Consunji-led Semirara Mining and Power Corporation (SMPC) will funnel P4.0 billion capital expenditures (capex) for its businesses this year, primarily for the purchase of mining and support equipment for its coal mining venture.
In a statement to the media, the company emphasized that P2.9 billion will be earmarked for the targeted equipment procurement; and the balance of P1.1 billion will bankroll preventive and maintenance programs for its power generating facilities.
The Consunji firm has two power plants – the Sem-Calaca Power Corporation and Southwest Luzon Power Generation Corporation assets – that are both sited in Calaca, Batangas and have been feeding generated electricity into Luzon grid.
According to SMPC President and Chief Operating Officer Maria Cristina C. Gotianun, “2020 was a tough year for us because our coal and power generation businesses were hit by pandemic-induced market weakness.”
Nevertheless, she asserted that the company is “determined to stage a recovery this year,” albeit qualifying that “the magnitude of our recovery will largely depend on how demand and prices will behave following the vaccination rollout, Covid-19 infection rates and loosening of quarantine restrictions.”
The Consunji firm’s consolidated earnings dropped by more than 60-percent last year due to slowdown in power demand, as well as crash in coal prices due to the economically inimical impact of the pandemic.
On its rebound goal this year, SMPC indicated that it is eyeing “to produce 13 million metric tons (MMT) of coal,” and that shall be roughly “equal to its actual production volume in 2020.”
The company said the target is seen achievable “because of ongoing remedial measures in Molave North Block 7 (NB7),” which is one of its coal mine’s production area.
SMPC stated that in December last year, it voluntary deferred mining activities in the said block “to allow its technical consultants and mining personnel to implement remedial measures to manage the water build-up in the sump of NB7.”
In the power sector, the overall forecast of industry players is also a bounce back from the demand slump that hit the sector last year, although such prognosis may need some review if the prevailing fast-paced Covid-19 infection rates could not be abated at the soonest possible time.