Meralco eyes Semirara coal contract as DOE opens bidding

Manila Electric Co. (Meralco) Chairman and CEO Manuel V. Pangilinan has expressed interest in the coal operating contract on Semirara Island in Antique, describing it as being “on [our] radar” as the government moves to auction the asset.

“Meralco, or specifically, Meralco PowerGen Corp. will take a look at it,” Pangilinan told reporters, referring to the coal contract currently held by Semirara Mining and Power Corp. (SMPC).

The Department of Energy (DOE) has launched a Pre-Determined Area (PDA) Bid Round offering 18 coal mining blocks for competitive bidding, including 10 located on Semirara Island in Antique.

The DOE announced the bid round in a media release dated February 18, 2026, stating that the coal blocks will be awarded through Coal Operating Contracts (COCs) under Department Circular DC 2026-02-004.

The remaining eight blocks are located in Cagayan and Isabela.

The DOE confirmed that the 10 Semirara blocks are covered by Coal Operating Contract No. 5 (COC5), which grants the holder the exclusive right to explore, develop, and produce coal within a designated contract area, subject to regulatory requirements.

COC5 is currently held by SMPC and remains valid until July 14, 2027.

The bidding was set in motion after the Department of Justice issued an opinion that SMPC’s contract cannot be renewed outright, citing constitutional provisions.

Energy Secretary Sharon Garin said the government intends to conduct the bidding within the year.

Under the DOE’s framework, coal operating contracts will be awarded through a competitive process that evaluates bidder qualifications and not solely the highest financial offer.

Pangilinan described the opportunity as a potential “mine mouth kind of auction,” referring to a setup where a power plant is built near or beside a coal mine to allow direct fuel transport to the facility.

“You secure your supply chain, right? Locally. So that must be the benefit. So you save on freight at least,” he said, noting that such an arrangement would both guarantee a local fuel source and reduce logistics costs.

A coal operating contract grants its holder the exclusive right to explore, develop, and produce coal within a designated contract area, subject to existing regulatory requirements.

SMPC, in its most recent disclosure to the Philippine Stock Exchange, confirmed it has not received a formal response from the DOE on its request for a term adjustment under COC5.

The company reiterated that its current contract remains valid until July 14, 2027 and that its operations continue uninterrupted.

SMPC also said it is prepared to submit the appropriate mine plan and documentation required should a formal bidding process be confirmed, citing its decades of experience in managing complex engineering projects, along with its established operations, technical expertise, and equipment fleet as critical qualifications.

The uncertainty surrounding COC5’s future triggered a market reaction, with SMPC’s share price plunging 21 percent amid ongoing concerns over the contract’s eventual ownership.