By Sheldeen Joy Talavera, Reporter
THE DEPARTMENT of Energy (DoE) will no longer pursue its planned coal block auction this year, which would have included the country’s largest mine operated by Semirara Mining and Power Corp. (SMPC).
In an advisory dated Sept. 15, the DoE said it has scrapped the 2026 Coal Bid Round for the awarding of coal operating contracts covering three pre-determined areas.
The move came following the concerns raised by stakeholders during the pre-submission conference.
Among the reasons cited were developments affecting Semirara island — one of the areas offered in the auction — such as continuing water seepage, as well as legal considerations.
These concerns prompted the DoE to review the criteria for awarding coal operating contracts for the three areas.
The department said that the termination of this year’s coal auction will provide an opportunity to review and further develop “a fair, equitable, transparent, and comprehensive evaluation framework” for the awarding of the contracts.
“Such framework shall, consistent with the national interest, give due consideration to securing appropriate and measurable economic returns and benefits commensurate with the value and characteristics of the offered area,” the DoE said.
Launched in February, the bid round is offering three coal areas, which are estimated to hold around 207 million metric tons of coal reserves.
To be auctioned were five blocks across the municipalities of Benito Soliven, Naguilian, Cauayan in Isabela; and three blocks spanning the municipalities of Amulung and Iguig in Cagayan province.
It also covered the 10 blocks on Semirara Island in Antique, the flagship asset of SMPC, making it the country’s largest coal producer. The site has been operated by the company for nearly 50 years but failed to renew its coal operating contract that is set to expire in July 2027.
The auction was supposed to take place in April but was postponed as the DoE is still working on the terms of reference.
SMPC earlier questioned the proposed DoE and Department of Environment and Natural Resources joint administrative order which would set the rules for awarding natural resource contracts.
The mine operator raised concerns about the proposed rules, saying some provisions could affect its existing rights.
The termination of the coal auction is also inconsistent with Energy Secretary Sharon S. Garin’s recent statement that the bidding would push through this year as the DoE prepares a department circular that will determine all the terms and procedures.
“We are far from starting the bidding, but the bidding will happen within the year,” she said in Sept. 15 briefing.
The Energy chief said the government wants coal produced under the contracts to be sold domestically, rather than prioritizing exports.
“We want to make sure that the coal is being sold in the Philippines, that optimization of our resources for energy security. Learning from our experience with the Middle East conflict, we need to secure our resources,” Ms. Garin said.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the delay in awarding the contract for Semirara narrows the window for potential replacement operators to prepare for operations.
“The closer we get to the expiration date without a clear process, the more difficult it becomes for SMPC — and potentially any alternative operator — to plan for operations beyond the current contract,” Mr. Arce told BusinessWorld.
Mr. Arce said, however, that getting the framework right may be more important than proceeding simply to meet the original timetable.
“A rushed bidding process that later results in disputes over the rules, existing assets or the terms of the succeeding contract could create even greater uncertainty,” he said.
