Semirara Mining allots P4 billion capex this year

MANILA, Philippines — Listed integrated energy company Semirara Mining and Power Corp. (SMPC) has set a P4-billion capital expenditure this year as it eyes to recover from last year’s slump due to the COVID-19 pandemic.

Of the total amount, P2.9 billion will be used to purchase mining and support equipment for the coal business, the company disclosed yesterday.

The balance, on the other hand, will be split between Sem-Calaca Power Corp. (SCPC) and Southwest Luzon Power Generation Corp. (SLPGC) for their preventive and maintenance programs.

SCPC owns the 2x300-megawatt (MW) Calaca coal-fired power plant in Batangas which it acquired from the government in 2009 with its bid of $362 million. It runs the 2x150-MW coal power facility also in the same area.

“2020 was a tough year for us because our coal and power businesses were hit by pandemic-induced market weakness. We are determined to stage a recovery this year,” SMPC president and COO Maria Cristina Gotianun said.

“However, the magnitude of our recovery will largely depend on how demand and prices will behave following the vaccination rollout, COVID-19 infection rates and loosening of quarantine restrictions,” she said.

Last year, the company decided to defer P3.7 billion of its capex as part of its cash preservation measures as the COVID-19 pandemic put a strain on the firm’s liquidity.

SMPC chairman and CEO Isidro Consunji earlier said the company, with only P300 million in capex left to spend last year, faced a more challenging business environment because of historically lower coal and energy prices.

The company closed 2020 with a consolidated net income of P3.3 billion, down 66 percent from the previous year.

Revenues slumped by 36.2 percent to P23.3 billion as coal production, sales and prices plunged while electricity sales fell due to low power rates and the planned and unplanned outages of SLPGC.

To support its recovery plan, SMPC is also targeting to produce 13 million metric tons (MMT) of coal this year, roughly equal to its actual production volume in 2020 because of ongoing remedial measures in Molave North Block 7 (NB7).

In December, the company voluntarily deferred mining activities in the said area to allow its technical consultants and mining personnel to implement remedial measures to manage the water build-up in the sump of NB7.

The water build-up was caused by water seepages and aggravated by heavy rainfall from the typhoons in the latter part of the year.

SMPC has yet to say when operations will normalize in the area pending completion of the remedial measures.

The company is the only vertically integrated energy company in the Philippines that mines its own fuel source.