DOE slaps one-month suspension on Semirara

The Department of Energy imposed a one-month selective coal trading suspension and fines against integrated mining company Semirara Mining and Power Corp. for allegedly violating coal trading rules.

SMPC said in a disclosure to the stock exchange Tuesday that it received a DOE resolution dated Oct. 15, 2019 finding SMPC in violation of a department circular and imposing penalties on the matter.

“The corporation shall file its motion to the DOE seeking reconsideration of the said resolution. Moreover, considering that the said resolution is not yet final and executory, being subject to a motion for reconsideration, the company shall continue its coal trading activities to serve its existing customers,” SMPC said.

The department imposed a one-month suspension against SMPC for reportedly violating Section 7.2 of the circular due to coal trading or transaction with Gold Anchorage, an unaccredited coal trader “except deliveries of SMPC-owned power plants and other local power plants with existing coal supply agreements.”

It also slapped a P1.735-million fine against SMPC for violating Section 3 of the circular over alleged unabated and continuous coal trading despite suspension of its accreditation.

SMPC earlier disclosed that it supplied 4,768.73 metric tons of Semirara coal to Gold Anchorage on May 23 as trial shipment. The buyer issued assurances to SMPC that it had submitted and applied for a coal accreditation certificate with the DOE on April 5.

Under the rules, the DOE will either issue a certificate of accreditation or reject the application. 

On shipment date, the buyer was unable to submit the said accreditation as it was still pending with the DOE. SMPC said it then discontinued its supply and any trading with the said buyer.

The department also ordered SMPC to clarify claims of illegal coal trading operations at Pulupandan Port in Pulupandan, Negros Occidental  and to cease and desist  operations there until it received further notice from the regulator.

SMPC submitted its verified answer to the DOE on July 5 and sought the immediate lifting of the cease and desist order/suspension and the non-imposition of any administrative fine.

The department granted SMPC’s request to hold in abeyance the implementation of its June 4, 2019 cease and desist order and suspension of coal trader accreditation No. CT-208-12-0351(R), subject to certain conditions.

SMPC further submitted a rejoinder to the DOE to amend the conditions, which limited SMPC’s compliance to the work program approved by DOE. On August 5, DOE granted SMPC’s request and reconsidered the conditions earlier imposed in its July 12, 2019 letter.

The department said that after it had reviewed and evaluated SMPC’s request, the conditions in its July 12, 2019 letter were modified and the cease and desist order dated June 4, 2019 was held in abeyance pending final resolution of the case  and SMPC should faithfully comply with all its commitments and obligations under its coal accreditation.

SMPC owns the country’s biggest coal mining operations in Caluya, Antique. It remitted P3.57 billion in royalties to the DOE, representing the government’s share in the company’s mining revenues for 2018. 

The SMPC mine site directly employs more than 3,300 people, making it the single biggest employer in Semirara Island and Caluya. The mine site’s payroll in 2018 reached P1.48 billion.

Topics: Department of Energy , Semirara Mining and Power Corp. , Gold Anchorage
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