GENERAL SANTOS CITY -- Coal miner Sultan Energy Philippines Corp. has commenced the test production phase of the Daguma coal field in Lake Sebu, South Cotabato for its looming commercial operation, a senior company official confirmed Thursday.

Orestes T. Salon, senior vice president of parent Sultan Mining and Energy Development Corp., said several tons of coal resources extracted from sitio Tafal in Barangay Ned have been delivered to potential markets in this city.

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"We're still working on to get the endorsement of the barangay unit for us to extract 68,000 tons of coal for our initial commercial production quota," Salon said.

"In line with the commercial production stage, we have delivered truck loads of coal to the tuna canneries in the city, our potential customers, for testing," he added.

Sources said the firm's test production phase started last December but for how long it will last, Salon declined to give an answer "since that is the domain of the technical people."

The company is expected to employ open pit method in extracting the shallow coal reserves.

Sultan Energy holds the coal operating contract for the Daguma coal field covering 7,000 hectares. The contract was awarded by the Department of Energy.

The test mine production site straddles 13 hectares but focus has been centered in seven hectares of coal reserves that have been uninhabited, Salon said.

Barangay Ned is a government-designated relocation site, which are among the reasons why the company is facing stiff social opposition from the communities.

Yelen Yata, president of the local Hublag Kontra Mina (Movement Against Mining), a local Catholic Church-backed grassroots organization, recently urged the company to stop its mining activity.

"This coal project is going to dislocate us should they embarked on full commercial production,” Ms. Yata said in a separate interview, at the same time citing the project’s environmental impact.

But Salon said the company will abide with the necessary processes to ensure the project won't impact much on the environment and the people, including tribal members living in the area.

"We will respect the rights of the people. We are still going through the processes [required by the law]," the mining executive said.

Last year, MG Mining and Energy Corp., a sister company of Sultan Energy, forged an P8 billion, 10-year supply deal with Kepco SPC Power Corp for its 200-megawatt power plant in Naga, Cebu.

Officials of parent Sultan Mining have said the product of MG Mining, which operates a coal mine in Bislig, Surigao del Sur, would initially supply the requirement of Kepco, which is between 3.2 million to 6.4 million metric tons of resources in a 10 year span.

Sultan Mining reportedly plans to offer reserves from the Daguma coal mine to Kepco, subject for approval, to meet its future demand.

Studies showed that Daguma, which was expected to go into commercial stream within the year, contains coal resources of 426 million MT.

Initial exploration and drilling has blocked 55 million metric tons of minable reserves in 526 hectares of the 7,000-hectare Daguma property.