PH may lose Indonesian coal

by Alena Mae S. Flores – June 26, 2016 at 11:55 pm

from Manila Standard Today

Coal power plants in the Philippines risk losing their supply from Indonesia in the wake of the recent kidnapping of Indonesian nationals in Philippine waters.

Indonesia has issued a moratorium on coal exports until the Philippines guarantees the security of its shipping vessels and crew.

“As of now, DoE [Department of Energy] is… looking at coal inventories of importers and the power plants. And also their replenishment schedules if this is being followed,” Energy Secretary Zenaida Monsada told reporters over the weekend.

Coal power plants accounted for 51 percent of the country’s generation mix in May this year.

Most of these power plants rely on Indonesian coal, which is cheaper than other sources because of the proximity to the Philippines.

The Philippines imported 14,975,355 metric tons of coal from Indonesia in 2014, accounting for 98.6 percent of the total imports of 15,182,165 MT during the year. Other imports come from Vietnam and Russia.

Monsada said the Philippines could not afford to lose coal supply from Indonesia.

“At the moment, no. Because our dependence on Indonesia for our coal power plants is huge,” the energy chief said.

Indonesia in April also temporarily suspended some coal exports to the Philippines due to security concerns.

“We’re still verifying if it [export ban] is official,” Monsada said, adding the department was coordinating with the Philippine Coast Guard and Foreign Affairs Department.

The country’s coal plants have varying level of inventories, from 30 days to 60 days depending on their storage capacity.

Coal plant operators, however, said their suppliers could obtain the fuel from Australia if Indonesian coal was not available.

Semirara Mining Corp., the country’s biggest coal mining firm, can also supply to the power plants, although some power plants could not use the local source.

“We can always shift exportable coal to local. Some power plants cannot use Semirara coal or at reduced capacity. Currently, we can channel all production of one million tons a month locally,” Semirara Mining chairman Isidro Consunji said when asked for comment.

Alsons Consolidated Resources Inc. vice president for business development Joseph Nocos, meanwhile, said its contracts stipulated alternative suppliers.

Aboitiz Power Corp. executive vice president Luis Miguel Aboitiz said the company to date was still receiving Indonesian coal.