What is your Coal type?
Sub-bituminuous  


What are the specs of your Coal?
Proximate Analysis (Air Dried, ASTM D3172)
Ash, %      - ---------------------------------------------------: 8 - 17
Fixed Carbon, %     -------------------------------------------: 34 - 38
Volatile Combustible Matter, %    ----------------------------: 36 - 40
Residual Moisture, %  (Air Dried)   ---------------------------: 14 - 16
Total Sulfur, % (Air Dried, ASTM D2015)     ------------------: 0.4 - 1.0
Gross Heating Value, BTU/lb. (Air Dried, ASTM D2015)    ---: 8,700 - 10,200
Hardgrove Grindability Index             ------------------------: 40 – 50
Size, mm     ----------------------------------------------------: 50
Fines, 0-2 mm    -----------------------------------------------: <20%

Ash Fusion Temperature, ºC
Initial Deformation Temp., ºC ---------------------------------: 1,120 – 1,150
Hemispherical Temp., ºC   -------------------------------------: 1,150 – 1,250
Flow Temperature, ºC     ---------------------------------------: 1,250 – 1,500


What is the difference between ROM Coal and TPC Coal?
ROM or Run of Mine Coal is the raw coal that is mined out of the mine pit.  About 80% is Clean Coal and the remaining 20% is Washable Coal.  Washable Coal is washed in the Coal Washing Plant to get rid of contaminants, with a 60% average recovery.  The combination of Washed Coal and Clean Coal becomes the Total Product Coal or TPC.


What is meant by strip ratio?
It indicates the ratio between waste moved in cubic meters for every metric ton of coal produced, such that a 10:1 strip ratio means 10 cubic meters of waste materials are hauled to produce 1 ton of coal.


What kind of mine are you operating?
We are operating an open-cut coal mine.  Not only are we the biggest producer of coal in the country, but we are also the only open pit mine in the Philippines.


What are the other resources in the island of Semirara? Do you have the permit to mine them?
Apart from coal, Semirara island has about 824 thousand tons of silica, 1.2 billion tons of limestone, and 2.9 million tons of clay.  Yes, we have the exclusive right to explore and mine these reserves.  Our present permit grants the company the exclusive right to explore them.  The company has the option to convert the permit into a Mineral Production Sharing Agreement (MPSA).  The MPSA grants the company the right to mine these other resources.

What rights does the Coal Operating Contract grant Semirara?
The contract gives the company the exclusive right to conduct exploration, development, and coal-mining operations in Semirara Island until the year July 2012.  On 13 May 2008, the Department of Energy granted the company’s request for a fifteen (15)-year term extension of its Coal Operating Contract.  The company’s right to mine in the island is extended up to 14 July 2027.


What happens after your contract has expired?
DOE expressed in its formal notice to us on 14 July 1995 that if necessary, an extension or a new operating contract may be granted upon filing of an application for extension a year before the expiration of contract.  We of course intend to apply for an extension and we do not foresee any problem getting DOE’s approval.


What is the total coal reserves of Semirara Island?
According to the independent technical review done by Minarco Asia Pacific Pty Ltd. in November 2004, proven recoverable reserves in the Panian Pit, where we are currently mining our coal from, is 52 million metric tons (MTs), while there are 210 million tons of in-situ coal.  There are another 120 million MTs of in-situ coal inside Himalian Mine, the mine which is still unopened.  “In-situ” means that additional confirmatory drillings are required to reclassify our coal reserves to “proven and recoverable.”

In 2006 Australian consultants supervised confirmatory drilling activities in the Panian Pit in accordance with the Joint Ore Reserve Committee (JORC) standards of Australia (an internationally recognized body for establishing mineable reserves).  As at 31 December 2006, 62 million MTs of coal were classified as measured and confirmed, while additional 24.5 million MTs and 6 million MTs were categorized as indicated and inferred, respectively.


What is your annual mining capacity?  What are your expansion plans?
Currently, our annual capacity is 4 to 4.5 million MTs ROM coal.  We are planning to expand by 500 thousand MTs/year until we reach 5 million MT-capacity, which is the maximum limit of present infrastructure capacity at the Panian Mine.


When are you going to open Himalian mine?
There are two events that could drive the opening of Himalian mine:  when demand for local coal exceeds 5 million MTs per year or when the demand for cement goes up to justify putting up a cement plant.  The ideal set-up in opening Himalian mine is to put up a cement plant right beside the pit since the overburden of Himalian is mainly limestone and silica, two major components of cement.  
What is meant by DOE share?  How is it computed?
DOE share is the royalty we pay to the Department of Energy, as provided for by the Coal Operating Contract granted to the company by the government.  The formula in computing for the DOE share is as follows:

            Revenues                
        -  Allowable deductions (up to 90% of revenues)                  
            Income subject to DOE share                
        x          30%
           DOE share

Minimum DOE share is 3% of Coal Revenues.  

What are the allowable deductions for the computation of DOE share?
All expenses, except DOE share and income tax are allowable deductions


What happens if the allowable deductions for the period exceed 90% of revenues?
The excess will become part of the accumulated recoverable cost.  When the company is operating more efficiently and expenses are less than 90% of revenues, this could be used to maximize the allowable deductions and minimize royalty payments.  Thus:

            Revenues                
        -  Allowable deductions + accumulated recoverable expense (up to 90% of revenues)                  
            Income subject to DOE share                
        x            30%
            DOE share


What taxes do your company pay?
By virtue of Presidential Decree 972, otherwise known as the Coal Development Act, we are exempted from paying all taxes, except income tax.   


Who are your buyers?
Local buyers are composed of power plants, cement plants and other industrial plants.  We have also started to export to China and India starting February 2007 through three major coal traders.


How is pricing to your major client, NPC set?
Pricing is clearly defined under our Coal Supply Agreement with NPC for their Calaca Power Plants.  We are at “Import Parity Pricing,” with prices set quarterly.  This means that our price for a quarter depends on the average landed cost of imported coal NPC buys for its Calaca Plants during the period, levelized with the heating value (BTU/lb) of our coal.  On 16 October 2007, NPC and the Company executed Amendment #3 of the Coal Supply Agreement which provides that import parity pricing will now be based on all Indonesian Coal shipments of NPC.


What happens if NPC does not import coal during a particular quarter?
The price of the quarter when NPC last imported stands.


When will your Coal Supply Agreement with NPC expire?
14 July 2027


Who are your competitors?
Mainly suppliers of imported coal.  More than 90% of total coal production in the country is produced by our company.


What is your ownership profile?
As of 31 Dec 2008
DMCI HI – 56.46%
PCD (NF) – 31.58%
PCD (F) – 5.66%
NDC – 4.09%
Dacon Corp. - 1.89%
Privatization & Mgt. Office – 0.28%
Others – 0.04%