Semirara Mining questions coal bid rules ahead of 2027 handover

ILOILO CITY — Semirara Mining and Power Corp. (SMPC) has questioned the government’s bidding rules for the Semirara coal mine, saying requirements imposed on the current operator could prevent it from competing for a new contract and risk disrupting coal production next year.

SMPC said in a press release on Oct. 7 that the bidding rules require it to disclose its complete inventory of assets and surrender them to the government if it participates in the bidding.

“We are the only company covered by this rule. This is unfair and basically bars us from bidding,” it said.

SMPC argued that requiring it to surrender ownership of its assets as a condition to bid conflicts with Presidential Decree 972, or the Coal Development Act of 1976, which it said recognizes its ownership of the assets and allows it to remove them within one year after its operating contract expires.

The law provides that movable materials, equipment, plants, and other installations placed in the contract area by the operator remain the operator’s property, provided they are removed within one year after the coal operating contract ends. Those not removed within that period become government property.

SMPC also questioned the absence of prequalification requirements, saying prospective bidders need not have prior mining experience and that the highest financial bid alone will determine the award.

“Semirara is no ordinary mine. We are mining in the sea, deeper than the height of the highest building in Makati. We have to pump out the equivalent of 12 Olympic-size swimming pools or Pasig River’s torrent every hour just to get to the coal,” the company stressed.

SMPC warned that the bidding rules could result in zero coal production when a new operator takes over in July 2027.

A production shutdown, it said, would also mean no royalty payments to the government, defeating the bidding process’ purpose of generating revenue for the state.

From 2021 to the first half of 2026, SMPC paid PHP 43.4 billion in government share and PHP 3.7 billion in taxes, according to the company.

SMPC said the incoming operator would have to procure hundreds of pieces of heavy equipment and large mining trucks, hire and train thousands of workers, and secure billions of pesos in operating capital before taking over the mine in July 2027.

It also raised concerns about the mining plan, which it said the bidding rules treat merely as a pass-or-fail requirement.

The company questioned the decision to prioritize the highest financial bid over the capability and experience of a mining operator, saying the change was introduced early this year.

According to SMPC, the rules could allow a bidder to win based primarily on its financial offer, while the values used to determine the award would remain confidential.

SMPC also warned that a disruption in Semirara coal production could affect electricity prices because the coal is used to generate baseload power, which the company described as the cheapest form of electricity.

The dispute comes after the Department of Energy terminated its 2026 coal-bidding round in September to reassess the auction rules amid concerns raised by stakeholders, developments involving water seepage on Semirara Island, and related legal considerations.

The auction covered 10 coal blocks on Semirara Island in Caluya, Antique.

SMPC, a subsidiary of DMCI Holdings Inc., is the Philippines’ largest coal producer. It operates on the island under Coal Operating Contract No. 5, which is scheduled to expire on July 14, 2027.