Sultan Mining eyeing three foreign supply contracts

MANILA, Philippines- Coal miner Sultan Mining and Energy Development Corp. is optimistic that it will land contracts with three foreign firms looking for additional supply. Company officers said these prospective contracts would firm up Sultan's bottom line especially amid climbing oil and coal prices worldwide. At the sidelines of their investors briefing late Wednesday, Romina R. Lu, Sultan Mining director, treasurer and chief operating officer told reporters that a Japanese, Chinese and “one major multinational coal trader" is “seriously considering" importing from the company. Lu said the deals may be finalized within the next 30 days. Sultan Mining is planning to sell its shares to the public next week. Lu's announcement is good news for the company and prospective investors, since this ensures that Sultan Mining will have steady profit from its operations, especially as coal's popularity as a source of energy increases amid oil price hikes. Lu said these companies may need at least 300,000 tons of coal, more than the current production level of Sultan Mining. Apart from the three firms, Sultan Mining vice chairman Rufino Bomasang said that the firm is also looking at selling coal to China and India. Sultan Mining currently has exclusive rights to over 10,700 hectares of coal bearing properties, with 62 million metric tons (MT) of coal reserves and resources in its mine tenement in Bislig, Surigao del Sur. The company also told prospective investors that advanced exploration suggest that its Aragao, Cebu property has 2 million MT of high grade coal. Sultan Mining also has a minority interest in Sultan Energy Phils. Corp., the company that mines the Daguma deposit. The company said the Daguma deposit is “potentially the largest open pit coal resource in the country." The company is currently supplying PNOC-Energy Development Corp., General Tuna, Philbest Canning Corp., cement firms Lafarge and Holcim. It is also negotiating supply agreement with Toledo Power Corp and Glencore Far East (Phil.) AG. Sultan Mining said that proceeds of its P480-million initial public offering will be used to ramp up its production by 50 to 60 percent. The Bislig mine currently produces 1,000 metric tons of coal daily. The firm is earmarking P200 million for capital expenditures and P160 million for working capital which would go to equipment acquisition, additional equipment lease arrangements, the expansion and improvement of its Argao mine. About P78 million would go to debt retirement. - GMANews.TV