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SULTAN Mining & Energy Development Corp. said it is cashing in
on the rising cost of bunker fuel, which has created a new market
for coal among manufacturers in Mindanao such as tuna canneries,
paper and textile firms.
Michael Morales, Sultan vice president for
sales, said many manufacturers in Mindanao are refitting their
plants to burn coal instead of bunker fuel, which is three times
more expensive than local coal.
“They spend an initial P25 million to P30
million to buy new coal-fired boilers but are able to recoup this
investment in less than a year from savings due to the huge
difference between the costs of coal and bunker oil,” he said.
Morales said this new market for coal is
providing Sultan with a strong base for growth on top of its
traditional customers in the power generation and cement industries.
At present, the company supplies PHILBEST
Canning Corp., General Tuna Corp. and PICOP Resources, Inc. with
coal from its open pit mine in Bislig, Surigao.
Morales said the new market continues to grow as
rising oil prices make the shift to local coal more attractive. He
said two more canneries in General Santos City will shift to coal
later this year and another two plan to start consuming coal by next
year.
Aside from General Santos City’s tuna
canneries, Sultan is also looking at the sardine canneries in
Zamboanga City, the executive said.
The company’s Bislig mine operates the largest
open pit coal mine in Mindanao. It plans to begin the development of
its underground mines at Bislig with the first entering commercial
operations by late 2010.
Sultan is set to undertake a P480-million
initial public offering (IPO) this quarter to raise funds for its
exploration activities and ramp up current production from its
Surigao del Sur mine site.
The firm has tapped Asian Alliance Investment
Corp. as lead underwriter for the IPO. Sultan’s shareholder,
Maxinvent Trading Corp., granted Asian Alliance an option to
purchase or place up to P48-million worth of shares for the purpose
of covering over-allotments.
-- Euan Paulo C. Añonuevo
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