Proven coal areas face tougher bidding rules

Coal developers will have to wait—and potentially pay more for access to proven reserves—as the government pulls mature mining areas from its 2026 auction while it rewrites the rules for awarding state-owned coal assets.

The Department of Energy (DOE) terminated the 2026 Coal Bid Round rather than award coal operating contracts under parameters it is already reconsidering, particularly for areas that have been explored and developed under previous contracts.

The move sets the stage for a fresh auction under new rules being crafted with the Department of Environment and Natural Resources (DENR), as the government seeks to capture greater value from coal deposits that carry less exploration and development risk.

“These coal reserves are owned by the state. It is the right of the government to reassess or terminate a bidding process when the existing parameters are not yet sufficient to protect our state assets and ensure that we maximize the benefits that will be returned to the country,” Energy Secretary Sharon S. Garin told reporters on Tuesday.

“We want to make sure that the country, the state, benefits from any of these contracts because we have many contracts, including, for example, in Semirara, which has already been there for 50 years,” Garin added.

The distinction is crucial for the next auction. Mature coal areas, where reserves and commercial potential are better understood after years of development, will no longer be treated like new projects where companies shoulder significantly greater exploration risks.

“We have new rules now, a joint memorandum circular together with the DENR, on how we treat these mature projects already,” Garin said. “We're not going to treat it the same way as we treat new projects because the risks are also different.”

The policy shift puts particular focus on Semirara, the country’s largest coal mining area and a major source of domestic coal for power generation. Its long operating history has also made it a key example in the government’s reassessment of how mature mineral assets should be valued and awarded.

The DOE and DENR are moving to finalize the new framework after holding a second public consultation on 21 September.

The draft Joint Administrative Order establishes a National Interest Evaluation Framework that will govern the assessment and award of contracts and other rights involving the country’s natural resources.

“We've been listening, and we will start finalizing the draft now for issuance by the DOE and DENR, possibly,” Garin said.

With the new framework nearing completion, the government decided against proceeding with an auction whose terms could soon be overtaken by the revised rules.

“With that, that's why we had to cancel the previous announcement of the bidding of these coal mining areas,” Garin said. “And we have canceled that so that we can do the new bidding with a new set of rules.”

According to the DOE, stakeholder concerns raised during consultations were also considered in the decision to revisit the bidding parameters.