Semirara Mining and Power Corp., the coal mining and power generation unit of DMCI Holdings Inc., will buy back shares from the market in a bid to stop the drop in stock prices after the government threatened to shut down its coal mine.
Semirara said in a disclosure to the stock exchange Tuesday its board approved a 60-day share buyback program involving 20 million shares starting Aug. 18.
The shares will be acquired based on prevailing market price. Semirara said the buy-back program aimed to enhance shareholder’s value and provide stockholders an opportunity to liquidate their investments.
“In consultation with PSE trading participants, management will determine the prices and the terms under which said shares will be purchased from time to time,” Semirara said.
Share price of Semirara hit a 52-week low of P95.50 per share last week, before rebounding to P108.10 Tuesday, following the announcement of a share repurchase program.
Semirara said it received a show cause letter from the Environment Department on Aug. 12, asking the company to explain and comply within seven days from receipt of the letter why its environmental compliance certificate should not be cancelled.
Semirara said the Environment Department, which conducted an inter-agency fact finding and field visit on May 23 to 27, claimed that the company allegedly did not comply with one of the conditions provided in its ECC relative to the Molave coal mine expansion project in Barangay Semirara, Caluya, Antique.
The letter noted that there was no proper stockpiling and disposal of the materials scooped out from the settling ponds and other solid waste impermanent, stabilized areas to avoid pollution of any water body and drainage systems and maintaining them in safe and non-polluting conditions.
Environment undersecretary Leo Jasareno said there were complaints against Semirara, including massive clearing affecting the island ecosystem, degradation of water quality and siltation of the marine environment.
“ The problem with Semirara is the open pit mine is now below sea level. How would DMCI [Holdings] rehabilitate the area?” Jasareno said.
Jasareno said Semirara Island covers an area of only 5,000 hectares while the pit occupies 40 hectares. He said a new expansion area would cover 600 hectares in the middle of the island.
“The problem is that Semirara produces low-grade cheap coal and we are very much dependent on coal. We don’t want to have brownouts but Semirara has to get its act together,” Lopez said.
The Environment Department earlier suspended the operations of DMCI’s two mining units Berong Nickel Corp. and Zambales Diversified Metals Corp.