Semirara Mining and Power Corp. said Wednesday it immediately stopped its coal mining operations after receiving an order from the Department of Energy to suspend all mining activities covered by coal operating contract no. 5 based on the results of the investigation on the mudflow incident in Semirara Island, Antique province last month.
This followed the DOE’s issuance of a resolution imposing a one-month selective coal trading suspension and fines against SMPC for allegedly violating coal trading rules.
“The DOE orders of suspension will result in opportunity loss in production per day from 40,000 to 45,000 MT. The financial impact, however, shall depend on the prevailing price of coal,” SMPC said in a disclosure to the stock exchange.
SMPC said it would submit all the requirements to the DOE soon, “and is confident that the conditions for resuming operations can be speedily met.”
Semirara owns the country’s largest coal mining operations which directly employ more than 3,300 people, making it the single biggest employer in Semirara Island and Caluya.
The company said that as of Nov. 20, total production reached 14.5 million metric tons, up by 12 percent from 12.9 million MT a year ago. Coal shipment reached 14.6 million MT, or 26 percent higher than 11.5 million MT in 2018.
“Late yesterday afternoon, we received a letter from the DOE dated Nov. 14, 2019 directing SMPC to suspend any and all mining activities under Coal Operating Contract No. 5,” SMPC said.
The DOE directive was issued in relation to a mudflow incident in Semirara Island, Antique Province on Oct. 2, 2019. An employee of SMPC, the operator of PS27 machinery, was found dead after a three-day search and rescue operation.
A mudslide occurred in Southwest Tungao, Semirara Island at 1:05 a.m. on Oct. 2, sweeping the equipment operator.
SMPC said that in compliance with the DOE directive, it suspended its mining operations effective immediately.
The DOE said the suspension would remain in effect until the company complied with several conditions such as addressing the existing and continuing apparent risk in the Casay Lake area near and adjacent to the operations of the Molave Pit.
It said SMPC should immediately implement a DOE-approved geo-hazard assessment of the Casay Lake area. It should include a specific plan to remove the hazard for evaluation and approval of the DOE.
The agency said SMPC should conduct geo-hazard assessment in all existing and proposed mining areas to identify and determine the risks and appropriate mitigating measures to these geo-hazards such as landslides, mudflows, flooding, storm surge, liquefaction, among others, to be approved by the agency.
It also directed SMPC to conduct a comprehensive review of health and safety program including management leadership, worker participation, hazard identification and assessment, hazard prevention and control, education and training, program evaluation and improvement and coordination and communication, among others.
The company was ordered to reorganize its safety department to address its deficiencies and provide appropriate competencies to implement a DOE-approved health and safety program and allocate sufficient budget for the implementation of the said program.
“Since the Oct. 2 incident, SMPC has been in close coordination and full cooperation with the DOE on all its legal and regulatory compliances, particularly the safety aspect of its operations,” the company said.