July 19, 2015

SCC’s mining operations suspended as coal mine collapse

The Department of Energy (DOE) has suspended mining operations of Semirara Mining and Power Corp (SCC) after a section of the Panian coal-mining pit collapsed before dawn Friday, causing the death of six workers and leaving three missing. The cause of the incident is currently under investigation but initial reports say continuous rains the past few days may have led to the mine's collapse.

A local government official, quoted by the press, said that workers were using heavy machinery to remove sea water from the open pit when the northern wall of the pit collapsed and buried the workers.

Our take: SCC’s share price is likely to suffer following this latest incident. A similar incident happened in February 2013, when five workers were killed after the western wall of the pit collapsed. SCC’s share price dropped by as much as 13.7%, before ending 7% down, a day after the incident.

Mining operations were temporarily suspended but was allowed by the DOE to resume operations two months later. The latest incident can also take toll on parent firm DMCI Holdings (DMC) as this comes on the heels of the temporary restraining order by the court on the construction of its Torre De Manila residential condominium project in Manila. - WealthSec