Coal Asia Accelerates Commercial Operations
MANILA, Philippines - Listed Coal Asia Holdings Inc. will start commercial operations of a coal mine in Mindanao this year, months ahead of the original schedule.
The holder of the mining rights for the country's second largest coal project in terms of resources and reserves said commercial production would start this October instead of the Jan. 2014 target date.
"The expected start of commercial production for Davao Oriental has been moved up as a result of the completion of drilling and exploration activities a few months ahead of schedule," Coal Asia said in a statement.
"Coal Asia wants to bring the local industry into a sustainable level and developments like these not only keep us on track, but also further accelerate our goal in achieving that," said Coal Asia chairman Harald Tomintz.
A Philippine Mineral Reporting Code Standard Geological Report completed in April identified the Davao Oriental and Zamboanga Sibugay coal mines to contain a total potential coal resource of 120 million metric tons (MT).
Coal Asia, through its subsidiary Titan Mining & Energy Corp. (TMEC), projects to produce 600,000 MT of high grade coal per year.
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The reevaluation of Coal Asia's reserves and resources is scheduled for completion in the first quarter this year.
Coal Asia earlier announced a net income of P500 million with the start of the Davao coal mine operations in 2014.
Coal Asia said it is also testing two previously undiscovered coal deposit areas within its coal operating contract in Davao Oriental.
Part of the P726.87 million net proceeds from the coal miner's initial public offering last year would also be used to bring the Zamboanga Sibugay mine to commercial operations in 2015.
The Department of Energy is pursuing energy independence and sustainability through the development of indigenous energy resources like coal, petroleum and natural gas.
To date, the Philippines is producing only 7.61 million MT of coal annually, way below the demand of around 14 million MT, data from the Philippine Chamber of Coal Mines showed.
There are only two major coal producers in the country: Semirara Mining Corp. in Antique and the Philippine National Oil Co.-Exploration Corp. in Zamboanga Sibugay.
In 2011, the Philippines imported roughly 10 million MT of coal from Indonesia and Vietnam.
Meanwhile, Coal Asia said its majority shareholders agreed to a one-year lock-up period instead of the six months required by the local bourse.
This means majority shareholders cannot sell their shares in Coal Asia.
"The developments in both exploration and production have only skimmed the surface of Coal Asia's true value, which is why the majority shareholders have agreed to a longer lock-up period," Tomintz said.
Coal Asia has already secured offtake contracts for coal from domestic and international customers and is looking to export to India, Japan, Taiwan, Hong Kong and Vietnam.
Last year, Coal Asia's affiliate Colossal Petroleum Corp. signed a memorandum of agreement to buy into VenturOil, which owns Service Contract 6 covering the offshore oil and gas exploration rights to Northwest Palawan encompassing the Cadlao and Bonita oil fields.