Semirara Mining and Power Corp. plans to expand its power generation business and studies a shift to liquefied natural gas once it becomes financially viable, a top executive said Tuesday.
“We expect to expand our power projects and maybe even shift to LNG if and when situation arises that makes this shift a good business opportunity,” SMPC chairman Isidro Consunji said during the company’s annual stockholders meeting.
Consunji said Calaca in Batangas is ideal for both LNG and coal.
“The question is really just an issue of business viability but physically and technically, there is no reason why SMPC cannot go to LNG,” he said.
SMPC owns coal-fired power plants in Calaca, Batangas through subsidiaries Sem-Calaca Power Corp. and Southwest Luzon Power Generation Co.
“We are exploring alternative revenue streams such as expanding our power generation capacity and pursuing new mining opportunities beyond Semirara Island,” Consunji said.
“To manage market risks, we are enhancing our power generation capabilities while maintaining low fuel costs. Our adaptability in the face of these ongoing challenges will prove crucial to the next phase of our company’s journey,” he said.
Consunji said there were opportunities in mining outside of Semirara Island where SMPC could participate.
He said SMPC would also look at other businesses “assuming our financial state enables us to diversify to other businesses.”
Meanwhile, Consunji said they were not likely to transfer DMCI Mining Corp. from DMCI Holdings Inc. to SMPC.
“Our finance people concluded that the cost involved in such transfer will make it very expensive. Secondly, the ability to determine a fair price for both set of stockholders – DMCI and Semirara is extremely difficult considering the fact that bulk of the mining assets of DMCI Mining are not fully permitted, so it will probably not happen anymore,” he said.
SMPC president Maria Cristina Gotianun said coal production was expected to reach 15 million to 16 metric tons this year.
The company plans to increase coal sales to the local market to 70 percent from 50 percent, while the remaining 30 percent will be for export.
“As we move forward into 2023, we expect global coal prices to consolidate on economic softening, high fuel inventories and warm winter in Europe,” Gotianun said.
She said prices at the electricity spot market should remain elevated but would likely trend lower year-on-year due to secondary price caps and easing fuel prices.
“Potential upside drivers include strengthening post-pandemic demand, our high uncontracted capacity and improved performance of SCPC Unit 2,” Gotianun said.
She said SMPC was looking at P1.5 billion capex for asset management plan of Calaca power plants this year.
“So far, [in] first quarter this year, power plants have been running quite well and we hope this will continue until the end of the year,” she said.