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THE Consunji-led Semirara Mining Corp. will increase coal production
this year to serve the growing demand of its buyers abroad, the
company told its shareholders Tuesday.
Isidro Consunji, Semirara vice chairman, said
the company will build up its capacity of saleable coal by at least
500,000 tons, pushing the total up to 4.5 million to 5 million
metric tons per year.
To achieve capacity expansion, the company has
earmarked P1.5 billion to buy equipment that will excavate and haul
the coal for shipping. At end-2007, at least two 16-tonner
excavators and 16 100-tonner dump trucks were delivered to Semirara,
and a couple more are expected to arrive by the middle of this year.
Of the total capacity, 1.6 million metric tons
will be shipped to China, Hong Kong and India, double the amount the
company exported last year. During the first quarter, Semirara, a
unit of DMCI Holdings Inc., sold its coal for $60 per metric ton.
Consunji said the firm is expected to keep the price at that level
for the rest of the year.
Due to high demand from the three countries, the
new markets of Taiwan, Japan and Korea that Semirara previously eyed
for expansion may not be supplied with enough coal for this year.
The company is also eschewing long-term supply contracts with its
buyers to take advantage of rising coal prices brought about by
tight supply.
Consunji said prospects for opening up a new
coal mine within the Semirara island is promising, and the company
may open it within the next two years. However, he said the company
is in a quandary whether to prioritize its short-term plans over
long-term ones given the demand for coal. It is not sure whether to
accelerate production and exhaust the first mine sooner or maintain
the pace so that it can be utilized for the whole duration of its
10-year lifespan. Besides, it is cheaper to operate one mine at a
time, Consunji told reporters.
On the local front, Semirara refused to bow to
the demands of domestic buyers, the new owners of the power plants
that the government disposed of, for steeper discounts than the 3
percent it allows the National Power Corp., its biggest buyer aside
from the Philippine National Oil Co.
Consunji said the new local buyers enjoy big
discounts from foreign suppliers, but as coal prices abroad are
climbing, the discounted Semirara coal now costs almost the same as
the imported ones. At present, the company is still negotiating with
local buyers regarding discounts and buying price.
-- Likha C. Cuevas-Miel
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