DOE awards 3 coal exploration contracts for power generation

The Department of Energy (DOE) has awarded three more coal operating contracts (COCs) to explore and develop coal resources for power generation.

The DOE awarded COC 140 to the Philippine National Oil Co. Exploration Corp. (PNOC-EC) to explore three blocks, equivalent to 3,000 hectares in Cagwait Surigao del Norte.

PNOC-EC also bagged COC 141 to explore coal deposits in three blocks in Naguilan and Benito Soliven town in Isabela.

The third contract, COC 142, was awarded to Visayas Multiminerals Mining and Trading Corp. to explore another three blocks in Toledo City, Cebu.

"These are just exploration contracts to determine if it could be commercially viable," said Energy Undersecretary Guillermo Balce.

Coal exploration is one of the DOE’s major programs to increase the country’s exploration and development of indigenous energy resources and subsequently, reduce its dependence on imported fossil fuels whose prices have steadily risen in recent years.

Earlier, the DOE awarded five COCs to four local companies for the exploration and development of coal resources in Southern Luzon, Cebu Province, and Mindanao.

The DOE awarded to SKI Construction Group, Inc., formerly known as Summa Kumagai Inc., two exploration contracts for coal areas in Alpako, Naga and in Danao City, both in Cebu Province.

Rock Energy International Corp. was awarded the contract to explore coal in three blocks with an area of 3,000 hectares, located in Siocon, Zamboanga del Norte.

Bonanza Energy Resources Inc. will explore the coal-bearing areas located within eight coal blocks in the provinces of Sultan Kudarat, South Cotobato and Sarangani.

Currently, demand for coal in the local market is steadily increasing but majority of the supply comes from abroad.

The other existing COCs are those of MG Mining and Energy Corp. for South Cotabato in Mindanao and in Southern Cebu areas; Forum Exploration Inc. for Balamban-Naga, Cebu and Dalaguete, Cebu coal fields; Philex Mining Corp. for Diplahan-Buug, Zamboanga Sibugay and Samaju Corp. for Batan Island in Rapu-rapu, Albay.

Estimates show that the country’s total coal reserves stand at 343.4 million metric tons (MT). Local coal production hit an all-time high of 2.72 million MT last year, up by 34.3 percent from the previous year of 2.03 million MT. In 2002, production was registered at 1.66 million MMT.

The market supply outlook in 2005 from production and importation of coal is 8.03 million MT, of which some 2.55 million MT will come from local coal production.

Power and other industrial sectors are the bulk users of coal, with the power sector traditionally accounting for about 80 percent.