Semirara to build 1,100 MW coal-fired power capacity

Business World Online
Posted on July 29, 2015 09:52:00 PM

SEMIRARA Mining & Power Corp., the country’s biggest coal miner, said on Wednesday it expects to bring on stream 1,100 megawatts (MW) of power capacity in the next three to four years, offering a market for its expanding coal mining business.

A RARE cloud-free view of the northern end of Semirara Island is seen in this photograph released by the NASA Earth Observatory in April 2010. The northern part of the island is dominated by the Panian Coalfield, the largest of three coalfields on the island. That coalfield is being mined using open-pit methods. -- AFP
The Philippines is counting on dozens of coal-fired power plant projects now in the development stage to meet soaring electricity demand and help the country avoid a power crisis.

Semirara Chief Executive Isidro A. Consunji said plans were underway to build a 700 MW power facility, while a 300 MW plant was scheduled to begin commercial operations in the main island of Luzon this year.

Semirara, a unit of conglomerate DMCI Holdings, Inc., produces about 8 million tons of coal a year and ended the first quarter with a generating capacity of 74.1 MW at one plant, which it said could be expanded to 200 MW.

The company will supply all of the coal needs of its expanding power generation portfolio, Mr. Consunji said, providing an income boost for DMCI, which is also engaged in nickel mining, road construction and real estate development.

Semirara normally exports some of its coal to China, but has halted exports to ensure supply for local power generation following the suspension this month of its mining operations in central Philippines after a deadly landslide.

It plans to operate a second coal mine in the same region at full capacity in 2016 and is looking to develop a third.

PROFIT GUIDANCE KEPT
On the sidelines of DMCI’s shareholder meeting yesterday, Mr. Consunji said the parent firm is sticking to its profit guidance on hopes the suspension on Semirara mine will be lifted soon.

DMCI’s unaudited net income attributable to shareholders stood at “approximately P6 billion” in the January to June period, he said.

That represents a 17% growth from the P5.128 billion reported a year ago.

“We said we’ll grow 20% this year [from P10 billion] so we’re on track,” he said.

The holding firm has yet to quantify the possible impact of the suspension on Semirara’s financial performance, Mr. Consunji said.

Coal operations currently account for 46% of Semirara and 20% of DMCI.

Semirara has a coal stockpile of 500,000 tons worth about P1 billion, which may be good for a month, he said, with monthly coal production hitting 800,000 tons worth P1.6 billion.

NICKEL EXPORTS
DMCI Mining Corp., the conglomerate’s ore mining subsidiary, is exploring the viability of a downstream processing facility to raise the value of its nickel exports.

“The problem is nickel prices are down. All commodity prices are down. At these prices, it is not viable,” Mr. Consunji said.

Nickel prices should hit $14,000 per metric ton (MT) before the project becomes viable, Mr. Consunji said. Nickel prices are currently at $11,000 per MT.

Cost of the plant will depend on what technology will be used, Mr. Consunji said, noting that an investment on a blast furnace will cost $40 million, while high-pressure acid leach (HPAL) facility will entail an investment of $1 billion.

DMCI shares fell 22 centavos or 1.83% to P11.80 apiece, while Semirara shares rose 50 centavos or 0.42% to P119 each yesterday. -- main report from Reuters, with Krista Angela M. Montealegre source