In a disclosure to the Philippine Stock Exchange, Semirara said its board approved a plan to engage in the business of exploring and producing all kinds of petroleum and petroleum products, hydrocarbon materials, chemical substances and salts, precious and base metals.
The company’s board also approved a plan to venture into power generation. Semirara was recently chosen by the government to operate the off-grid Small Power Utility Group (SPUG) project in Masbate Island.
The company is hoping that the diversification will provide for a more stable domestic consumption for its coal.
Semirara earlier said it expects its 2006 net profit to drop to P600 million from P1.59 billion a year earlier on lower sales as demand for coal in the power industry and the cement sector declined.
DMCI said competition from the natural gas-fired plants as well as entry of cheaper imports limited coal deliveries.
DMCI said coal sales volume registered at 2.076 million metric tons (MT), 16 percent lower than last year’s 2.4479 million MT. Production costs likewise went up as advance shipping cost of material overburden was taken up as current cost in the books.
Net coal produced dropped 21 percent to 2.27 million MT compared with the previous year’s 2.888 million MT. Pre-stripped coal, on the other hand, is estimated to amount to 1.3 million MT with a market value of at least P2.3 billion as of the end of 2006.
In addition, coal stockpile inventory amounted to 606,000 MT with a market value of P1.1 billion as of yearend 2006.
Last year, DMCI completed its modernization and expansion program bringing production capacity to four million MT of run-of-mine coal.
"The economies of scale at this level is expected to bring down cost of production that will make the company more competitive against imports. At the same time, it will bring up the company’s level of business to the vast potentials of the export market in the region which management looks forward to initiate in 2007," DMCI said.