Semirara flags DoE coal auction risk to Philippine mining operations

Traders Union
All News
Financial News
Semirara flags coal auction risk

Highlights

Semirara Mining and Power Corp. warns that the Department of Energy's planned auction for the Semirara mine could exclude SMPC and threaten its business after its contract expires in July 2027.
The new DoE auction rules base selection solely on the highest financial offer, raising risk that inexperienced bidders could win and disrupt Philippine coal supply, with SMPC producing 97% domestically last year.
SMPC's net income rises 2% to P8.58 billion in H1 2026 due to stronger power earnings despite weaker coal operations, while its shares fall 1.91% to P11.28.

Auction dispute and contract concerns

As reported by BusinessWorld Online, Semirara Mining and Power Corp. says the Department of Energy's planned auction for the Semirara mine could push the Consunji-led company out of the bidding and eventually out of business. The company says the process violates established bidding protocols and questions the rules for the coal area it currently operates in Antique.

The Department of Energy is preparing to auction three coal areas with estimated reserves of about 207 million metric tons. One of those areas is on Semirara Island, where SMPC operates a coal mine and where its current operating contract is set to expire in July 2027.

SMPC says the auction process lacks several documents and procedures it considers necessary, including bid bulletins, pre-qualification screening, official replies to questions, a model contract and minutes explaining how the award would be decided. It also says a change in the bidding rules earlier this year makes the highest financial offer the sole basis for selection, instead of weighing technical capability alongside price.

Industry and market implications

SMPC says the revised criteria raise the risk that a bidder without mining experience could win the contract yet fail to meet production targets or generate government revenue. The company also says the DoE canceled the initial bidding round in September without addressing the issues it had raised, while a later joint administrative order requires SMPC to turn over its assets to the department as a condition for joining the new round.

The DoE had not responded to a request for comment as of press time. SMPC says it accounted for about 97% of domestic coal production last year, with record output of 19.9 million metric tons, underscoring the potential impact of any disruption on Philippine coal supply.

In financial terms, the company says net income rises 2% to P8.58 billion in the first half of 2026 as stronger power earnings offset weaker contributions from coal operations. Shares in SMPC fall 1.91% to P11.28 on Tuesday.

Our earlier report followed Philippine community leaders pressing the International Finance Corp. for long-delayed remedies over harm linked to 10 coal plants associated with IFC-backed financing. The article highlighted allegations of environmental and social damage affecting local residents, alongside campaigners’ claims that studies and recommendations have not translated into on-the-ground compensation or corrective action despite reported investment returns.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.