Firm to set up coal plant in SouthCot

Flor dela Cruz, community development and external relations officer of the MG Mining and Energy Corp., said building a coal-fired power plant is high on the priority list of the company.

“It’s a major pipeline project. At the moment, I could not tell you how big the power plant would be.  It will depend on the coal supply in the area,” she said.

MG Mining is eyeing coal deposits in remote Barangay Ned in Lake Sebu town, said to be having coal deposits of 211 million metric tons within its contract area.

The firm has suspended its exploration activities but dela Cruz said these are expected to resume within the year.

Drilling equipment of its contractor malfunctioned about five months ago and the company is presently looking for another contractor, she said.

Initial talks have been conducted by the management with an unidentified Italian drilling firm but nothing has been reached so far, she added.

Unlike STEAG, which is scheduled for inauguration by President Gloria Arroyo today, MG Mining will source the coal requirements of its planned power plant from the locality.

STEAG, which reportedly will be fed with Indonesian coal, will supply 15% of Mindanao’s power requirement. Mindanao’s power supply has been experiencing weather-related supply problems with its hydroelectric power and rising fuel for its power barges.

Coal development projects in Lake Sebu town are also being pursued by Daguma Agro Minerals, Inc and its sister company Bonanza Energy Resources, Inc.

Thousands of village residents, backed by the local Catholic Church, are opposing their ventures fearing livelihood dislocation and environmental problems. The residents also alleged the firms have questionable documents in pursuing the project.

They claimed the coal mining companies failed to consult them properly and that the other signatories who were included in the list attached for the firms to pursue explorations, were dubious.

Rufino Bomasang, MG Mining senior consultant, recently disclosed they are planning to put up a coal-fired power plant in the area to address a projected electricity shortfall in Mindanao in 2010 onwards.

The construction of the power plant, he said, “depends on the supply and demand. But the island needs an additional 200 megawatts (MW) in 2010 and after due to a foreseen growth of industries,” he said.

While he declined to give cost details of the planned power plant, Bomasang said building a power plant entails more or less $1 million for every MW.

“A 300 MW power plant, for example, would be built at a tune of $300 million,” he added.

MG Mining was granted a coal operating contract by the Department of Energy to explore 7,000 hectares of land in Barangay Ned in 2004. The four-year exploration stage will cost the company at least P34 million.