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As part of its expansion into limestone mining and related activity, wholly-owned subsidiary Borneo Oil & Gas Corp Sdn Bhd acquired a 5.38ha quarry in Lahad Datu, Sabah, for RM47mil last year.

The acquisition of the quarry, which has a reserve of 6.27 million tonnes, was done in the form of sub-lease for a 30-year lease period.

Marble blocks extracted from the quarry will be exported while the balance of the resources will be used for limestone aggregates and related products.

With the acquisition, together with its existing landbank of limestone reserves held for long-term investment, the group has become a substantial player in the supply of high grade limestone resources in Sabah, according to Borneo Oil.

The group expected great demand for aggregates and other construction materials with the ongoing construction of the Pan Borneo Highway project. Phase one of the project involves construction and upgrading of 706km of road estimated to cost RM12.8bil.

On the Sarawak side, the construction of the Pan Borneo Highway project is gaining momentum and way ahead of the Sabah project. The Sarawak project has led to a steep spike in the demand for quarry aggregate and quarry land.

According to Cahya Mata Sarawak Bhd, which owns five quarries with a combined rated capacity of 2.19 million tonnes per annum, the state construction industry is now facing an “unprecedented” shortage of quarry aggregate and sand. The shortage is expected to continue into the next two to three years as more major infrastructure projects, like the proposed second state trunk road are rolled out.

On the proposed cement plant project in Sabah, Borneo Oil executive director Raymond Teo Kiew Leong said it would be part of an integrated limestone processing plant (ILPP) project currently in advanced construction.

Borneo Oil is involved in the project management of the ILPP, which is owned by a third party.

“The ILPP is expected to be completed in the current quarter, and to be commissioned in second half year,” Teo told StarBiz.

The ILPP, according to Borneo Oil, is anticipated to consume between 1,000 tonnes and 2,000 tonnes of limestone per day.

“With careful planning and cooperation with the ILPP owners, the company is confident of reaping further benefits from it upon (the ILPP’s) completion through the supply of limestone and other mutually beneficial arrangements.

“The group will play a part in the supply of limestone in crushed or powder form to the ILPP, which includes the manufacture of clinker and cement,” said Borneo Oil in its 2018 annual report.

The company said Sabah is the only state without a clinker and cement plant, and that the demand for cement is in the region of one to 1.5 million tonnes a year.

“With the relaunching of the Pan Borneo Highway project, the demand for cement is estimated to increase tremendously in the next 12 to 60 months,” it added.

Borneo Oil group is also into gold mining activities in Pahang, and produced 40.53kg of gold for the financial year ended June 30, 2018.

Following the completion of phase one exploration and drilling activities at the Bukit Ibam mine and in metallurgy testing, the company has commenced the testing of heap leaching on a large scale.

Going forward, Borneo Oil expected gold production from the said mine to be gradually scaled up.