SEMIRARA Mines and Power Corp. (SMPC) have voluntarily deferred mining activities in one of the four mining blocks at the Molave Mine in Antique.
In a statement to the stock exchange on Tuesday, the Consunji-led firm stated that the deferral was due to the build-up of water in the North Block 7 swamp caused by water leakage and was exacerbated by the heavy downpour caused by the recent typhoons that hit the region.
Semirara said that it has yet to decide when mining activities in the region can normalize.
“Deferring mining activities in North Block 7 would encourage our technical advisors and mining staff to enforce remedial steps to control the build-up of water,” the firm said in the statement.
Despite the deferral of mining activities, the mining company reported that its coal exports would not be affected for the year, adding that it had a coal inventory of 3.4 million metric tons (MT) as of December 1.
However, SMPC reported that, due to the anticipated delay in high calorific coal output, it might not be able to satisfy the quality requirements of a few customers.
Meanwhile the company said it also needs 1.7 million MT of its 2020 coal output target of 15 million MT.
“Ramping up development to meet the full-year goal is impossible at this stage given the North Block 7 water leakage,” said SMPC.
“With reduced demand, the projected financial effect is a rise of about P900 million in the cost of coal produced due to higher weighted average prices, which will adversely affect the profitability of 2020,” he said.