Why pursuing SMPC’s coal contract makes sense for big conglomerates

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February 19, 2026 | 12:00am

MANILA, Philippines —  As the government gears up to auction Semirara Mining and Power Corp. (SMPC)’s coal mine contract in Antique, all eyes are on some of the country’s largest conglomerates.

For heavyweights like the MVP Group, San Miguel Corp. (SMC) and the Aboitiz Group, which have significant coal portfolios, pursuing the contract can be a major strategic power play.

Any company that successfully takes over the coal contract will strengthen its supply chain, secure long-term fuel sources and reinforce its position in the power and industrial sectors.

These benefits, along with tax perks, are the same ones SMPC has enjoyed while operating on Semirara Island for decades.

“They have coal plants, too, like SMPC,” COL Financial chief equity strategist April Lee-Tan told The STAR, explaining why it makes sense for the three conglomerates to join the bidding.

The MVP Group holds its coal assets through Meralco PowerGen Corp. (MGEN), while SMC manages theirs through San Miguel Global Power Holdings Corp.

The Aboitiz Group, on the other hand, invests in coal projects through Aboitiz Power Corp., the country’s leading electricity generation company.

“Owning the mine would allow them to be vertically integrated, which could potentially lead to lower costs,” Tan said.

Just this week, tycoon Manuel V. Pangilinan already signaled the Meralco Group’s interest in taking over operations at SMPC’s main coal mining site.

While nothing is finalized yet, Pangilinan affirmed that going after the contract is definitely on the group’s “radar,” especially for MGEN.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said securing the contract would allow companies like MGEN to ensure a “more dependable supply of inputs at lower cost for coal-fired power plants.”

Semirara Island, located in the Caluya archipelago, is estimated to be several hours by boat and land from Iloilo City, where MGEN operates coal-fired facilities.

“Certain companies or groups that have sizable coal-fired power plants in their energy portfolios would naturally have an interest in looking at a major coal mine acquisition if the opportunity presented itself,” said Juan Paolo Colet of China Bank Capital Corp.

“In the case of Semirara, we’re talking about the largest coal mine in the Philippines, so that’s a tempting target,” Colet said.

Beyond power generation, SMPC’s coal mine contract could also benefit companies in the cement industry, according to economist Bienvenido Oplas Jr.

Both SMC and the Aboitiz Group are active in cement manufacturing.

Through San Miguel Equity Investments Inc., SMC is a major player in the industry, operating Northern Cement Corp., Southern Concrete Industries Inc. and Eagle Cement Corp.

The Aboitiz Group, meanwhile, runs Republic Cement, which has a total cement capacity of roughly 9.7 million tons each year.

“Coal is a good additive to cement. Coal for cement production is a good option,” Oplas said.

It remains unclear whether SMC or the Aboitiz Group will pursue SMPC’s coal contract, and it is too early to say who will ultimately enter the race.

But one thing is certain: the Consunji Group is expected to fight tooth and nail to defend its throne.

“It may be tough to bid against the Consunji Group, given all the advantages they have from operating the site for decades,” Colet said.

For now, it is business as usual for SMPC, whose existing contract remains valid until July 14, 2027.

“The company intends to fulfill the remainder of its current (contract) while preparing the appropriate mine plan and documentation should the DOE (Department of Energy) proceed with a formal bidding process,” it said in a regulatory filing yesterday.

At present, SMPC also expects “no immediate impact” on its financial condition and business operations.