SEMIRARA Mining and Power Corp. (SMPC) cited its P70.5-billion government remittances over the past 29 years as it renewed concerns over the bidding rules for the coal operating contract covering its mine on Semirara Island in Antique.
The Consunji-led coal producer warned in a statement on Monday that prioritizing financial bids over mining experience could disrupt production and affect future government revenues if a new operator is unable to sustain operations.
SMPC also said it contributes approximately P600 million annually to its host municipality of Caluya for education, healthcare, and livelihood programs, while more than 4,000 jobs could be affected by the bidding process.
The company questioned the use of the highest financial offer as the sole ranking factor in selecting the winning bidder, arguing that mining experience and technical capability should carry greater weight.
“The highest bidder with no mining experience will produce zero coal, resulting in zero royalty payments to the government, a complete defeat of the DoE’s (Department of Energy’s) objective of raising the most revenues,” SMPC said.
It also questioned what it described as the absence of penalties for a winning bidder that fails to produce coal.
“The bidding rules discourage industrialization. We hope the DoE realizes that its bidding rules directly contradict the sales pitch of our top officials when they go abroad to invite investors,” it added.
SMPC operates the Semirara mine under Coal Operating Contract No. 5, which is scheduled to expire on July 14, 2027.
Under the existing contract, the company is required to remit a government share equivalent to 30% of net proceeds from coal operations, subject to the contract’s provisions.
The DoE terminated its earlier coal bidding round in September to reassess the award framework, citing operational, legal, and economic considerations.
The department said the review would seek to ensure appropriate economic returns and benefits from the development of the country’s coal resources.
The earlier bidding framework required legal, technical, and financial qualifications, although SMPC has questioned the weight assigned to financial offers in ranking qualified bidders.
Separately, SMPC filed a petition for declaratory relief before the Makati Regional Trial Court in July seeking clarification of its rights and obligations concerning mining assets and information under its existing contract.
SMPC did not provide a quantified estimate of potential future royalty losses arising from the bidding rules. — Sheldeen Joy Talavera