SCC shares jumped 13.53 percent to P25.60 while DMCI rose 9.41 percent to P9.30 after management held a briefing to reassure investors.
Officials expressed confidence in retaining the mining rights despite the government’s reported decision to reject their extension request and open the contract to bidding.
Analysts’ view
“The management is confident in the SCC’s strong position to secure the coal operating contract, leveraging decades of experience in complex engineering projects and fully integrated operations on Semirara Island,” Shawn Atienza, AP Securities research analyst, said in a report following an analyst briefing held on Wednesday.
“With established infrastructure, specialized equipment, and deep technical expertise, SCC enjoys operational efficiencies and significant barriers to entry for competitors,” he added.
Even then, Aitenza rates SCC a “sell”.
“[E]xpect persistent volatility, driven by the sticky regulatory overhang introduced by the issue on hand,” he said.
Losses pared
The gains on Thursday partially reversed a sharp selloff earlier in the week triggered by uncertainty over the contract’s future.
Both SCC and DMCI are still down 22 percent and nearly 14 percent, respectively, compared to their prices before the issue came to light.
The Semirara concession is central to SCC’s integrated mine-mouth model, where its own coal directly fuels its power plants at lower cost.
In a stock exchange filing on Thursday, SCC said it “remains focused on the bidding process and continues to operate under its existing coal operating contract, which remains valid.”
It added that it has yet to receive another formal notice on next steps from the DOE.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
