Semirara Mining and Power Corp. (SMPC) sees reduced margins and higher operational costs this year due to the current volatility in coal, fuel and power prices.
“The erratic movement of coal, fuel and electricity prices should translate to uneven quarterly results, reduced margins and high cash burn rate for (SMPC)… we are doing everything we can to mitigate the risks, protect our cash flow and deliver a performance worthy of commemoration,” said Isidro Consunji, SMPC chief executive officer, during a virtual stockholders’ meeting yesterday.
SMPC booked a 393- percent surge in net income in 2021 to P16.2 billion from P3.3 billion in 2020, and the highest in the company’s history.
The growth was mainly driven by across- the- board increases in coal production, shipment and average selling prices.
Aside from continued COVID-19 outbreaks in Asia and Europe, Consunji said the volatility continues because of decelerating global growth, escalating geopolitical tensions and possible market interventions of China and Indonesia in the global coal industry.
Maria Cristina Gotianun, SMPC president and chief operating officer, said the company was able to establish and supply Semirara coal to new local buyers in the power and cement plants and was able to develop new export markets, namely South Korea, Cambodia and Brunei.
Gotianun said SMPC will have enough coal reserves until the expiration of its coal operating contract in 2027 as its annual coal production ranges between 13 million metric tons (MT) and 16 million MT yearly.
SMPC is developing a science-based plan to reforest and restore the biodiversity in the Panian pit in Semirara island which was once the largest open-pit mine in the Philippines.
SMPC fully covered the pit in six years, ahead of the original 10-year mine rehabilitation plan and involved 11.5 million man-hours and over 452 million bank cubic meters of earth material, which is enough to fill 217,000 Olympic-size swimming pools.
The Panian pit had a mine life of 16 years and generated P12.7 billion in royalties for the government and SMPC host communities. Of the total amount, P7.6 billion went to the national government while the municipality of Caluya and barangay Semirara received P2.3 billion and P1.8 billion, respectively with another P1 billion for the province of Antique. – Jed Macapagal
