Semirara Mining and Power Corp. (SMPC) has suspended mining operations in one of its four mining blocks in Molave Mine in Antique due to water seepages caused by the water buildup from the recent typhoons.
In a disclosure to the Philippine Stock Exchange, SMPC said deferring mining operations in its North Block 7 will enable technical consultants and mining personnel to implement remedial measures to manage the water buildup.
The company assured coal shipments for this year will not be affected, saying it had 3.4 million metric tons (MT) of coal inventory as of yesterday, December 1.
However, SMPC said it may not be able to meet the coal quality specifications of some customers due to the expected delay in the production of high calorific value coal.
The company is also behind by 1.7 million MT from its 2020 coal production target of 15 million MT.
SMPC said ramping up production is unlikely due to the water seepages at NB7.
“With the lower production, estimated financial impact is an increase of around P900 million in cost of coal sold owning to higher weighted average cost, which will negatively impact 2020 profitability,” SMPC said.
As of the first half of the year, the company recorded a 61- percent slump in consolidated net income to P2.2 billion from 2019’s P5.7 billion mainly due to pandemic containment measures that dragged down coal demand and average selling price, as well as electricity sales and average selling price.