SMPC seeks fairer terms in Semirara coal auction
Semirara Mining and Power Corp. (SMPC) seeks clearer, more balanced bidding rules for the Semirara coal mine, raising concerns that the government’s revised requirements could put its more than P55 billion in mining investments at risk and limit its participation in the auction.
In a statement on Tuesday, the company questioned a provision in the Department of Energy’s (DOE) new bidding guidelines that requires SMPC to turn over its mining assets to the government before it can participate in the second auction.
SMPC said the requirement places the incumbent operator at a disadvantage despite its substantial investments and decades of experience operating the mine.
“In other words, the DOE is telling us not to bid,” SMPC said.
The company maintained that Presidential Decree 972 recognizes its ownership of the mining equipment, which it said should not be subject to mandatory turnover as a condition for joining the auction.
SMPC has invested more than P55 billion in its mining operations, including hundreds of heavy equipment units used to extract coal from deposits approximately 350 meters below sea level.
The company also raised concerns over the DOE’s decision to shift the primary basis for selecting the winning bidder from technical capability to the highest financial offer.
It warned that prioritizing financial bids without adequately assessing operational readiness could create challenges in maintaining coal production when the new operator takes over in July 2027.
“The highest bidder with zero mining experience will most likely produce zero coal output and zero government share,” SMPC said.
According to the company, a new operator would need to procure specialized mining equipment and recruit and train approximately 4,000 workers within a limited transition period to sustain operations.
SMPC said operating the mine also requires technical expertise in managing seawater intrusion and extracting coal from deep deposits, capabilities developed through years of experience.
The company further questioned the transparency of the bidding process, citing the absence of bidder prequalification, a model contract, official responses to inquiries and details on how the winning bidder would be selected.
“There were no bid bulletins, no pre-qualification to screen the unqualified, no official reply to questions raised, no reply to all the letters sent by the current mine operator, no model contract, no minutes, and complete secrecy on how the award would be reached,” SMPC said.
The DOE canceled the initial bidding round in September before issuing a joint administrative order establishing the basis for the second auction.
SMPC said several of its concerns from the earlier bidding process remain unresolved, including the treatment of existing mining assets and the technical qualifications required of prospective operators.
The company maintained that clearer bidding conditions and transition arrangements are necessary to protect existing investments, encourage competition and ensure uninterrupted coal production.
It also warned that any disruption in mining operations could affect government revenues, particularly if the winning bidder is unable to begin commercial production on schedule.