Semirara puts cement project on hold, return to pre-pandemic levels unlikely this year

Semirara Mining and Power Corp. (SMPC) on Monday said it will revisit plans to venture into cement, as the company is unlikely to return to pre-pandemic levels this year.

During the company's virtual annual stockholders' meeting, president and chief operating officer Maria Cristina Gotianun said the cement plans will be put on hold in the meantime.

"Today the economics of the project has changed and we cannot tell until this COVID pandemic will be over. We will revisit when economic recovery from this pandemic will be certain. There are still a lot of economic uncertainties right now," she said.

Semirara generates its revenues from the production and sale of sub-bituminous coal. It has existing coal supply contracts with its own power subsidiaries, as well as other power plants and cement manufacturers.

This comes even as President Rodrigo Duterte last month issued EO 130, which lifted the mining ban imposed by his predecessor Benigno Simeon Aquino III in 2012. With this, new mineral production sharing agreements (MPSAs) may move forward.

"The lifting of the MPSA moratorium is a welcome development. In the meantime, we will revisit the feasibility study of the cement project given the pandemic, current market conditions, and tightening credit standards," Gotianun said.

"After all, it is the financial viability and other economic considerations which will dictate the progress of this project," she added.

SMPC has earmarked P4 billion for its capital expenditure this year, mainly to purchase equipment for its coal business and to sustain its maintenance programs.

"For 2021, we expect some improvements on our bottom line as coal markets recover from last year's historic low," said SMPC chairman and chief executive officer Isidro Consunji.

Consunji said the company will take advantage of the upswing by capitalizing on its COVID-19 resiliency and its adaptation strategy.

"However, given our operational headwinds and until our country reaches herd immunity, it is unlikely that we will return to our pre-pandemic level this year," he explained.

Shares in Semirara opened Monday at P12.40 apiece, up from last Friday's finish of P12.30.—AOL, GMA News