Semirara uncertainties deepen as DOE scraps 2026 coal auction
The Philippine government has ditched plans to bid out coal contracts this year as it overhauls awarding rules, a development that further fuels the anxiety gripping Consunji-led Semirara Mining and Power Corp. (SMPC).
In an advisory dated Sept. 15, the Department of Energgy (DOE) scrapped the 2026 coal bid round covering three predetermined areas under the Philippine Conventional Energy Contracting Program. This came five months after the DOE initially held off the auction.
Influencing this decision were concerns raised by stakeholders during the presubmission conferences, particularly developments affecting major mine site Semirara Island such as water seepage and legal hurdles.
“[These] warrant a reassessment of the evaluation criteria applicable to the award of DP COCs (development and production coal operating contracts) for the offered areas,” the agency said.
Energy Secretary Sharon Garin, however, said on Tuesday that the DOE was on track to finally launch the bidding.
“We’re still far from the bidding, but the bidding will happen within the year,” she said.
The planned auction is supposed to cover three areas determined to have coal reserves. These are located in Cagayan, Isabela province and Antique, including 10 blocks on Semirara Island.
SMPC, which accounts for more than 90 percent of domestic coal production, has held the Semirara contract for about 50 years. It is set to expire in July 2027.
As uncertainties mount, SMPC has significantly slashed its capital spending by 68 percent this year as it put major purchases on hold. The group was also forced to let go of more than 400 employees and more rounds of layoff could follow.
SMPC declined to comment for this report.
“The market essentially has difficulty determining what SMPC looks like beyond July 2027: whether it continues operating Semirara under a new contract, operates under potentially different economic terms, or eventually loses the mining operation,” said Toby Allan Arce, head of sales trading at Globalinks Securities and Stocks Inc.
“If the process moves too close to July 2027, the risk of operational disruption becomes more significant, particularly if the winning bidder is not the incumbent,” Arce said.
