Semirara Mining and Power Corp. (SMPC), the Consunji-led company that has operated the Semirara coal mine in Antique for decades, says the Department of Energy’s (DOE) revised bidding rules effectively prevent it from competing for the mine’s next operating contract.
Dispute Over Asset Disclosure
The dispute centers on a joint administrative order issued after the DOE scrapped its first bidding round in September. Under the new rules, SMPC, as the incumbent operator, must disclose its full inventory of assets and turn them over to the government if it wishes to bid.
SMPC argues that this requirement conflicts with Presidential Decree No. 972, or the Coal Development Act of 1976, which recognizes an operator’s ownership of equipment and installations, provided these are removed within one year after the contract expires.
“We are the only company covered by this rule,” SMPC said in an October 7 statement, describing the requirement as unfair.
The company also questioned the shift from technical capability to the highest financial offer as the main basis for awarding the contract. It argued that other bidders are not required to demonstrate their mining capabilities through prequalification. SMPC further cited the absence of bid bulletins, a model contract, and official responses to its questions.
Billions at Stake
SMPC said it has invested more than P55 billion in the operation, which extracts coal from deposits about 350 meters below sea level using hundreds of heavy machines and employing around 4,000 workers.
The mine accounts for approximately 90% of the country’s domestic coal production. Its Coal Operating Contract No. 5 is set to expire on July 14, 2027.
Risks of a New Operator
SMPC warned that an inexperienced winning bidder would have only months to acquire equipment and train workers before taking over, potentially resulting in zero coal production and lost government royalties.
Under its existing contract, the company remits 30% of its net proceeds as royalties. SMPC said it is studying its legal options.
Meanwhile, Energy Secretary Sharon Garin said the auction could be relaunched in November or early December. As of October 13, no detailed public response from the DOE addressing SMPC’s legal objections had been identified.
