BARMM Awards First Coal Exploration Contract

COTABATO CITY – The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) took a significant step in its energy development as the Department of Energy (DOE) and the Ministry of Environment, Natural Resources, and Energy (MENRE) awarded the region’s first Coal Operating Contract (COC) to Filipinas Systems, Inc. (FSI).

The contract covers coal exploration in the municipalities of Kapai and Tagoloan II, Lanao del Sur. The awarding ceremony took place on October 24, 2024, at the Bangsamoro Government Center, witnessed by BARMM Chief Minister Ahod Ebrahim, Energy Secretary Raphael P.M. Lotilla, and MENRE Minister Akmad A. Brahim.

The award marks a milestone for BARMM’s energy self-sufficiency and economic growth. The COC allows FSI to conduct coal exploration in the region, which aligns with the broader goal of diversifying the Philippines’ energy sources. Currently, the country imports more than 80 percent of its coal, with 98 percent coming from Indonesia.

Secretary Lotilla underscored the importance of the partnership between the national and Bangsamoro governments, calling the awarding of the COC a “landmark moment.”

“This partnership will not only foster energy independence for the Bangsamoro region but also create pathways for sustainable economic growth and development,” Lotilla said.

The development of fossil fuels like petroleum, gas, and coal in the BARMM is jointly managed by the National Government and BARMM, while renewable energy sources fall primarily under the region’s jurisdiction. Lotilla assured that the DOE will assist BARMM in tapping into renewable energy opportunities, including solar, wind, and geothermal sources.

Under the two-year exploration work program, FSI has committed to investing PHP 19 million. The company has also pledged annual scholarships worth PHP 150,000 for locals from the contract area if the project progresses to the development stage.

Additionally, FSI will provide a signature bonus of PHP 250,000 and PHP 250,000 in development assistance, alongside PHP 75,000 annually for training during exploration, which will increase to PHP 200,000 in the development phase.

For BARMM, this agreement signifies greater autonomy over its energy resources, as well as potential economic benefits through job creation and infrastructure development. MENRE Minister Akmad A. Brahim highlighted the long-term impact of this collaboration on the region’s energy landscape.

The awarding of this contract follows the co-signing of the Intergovernmental Energy Board (IEB) Circular in July 2023, which established a framework for collaboration between the national and Bangsamoro governments on energy resource management. This framework is seen as a turning point for energy governance in the region.