Shares of the Consunji family-led Semirara Mining and Power Corp. (SMPC) fell Monday as investors weighed risks threatening its core business.
Firm underscores decades of expertise
“Management believes that SMPC’s decades of experience in managing complex engineering projects, coupled with its established operations, technical expertise, and extensive equipment fleet developed through its long-standing operations in Semirara Island, provide a strong competitive advantage, which we have communicated to the DOE [Department of Energy],” the company said.
“We clarify that the decision on the coal operating contract rests with the DOE, and we have not received any formal notice of a final decision on our request for term adjustment.”
The statement came after reports that the Department of Justice ruled the company’s 50-year coal operating contract cannot be extended beyond July 2027, removing automatic continuation rights over Semirara Island.
Key operating asset
Energy Secretary Sharon Garin said the contract would instead be opened to competitive bidding within the year.
The potential loss of Semirara, which supplies most of SMPC’s coal and anchors its integrated mine-mouth power business, also pulled parent DMCI Holdings Inc. shares lower.
The Semirara coal operating contract dates back to 1977, when it was awarded to the company’s predecessor under Presidential Decree No. 972. The contract was last extended by the Department of Energy in 2008, moving its expiry from 2012 to July 2027.
Brutal Monday sell-off
Shawn Atienza, research analyst at AP Securities, expects Semirara Mining and Power Corp. (SCC) to consolidate around current levels until investors gain clearer visibility on contract risk.
Downside risk will also depend on market sentiment indicators, he added.
“I can see SCC’s price staying in the current level (P26.50 - P26.70). Further decline will heavily depend on how heavy the weakness will be on the close,” Atienza said.
SCC shares closed near the session low at P26.10 (-21.4 percent) while DMCI slumped 14.7 percent to P9.20 each while the broader Philippine Stock Exchange index slipped 0.25 percent.
—Edited by Miguel R. Camus
