Sultan Energy to build $500-M coal-fired plant

Sultan Energy Philippines Corp. and MG Mining and Energy Corp. will invest more than $500 million to set up a coal-fired power plant and expand the capacity of an open-pit coal mine in Bislig, Surigao del Sur, a top company official said.

Sultan Energy Phils. president Rufino B. Bomasang said they are looking at various options for raising funds for the power plant and coal mine project. Bomasang, a former key official of the Philippine National Oil Corp. is also the vice chairman of MG Mining.

The power plant will have a initial capacity of 200 megawatts (MW), with the option to increase to 400 MW as demand increases.

Likewise, the present capacity of the Bislig coal mine at just 500 tons per day will be increased to roughly 700,000 metric tons when the power plant is fully operational in 2011.

"We are prepared to infuse capital, borrow money, to invite strategic partners for a joint venture, and to even have it listed in the Philippine Stock Exchange," Bomasang said in a briefing.

When operational, the coal-fired plant has the potential to supply power to the rest of Mindanao. In the event of excess capacity, it can sell power to the wholesale electricity spot market (WESM).

National Transmission Corp. (TransCo) president Alan Ortiz said the deal is beneficial to the National Government as there will be no cash out required.

Under the agreement, TransCo will assume control, operation, and maintenance of the plant "subject to a charge to be imposed on MG Mining and Sultan Energy."