The accident at Semirara Mining Corporation's open pit coal operations in Antique, which supplies 90 percent of the country's coal requirements, will not have a debilitating impact on coal supply and the output of major power plants, analysts said Friday.
"In the short-term there could be some supply problems with stockpile depletion, but it's going to be very, very minimal," said Juan Rafael Supangco, research head at Angping & Associates Securities who specializes in mining stocks.
Krizia Syquiatco, mining analyst who handles Semirara shares at PAPA Securities Corp., echoed the position. "The company still has a month's worth of coal inventory,” she told GMA News Online, citing information given from Semirara officials.
"If that gets depleted , they (power plants) could easily outsource or import, and coal prices are not that steep in the international market," Syquiatco noted.
Semirara's net coal output is 7.3 million metric tons (MT) per year or some 20,000 MT a day.
Bulk of the output is supplied to cement and power companies, including the firm's 600 mega-watt Calaca Coal Power Plant in Calaca, Batangas.
The Calaca Power Plant supplies power to Manila Electric Company (Meralco) and the Wholesale Electricity Spot Market (WESM).
Semirara on Thursday reported that a part of its open pit mine in Caluya collapsed Wednesday night, with five miners dead and five more missing in the accident. /news/story/294880/news/regions/five-miners-killed-five-missing-as-semirara-coal-mine-collapses
No impact on earnings
Analysts, likewise, said the accident won't hurt Semirara's earnings.
"The effect on the income would depend on how long the mine will close," said Syquiatco, noting the contribution from the company's power business "will compensate for any losses."
Supangco also said the drop in share prices of Semirara were simply "knee jerk reactions" in the market. "It's the [investor] sentiment. It (Semirara shares) will remain down until the mine is closed," he noted.
"But this will rise when the mine opens and bargain hunters start buying the issue," Supangco added.
Semirara shares fell to P231.40 apiece on Friday from Wednesday's close P237.20 before news of the accident broke.
Shares of DMCI Holdings Inc., a majority stakeholder in Semirara, fell by 1.42 percent to P52.30 Friday.
Mining and oil shares posted a 0.87 percent decline despite a 0.13 percent gain of the PSEi. — VS, GMA News source
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