Philex closes Zamboanga Coal Mine

Manila Bulletin 

By Myrna M. Velasco 

Published: September 3, 2013 Brixton 

Energy and Mining Corporation (BEMC), a wholly-owned subsidiary of Pangilinan-led Philex Petroleum Corporation, has decided to shut down its coal mining operations in Diplahan, Zamboanga Sibuhay primarily due to “negative margins” it has been logging for that venture.

In a disclosure to the Philippine Stock Exchange (PSE), Philex Petroleum chief information officer Mark H. Rilles noted that the Department of Energy (DoE) has already been informed of the company’s decision to close the coal mine.

The Diplahan blocks are under coal operating contract (COC) 130 that was previously awarded by the energy department to BEMC.

The operating company first suspended the underground mining operations at COC 130 in January this year, as it reviewed probable viability of operations. However, the end-result was still a cessation of operations.

Philex Petroleum said the “negative margins (resulted) from the high operating costs and substantial drop in regional coal prices in 2012.”

In the last six months, when BEMC continually operated the Diplahan coal mining blocks, it reviewed the mine’s viability, and such included “the evaluation of possible options to address current technical and commercial issues and to prepare the coal production work program.”

It also crunched numbers on required budget for the coal mine’s operations – prospectively for the next five years.

Within that period, mine activities were reportedly limited to maintenance and repair, and also on the processing and marketing of existing coal inventory.

COC 130 covered two coal blocks in Barangays Butong and Sta. Cruz in Diplahan and Barangay Del Monte in Buug, Zamboanga Sibugay.

There is no specific assertion from BEMC’s parent firm if the mining activities’ closure would just be temporary and if operations will resume when global coal prices will improve once again.   source