Foreign firm explores Danao coal prospects

A FOREIGN mining firm is preparing to extract coal in Danao City’s mountains to be supplied to the Cebu Energy Development Corp. (CEDC) in Toledo City and the Korean Electric Power Corp. (Kepco) in Naga City.

Danao City Mayor Ramon “Nito” Durano III said that SKI Energy Resources Inc. (SERI) can create jobs and add to local revenues through its coal mining operations.

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Seri Mining, he added, is using British technology that’s been tested in Africa as it prepares for large-scale coal production in the northern city.

SKI began securing coal concessions in 2005 and now holds 13,000 hectares, including the Danao site, under coal operating contracts granted by the Department of Energy, according to a disclosure filed with the Stock Exchange of Thailand.

Joint venture

“Coal remains a primary fuel for power generation, particularly in Asia,” the disclosure, dated Aug. 14, 2009, said.

“Cebu, the site of SERI’s initial mining operations, has local coal demand for power generation, which is presently being met largely by imports,” it added.

As part of a joint venture, SKI will work with the Merton Group in studying the logistics of transporting coal from Cebu to potential markets abroad.

Durano said that SERI is scheduled to supply coal to customers by September, which will be delivered to CEDC and Kepco from a private port in Danao City.

Kepco and CEDC both have their own ports.

CEDC’s first of three 80-megawatt coal-fired power plants began operating last March.

The second plant will start operating next month, while the third plant is scheduled to be completed in December this year.

Supply

Kepco, which entered into a joint venture agreement with SPC Power Corp., has two 100-megawatt power plants that are projected to start operations next year.

In an earlier interview, Director Antonio Labios of the Department of Energy (DOE) Visayas, said that with the total 446 mw of power that both CEDC and Kepco will generate,
the power supply deficiency in the Cebu-Panay-Negros (CNP) grid will be solved.

But environmentalist-lawyers in the Global Legal Action against Climate Change have criticized Kepco and CEDC for using coal in power generation.

CEDC president Jesus Alcordo has previously explained they use clean coal technology.