner of JG Sablan Corp. also disclosed to the Journal that a group of top level engineers is scheduled to visit the volcanic island this January to start the process of setting up a base from which to export pozzolan to the buyers. “We already have buyers from various Asian and Middle Eastern markets ” Sablan told the Journal. He declined to say how much would the joint venture sell the pozzolan for. “No price yet. But we will be shipping quite a substantial tonnage per month once we operate ” he said.
Sablan said his company entered into a joint venture in December with Bridgecreek International Corp. which will be sending the group of engineers. Bridgecreek is a full service real estate firm specializing in domestic and international development as well as property management and leasing. The company is expanding to China where it is building research and development facilities among others. “We’re moving on ” Sablan said. “Management-level engineers will be flying to Pagan to look it over.”
Sablan said that following the site visit a second batch of engineers accompanied by a team composed of a geologist biologist and an archeologist as well as representatives of various local government agencies involved will be going to the island in February “to do survey for a loading system roads and workers’ housing to finalize plans for the operation.” Sablan said pozzolan exportation could start by July if the team agrees to a barge loading system or October if a stationary loading system is preferred. Sablan said “We should be in full operation before the end of the year barring unforeseen incidents.” Sablan said Bridgecreek managed to get information about Pagan island and his company’s involvement in pozzolan extraction. “They got interested ” he said. “They met with us in Hong Kong six weeks ago (in mid-November 2005) to finalize negotiations.” He added that two weeks after that meeting “we signed the joint venture.”
Sablan said Bridgecreek “did a lot of research before they decided” to talk to him.
“They saw it as a viable business ” he said. Sablan said initial capitalization is “between $8 million and $10 million.” He did not disclose how much his company has shared to finance the undertaking. Sablan said “buyers are already in place” and that Bridgecreek facilitated the transactions. Sablan said his team along with Bridgecreek representatives met with Gov.-elect Benigno R. Fitial and Lt. Gov.-elect Timothy P. Villagomez in the third week of December.”
John G. Carlson president of Bridgecreek told the Journal on Jan. 5 “We briefed them on the opportunities we saw in the CNMI and the revenues that we could bring to the CNMI.” Concerning the project he said “We can clean up the beautiful island of Pagan and be a partner to improve the quality of life for everyone. We’re prepared to spend $8 million to $10 million – it’s a big investment. We understand that we need a new permit and we’re willing to do that.” Frank Jao chairman of Bridgecreek also was at the meeting with the incoming gubernatorial team.
Carlson was on Guam in May to participate in a Business Opportunities Mission sponsored by the Department of the Interior and subsequently discussed opportunities on Guam (See “Aviation Excitement ” in the Sept. 5 issue of the Journal.).
He said “They were very supportive.” Sablan said the project will need approximately 60 people to start. He said the joint venture would prioritize the local workforce in hiring needed personnel. Situated appoximately 300 miles north of Saipan and 410 miles north of Guam Pagan is 700 000 years old and is a 18.5 square mile volcano island and is about 75 miles deep according to government data. Pagan erupted in 1925 and 1981. It has an eruption cycle of about 50 years. As a result of the 1981 eruption Sablan said up to 800 million tons of uniformly high-quality natural pozzolan blanket the lowlands surrounding the volcano in vast drifts ranging from 30 feet to over 100 feet.
Pozzolan is a volcanic ash used as an additive to cement for increased strength durability and production volume. Pozzolan also reduces cement production cost. This is the second time since 2000 that JG Sablan has entered into an agreement with another business entity to export pozzolan. The Journal reported in its June 28 2004 edition that Sablan signed a contract with a Hong Kong-based firm to export five million tons of unprocessed pozzolan to China in five years. According to Sablan the contract stipulated that initial export would start at 500 000 tons a year gradually increasing until the quota is reached. Sablan said that the Northern Mariana Islands government stood to gain up to $3 million in royalty fees and taxes for the first year of his company’s operation alone. Sablan declined to divulge the Hong Kong-based company’s name. He said though that the contract was in place since 2000. The project did not get off the ground because of alleged efforts by other interested groups to block it said Sablan. At the time there were two other companies wanting to extract and export pozzolan from Pagan to include the Azmar Foundation which is based in Arizona and the Consolidated American Energy Resources Inc. Added to this were efforts by a local activist group — PaganWatch — to scrutinize any agreement involving mining activities on the island.
Sablan said “The buyer pulled out.” Sablan said that the contract with the Hong Kong company is for $35 a ton to cover shipping expenses. Aside from this JG Sablan had also stockpiled 10 000 tons of pozzolan for Singapore in 1997 but the buyer went bankrupt following that year’s Asian currency crisis. Sablan sought an opinion from Anders Henrichsen professor of the Technical University of Denmark who told him in a May 12 1997 letter that the unprocessed pozzolan on Pagan Island is of high quality that can be sold at $25 a ton. Henrichsen said ground granulated pozzolan can be sold at up to $40 a ton.
JG Sablan is a 17-year-old Saipan-based corporation also deals in rock quarrying drinking water and ice production and construction. The company has been involved in the pozzolan project since 1991. MBJ