Semirara Mining sees sustained growth

MANILA, Philippines — Integrated energy company Semirara Mining and Power Corp. (SMPC) expects to sustain its growth this year despite scheduled and unplanned shutdowns in the first quarter of its four power plants.

“Even with the plant shutdowns, we are on track to deliver full year growth.  We expect to offset our replacement power costs in the succeeding quarters from our insurance claim,” SMPC president Victor Consunji said.

SMPC is banking on its coal segment to drive earnings upward despite the downward pressure from its power segment.

“We anticipate higher coal sales this year because of healthy demand from local and international consumers. The foreign exchange rate and strong coal prices will also prop up our bottom line,” Consunji said.

The company also expects its newly formed ancillary service business to be a bright spot.

Southwest Luzon Power Generation Corp. (SLPGC) was issued a certificate of compliance in early March by the Energy Regulatory Commission for its 50-megawatt modular gas turbine power plant.

SLPGC is now finalizing its contract with the National Grid Corp. of the Philippines which will allow the SMPC subsidiary to provide ancillary services to the grid operator.

While awaiting the ancillary service contract to take effect, SLPGC is bidding its gas turbine capacity in the electricity spot market.

For its power generation business, Unit 2 of Sem-Calaca Power Corp. (SCPC) was offline for the most part of the quarter for scheduled preventive maintenance and technical inspection in relation to its rehabilitation program, while Unit 2 of SLPGC was shut down for preventive maintenance work.

SMPC Unit 2 resumed normal operations on March 17, while the SLPGC Unit 2 went back online on April 16.

Meanwhile, forced to go on unplanned shutdowns in early March were Unit 1 of SCPC and Unit 1 of SLPGC, as the former required the removal of slags from its boiler, while the latter exhibited abnormal equipment vibration.

Unit 1 of SCPC went back online on March 17, but Unit 1 of SLPGC will remain offline for repairs until August this year, according to SMPC.

With the protracted shutdown of SLPGC Unit 1, SMPC began purchasing replacement power from the Wholesale Electricity Spot Market in the last week of March which had minimal impact on its first quarter earnings.

SLPGC has business interruption insurance that covers the loss of business income as a result of damage to the insured asset.

The final amount will still be determined by the insurance adjuster appointed by SLPGC’s reinsurers but SMPC expects that it will substantially reduce the impact of replacement power costs to SLPGC’s profitability.

Consunji said the generated output of SLPGC Unit 2 is enough to serve the contracted capacity of SLPGC, except for a few hours during peak demand or as needed by its offtakers.