Semirara coal mine up for bidding–DOE

Semirara Mining and Power Corp. (SMPC), the largest coal producer in the Philippines, stands to lose its mining contract as the Department of Justice (DOJ) rejected the company’s plea for renewal.

“Our direction is to have it auctioned. They said we cannot renew,” Energy Secretary Sharon Garin told reporters on the sidelines of a forum last Friday.

“We will respect the opinion of the DOJ on this because that’s what the Constitution says,” Garin said.

She added that the government could no longer accommodate SMPC’s request for another 13 years as its 50-year contract period is ending.

The contract of SMPC, led by Isidro Consunji, gives the group the exclusive right to explore, develop and conduct coal mining operations on the island of the same name. Under this contract, the company receives tax perks, except for income tax.

Also, the agreement mandates SMPC to remit 30 percent of its net proceeds as royalties to the Department of Energy (DOE). The company is also required to compensate landowners.

Garin said the DOE is targeting to have the bidding scheduled “within the year.” This, even as SMPC’s contract is good until July 2027.

Pushing for this early on will ensure that operations at the mining site are not disrupted, the energy chief said.

Garin said SMPC has been apprised of the decision on the matter. When pressed about the company’s reaction, Garin said SMPC was still hopeful for a renewal of the contract.

See Also

Why the wealthy still use life insurance

“But if the law says we can’t, then we cannot. It’s not what they want [that will be followed], for sure,” she said.

But Garin said SMPC is “qualified” to join the bidding, even noting that the group has an edge given its expertise.

“If you’ve been to Semirara [Island], it’s such a complicated engineering project. There’s so much technology … The advantage is they already know what to do, they have the equipment and they have experience in Semirara,” she said.

Foreign investors may also join, but they may have to partner with a local firm since it involves “extraction of natural resources, so there might be limits to that,” Garin said.