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UPDATE 1-Philippine coal importers say can buy coal elsewhere on Indonesian halt

Published 21/04/2016, 08:22 pm
© Reuters.  UPDATE 1-Philippine coal importers say can buy coal elsewhere on Indonesian halt
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(Adds comments from more importers, details)

By Enrico Dela Cruz and Manolo Serapio Jr

MANILA, April 21 (Reuters) - Philippine coal users can import coal from other countries including Australia, South Africa and Russia and source more locally if shipments from top supplier Indonesia are halted, company officials said on Thursday.

Two Indonesian coal ports have blocked ships from leaving to the Philippines due to safety concerns following a spate of ship hijackings in the southern Philippines. The Indonesian Coal Mining Association expects more areas to suspend coal shipments to the Philippines. far we are not aware of any stopped shipments" from Indonesia, Luis Miguel Aboitiz, chief operating officer of Aboitiz Power Corp AP.PS . "We can get coal from Australia or South Africa but at higher cost," he told Reuters.

The Philippines imports 15 million tonnes of coal a year mainly for power plants, 70 percent of which is sourced from Indonesia.

The Philippines' Department of Energy is seeking to meet with coal importers to discuss supply options, agency officials said. The energy department is also drafting a letter to the Department of National Defense seeking military assistance for vessels carrying imported coal, they said.

South Luzon Thermal Corp, which imports from Indonesia about a quarter of the 1 million tonnes of coal that it uses annually, can buy more locally, said company president Virgilio Francisco.

"If necessary, we can draw from Australia and Russia," Francisco said.

Semirara Mining and Power Corp SCC.PS is the Philippines' biggest coal miner but it exports more than half of its output because some domestic plants cannot use the lower-grade coal that it produces. That limits its ability to boost local coal supply, importers said.

Output from Semirara reached 7.98 million tonnes in 2015.

However, Global Business Power Corp, a utility that serves the central Philippine islands, can double its purchases from Semirara, which currently stand at around 800,000 tonnes, said fuel manager Jose Eduardo Co.

Global Business Power buys around 500,000-600,000 tonnes of Indonesian coal, mainly from Adaro Energy ADRO.JK , and a similar volume from Russia, said Co. Increasing the volumes from Russia is also an option, he said.

Shipping permits to the Philippines were no longer being approved at the ports of Banjarmasin and Tarakan in Indonesia's Kalimantan, an area home to some of the biggest coal mines operated by Adaro and Bumi Resources BUMI.JK . fears piracy on the route along its maritime border with the Philippines could hit levels seen in Somalia unless security is tightened, its chief security minister said on Thursday.

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