Semirara investing P5B to expand production
Consunji-led Semirara Mining and Power Corp. plans to invest P5 billion this year and next to increase its coal production capacity to a maximum of 16 million metric tons.
The increase in capacity seeks to “take advantage of favorable coal prices and local market demand” and make the most of the extraction capacity allowed by the government, Semirara president and chief operating officer Victor Consunji said in a report to stockholders.
This year, Consunji said Semirara was aiming to produce 13 to 14 million metric tons of coal. If the company could produce 13 million, he said he would be happy given forecasts of a little bit more wet weather this year.
Last year, Semirara’s coal sales volume stood at 12.8 million metric tons, translating to revenues of P24.2 billion.
Semirara has earmarked about P2 billion this year to expand its pier and coal conveyor line while another P3 billion will be invested next year to import mining equipment such as new trucks and excavators.
Isidro Consunji, Semirara chair, said the company was expected to perform better than last year because coal prices had increased compared to 2016 while the volume of coal production was set to increase. At the same time, Semirara’s coal-fired power plants were expected to produce more this year given recent retrofitting and upgrading of facilities.
“Our plan to increase coal mining capacity is in line with the government’s thrust for power stability, optimal pricing of electricity and intensified infrastructure developments,” he said.
“We expect our coal segment to perform even better than last year because of our expanding production capacity and improving market conditions. We are also anticipating higher domestic coal sales because of new coal plants that will be commissioned and operational during the year and the scheduled capacity expansion of cement plants,” Victor Consunji said.
Unit 1 of Sem-Calaca Power Corp. is also seen to perform better after undergoing some boiler enhancements while both units of South Luzon Power Generation Corp. are seen to secure their turnover certificates by the second or third quarter of the year, he added.
Semirara Island has a known coal resource of 570 million metric tons. From inception, volume of coal extracted has reached 94 million metric tons and converted to energy. Some 65 percent was used by the local economy while 35 percent went to the export market.
Semirara is also pilot-testing a new coal shipment to Japan that could pave the way for the company’s foray into the Japanese market. Previously, Semirara was exporting mostly to China and Thailand.
Victor Consunji said that Semirara would do its first shipment to Japan by selling to Hitochu Corp., the co-owner of Tohoku Electric Power Plant. If successful, he said Semirara could do four more coal shipment of 70,000 metric tons each.
Meanwhile, Semirara’s shareholders approved yesterday an increase in the firm’s authorized capital stock to P10 billion from P3 billion. Isidro Consunji said the capital increase would allow the company to declare stock dividends in order to disburse huge retained earnings. —DORIS DUMLAO-ABADILLA
