SMPC hikes capex to P5.6 B for 2023

Published December 4, 2022, 11:50 PM

by Myrna M. Velasco

Consunji-led Semirara Mining and Power Corporation (SMPC) has hiked its capital expenditures (capex) to P5.6 billion for 2023, higher by 8.0-percent from P5.2 billion set for the year to support the modernization of its mining equipment and optimize electricity generation of its power plant assets.

The company specified that bulk of its programmed capital outlay at P4.1 billion will be used to purchase new equipment for the coal mining segment of its business operations.

The balance of P1.5 billion will be earmarked for the planned maintenance activities of its power subsidiaries – the SEM-Calaca Power Corporation (SCPC) and Southwest Luzon Power Generation Corporation (SLPGC) which are operating coal-fed power facilities in Batangas.

For Unit 2 of its 600-megawatt Calaca plant, in particular, the company indicated that it will continue exploring viable solution for the facility’s “life extension program” so it can eventually inject more generated capacity into the grid.

As emphasized by SMPC President and COO Maria Cristina C. Gotianun, “We expect stable demand for coal and electricity next year, so we’re continuously investing in our production and generation capacities.”

The company’s coal production this year already reached record-high 13.7 million metric tons (MMT) and is likely to escalate further to 14.5 MMT-15MMT by year-end. Parallel level of output at 14.5 MMT is likewise targeted for next year.

The main development which helped shore up the company’s coal output was the extensive remedy it was able to administer on a seepage problem at its Semirara mine, an undertaking that the entire SMPC team had to collectively resolve for months, between October 2020 to early part of 2021.

The coal mine’s return to operation had been exceptionally fortuitous because that was also the period when international coal prices started shooting through the roof, surging beyond $400 per metric ton in previous months, that also propped the company’s all-time high income in recent quarters.

Within the nine-month stretch this year, SMPC so far logged capital spending of P3.6 billion where the lion’s share of P2.2 billion had been paid out for the acquisition of mining and support equipment.

“The rest – amounting to P1.4 billion – was used to repair and replace plant components of SCPC and SLPGC,” the company said.