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DESPITE
heavy rains and challenging sea conditions in April,
coal mining and trading firm Sultan Mining and Energy
Development Corp. (SMEDC) reported Monday that
production and sales of its Surigao del Sur site
exceeded the first quarter’s production and sales
volume. “For April alone, the production volume of
22,000 metric tons [MT] was a 120-percent increase from
the previous month and is also greater than the first
quarter’s production levels,” Anthony Buyawe, SMEDC
chief finance officer, said.
He added
that the April output also exceeded the target for the
month, which was set at 20,000 MT owing to the ramping
up of production and the healthy growth in coal prices.
Buyawe
said the higher selling price it recorded was mainly due
to the increasing price of coal in the local and
international markets brought about by rising demand.
“SMEDC’s
management believes it is in a position to increase and
sustain profitability for the remaining eight months of
the year as it continues to increase monthly coal
production and convert these into sales,” he said.
Buyawe
said the firm’s higher production also comes partly due
to its strong partnership with local stakeholders which
allows SMEDC’s operations to run smoothly and
uninterrupted. It is also ramping up production in
Bislig to at least 300,000 MT this year from less than
20,000 MT to take advantage of rising prices and demand
in both the local and world markets.
The
firm’s Bislig coal mine is now in full commercial
production after Sultan Mining made fresh investments to
bring in more heavy equipment so it can simultaneously
develop and operate several open pits to dig up surface
coal.
SMEDC’s
production volume will steadily increase once additional
open pits come on stream with the help of expansion
efforts financed by fresh funds SMEDC will raise from
its planned P480-million public offering.
The
company expects to undertake a P480-million initial
public offering this year. The offering, which will sell
480 million new common shares at a par value of P1 per
share, is equivalent to 33.5 percent of outstanding
capital stock after the IPO.
Sultan
Mining has tapped Asian Alliance Investment Corp. as the
underwriter in the IPO geared only for domestic
investors. It said proceeds will be used to finance
capital expenditures related to additional exploration
of its coal areas, improvement and expansion of coal
extraction and processing facilities, bank obligations
and working capital requirements.
All
output from the mines are immediately sold to its
customers who have fitted out their power plants to use
local coal.
Local
coal is preferred over imported coal since buyers save
on shipping costs, import duties value added tax
payments. Buying coal locally also assures customers of
security of supply and insulates them from foreign
exchange fluctuations.
Oreste
Salon, SMEDC senior vice president for community
development and external affairs, also noted that they
have a strong social component that has been integrated
with the company’s long term plans to ensure that the
community’s needs are addressed effectively, while its
operations continue on with the support of its
stakeholders for the entire life of the mine. |
