May 06, 2013

Semirara allots $500 M for coal plant expansion, possible rights offering, expected net income of P6.5 B


Consunji-led Semirara Mining Corp. will spend as much as $500 M for the second expansion of the Calaca coal-fired power plant in Batangas. Construction of the 300-400 MW power plant, which will use the circulating fluidized bed or pulverized coal boiler technology, will start in the third quarter.

For the funding requirements, Semirara will stick to the industry benchmark of securing 70 percent through debts and 30 percent through equity. Semirara vice chairman and CEO Isidro A. Consunji said the company might conduct a rights offering. Completion of the expansion may take two and a half years.

Semirara’s profit is expected to hit roughly P6.5 billion this year from a record P6.36 billion last year despite lower income of the coal mining operations in the first quarter. For its coal mining venture, Semirara plans to retain its 7 million metric ton (MT) per year coal production amid depressed selling prices. Capital spending for the coal production is at P1 B to P1.5 B. At the current rate of seven million MT of yearly production, Semirara expects a mine life of another 25 years without conducting underground mining.  - WealthSec