MANILA, Philippines - The group of businessman Manuel V. Pangilinan has suspended its coal mining operations in Mindanao as a result of falling coal prices.
In a disclosure to the Philippine Stock Exchange yesterday, Philex Petroleum Corp. said that its wholly-owned subsidiary Brixton Energy and Mining Corp. (BEMC) has decided to suspend for six months the operations of its coal mining project in Diplahan, Zamboanga Sibugay.
“Brixton Energy and Mining Corp. (BEMC), a wholly owned subsidiary of Philex Petroleum Corporation, has recently been adversely affected by the significant drop in coal prices. In response to this unexpected change in market conditions, it has been decided to undertake a detailed review of the operations and prospects of the coal mining project under Coal Operating Contract No. 130 located at Diplahan, Zamboanga Sibugay,†Philex said in its disclosure.
BEMC said the detailed review would cover the business’s operations and prospects.
“Whilst this assessment is being undertaken, BEMC has determined that it would be prudent to suspend underground mining operations,†it said.
“In the meantime, activities will be confined to maintenance and repair of the coal mine, and to processing and marketing of existing coal inventory,†BEMC also said.
Oversupply of coal in the global markets has pulled world coal prices down.
In October, Philex reported a fall in profits in the first nine months of 2012 also due to a decline in coal prices.
In a financial report, Philex Petroleum said its earnings for the first three quarters dropped to P131.85 million from last year’s P472.11 million.
Because of lower coal prices and petroleum sales, Philex’ revenues amounted to P154.37 million in January to September 2012, down by more than half year-on-year compared to the same period last year.
Of the total amount, P120 million came from petroleum sales by Philex’ Forum Energy and P34 million from Brixton.