Monday, July 31, 2017

The Semirara-San Jose energy connection

The island and the company

Semirara, a 5,118-hectare island is within the jurisdiction of Municipality of Caluya in Antique province, lies between mainland Mindoro and Panay. From San Jose (Occidental Mindoro), it would take about 4-5 hours by ferry boat.

The Semirara Mining and Power Corporation is the biggest producer of coal in the Philippines. Apart from coal, the once marine life-rich island has other mineral reserves that the company has the right to explore and mine. The whole Semirara island has about 824 thousand tons of silica, 1.2 billion tons of limestone, and 2.9 million tons of clay. The Municipality of Caluya’s poverty incidence in 2013 is pegged at 47% but on that same year, the mining company, in stark contrast, posted a P12.6 billion revenue for coal production.

With regards to the coal mining, the Department of Energy (DOE) granted the extension of the company’s Coal Operating Contract until July 14, 2027. The Semirara Mining and Power Corporation or simply Semirara, is part of the DMCI Holdings, Inc. Aside from coal mining, the group is operating power, property and nickel mining businesses. DMCI Holdings, Inc. has allotted P14.5 billion to Semirara for capital spending onwards. At present, the coal company is steadily increasing its capacity to a maximum of 16 million metric tons of coal to cope up with the approving prices and demand of the local market. This 2017 is also planned to be a year of updating the company’s operations and maintenance programs to improve efficiencies of its power plants. Therefore, there goes the proposed coal-fired power plant in San Jose, Occidental Mindoro.

Its reserve and power capacity

In November 2004, an independent technical review conducted by Minarco Asia Pty Ltd. It shows that in the Panian Pit is estimated to have 52 million MT of already available coal while there are still 210 MTs of in-situ (requiring an additional confirmatory drillings to show that the reserve is proven and recoverable) in the pit. Inside another pit, Himalian Pit, there is a potential 52 million MTs of in-situ coal inside it.

Two years later, in December 2006, consultants from Australia supervised the confirmatory drilling in Panian Pit and as per standards of Australia’s Joint Ore Reserve Committee or JORC, 62 million MTs and 6 million MTs of coal were categorized. The Panian Pit is the place where several workers died due to a landslide incident in July 2015.

On July 11, 1977, the Energy Development Board, precursor of the Department of Energy (DOE), awarded a 25- year Coal Operating Contract (COC) to a group of three private companies, incorporated as Semirara Coal Corporation or SCC and in 2004 it changed its name to Semirara Mining Corporation or SMA and later became the Semirara Mining and Power Corporation. The DOE is most likely to renew the coal extraction contract every time it expires, or at least that was the expectation of the mining firm.

Semirara is the only power producer in the Philippines that owns and mines its own fuel source which is coal. According to them, their whole operation can produce 8 million MTs of coal per annum. Reportedly, the expansion of the coal mining operations, which involves an estimated 10,000-hectare area, is already 5 to 7 KMs off the shore. The company boasted that it has an installed generating capacity of 600MW, with an additional 1,200MW in the pipeline. Occidental Mindoro to date has only a peak-hour demand of 19 MW of electricity.

Meeting the SP and the EC

The Provincial Board of Occidental Mindoro in its Facebook account reported that last June 16, 2017,  the so-called “unified leaders” (the Sato-Mendiola local political faction) had a meeting with some top brasses of the DMCI Power Corporation and the Semirara Mining and Power Corporation regarding the conglomerate’s proposed coal-fired power plant. Further, the provincial board stated that because of the 12.17% annual power growth demand of the province, the current power suppliers can no longer be enough for such a huge demand in the future.

The social media post which was quoted here in verbatim further states, “Three options for this proposal is presented. Option 1, to be constructed in mainland San Jose, Option 2 in Ilin Island while Option 3 is the Semirara Mine Mouth. Our leaders are taking into consideration the environmental impact and the like for this project. On the other hand, the geothermal plant being eyed in Naujan is not feasible and so the government is looking for other options to address the province’ current power situation.”  With the fragile island ecosystem of the island, the provincial board is bound to weighing matters in its legislative scales.

The members of the Sangguniang Panlalawigan (SP) are aimed at increasing 20 MW diesel power plant of the Occidental Mindoro Consolidated Power Corporation (OMCPC) in the town of San Jose.

Weeks after the SP meeting top political leaders, according to sources, went to Semirara for an ocular inspection and reportedly fetched by the company’s private plane from San Jose to Semirara. No result was disclosed to public as of post time regarding the visit.

On July 8, 2017 on the other hand, same representatives from the DMCI Power Corporation oriented the Occidental Mindoro Electric Cooperative (OMECO) Board about their company and later expressed their willingness and intent to participate in the Competitive Selection Process (CSP) in due time. The electric cooperative (EC) just listened to them and no assurances or whatever was given by its Board. OMECO reportedly eyeing for another independent power producer to join the bidding. This IPP is projected to establish a diesel-fired power plant in Mamburao and the project is anchored on the EC’s energy development plant for the province.

But prior to the two presentations in two different bodies, Mindoro’s electricity requirement is being supplied by the National Power Corp. (Napocor) through its missionary electrification and DMCI Power Corporation which is an affiliate of Semirara. DMCI Power Corporation provided power rentals for Napocor for some time until the OMCPC came in.

By 2018, the 25-year Energy Conversion Agreement (ECA) entered into by OMECO and Island Power Corp. (IPC) will finally expire, finally allowing more investors to invest in Occidental Mindoro. The Semirara Mining and Power Corporation is one of the prospects.

Coal : Dirty and mean

Coal is considered by the environmentalists as the dirtiest fuel on earth. Many countries in the world considered coal as fuel for global warming that is why many of the coal mines are banned in many parts of the globe. Philippines is host to 10 coal-fired plants and majority of which are located in Mindanao.

It is a nation-wide call of environmental groups to continuously campaign in convincing the government to shut down all or most of the plants and replace them with facilities that tap renewable energy. They insist “green energy” like solar, geothermal and wind over “dirty energy” like coal. According to Owen Migraso, executive director of Center for Environmental Concers (CEC), “The government should not pursue coal to generate electricity for industrialization. Technology is available in developed countries. There are technology transfer laws. The important thing to consider is how renewable energy will benefit the people.” According to an EC insider, solar is the only feasible renewable energy in Occidental Mindoro. 

Passive populace

Though the people of Occidental Mindoro is yet to be informed on the details of the project, vigilance is deemed by some local environmentalists, both in the government and the public sector, as a future course of action.

Occidental Mindoro in general, San Jose in particular, is not known to such active and massive pro-environmental issue-projection and mass actions since time in memoriam. It is a reality that any aggressive anti-environment project can easily exploit. 

(Photo: Business World)
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