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The Department of Energy (DOE) is delaying the competitive auction for the Semirara coal block as it revises bidding rules to prioritize the use of locally produced coal, following regulatory changes in Indonesia that have raised concerns over the Philippines’ heavy dependence on imported fuel.
Energy Secretary Sharon Garin said the auction for the 18,000-hectare coal block in Antique, originally targeted earlier this year, is now expected to proceed in August or September. The postponement will allow the agency to update the terms of reference (TOR) to maximize the use of indigenous coal for domestic power generation.
The move comes as Indonesia, the Philippines’ largest coal supplier, introduces new export governance measures aimed at improving transparency and traceability in coal transactions.
Reducing Dependence On Imports
According to Garin, the changes in Indonesia’s coal export framework prompted the DOE to reassess the auction guidelines for the Semirara coal block, where Consunji-led Semirara Mining and Power Corp. (SMPC) currently operates under Coal Operating Contract No. 5, which expires on July 14, 2027.
“The Semirara auction will be impacted,” Garin said, noting that the government wants to include provisions that would maximize the country’s utilization of indigenous coal resources before finalizing the bidding documents.
SMPC accounts for more than 90 percent of the country’s domestic coal production, but a significant portion of its output is exported. Garin said this practice may need to change under the revised auction conditions.
“We’re importing coal from other countries while we’re exporting our own,” she said, adding that increasing the share of Semirara coal consumed locally would help lessen the country’s exposure to supply risks abroad.
The Philippines remains heavily reliant on imported coal, with about 95 percent of its coal requirements sourced overseas. Nearly all of these imports come from Indonesia, making the country particularly vulnerable to policy changes affecting coal exports.
Targeting Higher Domestic Use
Garin said the DOE is considering requiring the winning bidder to prioritize domestic coal supply under the new operating contract.
She said local utilization could initially reach around 60 to 70 percent of Semirara’s production, although she personally favors a much higher allocation.
“As much as possible, I would recommend all of it. But if not possible, then on the high side, 80 to 90 percent should be used in our power plants,” she said.
The energy chief acknowledged, however, that technical limitations have prevented some power plants from using Semirara coal. She noted that blending locally produced coal with imported varieties, a practice already observed in Indonesia, could enable more Philippine power plants to use domestic fuel.
TOR Revisions
The government is preparing to reopen the bidding for the Semirara coal block after rejecting SMPC’s proposal to extend its existing operating contract by another 13 years.
Instead, the DOE plans to subject the coal area to a competitive auction once the revised TOR is completed.
Garin said the additional time has proven beneficial because it allows the agency to incorporate policy adjustments reflecting developments in the regional coal market.
The DOE expects to finalize the revised bidding rules within the next few weeks before opening the auction process later this quarter.
Indonesia Assures Stable Coal Supply
The policy review follows a series of high-level meetings between Philippine and Indonesian officials in Jakarta led by Garin.
The Philippine delegation met separately with Indonesia’s Coordinating Ministry for Economic Affairs, the Ministry of Energy and Mineral Resources, and PT Danantara Sumberdaya Indonesia to seek clarity on the country’s evolving coal export regulations.
During the discussions, Philippine officials emphasized Indonesia’s role as the country’s principal coal supplier and underscored the importance of maintaining stable coal deliveries to support electricity generation.
Indonesian officials assured the Philippine delegation that the planned regulatory changes are intended to improve transparency and traceability in coal exports rather than restrict supply.
They also acknowledged the importance of ensuring uninterrupted coal shipments to partner countries that continue to rely on Indonesian coal for power generation and industrial operations.
Meanwhile, SMPC reported lower coal shipments during the first quarter of 2026. Despite producing 4.7 million metric tons of coal during the period, the company shipped only 2.5 million metric tons due to weaker market demand.
Source:
https://business.inquirer.net/602432/doe-chief-eyes-keeping-semirara-coal-for-domestic-use
https://mb.com.ph/2026/07/27/doe-delays-major-coal-mine-auction-to-shield-domestic-power-grid
https://businessmirror.com.ph/2026/07/27/doe-auction-of-semirara-coal-deal-faces-slight-delay