Table of Contents
The Department of Energy (DOE) is moving forward with plans to auction off the country’s largest coal mining area in Semirara Island this year, while considering new rules that would require winning bidders to reserve part of their coal output for the domestic market to help strengthen the Philippines’ energy security.
Energy Secretary Sharon Garin said the government is targeting to resume the bidding process by the middle of the year after addressing concerns raised by prospective investors during presubmission conferences.
The planned auction covers three coal areas in Antique, Cagayan and Isabela, including 10 coal blocks on Semirara Island currently operated by Semirara Mining and Power Corp. (SMPC).
“This is the first time for us to bid out an already existing coal mine. And it’s also the biggest in the country. So, we’re trying to get the best offer that we can, and the best offer that’s for the country,” Garin told reporters.
She added that the government wants to “maximize Semirara’s potential” while ensuring that the country benefits from the project over the long term.
Domestic Allocation Under Study
Among the proposed conditions being studied by the DOE is a mandatory domestic allocation requirement that would compel winning bidders to sell a minimum portion of their coal production locally instead of exporting it.
The proposal comes as the Philippines continues to rely heavily on imported coal despite having local reserves. DOE data showed the country imported more than 80 percent of its coal requirements in 2023, with imports accounting for over 90 percent in previous years.
Government officials said the domestic supply requirement is aimed at improving fuel security for the power sector amid lingering global supply and price risks.
Coal remains the dominant fuel source for electricity generation in the Philippines due to its relatively lower cost and stable baseload capacity, even as the country accelerates investments in renewable energy.
Investor Questions
Garin said the DOE deferred the bidding schedule in April to address various concerns raised by interested participants.
Among the issues raised were the treatment of existing mining equipment on Semirara Island, currently owned and operated by SMPC, as well as questions surrounding production commitments and contract duration.
Potential bidders also sought clarification on how long the winning operator would be allowed to run the coal blocks and the expected production volumes from the site.
“There are so many concerns because there are so many that are interested,” Garin said.
The DOE has yet to announce a revised timetable for the submission and opening of bid documents under the 2026 Philippine Conventional Energy Contracting Program.
SMPC Bid
SMPC, controlled by the Consunji group, has operated the Semirara coal mine for around five decades and currently accounts for more than 90 percent of the country’s domestic coal production.
Its existing coal operating contract is scheduled to expire on July 14, 2027, after the Department of Justice ruled against extending the agreement beyond the 50-year limit.
The company earlier sought a 13-year extension of its contract but was rejected following the legal review.
Despite this, SMPC has expressed confidence in its chances of securing a new operating contract through the auction process, citing its long operational track record and established mining infrastructure in Antique.
The Semirara auction covers around 10,000 hectares with estimated coal reserves reaching 160 million metric tons.
SMPC is also preparing a mine development plan to support its bid, with the company aiming to sustain government revenues, community investments, and local energy supply.
MGen Open To Partnership
Meralco PowerGen Corp. (MGen), the power generation arm of Manila Electric Co., has also expressed interest in participating indirectly in the Semirara project through a potential partnership with SMPC.
MGen president Emmanuel Rubio said the company is open to taking a minority stake in the coal blocks if SMPC secures the operating contract.
“We believe that they have the advantage. They have all the equipment needed to extract coal in Semirara. The logical winner, with the rational bid, I think, is still Semirara,” Rubio said.
Rubio clarified that MGen does not intend to participate directly in the auction because of time constraints related to due diligence requirements.
“We’re not going to join the auction,” he said. “Now, if we see the offer acceptable and we see that there’s a business case for it, then we will discuss us coming in.”
According to Rubio, the company’s interest in Semirara is anchored on ensuring long-term fuel supply for its power generation portfolio. “All we want is a semblance of fuel security,” he said.
The DOE’s planned auction is expected to draw close industry attention, given the strategic role of Semirara in the country’s energy mix and the government’s broader efforts to balance energy security with ongoing power sector transition goals.
Source:
https://business.inquirer.net/592364/doe-coal-mine-bidding-set-to-resume-by-mid-2026
https://mb.com.ph/2026/05/26/doe-wants-semirara-coal-bidders-to-reserve-supply-for-philippines
https://bilyonaryo.com/2026/05/06/mvp-to-sid-bid-for-semirara-well-partner/business/