Semirara: Is coal still the goal?
Semirara Mining and Power Company (SMPC) operates the largest coal mine in the Philippines. Since DMCI Holdings took over operations in 1979, it has transformed the moribund coal mine into a profitable enterprise. It is known for its sound environmental practices, responsible mining, and contributions to employment, community development, and tax revenues. Revenues fluctuate with coal and electricity prices, as well as domestic sales and coal exports, primarily to China. With stricter environmental standards, management foresees potential threats to its coal and power businesses from shifts in power supply to low-carbon energy resources.
The case comes at a time when management is formulating its strategic responses to these dilemmas: a) Should it lead the energy transition by investing in renewables? b) Can it wait and see what other energy players in Asia do? c) Can it ride the coal wave and diversify into other industries?
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Description
Semirara Mining and Power Company (SMPC) operates the largest coal mine in the Philippines. Since DMCI Holdings took over operations in 1979, it has transformed the moribund coal mine into a profitable enterprise. It is known for its sound environmental practices, responsible mining, and contributions to employment, community development, and tax revenues. Revenues fluctuate with coal and electricity prices, as well as domestic sales and coal exports, primarily to China. With stricter environmental standards, management foresees potential threats to its coal and power businesses from shifts in power supply to low-carbon energy resources.
The case comes at a time when management is formulating its strategic responses to these dilemmas: a) Should it lead the energy transition by investing in renewables? b) Can it wait and see what other energy players in Asia do? c) Can it ride the coal wave and diversify into other industries?
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