Coal Operating Contract No. 122 and 141 Isabela
The proposed Isabela Integrated Coal Mine-Mouth Power Plant Project is covered by COC 122. The project area is located some 290 kilometers north of Manila. It will utilize low rank indigenous coal to fuel an electric power plant employing “clean coal” technology. An Integrated Coal Mine and Power Plant business concept is ideal for the project instead of having a separate company for the mine and the plant.
An in-fill drilling program validated and confirmed the presence of 24.6 million metric tons of 'measured' reserves and 3.7 million metric tons of 'indicated' reserves, or a total in-situ lignite resource of 28.3 million metric tons. PNOC EC has completed the feasibility study of this project. Based on the study, the optimum plant size for Isabela deposit is 57.5MW. The lignite quantity required for full load operation is approximately 70 tons per hour or 1,700 tons per day.
Adjacent to the COC 122 area in the municipalities of Naguilian and Benito Soliven is COC 141 which has a total estimated potential coal resources of 42 million MT over three coal blocks. The COC, granted in July 2005, will allow PNOC EC 2 years to conduct exploration activities.
As of July 2006, PNOC EC management decided to put on hold the proposed Isabela Integrated Coal Mine-Mouth Power Plant Project due to significant opposition to the project from the local communities.
Coal Operating Contract No. 41 Malangas
PNOC EC operates COC 41 within the Malangas Coal Reservation in the province of Zamboanga Sibugay straddling portions of the municipalities of Malangas, Diplahan and Imelda. As holder of the COC 41, PNOC EC supervises mining operations of various small-scale miners and operates two satellite coal mines – the Shaft 3 Satellite Mine in Malangas and the Lumbog Satellite Mine in Imelda which commenced coal mining operations on February 27, 2005. The Company also oversees the operations of a large-scale coal mine in Imelda known as the Integrated Little Baguio (ILB) colliery which is operated by Taiwan Overseas Mining Company under a Joint Venture Agreement with PNOC EC. Development of two other large-scale mining projects, the Lalat and Lumbog coal projects, are also underway.
Total in-situ coal reserve in the entire COC area is estimated at 25 million MT.
The application for an Environmental Compliance Certificate (ECC) for the entire COC 41 area was initiated in the last quarter of 2006.
Coal Operating Contract No. 140 Surigao Del Sur
COC 140 was awarded by the DOE to PNOC EC on July 5, 2005, allowing PNOC EC 2 years to conduct exploration activities in the area. The project area covers 3 coal blocks, totaling 3,000 hectares. The area is located in the Municipality of Tago, Surigao del Sur, has an estimated potential coal resources of 42 million MT. The area lies between the Lanuza Bay and Liangga Bay of Surigao del Sur, Eastern Mindanao, Philippines.
In the early part of 2006, PNOC EC in cooperation with the National Commission on Indigenous People CARAGA Regional Office conducted field visits and preliminary assessments for the conduct of the Free and Prior Informed Consent activities; however, due to insurgent attacks in the neighboring/adjacent municipalities and heightened military alert in the area, the project was placed under moratorium on October 12, 2006 with the approval of the DOE.
Indonesia Coal Projects
As part of its mandate to provide a stable supply of coal for domestic market, PNOC EC has established alliances with coal mines in Indonesia.
To date, PNOC EC has set its eyes on Ampah Coal while still reviewing other potential partners. PNOC EC is currently conducting due diligence on the viability of entering into a JVA with PAMT. This will serve as the Company’s test case in its international debut in mine development and production. PNOC is currently reviewing available options for doing coal business in Indonesia, such as entering into a Joint Venture partnership and forming an Indonesia-registered company.