SEMIRARA MINING and Power Corp. (SMPC) has voluntarily deferred mining operations in one of the four mining blocks in its Molave Mine in Antique.
In a disclosure to the stock exchange on Tuesday, the Consunji-led firm said the deferral is due to water buildup in the sump of North Block 7 caused by water seepages and was worsened by the heavy downpour brought by recent typhoons that hit the country.
Semirara said it has yet to determine when mining operations in the area will normalize.
“Deferring mining operations in North Block 7 will allow our technical consultants and mining personnel to implement remedial measures to manage the water buildup,” the company said in the statement.
Despite the deferral of mining operations, the mining firm said its coal shipments for the year will not be affected, adding that it has a coal inventory at 3.4 million metric tons (MT) as of Dec. 1.
However, SMPC said it might be unable to meet the coal quality requirements of a few customers due to the expected delay in high calorific coal production.
Meanwhile, the company said it still lacks 1.7 million MT from its 2020 coal production target of 15 million MT.
“Ramping up production to meet the full-year target is unlikely at this point given the water seepages at North Block 7,” SMPC said.
“With the lower production, estimated financial impact is an increase of around P900 million in cost of coal sold owing to higher weighted average cost, which will negatively impact 2020 profitability,” it added.
Shares of SMPC at the stock exchange fell 1.94% or 24 centavos to close at P12.16 per piece on Tuesday. — Revin Mikhael D. Ochave