Not enough local coal to meet ’08 demand – study

Coal demand is expected to go up in 2008 to 12.246 million metric tons (mt) as more industries and power generators shift to the cheaper fuel but only about a third of that amount will be sourced locally, an official study showed.

Based on the Philippine Energy Plan’s Coal Demand and Supply Outlook, about 10.177 million mt will be used for power generation and 2.07 million mt will be consumed by industries next year.

Only 3.88 million mt of coal will be locally sourced while the remaining 8.36 million mt will be imported from coal producing countries like Indonesia, Australia and China.

Coal demand is projected to grow steadily in the next few years to about 15.28.31 million mt in 2014 with coal for power demand reaching 13.06 million mt and industries accounting for 2.22 million mt.

In parallel with the increase in demand, coal production is expected to go up from 3.88 million mt to 6.603 million mt by 2014.

The Department of Energy (DOE) said increased production is expected in the near future as new contracts reach full blown production while exploration contracts are converted to production agreements.

Consumption will also grow as new coal-fired power plants are installed and industries switch to coal because of the highly volatile price of oil.

“As coal demand continues to increase, coal mining companies realize the need to fill the void by pursuing coal exploration projects around the country,” MG Mining and Energy Corp. (MGMEC) vice chairman Rufino Bomasang said.

MGMEC specializes in coal mining exploration and extraction, as well as processing and trade of coal and other energy related products.

In the past two years, the company has focused on the development of coal assets through the acquisition of coal operating contracts (COCs).

These COCs grant MGMEC the exclusive right to explore, develop, and extract coal from its mine sites, and market coal found in the respective areas.

Bomasang said the country’s largely untapped coal resources have the potential of producing 1,000mw to 2,000mw of power, equivalent to up to $2 billion in investments, for at least 25 years.

“Coal is a cheaper alternative to other energy mix. Coal is indigenous and we have untapped potential in our own backyard that we can explore,” he said.

Bomasang said there are proven and indicated coal resources large enough to supply major power plants for at least 25 years. These are located in Isabela (150 mw to 300 mw), Cagayan (100 megawatts  mw), Surigao del Sur (300 mw), South Cotabato (300 to 900 mw) and Zamboanga-Sibugay (200 mw).

He noted that there are several other coal deposits in Cebu, Masbate, Catanduanes, Batan Island, Negros Occidental, and Samar. Those in the Cotabato basin, estimated to contain huge coal resources, have yet to be fully explored at depth.