Power

Semirara to incur additional cost of P900M

Consunji-led Semirara Mining Corp. expects the suspension of its mining operations in Antique to negatively impact its profitability, with costs seen to increase by P900 million this year.

Semirara is behind by 1.7 million MT from its coal production target of 15 million metric tons this year due to its decision to defer mining operations in North Block 7 (NB7), one of four mining blocks in Molave Mine.

The suspension is due to water build-up, aggravated by heavy rainfall from the string of typhoons that hit the country.

“With the lower production, estimated financial impact is an increase of around P900 million in cost of coal sold owing to higher weighted average cost, which will negatively impact 2020 profitability,” Semirara said.

Deferring mining operations in NB7 will allow our technical consultants and mining personnel to implement remedial measures to manage the water build-up. The company is currently unable to provide an estimate of when operations in the area will normalize pending completion of the remedial measures,” Semirara said.

Coal shipments, on the other hand, will not be affected by the suspension of mining operations in NB7 as the company has 3.4 million MT of coal inventory.

Semirara, however, said it may not be able to meet the coal quality specifications of a few customers due to the expected delay in the production of high CV (calorific value)coal.

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