‘New auction rules put Semirara coal output at risk’

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September 29, 2026 | 12:00am

MANILA, Philippines — The Semirara coal mine in Antique could face zero output if the government awards the new contract solely to the highest bidder, regardless of mining expertise, its current operator warned.

Consunji-led Semirara Mining and Power Corp. (SMPC) said relying on the highest financial offer as the main basis for the award is “fraught with risks,” particularly if the winner lacks the mining capability and track record to operate the mine.

“In this instance, zero coal production could happen, and that means zero royalty payment to the government, which is exactly the opposite of what the bidding hopes to achieve,” the company warned.

The Semirara mine, the largest of its kind in the country, currently accounts for around 90 percent of domestic coal production.

In 2025 alone, SMPC saw coal production increase by 24 percent to another all-time high of 19.9 million metric tons from 16 million MT in 2024.

Under its existing contract, the integrated energy firm is required to remit 30 percent of its net proceeds as royalties to the Department of Energy (DOE).

“Given the scale and complexity of the Semirara mine, including operating below sea level as deep as a tall building, the process should safeguard operational continuity and take into account the welfare of the host communities whose jobs, livelihoods and local economy depend on the mine,” SMPC said.

The company issued the statement as the government moves to make the financial offer the “sole ranking factor” among qualified bidders in the new Semirara coal auction.

Under the proposed guidelines, the DOE and the Department of Environment and Natural Resources will adopt a two-stage evaluation process to select the winning bidder.

The first stage will assess whether bidders meet the eligibility requirements. Only those that pass this stage will advance to the ranking phase, where the highest financial bid will secure the new Semirara coal operating contract.

“The new bidding rules should ensure a fair process, including proper prequalification of prospective bidders based on technical capability, operating experience and financial capacity,” SMPC stressed.

SMPC, whose current contract expires in July 2027, had earlier sought an extension to continue its decades-long operations on Semirara Island.

The DOE, however, rejected the request and opted to put the contract up for bidding instead.

The 2026 Semirara coal bid was launched in February and postponed in April before being terminated earlier this month.

Energy Secretary Sharon Garin earlier told The STAR that the auction is expected to be relaunched in early October.