San Miguel eyes more coal mines in Mindanao

MANILA, Philippines - SMC Energy Corp. (SMEC), the power development arm of food and beverage giant San Miguel Corp. plans to acquire more coal mines in Mindanao, a top company official said.

SMEC president Ramon Ang said the acquisition of these coal mines will support the firm’s plan to put up coal-fired facilities in the island and in other parts of the country.

Ang, also San Miguel’s president and COO, said they are looking at the possibility of acquiring more stakes in the Daguma coal reserves in Sultan Kudarat and South Cotabato.

“We are looking at all available coal mines that are up for sale there. We would be very interested to buy them,” he said.

Earlier, San Miguel purchased the coal concession of Daguma Agro Minerals Inc. to support its aggressive plan to put up a 2,000-megawatt (MW) coal-fired mine-mouth plant in Mindanao. Blocked coal resources at Daguma is estimated at 426 million tons.

Ang said they plan to put up these coal-fired facilities in tranches, starting with a 300-MW facility to be constructed anytime within the year. This coal-run unit will require about 750,000 tons of coal per year.

The San Miguel executive said they have started preliminary talks with some coal mining firms in Mindanao. “We have started talks with some firms beside our Daguma coal exploration site,” he said.

Ang said they are also in discussions with Sultan Mining for a possible joint venture.

In 2008, Sultan Mining entered into an agreement with the Alcantaras’ Conal Holdings to supply coal to a planned power plant in Mindanao from the Daguma coal reserve where it owns a 12.5-percent stake.