Semirara Mining and Power Corp. plans to expand its 600-megawatt, coal-fired power plant in Calaca, Batangas province by 100 MW with potential investments reaching $150 million to $160 million.
Semirara Mining chairman Isidro Consunji told reporters the coal plant, which the company acquired from the government in 2009 for $361.7 million, was running at 500 MW. Two units with a capacity of 300 MW each have a combined installed capacity of 600 MW.
Consunji said the coal plants, built in 1984 and 1995, underwent rehabilitation upon the company’s acquisition to increase the plant’s capacity and ensure reliability.
The Calaca facility was running only at 340 MW when the Consunji Group took over the operations of the plant from the government. The plant’s capacity rose over 500 MW upon completion of the rehabilitation program in 2013.
The plants are can now run on 100 percent local coal from Semirara Mining’s operations in Antique.
“Construction will take only about six to nine months but we have to start ordering the machines now. That will be in end 2018 or 2019,” Consunji said.
The acquired Calaca coal plants recorded higher availability in 2015 at 87 percent compared with 30 percent in 2014.
Semirara Mining’s wholly-owned subsidiary Southwest Luzon Power Generation Corp., meanwhile, has completed a 300-MW plant expansion also in Calaca.
The full commercial operation of the plant is expected to bring in P2 billion in additional profits to the company this year.
The company expects net income to reach around P10 billion this year from P8.45 billion in 2015 with the completion of the expansion.
Semirara Mining president and chief operating officer Victor Consunji told reporters after the annual stockholders’ meeting that “if all remain equal,” the company might hit a net income of P10 billion in 2016.
“That’s the way we’re thinking because if we did P8.5 billion, and assuming we can control the costs. But prices are still falling, so it’s hard to speculate,” Consunji said.
Semirara Mining posted a record net income of P8.45 billion in 2015, up 24 percent from 2014 despite a 13-percent drop in revenues to P24.68 billion due to low coal prices.
Consunji said “notwithstanding the difficulties in 2015 and the failure of the 2x 150 MW plants to contribute to the net earnings of our company,” Semirara Mining still achieved a 25-percent growth in profit to P8.45 billion from P6.86 billion in the previous year.
The output of the 300-MW power plant expansion secured 222 MW of supply contracts, or 84 percent of the rated capacity.
Consunji said he was optimistic on the outlook on coal demand, saying growth will be driven by the commissioning of new power plants and the expansion of cement plants.
Semirara Mining’s coal production reached 7.98 million tons in 2015, a slight decline from 8.08 million tons in 2014 due to the less temporary suspension of operations for nearly a month from July 17, 2015 after a mining accident.