Philcemcor seeks zero tariff for bituminous coal, anthracite

The Philippine Cement Manufacturers Corp. (Philcemcor) is asking the Tariff Commission to reduce to zero the existing duty rate on bituminous coal and anthracite.

In a letter to Tariff Commission chairman Edgardo B. Abon, the Philcemcor requested that the tariff on bituminous coal with a heating value of more than 5,500 kilocalories (kcal) and anthracite be reduced from their existing rates of seven percent and three percent, respectively, to zero effectively next year.

The Philcemcor said this will not adversely affect the local coal industry considering that anthracite is not available locally in any form while imported and local bituminous coal, although categorized under the same tariff heading, are technically different and consumed by distinct sets of end-users.

Philcemcor said imported bituminous coal from Indonesia has a heating value of 6,500 kcal while local bituminous coal only has 5,000. Imported bituminous coal, the Philcemcor said, also has a lower moisture content 12 percent compared to local coal 24 percent. Inherent (residual) moisture of imported coal is also much lower at 5.4 percent compared to local coal at 13 percent.

Philcemcor said local coal can be used by power generating plants but is not adaptable to cement plants whose coal firing systems requires heating value of more than 5,500 kcal.

The cement industry, Philcemcor said, has not yet recovered from losses since 1998 when the country began feeling the full impact of the regional financial crisis that started in mid-1997.

The situation, Philcemcor said, is aggravated by a surge in the entry of imported cement which has forced the local industry to lay off workers and operate at only half of its production capacity.

Coal as fuel, Philcemcor said, represents about 23 percent of total production cost of cement.

Lowering the tariff rates on high grade bituminous coal with heating value of more than 5,500 kcal and anthracite will help reduce production cost and will, in a way, alleviate the present plight of the ailing local cement industry, Philcemcor said. – Marianne Go