RP needs P162.3B for coal exploration & development

The Philippines needs about P162.3 billion worth of investments for indigenous coal exploration and development until 2014, data from the Department of Energy show.

The DOE data also indicate that of the total, some P45.6 billion worth of capital will be required to develop potential areas in Luzon, P77.4 billion for Visayas and P39.3 billion for Mindanao.

With this huge investment requirement, the DOE is encouraging private sector investments in putting up  mine-mouth power plants designed to utilize the abundant low-rank coals as well as setting up coal preparation plants to upgrade the quality of local coal.

More investments are also being encouraged for the expansion of production volumes of higher-rank coal which can be used without upgrading and/or blending with high-quality imported coal and for the introduction of clean coal technologies to ensure minimal adverse effects on the environment.

The DOE is promoting the use of local coal for power generation as it has the largest reserve and it is often the cheapest of all fuel options.

“Now that clean coal technologies are available, the demand for coal has remained steady despite the current stringent standards on environmental concerns,” the DOE said.

The Philippines is largely a coal consuming country with coal consistently having the highest contribution to power generation.

Heeding the call for more investment in the coal exploration sector, Sultan Mining and Energy Development Corp. (SMEDC) chairman Rufino Bomasang said the company is committed to pursuing its exploration projects in Daguma, North Cotabato and Argao, Cebu while production continues in Bislig, Surigao del Sur.

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

Bomasang pointed out that until recently, many power plants and cement plants have been reluctant to use local coal due to its generally low rank and supposedly poor quality. Thus, most designed their plants to use imported coal.

“For several decades, however, conventional pulverized coal fired power plants worldwide (i.e. Germany, Australia, India, Thailand, etc.) have used very low rank coals, some with much lower heating value than Philippine coals,” he said.

Bomasang noted that with current fluidized bed technologies (clean coal technologies), a power plant can burn coals with a wide range of coal rank and quality.

Since the coal shortages in 2003, Bomasang said coal users have successfully increased their utilization of local coal with little or no retrofitting in their respective plants.

The SMEDC official said some Philippine power plants have since then been using low rank imported Indonesian coals, which had earlier been considered as not of exportable quality. Similarly, low rank Semirara coal, which was never considered exportable, has been exported to China and India.

“Thus, new Philippine power plants are now designing their plants to have the flexibility of maximizing the use of low rank local coal,” Bomosang said.

This decision of power producers to use low rank coals should lead to an accelerated expansion of the Philippine coal mining industry, he added.

“However, most of the current coal producers are small companies with limited access to financing and technology and with very little experience in large scale coal mining,” Bomasang said.

He said this presents excellent business opportunities for experienced mining companies farming into existing coal operating contracts to provide financing and technical/managerial expertise.